Adb Delegates Gather in Japan Amid Controversy

Delegates from 46 countries are gathering for the 20th meeting of the Asian Development Bank (ADB) amid concern over the bank"s role in aiding regional development.

The three-day meeting, the first to be held in Japan since the bank"s inaugural meeting in Tokyo in 1966, will open tomorrow with political controversy dogging its heels.

Taiwan, one of the ADB"s founders, will boycott the meeting for the second year in succession in protest against China"s admission last year.

Taiwan, which borrowed only 100 mln dlrs or 0.51 pct of the ADB"s total lending of 19.4 billion dlrs over the past 20 years, is staying away because its name was changed by the bank to “Taipei, China.”

But the boycott is likely to be overshadowed by the presence of communist giants China and the Soviet Union.

Moscow is attending an ADB meeting for the first time in what is widely seen as a first step to eventual full membership.

China is expected to obtain its first loans from the bank in 1987.

A senior ADB official said Peking, now the bank"s third largest shareholder after the United States and Japan, would also take one of the 12 seats on the bank"s board of governors.

The official, who declined to be identified, expected sparks to fly when governors met in formal session on Tuesday.

He said calls for expanded bank lending were expected from poorer countries in the Asia-Pacific region, hit by plunging commodity prices, tariff barriers in export markets, a growing resources crunch and balance of payments crises.

But the U.S. Delegation was likely to repeat warnings ADB lending should stress quality over quantity, the official said.

The debate over ADB lending is fuelled by the bank"s highly successful money management.

With liquid reserves of about four billion dlrs, profits have been rising steadily and touched 287 mln dlrs last year.

The key indicator of the ADB"s reduced role in regional development is its net transfer of resources – loan disbursements less repayments made by borrowers – which fell sharply to 237 mln dlrs in 1986 from 421 mln in 1985.

In 1986, the bank approved loans totalling two billion dlrs, but only to 19 of its 29 developing members.

ADB chief economist Kedar Nath Kohli told Reuters the bank"s ordinary lending had declined each year since 1984.

“I"m afraid if you exclude India and China, it"s going to go down even further in 1987,” Kohli said.

Kohli said developing countries in the region were entering a period of painful adjustments.

He said one country that seemed to be on the right track was South Korea, which had bucked the regional trend of rising indebtedness by cutting its foreign debt by about two billion dlrs last year.

One country that has complained about the ADB’s lending policies is Vietnam, which charged at last year’s meeting that the bank had cut off its aid on political grounds.

The bank abruptly halted loans to Hanoi after the fall of the Saigon government in 1975. Despite Moscow’s presence, however, the bank is not expected to change its Vietnam policy.

The Philippines, the ABD’s second-largest borrower in 1986 with loans totalling 316 mln dlrs, is happy with the bank’s role.

Finance Minister Jaime Ongpin told Reuters he expected the figure would reach roughly the same level this year.