How Asian is the ADB?

The Asian Development Bank (ADB) held its 46th annual Board of Governors' meeting in Greater NOIDA, Delhi, during May 2-5, 2013. The Board of Governors is the bank's highest policy-making body, which meets annually.A As an Asian bank, the least one expects is that it would be truly Asian in character. Out of ADB's 67 members, 19 are non-regional, including the United States of America (USA), Canada and several European countries. The United States holds 15.57% capital stock and 12.76% voting power as of December 2012. Being an ADB member country makes firms from non-regional countries eligible to bid on ADB-generated business opportunities.

The office of the US Executive Director (OUSED) at the ADB represents the United States at the Board of Directors of the ADB. Just as for other non-regional members, the ADB's project lending and grant activities to its developing member countries generate procurement and consulting opportunities for qualified US firms and individuals. In 2011, reportedly US companies won more than USD 634 million in procurement contracts. Therefore, the office, in particular through the US Foreign Commercial Service (FCS-ADB), responds to queries and requests for assistance from US firms and/or their local representatives for business information on bank-funded projects/investments.

As per the ADB Annual Report 2012, most of Asia's development investment needs will have to come from the private sector, and it has expressly stated to have more clearly defined its financing role, seeking to leverage resources with greater efficiency through private sector involvement (PSD), public�private partnerships and co-financing.

For example, the 100% Reliance-owned Dahanu Solar Power Project (2011) near Dhursar village in Jaisalmer District of Rajasthan was envisaged with financial support from the US Exim Bank and the photovoltaic plants were to be supplied by a US company. While the ADB loan amounted to USD 48 million, the commercial co-financing amount from US firms was to the tune of USD 65 million. Meanwhile, the Rajasthan state government made land available on a 60-year lease.

This is also reflected in the ADB Private Sector Development (PSD) Strategy (2000) and its policy document PSD: A Revised Strategic Framework (2006). ADB's Strategy 2020 also prescribes that 50% of the bank's annual operation support PSD. The bank supports policy reforms to create a better environment for private sector operations. It has a general PPP operational plan and region-specific initiatives, such as the Pacific Private Sector Development Initiative, 2012. Meanwhile, ADB's own reports released at the NOIDA AGM point to the fact that the public sector in the region is failing in delivery to peoples in Asia-Pacific.

Instead of helping support corrections in the public sector itself, the bank's now familiar prescription is to pave way for private companies in those sectors. Meanwhile, the small Asian privates � the countless unorganised and informal sector enterprises and individuals, need to be encouraged rather than the big multinational players that have come to crowd the term 'private sector'.

Set up in 1966, the ADB provides billions of US dollars in loans to its primary borrowers � Developing Member Countries (DMCs). This allows it to have enormous influence over its DMCs' development objectives. For the Asia-Pacific region, the ADB is the third largest donor after the Japanese government and the World Bank. India is the biggest borrower of ADB, having received USD 2.4 billion in loans in 2012.

Yet 'development' in India has long become a dirty word. Not many of us may know the bank and how it affects our everyday lives and larger landscapes in which we and other Asians exist. But several people's groups, movements and popular campaigns in the region are working to expose the not so benign aspects of the development model promoted by the ADB. The genuine grievances of people's affected by development projects are yet to be addressed.

(The writer is a legal researcher working on Asian issues and based in Delhi).