In the wake of the global financial crisis the board of the Asian Development Bank has passed a resolution calling for a 200 percent increase in the banks capital base, the banks president said Wednesday. Haruhiko Kuroda said that the increase would boost the banks general capital from 55 billion dollars to 165 billion dollars in what will be the fifth increase in the banks 42 year history and the first in 14 years.
He said the banks 67 governors were now voting on the resolution with a decision expected on April 29 - a week before the Manila-based banks annual general meeting on the Indonesian island of Bali. Speaking to reporters Kuroda said the resolution needs the backing of a three-quarters majority to be approved. "I am not anticipating any problems," Kuroda said.
He said the financial crisis had hit most developing Asian nations "very hard." "I expect you will see (economic) growth in most low-to-middle income Asian nations to be either low or negative this year," Kuroda said. "India and China, on the other hand, appear to be doing relatively well."
Kuroda said he expected lending to increase this year and in 2011 as countries try to ease the pain inflicted by the global financial downturn. The bank had budgeted to lend nine billion dollars with a further three billion earmarked for assistance funding this year but Kuroda said he expects this could go up by a further six billion. "We will be asking our donor countries in Bali to increase our loans to low and middle income countries," he said.
The bulk of the capital injection would come from the ADBs shareholder nations. Japan and the United States are the biggest contributors with shares of 15.6 percent each in the bank, which has more than 60 member countries. A capital increase has been on the table for about two years as Asias emerging economies rapidly expand but the urgency has increased following the global economic collapse. New loans from the ADB grew to a record 8.9 billion dollars in 2008.
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