ADB Through the Decades

When the Asian Development Bank (ADB) was established in 1966, the Asia and Pacific region was undergoing a process of deep change. Several countries gained independence and a sense of regional identity was emerging. A more organized drive toward modernization started in several countries but the region was still defined by poverty. Feeding people remained a primary concern even while the Green Revolution was under way. The first oil crisis in 1973 led to a worldwide recession and tested many Asian economies. This volume explains how the idea of a regional development bank for Asia emerged and gained support. During its formative years, ADB dealt with a myriad of administrative, organizational, and funding issues in order to establish itself as a sound and credible institution. ADB's first President, Takeshi Watanabe, envisioned ADB's role as Asia's "family doctor." ADB took a pragmatic approach and conducted studies and surveys to acquire a fuller understanding of the region before lending gained momentum in the second half of the decade, focused on energy, transport, agriculture, and finance.

The Asia and Pacific region continued to grow despite a difficult external global environment. The developing member countries demonstrated considerable resilience, following the second oil shock and the international debt crisis that followed. This volume shows how the Asian Development Bank (ADB) responded to the growing diversity among its developing member countries as both membership and operations widened during decade. Considerations about ADB's priorities were ongoing and ranged across many topics. To support these discussions as well as to provide information for policy makers across the region, ADB sought to position itself as a "regional resource center" with a broader development role of providing not only financial assistance but becoming a center of new thinking on development issues in the region as well. ADB moved closer to the ground by opening its first Resident Office in Bangladesh in 1982. New products were introduced---program lending, sector lending, direct lending to private sector without government guarantees, and equity investment---to meet changing needs and expectations of countries. As the decade closed, two key historical landmarks occurred: ADB made its first loan to India, and the People's Republic of China became a member after long and detailed negotiations.

The 1997 Asian financial crisis hit the region and became a defining moment for Asia and the Asian Development Bank (ADB). As ADB participated in coordinated crisis responses, Asian policy makers used this opportunity to reassess their economic policies in a fundamental way. This volume presents how ADB met the challenges during the fourth decade of designing strategies to respond to rapid changes in the region following the Asian financial crisis, and responding to the changes in international development thinking. Several important policies and strategies were approved, including ADB's Poverty Reduction Strategy as well as ADB's first Long-Term Strategic Framework to 2015. ADB embarked on two major reorganizations (in 2002 and 2006) and committed to an internal reform agenda to be a more responsive, relevant, and results-oriented organization. ADB also took a proactive role in postconflict reconstruction in Afghanistan, Sri Lanka, Tajikistan, and Timor-Leste. ADB also needed to respond to a series of external shocks such as the severe acute respiratory syndrome epidemic in 2003, the Asian tsunami in 2004, and the Pakistan earthquake in 2005.

Asia proved resilient to the effects of the 2008-2009 global financial crisis, but sustaining rapid growth became more difficult afterward. Development challenges intensified, the global development agenda became more ambitious, and new sources of development finance emerged. This volume shows how the Asian Development Bank (ADB) continued to reform in order to meet these challenges. A new long-term strategic framework, Strategy 2020, was launched in 2008, to respond to the changing needs of the region. A midterm review of Strategy 2020 was released in 2014, further refining and adjusting priorities in order for ADB to remain relevant and responsive to borrowers. Various organizational changes were introduced, internal business processes were improved, and several new instruments were adopted as part of ADB's efforts to become "stronger, better, faster." ADB's lending capacity expanded significantly, with the fifth general capital increase in 2009, followed by the unique and groundbreaking combination of the Asian Development Fund portfolio with the ordinary capital resources balance sheet approved in 2015. Lending reached record levels in 2015 and 2016, exceeding the earlier spike in 2009 when ADB had responded to the needs of countries affected by the global economic crisis. ADB also enhanced its accountability and results orientation, becoming the first multilateral development bank to adopt a corporate results framework in 2008.

The Asia and Pacific region experienced continued growth. Intraregional trade and investment grew rapidly as Asian economies drew increasing strength from within the region. Interest was growing both within and outside Asia to understand and assess policy recipes for rapid and sustained "miracle growth." This volume presents the story of the third decade of the Asian Development Bank (ADB), which opened with recommendations from a panel of eminent development experts for a new role for the ADB in the 1990s. Donor expectations evolved and there was greater emphasis on effectiveness in the delivery of development assistance. In response, ADB also strengthened its internal procedures and gave greater attention to project quality. For the first time, in 1994, ADB's lending program ran up against the lending headroom and had to be frozen. ADB moved to a new headquarters to centralize its operations, which had spread to several locations over the years. New members joined from Central Asia and some existing but non-active members renewed their regular links with ADB. Lending picked up considerably, with the People's Republic of China and India looking for more support while regional activities began to grow.