The Asian Development Bank has recently concluded its 45th annual meeting of board of governors in Manila. Established in the mid-sixties, ADB has grown in size and prestige over the decades.

It has more than doubled its membership from 31 to 67, provided loans, grants and other forms of development assistance amounting to a quarter of a trillion dollars, raised its capital base five times to $165 billion, and maintained consistently highest ratings from international credit rating agencies.

The Bank has justifiably earned a reputation as an efficient financial institution.

Yet the more important question is: how has the bank fared in its role as a development institution? It is true that ADB provides only a tiny fraction of financing even for countries that are most aid-dependent. It is also true that its lending to its member countries has achieved at best mixed results.

According to the Bank's evaluation department, the performance of its sovereign lending kept on declining since 2000 after reaching a peak success rate of 70 percent, though the performance of its non-sovereign lending is somewhat better.

Nevertheless, the Bank played a laudatory role in providing finance to poorer countries with few financing options or in offering liquidly to distressed economies that were in financial turmoil.

During the last half century, Asia has attained spectacular economic success that brought more people out of poverty than any comparable period in human history.

Despite this enormous success, a large swathe of humanity in developing Asia remains trapped in abject poverty, with 1.8 billion people subsisting on less than two-dollars a day.

This spectre of human deprivation manifests itself in many forms -- pervasive hunger, ubiquitous illiteracy, widespread malnutrition and high infant and maternal mortality rates. Two thirds of the world's hungry, three-fourths of the world's illiterates and two-thirds of the world's malnourished children live in Asia.

The magnitude and complexity of the human development challenge facing Asia far exceeds that of the rest of the world combined. The Bank, whose motto is to fight poverty in Asia and the Pacific, has its work cut out for it.

Moving forward, the Bank needs to further improve on its past performance. This would require ADB to embrace changes in its operations, internal governance and current personnel practices, research and evaluation.

First, the Bank needs to adopt a more holistic approach to development that goes beyond a single-minded pursuit of growth to incorporate -- more directly -- concerns of sustainability, equity, and other human development dimensions.

It needs to be more innovative and strategic in its development assistance. The Bank should maintain -- except in two areas -- a hands-off policy while allowing borrowing countries a freer hand in planning and implementing investments and formulating policies.

The first relates to corruption that it should pursue aggressively when it suspects of malfeasance; the second relates to policy advice, which it should offer generously, only when sought.

Second, in a recent op-ed in the Wall Street Journal, the former US ambassador to ADB Curtin Chin has noted about a governance deficit at the Bank. The top leadership of the bank is currently determined by an unwritten quota-system.

According to this system, the president of the bank is selected among its senior officials by the ministry of finance of Japan, which -- along with the United States -- is the single majority shareholder of the Bank.

While the president is supposed to be elected by a simple majority, it is currently conducted through a mock consensus, where a senior official from the ministry of finance of Japan is selected without any alternative candidates from other countries.

Not only is the president selected in an uncompetitive and nontransparent way, senior positions from vice presidents to department heads are similarly rationed. It is a quota system where other considerations often override merit.

As Ambassador Chin has summed up, the Bank's personnel practices have been "less than world class".

Abandoning the current practices for a transparent, competitive and merit-based system will augur well for ADB.

The quota system is an antithetical to a competitive, globalised world and is incongruent with the concept of good governance that the bank so eloquently advocates to its member countries.

As a development institution, the Bank can organizationally reinvigorate itself from its bureaucratic torpor by having development professionals with actual development experience at its helm.

The Bank may consider introducing a ¡°double majority ¡°system to select its president, whereby a candidate for the president will have to earn the majority from both donors and borrowers. A similar double majority system, which preserves the interests of both groups, has been in vogue in other regional development banks.

Third, the Bank needs to strengthen its role as a knowledge center. Asia offers an interesting narrative of development -- its successful Asian economies have not always followed the playbook of orthodox economics.

This heterodox, pragmatic approach to economic development requires careful review and analysis, which the Bank is at a vantage position to offer.

In the past, the Bank's research and analysis work has been both fragmented and deficient -- it has been more of an aggregator than a generator of research.

Through revamping research, the Bank should contribute to a sophisticated understanding of the development process in Asia, something from which the global development community can benefit.

Finally, discussion of foreign aid has become increasingly contentious -- much of it has to do with the relative scarcity of aid resources and the murky evaluation issues surrounding the assessment of aid.

In recent years, to garner an aura of objectivity, most international development institutions have gone on to create in-house, ¡°independent ¡°evaluation departments.

Truth be told, the idea of in-house, independent evaluation is essentially an oxymoron.

To overcome the cloud of suspicion on the objectivity of evaluation, truly independent, external evaluation entities -- akin to independent credit rating agencies -- would be desirable.

As a premier development bank, perhaps the Bank can take a lead in this initiative.

MG Quibria is a professor of international development at Morgan State University, USA. He could be reached at: [email protected].

The Daily Star/ Bangladesh/ 20th May 2012

The Performance Review Meeting for the managers of Exim Bank was held at the Exim Bank Head office Saturday for evaluating the total performance and financial situation of the bank.

Chairman of the Exim Bank Md. Nazrul Islam Mazumder was present at the meeting as chief guest while Managing Director Fariduddin Ahmed presided over the conference, said a press release.

Members of the Board of Directors Md. Nazrul Islam Swapan, AKM Nurul Fazal, Md. Habib Ullah Dawn, Mohammed Shahidullah, Al-haj Md. Nurul Amin Farook, Mohammad Omar Farooque Bhuiyan, Lt Col (retd) Serajul Islam, Ranjan Chowdhury, Md. Fakhrul Islam Mazumder, Additional Managing Director Dr. Haider Ali Miah, Deputy Managing Directors Abdul Latif Barabhuiya, M Sirajul Islam and Sirajul Haque Miah, all branch managers and executives attended the conference.

News: The Daily Sun/ Bangladesh/ 20-May-2012

Islami Bank Bangladesh Limited (IBBL) inaugurated its 137th ATM booth at Sejan Point, Farmgate, in Dhaka recently.

Hafizul Islam Mian, Director of the bank inaugurated the ATM booth as chief guest, said a press release on Saturday.

Md. Shamsuzzaman, Executive Vice President and Head of Dhaka Central Zone, Md. Shahidullah, Senior Vice President and incumbent of Farmgate Branch, Dr. Muhammad Kamal Uddin Jasim, Senior Vice President and Head of Business Promotion and Marketing Division and other high officials of the bank were present.

News: The Daily Sun/ Bangladesh/ 18-May-2012

NCC Bank Limited signed a deal on remittance agreement with Japan Remit Finance Company Limited in Tokyo, Japan recently.

Bangladeshi expatriates from now would be able to remit their hard-earned money from Japan to Bangladesh safely and quickly, said a press release on Saturday.

Mentionable that Japan Remit Finance Company Limited is the only legal organisation to remit money from Japan to Bangladesh.

Mohammed Nurul Amin, Managing Director of NCC Bank Limited and Hossain Sarwar, CEO of Japan Remit Finance Co. Limited signed the agreement on behalf of their respective sides.

Md. Nurun Newaz Salim, Chairman of NCC Bank, Noboru Muramatsu, General Manager of Japan Remit Finance, CFO Masahiko Watanabe and CTO Taka Mizuno were also present.

News: The Daily Sun/ Bangladesh/ 20-May-2012

Asian markets slumped and the euro fell further on Friday as the eurozone debt crisis was stoked by a ratings downgrade for Greece and 16 Spanish banks, while weak US data added to the pessimism.

Tokyo tumbled 2.99 per cent, or 265.28 points, to 8,611.31, while Seoul plummeted 3.40 per cent, or 62.78 points, to 1,782.46 and Sydney dived 2.67 per cent, or 110.9 points, to 4,046.5, its biggest fall in eight months.
Hong Kong fell 1.30 per cent, or 249.08 points, to 18,951.85 and Shanghai was 1.44 per cent lower, shedding 34.37 points, to 2,344.52.

Moody’s slashed the ratings of 16 banks in Spain by between one and three notches, citing “renewed recession (in Spain), the ongoing real-estate crisis and persistent high levels of unemployment”. It also blamed the reduced credit-worthiness of the government.

Top bank Santander and number two BBVA were both hit with three-notch downgrades to A3, while two other large banks, Banesto and CaixaBank, were also cut to the same level.

The move came just over a week after the government intervened to prop up the fourth-largest bank Bankia by taking a 45 per cent stake.

Bankia on Thursday had to bat away rumours it had been hit with a run on deposits, as nervousness around the eurozone grew over the entire Spanish banking sector.

Also Thursday, Fitch downgraded Greece’s credit a notch, to CCC from B-, saying it was vulnerable to default amid political uncertainty over Athens’ commitment to a crucial bailout plan and its possible exit from the eurozone.
“The downgrade of Greece’s sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union (EMU),” it said in a statement.

A strong showing by anti-austerity parties in May 6 elections and the failure of officials afterwards to form a government “underscores the lack of public and political support for the EU-IMF 173-billion-euro ($220 billion) programme”, it said.

A caretaker government of technocrats took office in Athens Thursday to prepare fresh elections to be held mid-June amid rising popularity of political parties that oppose the bailout and its tough austerity measures.

The agency warned that if a new government did not support the bailout, Greece would likely leave the euro bloc and default on its debt, potentially hurting the ratings of other eurozone member countries.

The single currency tumbled in early European trade as low as $1.2642 to reach a level last seen on January 16. It later stood at $1.2687, compared with $1.2693 in New York, and well down from $1.2744 in Tokyo Thursday.

It also stood at 100.55 yen—its weakest level since February—from 100.65 yen, and sharply lower than 102.35 yen seen in Thursday in Tokyo.

The dollar stood at 79.27 yen compared with 79.28 yen in New York. The US currency bought 80.32 yen Thursday in Tokyo.

On Wall Street, trade was subdued amid fears that a deep crisis in the eurozone may spread across the Atlantic and knock the tentative US recovery off course.

The Dow fell 1.24 per cent, the S&P 500 dropped 1.51 per cent and the Nasdaq plummeted 2.10 per cent.
Discouraging US indicators on regional manufacturing and the economic outlook added to investor woes. Oil was lower.
New York’s main contract, West Texas Intermediate crude for delivery in June, was down 25 cents to $92.31 per barrel while Brent North Sea crude for July shed 66 cents to $106.83 in late afternoon trade.

Gold was at $1,589.90 an ounce at 1100 GMT, compared with $1,547.20 late Thursday.
In other markets:
Singapore slipped 1.54 per cent, or 43.51 points, to 2,779.10.
DBS Bank fell 1.99 per cent to Sg$13.27 while real estate developer CapitaLand was down 3.48 per cent at Sg$2.50.

Taipei fell 2.79 per cent, or 205.58 points, to 7,151.19.
TSMC shed 3.88 per cent to Tw$81.8 while Chunghwa Telecom was 0.77 per cent lower at Tw$90.3. 

The Independent/ Bangladesh/ 19th May 2012