Asian Development Bank set to increase crisis response lending

Asian Development Bank in focus: The Asian Development Bank (ADB) is currently not considering an immediate need to increase its capital base, citing successful efforts to streamline operations and enhance lending capacity in response to challenges posed by the COVID-19 pandemic, according to a senior official.

Image Credits: ANI

Tomoyuki Kimura, head of the bank's strategy and policy department, highlighted that multilateral development banks (MDBs) can augment their lending capacity through capital increases and balance sheet optimisation. 

He acknowledged the growing role of emerging economies in ADB's operations, stressing that it is inevitable for them to play a more crucial part.

However, Kimura noted that determining the extent to which the economic size and influence of emerging economies are reflected in the size of their shares would be a political matter. 

The ADB takes a neutral position on the shareholding issue, leaving it to be resolved by its member nations.

In September, the ADB approved capital management reforms, unlocking $100 billion in new funding capacity over the next decade to address regional crises. 

Kimura asserted that these measures provide the ADB with substantial room to increase lending for the foreseeable future.

Despite Japan and the United States being the largest shareholders, emerging nations, including China and India, hold a 40 per cent share, giving them notable influence. 

Kimura maintained that there is no friction over shareholding among ADB members, stressing that the voices of emerging economies are considered in the selection of executives and in daily operations.

(With Reuters Inputs)