Can the ADB Resurrect Itself?

Last year, this newspaper organised a regional conference in Bangkok on the development of the Mekong sub-region, an area covering the northern parts of Thailand and Burma and the southern parts of China, Vietnam, Laos and Cambodia.

The conference was expected to attract more than 1,200 participants and serve as an opportunity for policymakers, business people and interested members of the general public to get together to sort out the many lingering issues that had delayed the development of the area.

A number of senior ministers from Mekong countries were due to attend, including some from Yunan, China, who were looking for chances to engage with the neighbouring countries.

The president of the Asian Development Bank (ADB) was invited to deliver the keynote address as the bank is the prime sponsor of Mekong sub-region development, and the president’s representatives flew to Bangkok to discuss his participation.

They had one condition – the ADB’s president, who is a Japanese, would only come if the Thai prime minister also attended. The bank’s representatives also objected to some of the speaker nominations, as well as the plan to float the idea that the bank become a co-organiser of the conference.

These demands are just a few examples that indicate how the development bank has become more and more politicised over the years. The incident is characteristic of an organisation which has lost its direction, sense of mission and strong governance.

Morale among the 2,200-strong staff at the ADB’s headquarters in Manila is said to be woefully low. Leaks from frustrated donor and shareholder nations critical of the bank’s management have been publicised. Reform is said to be underway, though progress is slow and painful. Private management organisations have been brought in to re-engineer the bank’s so-called expert staff.

Armed with an annual lending budget of about US$6 billion (Bt236 billion), the ADB continues to play second fiddle to the World Bank in Asia despite its being located in the region. While the management of the World Bank has taken the bull by the horns in reorganising and reinventing itself, the ADB appears stuck in the time warp of “factions and rivalries”, according to the Financial Times.

The ADB has failed to ride Asia’s economic successes. In Thailand, for instance, during the economic boom time, the bank was said to be unable to match the services of private commercial banks. Conversely, during the tough times, the bank’s interest rates were said to be too high.

Moreover, the ADB has picked up where the World Bank left off in its battle against environmentalists by getting caught up in a triangular conspiracy relating to the failed, corrupt Klong Dan waste water treatment project. As a result, the bank has given ammunition to popular leaders like Prime Minister Thaksin Shinawatra to use against international organisations.

Can the ADB reform its institutional culture of patronage and bureaucracy – an environment that seemingly brings out the worst in Asian people?

In a small way, Thailand has a role to play. The ADB will soon open a sub-regional office in Bangkok. The office’s mission is not so much to manage development loans and other financial services to Thailand, but to hasten the development of the Mekong area, as the bank is the prime sponsor of both strategies and funding for the area. The priority areas are road construction and other infrastructure projects that will increase economic activity in the sub-region.

The ADB’s Bangkok office will have a small staff, giving it the potential to act with unity and speed, safely removed from the internal politics of the Manila headquarters.

“We should have done this a long time ago. It is a dream come true to have a presence in Bangkok,” said one ADB staff member.

If given a clear mission and mandate, the ADB’s Bangkok office will have the opportunity to display the kind of versatility and professionalism that the headquarters lacks. The ADB can use this opportunity to cut red tape and be more responsive to local needs.

Finally, it should be noted that the ADB did send an official to speak at The Nation’s Mekong conference last year; however, his performance merely served as a demonstration of the plague afflicting the organisation. Without changes for the better, the road towards bettering the Mekong region will lose its way.