Asian Development Bank triples capital base to $165 billion
KATHMANDU: Asian Development Bank’s (ADB) Board of Governors has agreed to triple ADB’s capital base from $55 billion to $165 billion, giving it much-needed resources to respond to the global economic crisis and to the longer term development needs of the Asia and the Pacific region.
Voting by ADB’s 67 member countries on a fifth general capital increase closed on April 29, with an overwhelming majority of members endorsing it. The 200 per cent increase is ADB’s largest, and the first since ADB increased its capital by 100 per cent in 1994.
“This substantial increase is a resounding vote of confidence from our shareholders for what we can achieve as a premier development partner in the region,” said ADB president Haruhiko Kuroda. The capital increase decision comes two days before ADB begins its 42nd Annual Meeting in Bali, Indonesia, from May 2 to 5.
The 200 per cent increase allows ADB to substantially increase its support to countries affected by the global downturn, enabling ADB to provide an additional $10 billion from its Ordinary Capital Resources over the next few years for crisis-related assistance.
“We must do all we can to prevent the reversal of hard won gains for our region in social and economic development, and in poverty reduction,” Kuroda said.
ADB estimates that the crisis will keep more than 60 million people in developing Asia trapped in absolute poverty this year, and nearly 100 million more in 2010.
The capital increase will also give ADB the financial capability to pursue longer term development priorities in the region. Even before the global economic crisis, funding needs for the region were huge.
ADB’s developing member countries face an estimated resource gap of $53 billion a year for meeting the Millennium Development Goals (MDGs).
A quarter of the total population of ADB’s developing member countries have no access to electricity, some have piped water access ratio of less than 20 per cent while access to improved sanitation is eight per cent in some countries. In addition, more than 30 per cent of the rural populations in the developing countries lack access to all-weather roads.