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Unit 30 : UNCTAD, IMF, World Bank and Asian Development Bank

As of December 31, 2004, ADB had 63 members consisting of 45 regional members, including Japan, Notes
Australia, and New Zealand, and 18 nonregional members, including the United States, Canada and
16 European countries. The regional members provided 63.2% of ADB’s capital and the nonregional
members provided 36.8% of its capital during the previous fiscal year. The membership of ADB
reflects the intention of the founders that, while its operations should be limited to the region, it
should incorporate the active participation and financial resources of developed nations outside the
region. The percentage of voting power in ADB’s affairs held by the respective members is related,
but is not directly proportional, to their capital subscriptions. As of December 31, 2004, the aggregate
voting power of the developed member countries, which include all nonregional members plus Japan,
Australia, and New Zealand, represented approximately 54.6% of the total. The members and their
respective voting power and subscriptions to ADB’s capital stock as of December 31, 2004 are set
forth in Appendix VII of the Financial Statements.
ADB’s primary activity is making loans to finance projects or programs located within the territories
of its developing member countries. Such activity is divided into ordinary operations and special
operations, for which separate financial statements are maintained. Ordinary operations are financed
from ordinary capital resources and special operations are financed from Special Funds resources,
most of which are contributed by members. Under the Charter, ADB’s ordinary capital resources and
the Special Funds resources must at all times be held and used entirely separately from each other.
In addition to its lending operations, ADB issues guarantees, makes equity investments and participates
in underwriting equity funds. ADB also extends technical assistance in the form of grants or loans for
project preparation and evaluation, development planning and other purposes. ADB also provides
policy dialogues and advisory services and mobilizes financial resources through its cofinancing
operations tapping official, commercial, and export credit sources to maximize the development impact
of its assistance. To complement ADB’s activities in development research and training, ADB has
established the ADB Institute, a subsidiary body of ADB, located in Tokyo, Japan.
Operational Policies
ADB is authorized under the Charter to make, participate in or guarantee loans to its developing
member countries or their governments, to any of their agencies or political subdivisions, and to
public or private enterprises operating within such countries, as well as to international or regional
entities concerned with economic development in the region. Such loans are made only for projects
or programs of high developmental priority. ADB provides financing to its borrowers to cover foreign
exchange expenditures incurred in a project and also finances local currency expenditures in certain
cases. ADB requires its borrowers to absorb exchange risks attributable to fluctuations in value of the
currencies which it has disbursed.
In evaluating the projects that it may finance, ADB considers such factors as economic, social,
environmental, technical, institutional and financial feasibility, effect on the general development
activity of the country concerned, contribution to economic development, capacity of the borrowing
country to service additional external debt, effect on domestic savings, balance of payments effects,
impact of new technologies on productivity, and expansion of employment opportunities. In response
to the changing needs and imperatives of the developing member countries and the international
environment, ADB has declared poverty reduction to be its overarching goal. ADB supports this goal
by providing loans and grants to promote sustainable economic growth, social development, and
good governance. To broaden and deepen the impact of its interventions, ADB promotes the role of
the private sector in development, supports regional cooperation and integration, and addresses
environmental sustainability in all its loans.
Goal
ADB’s overarching goal is to reduce poverty in Asia and the Pacific. It helps improve the quality of
people’s lives by providing loans and technical assistance for a broad range of development activities.
ADB is a multilateral development finance institution that engages in mostly public sector lending
for development purposes in its developing member countries. ADB’s clients are its member
governments, who are also its shareholders.

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