Asian Development Bank (ADB), complete guide for the investor

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The development of the world’s poorest geographical areas passes through the support of economic and financial jurisdictions specialized in supporting the territories and populations that live there. This is the case of the Bank Asiatica of Stangle (ADB) for the geographical area of ​​Asia-Pacific, which for over 50 years has supported the economic development of 49 nations.

Like all banks, the ADB also has its tools both to lend and to attract new capital from investors. Therefore, in presenting its activities and its history in brief, we dedicate an important part of the guide to the investment opportunities that the investor can explore among those offered by the Asian Development Bank.

What is the Asian Development Bank (ADB)

The Asian Development Bank (ADB), in English Asian Development Bank, is an Asian regional financial institution whose goal is to foster Asia’s economic and financial development to make it economically independent of western nations.

Its primary objective is the reduction of poverty, a mission that it continues today even more than 50 years after its establishment. The poor in Asia in 50 years have certainly decreased but two thirds of the poor worldwide remain, that is 1.4 billion people in a state of poverty, with 1.1 billion people living on just 3.2 USD per day and 263 million people who even live on $ 1.90 a day.

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History of the Asian Development Bank (ADB)

The Asian Development Bank (ADB) was conceived since the early 1960s and is due to the work of the United Nations if, in 1963, with the first ministerial conference on economic cooperation in Asia, the Asian Development Bank begins its path of actual constitution.

The December 19, 1966 ADB was established with headquarters in the capital of the Philippines, Manila, and 31 members joined immediately. The initial objective is to improve the agricultural sector. Takeshi Watanabe is appointed as first president, who is considered the founding father of the financial institution for laying the Bank’s current foundations and for establishing the first bond in 1969.

The effect of the Bank made itself felt in Asia, already in the 70s of the last century the economic aid provided to some economies allowed them to become independent and not need any further aid in the future.

Over the following decades the financial institution has financed the construction of the infrastructures of the Asian countries starting from the energy infrastructures, therefore the urban ones, and then the school education of the new generations. Each activity was aimed at eradicating poverty, but in many cases the Bank also financed the recovery of sustainability from the financial crises and was responsible for financing recovery projects following natural disasters.

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ADB for investors

Investors can join Asian Bank investments mainly by purchasing bonds that have triple A as the quality of the security rating on the international financial markets.

I bonds of the ADB have various purposes, one of them is climate change, so it’s about green bond to support projects dedicated to the green economy.

Other type of bond established in the decade 2011-2020 is the water bond, with the aim of realizing projects for the purification of drinking water and avoiding water waste. To achieve its objectives, the Bank raised approximately 1.5 billion USD.

Another form of investment, always in bonds, is the Global Benchmark Bond. The latter is an ordinary bond through which the Asian Development Bank refinances itself periodically to meet its ordinary needs. The bond is issued in US dollars and usually has a short maturity: 3 years.

Not all projects are successful

The Asian Development Bank transparently publishes all the data concerning the investments made and thus periodically updates the list of projects implemented nation by country, with the degree of success or failure.

The table is interesting not only because it tells us how many projects are successful and how many are not, but also because it indirectly helps the investor to understand which are the most reliable Asian countries.

China is the most reliable nation from this analysis, where all funded projects have achieved at least minimal success, even if below expectations. Therefore, no failure.

Pakistan is the worst nation, here between 2000 and 2018, as many as 25 projects have failed and 24 have achieved a result below expectations. A non-flattering result that indicates the very high risk of failure of an investment made in this Asian country.

In general, however, it should be noted that the projects financed by the ADB were unlikely to have been more successful than expected. The vast majority of projects have achieved the expected success, many others have achieved success below expectations.

Strategy to 2030

However, the Bank has a wide-ranging strategy that looks towards 2030. The documento Strategy 2030 It was published in July 2018 and has the primary objective of eradicating poverty from Asia through projects capable of creating inclusion, resilience and sustainability.

According to the plan, $ 1.7 billion a year is needed between 2016 and 2030 to address infrastructure shortages in the Asia-Pacific region. The main objectives are at least two: to promote gender equality by supporting the educational and entrepreneurial empowerment of women; fight against climate change.

The 2030 ADB strategy it is also available in Italian.

How many and what are the members

There are 31 founding members, but over the decades the Bank has grown to a total of 68 members, of whom 49 are members of the Asian and Pacific continent and 19 are outside the geographical area.

Without wanting to be here to list everyone i membri regional dell’ADB, we mention just a few:

Japan, China (1986), the Philippines, Pakistan, Bangladesh, India, Indonesia, Thailand, Malaysia, South Korea, Hong Kong, Taiwan (Taipei).

Some of non-regional members of the ADB: Austria, Belgium, Canada, Denmark, Finland, Italy, France (1970), Ireland (2006), the United Kingdom, the United States, Turkey (1991), Switzerland (1967).

Italy’s contribution to the Asian Development Bank

As written in the previous paragraph Italy is a non-regional member since the establishment of the ADB in 1966 and since then has contributed economically to the development of Asia by financing the institution through loans to Asian members and by providing economic concessions. In total, Italy contributed USD 1.19 billion to the Development Fund (ADF) in 50 years.

Italy owns 1.803% of the Bank, equal to 191,850 shares and has 230,964 votes, which represent 1.737% of the total members.

Concluding

The Asian Development Bank is one of the important building blocks among global economic and financial institutions, because its presence serves to support the economic growth of developing nations.

The economic boom of some countries in the area is also due to the loans that ADB has made to its members over the past 50 years.

The reference website through which to know everything about the Bank is https://www.adb.org.

This article was originally posted on FX Empire

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