The Asian Development Bank (ADB) is a regional bank aimed at fostering social and economic development in Asia. The history of the Asian Development Bank is that of an evolving institution, constantly shifting focus towards new problems and expanding its role in regional affairs.
Founding and Early History
The bank was founded in the early 1960s to foster cooperation among Asian countries and spur economic growth in the region. In 1963, the United Nations Commission for Asia and the Far East held its first Ministerial Conference on Asian Economic Cooperation, where a resolution passed for the creation of this regional bank. The ADB was officially created two years later in Manila, the capital of the Philippines with 31 member states and Takeshi Watanabe residing as president.
OPEC Oil Crisis and Expanding Role
Asia, along with the rest of the world, suffered a severe economic downturn due to the OPEC oil crisis in 1973. The Asian Development Bank responded by increasing funding towards the development of domestic energy sources and infrastructure, to cope with the current shock and mitigate against future instability in the energy markets. The resources of the Asian Development Bank began to expand during this time period to include increased co-financing and management of other organizational funds. The Asian Development Bank issued its first bond in 1973 worth $16.7 million in Japan.
The ADB also made strides to address the needs of developing nations. In 1974, it established the Asian Development Fund, a program designed to provide poorer nations in the region with safe, low-interest loans to aid in their economic and social development. The positive impacts of the Asian Development Fund on developing economies in Asia came to quick fruition, as some recipient countries’ reliance on the bank’s assistance ended within a decade.
Push for Social Development and Cooperation with NGOs
In the 1980s, the Asian Development Bank shifted its focus away from economic development to initiate support of social development in Asia. It began financing programs related to the environment, healthcare, urban development and women’s issues. In its 1987 policy paper, the Asian Development Bank established a framework for cooperation between the bank and various non-government organizations (NGOs) with the aim of increasing efficacy of social development efforts in the region. During the decade of the 1980s, the Asian Development Bank also expanded its support for infrastructure projects with particular emphasis on energy production, as memories of the OPEC oil crisis were still fresh in the minds of regional policymakers.
Poverty Reduction and the Asian Financial Crisis
With the end of the Cold War, the Asian Development Bank added several new central Asian countries as member states. Fears that the benefits of economic development were bypassing those most in need prompted the ADB to focus its efforts on poverty reduction in the mid-1990s. In 1995, the Asian Development Bank instituted a policy to ensure that 100 percent of its developmental assistance from the was directed to decreasing poverty.
The late 1990s were a dark period for Asia, which was hit hard by the Asian Financial Crisis of 1997. The ADB’s response was a shift towards aiding the poor and creating a social safety net for those hit hardest by the crisis. By 1999, poverty reduction became the top priority of the ADB.
Response to Humanitarian Crises
In the 2000s, the Asian Development Bank expanded its response to the humanitarian crisis in Asia. Following the Millennium Summit of the United Nations, the World Bank established the Millennium Development goals, which include the elimination of hunger and extreme poverty, promotion of universal primary education, reduction in child mortality, gender equality, combating disease, ensuring environmental sustainability, improving maternal health and establishing a global cooperative effort towards development. The ADB committed to helping its member states achieve each of these goals.
In 2003, Asia was struck with a severe acute respiratory syndrome epidemic, illustrating the need for regional cooperation to combat infectious diseases. The Asian Development Bank provided financial support for efforts to combat HIV and the Avian Flu in the region. In December 2004, the Indian Ocean tsunami caused widespread devastation across India, Indonesia, the Maldives and Sri Lanka. The ADB responded to the disaster by providing over $775 million to recovery efforts. In 2005, the ADB mobilized almost $400 million to help the victims of an earthquake in Pakistan.
The history of the Asian Development Bank is one of constant evolution. It was established with open-ended goals and forced to adapt to new challenges as they arose. In the 1970s, the OPEC Oil Crisis forced the bank to invest in energy infrastructure. The financial crisis in 1997 prompted a focus on poverty reduction. Most recently, the natural disasters in the early 2000s catapulted the ADB into disaster recovery. In its eventful 55-year history, the one constant of the Asian Development Bank is its willingness to assume a central role to address regional challenges.
– Karl Haider