In 1966, while still recognized by the United Nations as the government of China, Taiwan as the ROC was one of the 31 founding members of the ADB. When the PRC joined the bank in 1986, Taiwan's membership was continued designation "Taipei,China [sic]." To date, ADB membership has grown to 66, of which 47 countries come from within the Asia-Pacific region and 19 from outside.
The ADB was established to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral financial institution owned by its member countries. Its vision is a region free of poverty, and its mission is to help developing member countries reduce poverty and improve the quality of life for their citizens. Around 1.9 billion people in the Asia-Pacific region live on less than US$2 a day each.
Within months of adopting its poverty reduction strategy in 1999, ADB began focusing its work on the elimination of poverty in the region. Its projects and programs emphasize one or more of its priorities, which include economic growth, human development, gender and development, good governance, environmental protection, private sector development, and regional cooperation.
Like other banks, ADB has shareholders. Of these, Japan and the United States with 552,210 shares--15.8 percent--each are the largest, while Taiwan, with 38,540 shares--1.1 percent--is the 18th-largest overall and 12th-largest in the Asia-Pacific region. The PRC has 228,000 shares--6.5 percent--and Australia 204,740--5.8 percent--while the smallest shareholder is the tiny Pacific nation of Tuvalu, which holds 50 shares, or just 0.001 percent of the total. As with private corporations, a member country's voting power is equal to its number of shares. Taiwan's voting strength is therefore about 7 percent of that of Japan and roughly equal to that of Bangladesh or the Netherlands.
The ADB provides different forms of assistance to governments and private enterprises in developing member countries. This assistance may be in the form of loans, technical assistance, grants, guarantees or equity investments. Its operations are financed by issuing bonds, recycling repayments and receiving contributions from members.
ADB annual lending volume is typically about US$6 billion, with technical assistance usually totaling about US$180 million a year. In 2005, ADB approved loans worth $5.8 billion for 64 projects, most of which went to the public sector. The PRC was the largest borrower, followed by Indonesia, Pakistan, Vietnam and Bangladesh. Technical assistance, which is used to prepare projects and support advisory activities, amounted to US$198.8 million.
Governor of Taiwan's Central Bank, Perng Fai-nan, is its representative on ADB's board of governors. Taiwan is an active member of the bank and, as of Dec. 31, 2005, had contributed US$550.84 million in capital subscription and US$62.47 million to special funds since joining in 1966. Companies and consultants from Taiwan have been awarded US$667.74 million in procurement contracts on ADB-financed projects since 1967.
According to the ADB Fact Sheet, from Jan. 1, 1985 to Dec. 31, 2005, consultants from Taiwan were involved in 25 contracts for ADB loan projects worth US$18.5 million. During the same period, Taiwan consultants were involved in 29 contracts for ADB technical assistance projects worth US$2.1 million.
In addition to its financial activities, the ADB publishes over 50 current titles annually on economics, environment, society, and other sectors. These publications increase awareness and understanding of ADB's activities, strategies and objectives, and introduce the public to the wide range of the Bank's activities. Its flagship publications are its annual Key Indicators, of which the 2006 volume is the 37th edition, and the regular Asian Development Outlook Updates. It also puts out the AEM, a review of East Asia's growth, financial and corporate sector restructuring, and emerging policy issues.
The recent AEM reports that East Asia's rapid growth of GDP is expected to soften from 4.9 percent this year to a still robust 4.4 percent in 2007. It states that an expected slowdown in growth in the United States and Euro area will only slightly reduce demand for East Asia's exports. Coupled with resilient domestic consumption, it anticipates that this demand will continue to sustain economic expansion across the region.
The report does not provide a forecast specifically for Taiwan but anticipates economic expansion in the "newly industrialized economies"--Hong Kong, China; Republic of Korea; Singapore; and Taipei,China--as sliding to 4.6 percent in 2007 from 5.3 percent this year, as they react to slower growth in exports to the PRC and the United States. Asia Today reported in November that the Business Times had estimated Taiwan's 2007 GDP growth at 4.3 percent, however.
--Philip Courtenay is a free-lance writer based in Queensland, Australia.
Copyright 2006 by Philip Courtenay