This article is authored by Magaonkar Revati, a student pursuing BA LLB(Hons.) from Dayanand College of Law. This article elaborately deals with work methods and activities done by the Asian Development Bank (ADB) and its contribution to the economic development of its member countries.

Introduction

The Asian Development Bank (ADB) was founded in 1966, its headquarters are in the Philippines and Manila. ADB’s primary mission and goals are to encourage the growth and development of cooperation among all the countries located in the Asia-Pacific region. ADB started its functioning on 1st January 1967. When it comes to the chairmanship, it is always given to the Japanese and three deputy chairmen belong to the USA, Asia, and Europe. Takehiko Nakao from Japan is the current president of ADB. It has been one of the reasons behind the many projects in the region and it raises the capital with the help of the international Bond Market (also known as credit market, debt market that issues debt securities). It has reliance upon its member contributions, any retained earnings like interest from lending money, and last but not least repayment of loans for the funding of the organization. Asian Development Bank’s two big shareholders are the United Nations and Japan.

Role of the Asian Development Bank

The ADB is an assistance provider for its developing member countries, public-private partnerships, and the private sector by providing grants, loans, technical assistance, and equity investment to promote development. It also provides facilities of polity dialogue and gives advisory services, regularly. It also uses co-financing operations that utilize several commercial, official and expert credit sources while assisting its members.

Its majority of members are from the Asia-Pacific region. The members of the ADB enjoy the right to construction projects which are supported by bank loans. In its twenty-eight years of functioning, the bank has become a major catalyst in promoting the development of the extremely popular and fastest-growing region in the world today. 

Functional Role of Asian Development Bank

• As a multilateral finance institution of development, it provides loans, grants and technical assistance to its clients, who are also its member countries. The member countries are also the shareholders of ADB.
• It provides and builds up loans and equity investment for its developing member countries’ social and economic progress and growth. 
• It encourages public and private capital investment for development.
• It helps in the execution of developmental projects, advisory, and program services by providing technical assistance.
• It responds to the requests for assistance in adjusting developmental plans and policies. 
• It has raised the Asian Development fund for providing loans to its member countries with concessions on the interest rate.
• Its operations are structured to support its three complementary agendas including economic growth, environmentally sustainable growth, and regional unification.
• It uses its rare resources in the comparative strength areas. 
• Its areas of work are transport, information and communication, urban development, infrastructure, environment, finance sector development, regional cooperation and integration, education, health, agriculture and natural resources, and public sector management.
• It assists the private enterprises of the developing member countries by providing loans, equity investment, etc.

Overview of Asian Development Bank’s (ADB) Recent Law and Policy Reform Activities

ADB has initiated a step towards supporting the legal and justice sector from 1993, in previous years its main focus was on putting the legal fireworks into a place for a market economy and building capacity amongst the judges and public prosecutors.

It has now included legal support to poor people to get access to justice and to participate in public decision-making. The bank’s interference is in the four areas that include, institutional and legal reforms, transparency and diffusion of information, institutional training, and capacity building and research. 

Recent laws and policy reform activities of ADB are given as follows:

Environmental Governance and the Courts in Asia: An Asian Judges Network on the Environment

In this reform, the chief justices and judges of Asia have recognized that they have many things to learn and gain by exchanging thoughts and experiences with the judges across the various countries. They say that their professional tie-ups and connection with different associate or fellow judges are often strong as they look towards their shared professional challenges.

It has recognized different and unique leadership roles they play in the judiciary for the enforcement of environmental chains. It is the summary of ADB’s works at the Asian courts at regional or subordinate levels that are Southeast and South Asia, national-level it includes Indonesia, Pakistan, Malaysia, Philippines.

Energy Water Supply Services: Improving Efficiency through Policy and Regulation

In this reform, the policymakers and regulators have played a significant role in enhancing the water efficiency and services of energy supply. Water conservation and energy efficiency both have equal importance as according to delivering electricity and drinking water. 

The capacity of the energy can be increased affordably by reducing the rate of consumer electricity demand and the network access can be increased and expanded by reinvesting the gains from efficiency, and by contributing to energy security and detrimental environmental impacts to improve sustainability. 

Conserving water can help control expenses, improve service delivery and the available amount of water can be increased without bearing prohibitive costs. Policymakers have played an important role in both, enhancing the water efficiency and services of energy supply.

Empowerment of people after Natural Disasters: Lessons from the post-tsunami legal assistance, Governance, and Anti-corruption project in Srilanka

This reform has dealt with the empowerment of people after a natural disaster by providing them access to rights and their entitlement permits them to reconstruct their livelihoods or legal base. Because of the climatic changes, Asia and the Pacific are deemed to face more natural disasters in the coming decades. 

So due to the experience of natural calamities, the countries in Asia and Pacific region will know the best about how and in which manner they can help and support other countries facing natural disasters if they consider innovative ways to help people in reconstructing and fulfilling all their needs and potential. 

Pro-poor Policy and Regulatory Reforms of Water and Energy Supply

In this policy reform, it has been described how a pro-poor approach and goes beyond the macro level. 

According to researchers, Asia Pacific is the home of more than one and a half billion people. These people’s service a day on 147 rupees ($2.00)  and 903 million people are living below the poverty line surviving a day on 91.30 rupees ($1.25).  More than 406 million people including in urban and rural areas don’t have access to an adequate water supply. More than 1.9 million people don’t have basic amenities and sanitation facilities in their areas and nearly 1 billion people are living without electricity in the Asia Pacific.

Asian Judges: Green Courts and Tribunals and Environmental Justice

Asian Pacific region has experienced a dramatic environmental change from the last ten to twenty years. As the developing member countries adopted environmental policy and regulatory framework but still so many environmental challenges have not been properly addressed in it. 

The developing member countries have accepted new and amended environmental international laws but these have not yet been properly applied or reflected in their respective national laws or have not translated in implementing rules, regulations at different levels.

Effective Regulation of Water and Energy Infrastructure Services: small island countries

This reform describes ADB’s extended technical aiding program that examines water and electricity regulatory reforms experiences or infrastructural services in small island developing member countries.

These countries face issues like the regulation of basic water and energy services that vary from other countries. Due to this in earlier years many renowned scholars and researchers have paid attention to the factors of regulation of water and energy services that will take effect in Asian countries. 

Therefore, it is said that the studies and research are focused on only theoretical and policy level and small island countries or clean energy, pro-poor or consumer protection issues they face are out of the focus.

Effective Regulation of Water and Energy Infrastructure Services

Here, the analysis of the different developing member countries’ experiences of regulations have been described comparatively and it also included practical improvements to infrastructure and regulation of utility service.

Effective regulation of available and utility services to the customers is very important for efficient delivery. It is also important to keep the costs or rate of the products lower which can attract the investment that will help in infrastructural development. 

ADB is the major player in infrastructural development in the region of Asia Pacific. It has given more stress to the need for establishing the institutional and regulatory framework, underlying policy. 

Countering Money Laundering and Financing of Terrorism: implementing ADB’s policy

Such activities cause a threat to the international market and its security and create barriers to economic development. 

According to some calculations, the money laundering rate of the gross domestic product is about three to five percent annually. From these figures, it can be said that the challenges faced by the government and international institutions are looking forward to addressing the criminal and terrorism-related funds through the finance sector. 

However, the protecting committee of the global financial system has been very active in its efforts to eliminate the occurrence of money laundering and terrorism activities in finance.

Asian Development Bank’s evolving approach under its law and policy reform 

ADB strengthens the country focused approach by using the country’s partnership strategy as it’s the main platform that explains customized support, promoting the use of innovative technologies, and delivering integrated solutions by the amalgamation of expertise across a range of sectors and themes, through a mixture of public and private sectors.

• Empowerment of people after natural disasters: 

This law and policy reform of ADB has assisted more than 30,000 people who will provide such experience. It has also served or worked as the precedent for many other same governance interventions in assistance of ADB to Pakistan after the 2005’s earthquake which assisted about 27,000 people in it.

Because of experience, it suggests how to resolve the issues that will come out of the natural disasters, so it should be addressed and considered well before any natural disasters hits.

• Effective Regulation of Water and Energy Infrastructure Services: 

These frameworks for regulations need to be handled very effectively for the improvement of quality and quantity of the basic structure of the required economy for functioning and delivery of the utility services.

• Countering Money Laundering and Financing of Terrorism: 

The protecting committee of the global financial system has been more active in its efforts for eliminating the occurrence of money laundering and terrorism activities in finance. These activities play a very effective role in causing a threat to the international market and its security and create barriers to economic development. 

Enhancing the Capacity of the Judiciary and Government Lawyers

Legal education and training of the judicial system and public prosecutors/government lawyers belonging to developing member countries have always been important in ADB’s law reform activities. In the year 2000, these activities were continued under ongoing projects in Mongolia, Vietnam, and the South Pacific. 

The execution of technical assistance in the Maldives was the first time when the establishment of the first legal and judicial education and training institute in the Maldives was seen. At that time several sessions for giving training to judges were organized and the work of finalizing the syllabus for courses in legal and judicial education began. 

The approval given by the corporate and financial governance loan package for Nepal includes the support for establishing a National Judicial Academy that will serve the requirements and needs of not only judicial but also government and private lawyers. Here ADB stated that it will not only support in developing syllabus or curriculum and the training of the faculty but also in constructing the academy’s structure under a loan.

Judicial Independence

The main point in legal sector reform is the basic and real structure of legal institutions and the rules which operate the functioning of various parts of the government. It can be said that the main step or point in the success of any reform is having an effective independent judiciary system.  It is the necessary and most acknowledged factor in forming an impartial, reliable and efficient judiciary. 

It is clear that without an independent judiciary there will be no rule of law and if there is no rule of law, the conditions will not be in place for efficiently operating the open economy system and also to ensure legal security and foreseeability. When there is no independence given to the judicial system it gets misused by the different authorities and politicians by their powers and if there is no independent judiciary no proper justice will be delivered. This may often require working in a broad institutional reference and ADB has come up with these terms in its one of the most recent projects.

Issues in Legal and Judicial Reform

The systemic issues and their approach appropriately and comprehensively deals with those issues that have as it focuses on institutional capabilities of the legal system, it includes the judiciary, government administration, and regulatory agencies. It invites greater attention and judicial training and government officials staffing legal and regulatory institutions and motivating/incentive systems where they function. 

Its approach is implied by focusing on the resources that have been made available to the courts and the regulatory agencies, these resources are utilized on efficiency and transparency, and accountability of these agencies to the public. These were the conclusions that were reached being a part of studies that were conducted in 1999 in favor of technical assistance to the government of Pakistan regarding legal and judicial reform. 

In 2000, as a part of its support for technical assistance to the government of Pakistan, ADB approved technical assistance for capacity building for reforms and aviator testing some of the reform proposals.

Combating Money Laundering

In the developmental process, the private sector and market play a vital and central role in the development process by responding to the challenges for the mobilization of resources to address Asia’s increasingly complex development plan. One of the biggest threats to the operations and stability of the financial system of the nation and the ability of the private sector to act consciously for the development process for money laundering. 

Adding to the effects of the finance sector it is increasingly endangering the countries to so many other kinds of crimes such as fraud, drug trafficking, and corruption. It automatically leads to poor governance and evades state institutions and their legality.

To fight this serious threat to economic development, ADB started regional technical assistance work to serve the Financial Action Task Force and the Asia Pacific group of money laundering for the battle with money laundering and also it aimed to focus on the developing member countries to meet their international standards, this was started in the year 2000. This reform will help improve the transparency within the financial institutions and to establish a powerful accountability system.

Insolvency and Secured Transactions

During the period of the financial emergency/crisis, ADB has started guiding the regional initiatives in insolvency and secured transactions of law reforms. Looking towards its initiative in the year 2000 from starting as it carried out an exhaustive analysis of the insolvency laws in the region, ADB has implemented technical assistance to train the members of Bar and Judiciary of Thailand for the reorganization of business and insolvency laws. 

The national insolvency regime has contributed to preventing the crisis strongly by providing a much-needed effective and foreseeable legal framework to assist the financial difficulties faced by the firm in trouble with financial difficulties of the corporate sector that resulted from the economic crisis. 

The same training was also provided to the judiciary of the Philippines from the transfer of jurisdiction to insolvency cases, from security and exchange commission to the courts.

Pro-Poor Judicial Reform

From the reference of the annual report of 2000, the law and policy reform started its work on regional technical assistance for empowering pro-poor judicial reform efforts across Asia. Though the term pro-poor is used, its solid or concrete definition is still not available for pro-poor law and development work in the context of Asia. 

Many different components have been added in the pro-poor existing law and policy reform work such as legal aid, decentralization, alternative dispute resolution, and legal information. 

This study was implemented in the year 2001 mainly focusing on the questions of having access to justice across Asia and for identifying its available tools and finding solutions to the region’s most risk-bearing people. 

In 2000, the reform of efficient technical assistance continued its work of surveying legal literacy in the most needed developing member countries and its relevance in development projects.

Role of Legal Empowerment in Advancing Good Governance and Poverty

• Legal empowerment helps to reduce poverty and advance good governance in both essential and clever ways and also at the same time in some cases.
• Poverty reduction must not be considered as increasing income or the material circumstances but having the participation of them in the decision making where the question is relating to the lives of poor and vulnerable people.
• Having their participation in the decision-making of poverty is very important because it will directly affect their lives mainly and it will directly contribute to good governance.
• Legal empowerment helps in advancing good governance, reduction of poverty, and other development priorities by overcoming the limitation on access to justice and equal participation in governance.
• Providing basic knowledge of law and rights to be skilled and much-needed tools so that they can also participate in legal and other public decision-making processes confidently. 
• It provides vulnerable and disadvantaged people with the right to have a general awareness of law and rights.
• To have one’s legal rights and how to use and enforce them properly.
• Helping to improve knowledge, attitudes, behavior, performance standards of government officials to be cooperative while interacting with pro-poor people.

Lack of Economic Independence

It places so many limitations on citizens in accessing justice, resource allocation, participation in decision making, and some other processes of law and governance. Mostly those people who are largely dependent on their husbands, employers, or any other persons face more issues relating to maintenance and while exercising their rights.

Poverty can keep going by itself, as it can prevent people from access to government services which are for reducing poverty. Such as, some people are unable to have a legal status that can help them in improving their lives.

During 1997-98, the regional economic crisis and its outcome placed limitations on access to justice and participation in governance in the area of East and Southeast Asia. Because of this crisis, its effects were placed in the present and future for having access to available government resources for improving access to justice and also for some other services. 

Contribution of Asian Development Bank

The Association of Southeast Asian Nations (ASEAN) was established in the year of 1967 in Bangkok, it was established by the five original member countries that are, Malaysia, Philippines, Indonesia, Singapore, and Thailand. This ASEAN region has a population of over 560 million in a total area of 4.5 million square kilometers. 

The ASEAN declaration states that its main objective is to increase economic growth, cultural development, and social progress in the region; while promoting regional peace and stability by showing respect for rule of law and justice in the relations among states in the region and by giving respect to the principles of the United Nations Charter.

The achievement of their vision has implanted three ASEAN countries that are the ASIN Security Community, the ASEAN Economic Community (AEC), and the ASEAN Socio-cultural Community.

Contribution of ADB to AEC

The ADB in the year of 2009 made its contribution by its total 407 projects by implementing them in the ASEAN member states that amounted to about $11.6 billion basin on ADB’s in process and pipeline projects in the Southeast region Asia Department. 

Contribution of ADB in India

India has experienced rapid growth in the earlier decades and has become the third-largest economy in the world. It all happened because of the major economic policy reform that helped in reducing poverty from 2004. In 1966 India became the founding member of the ADB which now has become the fourth-largest shareholder in the ADB. 

The bank is helping the country in becoming a $5 trillion economy by the year 2025, India has been the topmost borrowing member since 2010. ADB’s strategic policy for the year 2018-2022 aims to speed up the country’s economic development. This policy is focusing on creating more job opportunities by structuring industrial competition, enlarging the infrastructures, and serving the lower-income states. 

ADB not only helps India in increasing economic capacity but also adds significance to it by creating the combination of project finance, capacity development, and knowledge services.

Contribution of ADB to AEC

AEC has its four main and important characteristics, 17 core elements, and 154 actions. ASEAN as a single market and its base production had the biggest number of actions that were supported by projects of ADB. 

ASEAN is a highly competitive economic region whose number of actions are second-highest supported by the ADB’s projects, including Infrastructure development ex. land and transport, development of Singapore-Kunming rail link, etc.

Areas not covered under ADB

• Technology
• Intellectual property
• Higher-income individuals
• Companies and corporations

Success rate of the Asian Development Bank

The ADB has the most powerful success rate in almost all projects and sectors, as its main focus is on infrastructure development, technical assistance in various sectors, economic development, education and training, energy, etc. 

Successful projects in the energy sector 2003-2005 

In this project, condensed reference on ‘successful’ ADB projects on the energy sector as it appreciated by the independent evaluation department, its aim behind the project was as follows:

1. construct a 240-megawatt (MW) run-of-river hydropower scheme along the Yuanshui River Lingjintan in Hunan province.
2. Support the institutional development of the Hunan Electric Power company and tariff policy and energy conservation reforms in Hunan province.

Success rate in the  finance projects sector 

In the years from 2003-2006 projects of the finance sector changed or consisted of the meaning of the word ‘successful’, as it was estimated by the independent evaluation department.

Success rate in the health, water supply, sanitation, waste management sector

The success rate in the years from 2001-2006 in the above-mentioned sector during this period the ADB again condensed the reference of ‘successful’.

Scope of development and way forward

The ADB in its 2030 strategy aims, imagines, or envisages for the prosperous, flexible, and sustainable, strong Asia-Pacific, by lowering the foremost poverty in the region. Regardless of the other successes in the region still it remains as a support system and home to a large number of people in the world and 330 million poor people are passing a day on less than 138.74 rupees and $1.90. 

Hence ADB with its other member countries, individual experts, financial organizations, and government focus on providing projects to developing member countries for constructing a great impact on the economic and development factor.

ADB has a huge scope of development as it has always been supporting and helping hand to its developing member countries by its various projects relating to infrastructural development, technical assistance in various subjects so that the member countries can also be developed in all ways.

Conclusion

Therefore, ADB in itself is a social development organization that is working to reduce poverty in the Asia-Pacific region by developing the country by increasing its economic growth. As we have seen, the ADB has always been helpful and successful in its many initiatives by providing technical assistance, funding, and loans to its developing member countries. It has done commendable work in its functioning years. 

References

• https://www.adb.org/publications/contribution-adb-asean-economic-community-blueprint
• https://data.adb.org/dataset/success-rates-database
• https://www.adb.org/documents/successful-projects-energy-sector-2003-2005
• https://www.adb.org/documents/successful-projects-finance-sector-2003-2006
• https://www.adb.org/documents/successful-projects-health-and-water-supply-sanitation-and-waste-management-sectors-2001
• https://www.adb.org/countries/india/overview#:~:text=ADB’s%20current%20portfolio%20in%20India,and%20agriculture%20and%20natural%20resources

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