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A mini-World Bank with ever-richer members?

By Clayton Jonesstaff correspondent of the Christian Science Monitor / April 28, 1981



Manila

Almost all Asia was equally poor when the Asian Development Bank opened its doors in the mid-1960s. But some of the doors have since closed. Singapore, South Korea, Hong Kong, and Taiwan have "graduated" into the developed- or near-developed-nation category (with Malaysia not far behind) now getting few loans. India, China and communist nations are not even receiving loans, and Indonesia's plentiful number of poor peasants still does not stop it from being asked to donate its oil wealth to bank coffers.

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Most ADB officials have few doubts about the bank's beneficial impact, but some wonder if it wouldn't do just as well as a branch of the World Bank. "I wonder if this bank should even exist," says one of its top internal-audit officials.

"All it really does is pick up the crumbs left by the World Bank. And the asset of regionalism or an 'Asian cohesion' has been overplayed."

India's recent overture to get ADB funds, for instance, has been rebuffed. And the bank's reputation for large "infrastructure" projects such as roads and electricity rather than social services such as family planning, puts it in a position of sometimes defending the "trickle down" theory of development. Many ADB staff in interviews admit lack of bank innovation. Some thought there should be more cross-fertilization of benefits between countries from ADB projects.

"Trickle-down theory may be coming back," contends ADB executive vice-president S. Stanley Katz, "The government and the rich may get richer from development projects, but if they spend the money to create jobs, then it works."

"Development banks may not be the most competent authority to penetrate the grass-root poverty," he adds.

Both the ADB and its Latin American counterpart, the Inter-American Development Bank, emerged with the dawning of the third world in the 1960s. They were modeled after the World Bank which was formed out of post-World War II reconstruction of Europe. During the 1970s the ADB enjoyed US preference for multilateral over bilateral aid, but that commitment has run thin.

Faced with such questions, the bank has ordered a one-year outside study its role in the 1980s.