Asian Development Bank (ADB)
The Asian Development Bank (ADB) has agreed to provide a $132.8 million loan to the Indian state of Meghalaya for upgrading the power distribution network and improving the power quality.
• The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, headquartered in Manila, Philippines.
• ADB was conceived in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world.
• The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries.
• From 31 members at its establishment, ADB now has 68 members. 49 members from the Asian and Pacific Region, 19 members from Other Regions.
• The ADB was modelled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members' capital subscriptions. Japan and the United States each hold the largest proportion of shares at 15.571%. China holds 6.429%, India holds 6.317%, and Australia holds 5.773%.
The ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
This is carried out through investments – in the form of loans, grants and information sharing – in infrastructure, health care services, and financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources.
Critics have charged that the two major donors, Japan and the United States, have had extensive influence over lending, policy and staffing decisions.
It has been criticized for insensitivity towards local communities. It can undermine people's human rights through projects that have detrimental outcomes for poor and marginalized communities.
ADB's large scale projects cause social and environmental damage due to lack of oversight.
It has also received severe competition from China led AIIB for geopolitical clout.
India and ADB
ADB's support to India aims to accelerate economic transformation by building industrial competitiveness, creating jobs, accelerating growth of low-income states, and addressing environmental and climate change challenges.
Since 1986, ADB has committed 239 sovereign loans totaling $42.26 billion for India. Cumulative loan and grant disbursements to India amount to $31.79 billion. These were financed by regular ordinary capital resources and other special funds.
In 2019, the bank committed a record $3.18 billion for 10 sovereign projects aimed to develop infrastructure and services in transport, energy, urban services, and agriculture and natural resources.
Improving connectivity and accessibility to services and markets at the state, district, and rural levels remains a key area of ADB’s support in India.
Recent grant of loan to Meghalaya will help in modernizing and improving the distribution network; the project will improve the operational efficiency of distribution system and the financial sustainability of distribution business in the state.
ADB maximizes the development impact of its assistance by facilitating policy dialogues, providing advisory services, and mobilizing financial resources through co financing operations that tap official, commercial, and export credit sources.
It provides an alternative to Chinese financial institutions, which is known for its chequebook diplomacy that is leveraging the investment made to serve its geopolitical purposes.
PEPPER IT WITH
Asian Infrastructure Investment Bank, New Development Bank, BROB, World Bank, International Development Association, International Monetary Fund