INTRODUCTION

The Asian Development Bank (ADB) is a multilateral development finance institution owned by 63 members, 45 from Asia and the Pacific and 18 from other parts of the globe. The overarching goal of ADB is to reduce poverty. To achieve this, ADB supports activities in its developing member countries to promote pro-poor economic growth, inclusive social development, and good governance. Under its Long-Term Strategic Framework (2001-2015), ADB takes into account in its activities three crosscutting themes: private sector development, regional cooperation, and environmental sustainability. ADB's principal tools are loans, guarantees, and technical assistance, which it mainly provides to governments for specific projects and programs. ADB lending volume in 2004 was US$5.3 billion. Technical assistance, which is used for preparing and implementing projects, supporting advisory activities, and undertaking regional activities, amounted to US$196.6 million. ADB-administered grants totaled US$99.4 million. ADB was established in 1966. it has 31 founding members. ADB's headquarters is in Manila. It has 26 offices around the world. ADB's staff consists of more than 2,000 employees from over 50 countries

I. Introduction
1. Throughout the 1990s, the Asian Development Bank (ADB) has faced numerous challenges and taken on new, complex policy initiatives, culminating in the adoption of the Poverty Reduction Strategy1 in 1999. All these initiatives have been consolidated in the Long-Term Strategic Framework, 2001-2015 (LTSF)2, which charts ADBs agenda for the next 15 years. 2. The LTSF recognizes that implementing ADBs strategic agenda requires a review of its organization, business processes and products. On 18 January 2001, the President established a framework for a review of the organization of ADB. The objective of the review is to assess the capacity of the current organization of ADB to effectively and efficiently implement the LTSF, and to recommend changes where necessary. 3. The review has been guided by the President who chairs a steering committee of senior ADB staff. A working group3 undertook detailed work, with the support of a small secretariat. The review was divided into three phases: phase I undertook a diagnosis of the current organization; phase II developed and analyzed options to address the issues raised by the diagnosis; and phase III, in which the selected option was developed in detail. Previous organizational changes in ADB and the experience of other development agencies were taken into account.4 Staff were consulted through focus groups and individual meetings, and three external advisers were invited to provide guidance during the early stages of the review.5 A working paper6 with proposals for changes in the organization was presented to the Board on 31 July 2001. 4. Following the Board discussion of the working paper, the issues raised have been addressed in a detailed Question and Answer paper, and through a Board seminar. This paper presents the revised recommendations for organizational change.

INTRODUCTION
____________________
1. 2. 3. R179-99: Fighting Poverty in Asia and the Pacific: The Poverty Reduction Strategy of the Asian Development Bank, 19 October. SEC.M17-01: The Long-Term Strategic Framework of the Asian Development Bank, 21 February. The members of the working group were Geert van der Linden (Chair), Shamshad Akhtar, J. Warren Evans, Rajat Nag, Ann Quon, Cedric Saldanha, and Kunio Senga. The secretariat consisted of Shyam Bajpai, Robert Yeung, Laura Campbell, and Qifeng Zhang. Masakazu Sakaguchi and Shoji Nishimoto acted as advisors to the working group. African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Department for International Development (DFID) of the United Kingdom, InterAmerican Development Bank (IDB), and World Bank (WB). The three external advisers were Richard Stern (ex-Vice President, World Bank); Peter McCawley (Deputy Director-General, Australian Agency for International Development [AusAID] and former Director of the Board of ADB); and Barrie Ireton (Director-General, Programmes, Department for International Development [DFID]). Working Paper 4-01: Review of the Organization of the Asian Development Bank, 5 July.

4. 5. 6.

HISTROY

Asian Development Bank (ADB) is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia.[2] The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly known as the From 31 members at its establishment, ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside. ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with

INTRODUCTION

member's capital subscriptions. At present, both the United States and Japan hold 552,210 shares, the largest proportion of shares at 12.756 percent each.[3]

Contents
[hide]

1 Organization 2 History o 2.1 1962-1972 o 2.2 1972-1986 o 2.3 Since 1986 3 ADB Lending 4 Notable ADB projects and Technical Assistance 5 Effectiveness 6 Criticism 7 Members 8 United Nations Development Business 9 References 10 See also 11 External links

United Nations Economic Commission for Asia and the Far East) and non-regional developed countries.[2] [edit]

Organization

ADB Headquarters, Metro Manila The highest policy-making body of the bank is the Board of Governors composed of one representative from each member state. The Board of Governors, in turn, elect among themselves the 12 members of the Board of Directors and their deputy. Eight of the 12 members come from regional (Asia-Pacific) members while the others come from non-regional members.

INTRODUCTION

The Board of Governors also elect the bank's President who is the chairperson of the Board of Directors and manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and because Japan is one of the largest shareholders of the bank, the President has always been Japanese. The current President is Haruhiko Kuroda, who succeeded Tadao Chino in 2005. The headquarters of the bank is at 6 ADB Avenue, Mandaluyong City, Metro Manila, Philippines, and it has representative offices around the world. The bank employs approximately 2,400 people, coming from 55 of its 67 member countries, and with more than half of the staff being Filipino.

[edit] History
[edit] 1962-1972
ADB was originally conceived by some influential Japanese who formulated a "private plan" for a regional development bank in 1962, which was later endorsed by the government. The Japanese felt that its interest in Asia was not served by the World Bank and wanted to establish a bank in which Japan was institutionally advantaged. Once the ADB was founded in 1966, Japan took a prominent position in the bank; it received the presidency and some other crucial "reserve positions" such as the director of the administration department. By the end of 1972, Japan contributed $173.7 million (22.6 percent of the total) to the ordinary capital resources and $122.6 million (59.6 percent of the total) to the special funds. In contrast, the United States contributed only $1.25 million for the special fund.[2] The ADB served Japan's economic interests because its loans went largely to Indonesia, Thailand, Malaysia, South Korea and the Philippines, the countries with which Japan had crucial trading ties; these nations accounted for 78.48 percent of the total ADB loans in 1967-72. Moreover, Japan received tangible benefits, 41.67 percent of the total procurements in 1967-76. Japan tied its special funds contributions to its preferred sectors and regions and procurements of its goods and services, as reflected in its $100 million donation for the Agricultural Special Fund in April 1968.[2] Takeshi Watanabe served as the first ADB president from 1966 to 1972.

[edit] 1972-1986
Japan's share of cumulative contributions increased from 30.4 percent in 1972 to 35.5 percent in 1981 and 41.9 percent in 1986. In addition, Japan was a crucial source of ADB borrowing, 29.4 percent (out of $6,729.1 million) in 1973-86, compared to 45.1 percent from Europe and 12.9 percent from the United States. Japanese presidents Inoue Shiro (197276) and Yoshida Taroichi (197681) took the spotlight. Fujioka Masao, the fourth president (198190), adopted an assertive leadership style. He announced an ambitious plan to expand the ADB into a highimpact development agency. His plan and banking philosophy led to increasing friction with the U.S. directors, with open criticism from the Americans at the 1985 annual meeting.[2]

INTRODUCTION

During this period there was a strong parallel institutional tie between the ADB and the Japanese Ministry of Finance, particularly the International Finance Bureau (IFB).

[edit] Since 1986

Its share of cumulative contributions increased from 41.9 percent in 1986 to 50.0 per- cent in 1993. In addition, Japan has been a crucial lender to the ADB, 30.4 percent of the total in 198793, compared to 39.8 percent from Europe and 11.7 percent from the United States. However, different from the previous period, Japan has become more assertive since the mid 1980s. Japan's plan was to use the ADB as a conduit for recycling its huge surplus capital and a "catalyst" for attracting private Japanese capital to the region. After the 1985 Plaza Accord, Japanese manufacturers were pushed by high yen to move to Southeast Asia. The ADB played a role in channeling Japanese private capital to Asia by improving local infrastructure.[2] The ADB also committed itself to increasing loans for social issues such as education, health and population, urban development and environment, to 40 percent of its total loans from around 30 percent at the time.[2]

Purpose, Functions, Membership

Article 1 PURPOSE The purpose of the Bank shall be to foster economic growth and co-operation in the region of Asia and the Far East (hereinafter referred to as the "region") and to contribute to the acceleration of the process of economic development of the developing member countries in the region, collectively and individually. Wherever used in this Agreement, the terms "region of Asia and the Far East" and "region" shall comprise the territories of Asia and the Far East included in the Terms of Reference of the United Nations Economic Commission for Asia and the Far East. Article 2 FUNCTIONS To fulfill its purpose, the Bank shall have the following functions: i. ii. to promote investment in the region of public and private capital for development purposes; to utilize the resources at its disposal for financing development of the developing member countries in the region, giving priority to those regional, sub-regional as well as national projects and programmes which will contribute most effectively to the harmonious economic growth of the region as a whole, and having special regard to the needs of the smaller or less developed member countries in the region; to meet requests from members in the region to assist them in the coordination of their development policies and plans with a view to achieving better utilization of their resources, making their economies more complementary, and promoting the orderly expansion of their foreign trade, in particular, intra-regional trade;

iii.

INTRODUCTION
iv. v. to provide technical assistance for the preparation, financing and execution of development projects and programmes, including the formulation of specific project proposals; to co-operate, in such manner as the Bank may deem appropriate, within the terms of this Agreement, with the United Nations, its organs and subsidiary bodies including, in particular, the Economic Commission for Asia and the Far East, and with public international organizations and other international institutions, as well as national entities whether public or private, which are concerned with the investment of development funds in the region, and to interest such institutions and entities in new opportunities for investment and assistance; and to undertake such other activities and provide such other services as may advance its purpose. Article 3 MEMBERSHIP 1. Membership in the Bank shall be open to: (i) members and associate members of the United Nations Economic Commission for Asia and the Far East; and (ii) other regional countries and non-regional developed countries which are members of the United Nations or of any of its specialized agencies. 2. Countries eligible for membership under paragraph 1 of this Article which do not become members in accordance with Article 64 of this Agreement may be admitted, under such terms and conditions as the Bank may determine, to membership in the Bank upon the affirmative vote of two-thirds of the total number of Governors, representing not less than three-fourths of the total voting power of the members. 3. In the case of associate members of the United Nations Economic Commission for Asia and the Far East which are not responsible for the conduct of their international relations, application for membership in the Bank shall be presented by the member of the Bank responsible for the international relations of the applicant and accompanied by an undertaking by such member that, until the applicant itself assumes such responsibility, the member shall be responsible for all obligations that may be incurred by the applicant by reason of admission to membership in the Bank and enjoyment of the benefits of such membership. "Country" as used in this Agreement shall include a territory which is an associate member of the United Nations Economic Commission for Asia and the Far East.

vi.