What is the Asian Development Bank?

Established in 1966 in the Philippines, Asian Development Bank is the first regional bank of Asia that was developed under the dominance of Japan. The main role of the Asian Development Bank is to finance commercial projects across the member states based in Asia. There were 68 member states registered with the ADB in 2019. This includes a total of 49 banks from the same region, while the rest of them are from international territories.

The members that belong to Asia and are part of the Asian Development Bank are considered the regional members while other members that are from international countries are included in the non-regional member group. The regional members are considered the primary beneficiaries of all sorts of financial and other programs introduced by the ADB.

International members, on the other hand, contribute Capital to the ADB. The total votes handled by the member will be equal to the shares of the company the member holds. Recently, Japan happens to enjoy the dominating power with over 15.5% ownership of the bank. The country has the highest number of shares in the Asian Development Bank.

Goals of the Bank

The Asian Development Bank was established to finance industrial projects in Asia. It mainly focuses on the important development aspects, including health, education, energy, finance sector, transport, climate and weather changes, and more. The goal of the bank is in line with the World’s Bank objectives.

The main objective of the bank is to promote the economic development of the businesses by financing certain projects in the health, education, and health Industry. As mentioned earlier, the bank focuses on improving the infrastructure in the countries. There are mainly three categories that the ADB covers under its financial programs, including:

• Sovereign financing
• Co-financing
• Private financing

The bank provides funds to the government so that they can finance certain health, education, and other such programs. The bank could offer cash either as a loan or grant. The Asian Development Bank employs a broad Range of financial product in order to conduct different financial activities. The most common examples include local currency loans, LIBOR-based loans, MFFs, and more. The bank generates a significant amount of capital from the international bond markets. The main objective of the bank is to provide financial assistance to the member countries via technical assistance, loans, grants, and investments.

The United States and Japan are two of the largest contributors of capital for the Asian Development Bank. Japan is the dominating country with the majority of the shares. It is the regional member of the bank, while the United States is counted in the non-regional members. One major quality that sets the regional members apart from other participants is their involvement in the financial activities the ADB conducts. These banks tend to work with the World Bank as well as the International Monetary Fund, helping the member banks grow. They contribute capital and finances to the Asian countries.