Asian Development Bank ups game in Eurasia

By bne IntelliNews February 11, 2015

Ben Aris in Baku -


If you hear the name Asian Development Bank (ADB), the first thing you are likely to think of is China. But after a decade of transformation the Middle Kingdom is doing well on its own, so the development bank has spread its wings across Eurasia.

The ADB has 64 members from both the developing and developed worlds that provide the funds to encourage development. "The focus was initially on Asia and the Pacific Rim when we opened our doors in 1994, but we have expanded since," says Betty Wilkinson, Director of the Public Management, Financial Sector and Trade Division for Central and West Asia at the ADB.

China remains the most important country in the patch, but the ADB limits its lending there to $1.5bn from a total of about $11bn a year of lending – and even then these investments are very targeted at things like renewable energy. "It’s amazing how fast and aggressively China dealt with the issue of poverty. We have a saying at the ADB: if you have a good idea and the Chinese like it, then you better put your running shoes on as you are going to be running to keep up," says Wilkinson.

The ADB does two types of lending: ordinary capital instruments, which are offered to countries that are already well on the road to recovery, and assisted instruments for poorer countries that are still struggling. "The Chinese take loans for things like renewable energy projects, but the other [poorer] countries borrow to build things infrastructure. We do a lot of transport, especially roads, and energy projects," says Wilkinson.

The bank has a wide brief and also supports some urban development, water and sanitation, financial sector and education projects.

The ADB has been working for a long time in Central Asia with a lot of Kazakh projects under its belt, but more recently it has become more active in the other countries in Central Asia and the Caucasus, traditionally the stomping ground of Western development banks like the World Bank and European Bank for Reconstruction and Development (EBRD). To highlight its increased interest, the ADB will hold its annual general meeting this year in Azerbaijani capital of Baku in May, a few weeks after the EBRD’s annual shindig in the next-door Georgian capital of Tbilisi.

"We overlap with the other development banks, but according to our estimates the infrastructure spending needs through to 2020 runs into the trillions of dollars so there is plenty of work to go round," says Wilkinson, who gave a talk on online innovations that banks can use during the “Azerbaijan Banking and Finance Forum” that was organised by Adam Smith Conferences in Baku in February.

And the help is welcome. The whole region is feeling the aftershocks of the collapse of the Russian ruble in December and those countries without natural resources to fall back on are in serious trouble, notes Wilkinson. 


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