Definition
The Asian Development Bank (ADB) is a regional development bank established in 1966 to promote social and economic growth in Asian and Pacific countries. It provides loans, technical assistance, and grants for a broad range of development activities. The ADB primarily assists its members and partners by providing loans, technical assistance and equity investments to promote development.
Phonetic
The phonetic pronunciation of “Asian Development Bank” is: Eh·zhehn Dih·veh·luhp·mehn·t Bangk
Key Takeaways
<ol><li>The Asian Development Bank is an international development finance institution dedicated to reducing poverty in Asia and the Pacific. It provides financial and technical assistance to its member countries for development projects and advisory services.</li><li>Established in 1966, ADB is comprised over 68 members, of which 49 are from the region. Its member countries primarily comprise numerous countries within Asia, along with several non-regional developed countries.</li><li>ADB’s focus extends to sectors that align with both the development and environmental needs of its member-areas. These include infrastructure, healthcare, financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.</li></ol>
Importance
The Asian Development Bank (ADB) is an important institution in the business and finance sector primarily due to its vital role in providing loans, grants, and expertise to its member countries for their economic, social, and overall development. Founded in 1966, it now comprises 68 members, including 49 from Asia and the Pacific region. ADB’s focus is on reducing poverty and creating sustainable growth, making it a critical player in fostering financial stability and growth in the Asia-Pacific region. Its actions help bolster economies, improve infrastructure, and promote investments, hence playing a significant role in shaping the regional economic landscape. In a broader context, ADB’s work contributes significantly to the United Nation’s Sustainable Development Goals to alleviate poverty and support sustainable development.
Explanation
The primary mission of the Asian Development Bank (ADB) is to enhance both social and economic development in Asia and the Pacific region. Established in 1966, the ADB aims to help developing member countries evolve into thriving, modern economies, capable of creating an improved quality of life for their people. To achieve this, it provides loans, technical assistance, grants, and equity investments to promote infrastructure, development, health care services, educational support, poverty reduction, and much more.The ADB uses its funds to undertake a vast range of projects that correspond with the specific needs and goals of each member country. For example, it funds road, railway, and port construction to enhance transportation and boost trade in member countries. It implements projects related to agricultural infrastructure and natural resources to increase productivity and sustainable livelihoods. What’s more, the ADB also focuses on financing the promotion of renewable energy, providing clean, affordable power sources. By carrying out these actions, the ADB helps facilitate economic growth and reduce poverty, leading to a more prosperous and stable region.
Examples
1. The Asian Development Bank (ADB) approved a loan of $100 million in 2016 to China Gas Holdings Ltd. to help the distribution of natural gas in about 20 cities in China. The loan was used to build infrastructure, such as pipelines and storage facilities, to expand the supply and usage of natural gas, contributing to the reduction of greenhouse emissions and pollution in China.2. In 2019, the Asian Development Bank and the Government of India signed a $200 million loan to upgrade rural roads in 34 districts of Maharashtra to improve road safety. The project aimed to connect rural communities with agricultural and trading centers and enhance the accessibility of health services and education for rural people in India.3. In response to the COVID-19 pandemic, the ADB approved a $20 billion expanded assistance package in 2020 to support its developing members’ efforts to fight and recover from the pandemic. The bank is delivering this package through close collaboration with its international development partners to allot financial resources to areas where they are most needed and can make a significant impact.
Frequently Asked Questions(FAQ)
What is the Asian Development Bank?
The Asian Development Bank (ADB) is a regional development bank established to facilitate economic growth in Asia. Headquartered in Manila, Philippines, it provides loans, grants, policy advice, and technical assistance to help developing member countries strengthen their economies.
When was the Asian Development Bank established?
The Asian Development Bank was established on December 19, 1966.
What is the main objective of the Asian Development Bank?
The main objective of the ADB is to promote social and economic development in Asia and the Pacific region, primarily by providing loans and grants for various development projects.
How many member countries does the Asian Development Bank have?
As of 2021, the Asian Development Bank is composed of 68 members, of which 49 are from the Asia and Pacific region, and 19 are from other parts of the globe.
Who can borrow from the Asian Development Bank?
The member countries of the Asian Development Bank, particularly the less developed ones, can borrow money from it. Public and private sector entities within these countries may also be eligible to borrow under certain circumstances.
What are some of the sectors that the Asian Development Bank focuses on?
The ADB focuses on several key sectors for development including: infrastructure, environment, education, healthcare, and finance sector development.
What is the source of funding for the Asian Development Bank?
The ADB’s funding comes from member contributions, retained earnings from its lending operations, and through the borrowing from international capital markets. It also receives funds from donor countries to provide low-interest loans and grants to its poorest member countries.
Does the Asian Development Bank provide grants?
Yes, the Asian Development Bank provides grants for development activities with a special focus on poverty reduction.
Related Finance Terms
- International Finance Corporation (IFC)
- Multilateral Development Bank
- Development Finance
- Asian Infrastructure Investment Bank
- Economic Development in Asia
