Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB)

• IAS NEXT, Lucknow
• 29, Oct 2021

The Government of India has applied for loans from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) to procure as many as 667 million doses of COVID-19 vaccines.

• The Manila-based ADB and the Beijing-based AIIB, where China and India are the biggest shareholders, are in the process of considering the loans.

Background:

The vaccines will be purchased by the Government of India through a competitive process and the ADB will be administering the purchasing system and implement it under ADB’s APVAX, or Asia-Pacific Vaccine Access Facility, mechanism.

About ADB:

• It is a regional development bank.
• established on 19 December 1966.
• headquartered — Manila, Philippines.
• official United Nations Observer.

Who can be its members?

The bank admits the members of the United Nations Economic and Social Commision for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.

• ADB now has 68 members, 49 from within Asia.

Voting rights:

• It is modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions.
• As of 31 December 2019, ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).

Roles and functions:

• Dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
• This is carried out through investments – in the form of loans, grants and information sharing – in infrastructure, health care services, financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.