The development journey of Asia and the Pacific region in the last 50 years is interesting on many counts. During this half century period, the whole region has teetered on the brink of an uncertain future through events of turmoil and transition. Those include colonial rule, wars and bloodshed to independence. During the five decades, the Asian countries have also faced series of natural and man-made disasters. But cooperation among themselves has changed the landscape and made the whole region resilient. One of the institutional catalysts of this change is Asian Development Bank (ADB).
Beginning its journey in 1966 with the modest ambition to support the regional countries in their efforts to improve their food output, ADB through its agendas and activities eventually got itself engaged in the wider spheres of poverty reduction and regional cooperation. Thus, the history of ADB is also a tale of Asia-Pacific's development journey. This episode is captured in the book titled 'Banking on the Future of Asia and the Pacific: 50 years of the Asian Development Bank.'
On the occasion of the 50th annual conference of the board of governors of the regional bank in Japan's port city of Yokohama, in the first week of May, the book on ADB's history was launched formally. Written by Peter McCawley, a development economist and a professor of Australian National University (ANU), the book is a compilation of the stories of the making of ADB and its journey in the last 50 years along with analyses of regional geo-political developments.
Takehiko Nakao, ADB's current and ninth president, has played a critical role in writing and publishing the book. "He wanted to make the book not just about the history of ADB, but also about how Asian countries have achieved growth and development in the face of various difficulties, and how international circumstances have affected Asia." (p-xvii) It took more than four years of hectic efforts to carry out research and documentation to prepare the draft which also went through extensive reviews and editing before finalisation.
FIVE DECADES: The book is divided into 15 chapters to present the development of ADB and its programmes across the region in the last five decades. The first decade was basically the decade of formulation, when the regional bank just started to provide loans and assistance on a limited scale. In 1968, the regional bank approved $5 million in loan for Thailand while the bank's first agricultural infrastructure loan was provided to Indonesia in 1969. "Initially, ADB support for agriculture was largely for strengthening food security; later it would be for promoting rural employment." (P-80)
By going through the book, many interesting things could be known. For instance, it was in the 1950s when Sri Lanka (then Ceylon) was considered as a model of a developing country with functional democracy, effective institutions and vibrant economic growth. Mentioning these, the book also adds: "On a visit to Colombo in the early 1950s, Lee Kuan Yew, later Prime Minister of Singapore, commented that the capital was orderly, clean and prosperous and that he wished Singapore could achieve the same standard." (p-23)
One of the best aspects of the book is that it critically examines the role of the bank in different crises. The Asian financial crisis in 1997 is the most important. The crisis, originating from huge inflows of 'hot money' to the East Asian counties and sudden outflows of capital from those financial markets, put ADB under a serious challenge. Though it was the International Monetary Fund (IMF) that came forward to assist the countries like Thailand, Indonesia and South Korea in overcoming the crisis, ADB also played a role to support these countries.
But the regional bank did not have any experience to deal with such a financial crisis. In fact, "ADB, like the rest of the international community, was caught unawares by the scale of the crisis. The bank was not prepared to provide emergency programs in the crisis-affected countries... Fortunately, ADB operational systems had become more flexible during the 1990s. Having evolved into a broad-based development institution, ADB had the staff resources to monitor the situation closely and to liaise with member countries, the IMF, the World Bank, and the bilateral donors. As a result, the Bank was able to contribute to the IMF-driven emergency assistance packages, not just financially but also by guiding developing member countries toward reforms in the public sector and the financial capital markets." (p-213-215)
The book also acknowledges the limitations of ADB to deal with the financial crisis adding that the Bank was greatly affected by it, both immediately and in the succeeding years. "For ADB, the Asian financial crisis was a severe test from which it emerged stronger as a multilateral development institution." (P-233)
BANGLADESH LINK: Bangladesh's relationship with ADB is quite interesting. ADB is the first international financial institution that extended assistance to the country immediately after the independence. The book categorically mentions: "Bangladesh became independent in 1971 and joined ADB in 1973. Two loans were quickly approved: one for a fisheries project to improve marketing facilities and the other for development financing to provide credit to a wide range of local firms producing jute, cotton textiles, and other manufactured goods. Two more loans, for electric power and for a Chittagong port project, were approved before the end of the year." (p-82). It also adds that ADB's approach in Bangladesh in those early years was 'to provide assistance as swiftly as possible, in increasing amounts, and on the softest possible terms.'
In fact, ADB opened its first field office or resident mission in Dhaka, the capital city of Bangladesh, in 1982 considering the country's development potential and also made a test case for establishing closer partnerships with the countries borrowing from the regional bank. Today, Bangladesh is the sixth largest recipient of ADB's assistance.
ADB's first programme loan came to Bangladesh in 1978 when the bank approved it for the low-lift pump maintenance programme. Some $8.9 million was disbursed from the Asian Development Fund that supported the repair and maintenance of water-lifting pumps. "This programme enabled farmers to irrigate an additional 40,000 hectares of land during the dry season. The succeeding program loans in these early days remained mainly targeted at activities in the agriculture sector which financed fertilisers and other inputs needed to boost output." (P-129)
Outlining the history of Asia's development journey in the last five decades is a daunting task. The book has succeeded to a large extent in accomplishing it. This is a work of memories and anecdotes with historical records and analyses of the contemporary regional and global events backed by a lot of research. Readers will find it interesting. Though focused on ADB, the book is basically a valuable addition to the historical records of development of Asia as a region in the global context.