Asian Bank Locates $6 Billion for Loans: Will Use the Cash for Public Projects
Witter, Willis, The Washington Times (Washington, DC)
TOKYO - Despite deep cutbacks in U.S. funding, the Asian Development Bank has cobbled together a package to keep aid flowing to the region's poorest countries.
To do so the bank will have to dip into its profits for the first time ever instead of relying exclusively on contributions from its 23 donor nations.
After a contentious debate that raged for more than a year, bank officials say they expect soon to finalize a $6 billion deal to replenish the Asian Development Fund (ADF).
"We have made a major breakthrough," bank President Mitsuo Sato told reporters in Tokyo recently.
Though a year behind schedule, the new four-year package will replenish the ADF, which makes interest-free loans for roads, dams and other projects in poor countries such as Bangladesh.
Unlike the profit-making commercial side of the bank, the ADF makes loans of up to 40 years with a 10-year grace period and a service charge of 1 percent.
In the spring, the United States threw the Manila-based bank into turmoil by announcing it would slash future contributions to the ADF in half.
Washington already owed some $337 million from a pledge made in 1991, leading some members to call for the bank to penalize the United States. European members demanded that American companies be banned from receiving contracts for projects financed with bank money until Washington pays up.
The move, though unsuccessful, reflected growing anger at the United States, which owes money to the United Nations, the World Bank and virtually every global institution.
Washington's debts reflect a decline in domestic political support for foreign aid. …