SEVENTEENTH ANNUAL MEETING OF THE ASIAN DEVELOPMENT BANK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01370R000801050098-1
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 3
• Document Creation Date: December 21, 2016
• Document Release Date: December 4, 2008
• Sequence Number: 98
• Publication Date: May 15, 1984
• Content Type: CABLE

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UNCLAS STATE 142201
E.O. 12356: N/A
TAGS: EFIN, EAID. ADB, US
SUBJECT: SEVENTEENTH ANNUAL MEETING OF THE ASIAN
DEVELOPMENT BANK
REFS: (A) THE HAGUE 02830 (NOTAL); (B) STATE 130299;
(NOTAL); (C) STATE 133050
1. SUMMARY: THE SEVENTEENTH ANNUAL MEETING OF THE
ASIAN DEVELOPMENT BANK (ADB) TOOK PLACE APRIL 25-27 IN
AMSTERDAM. THE NETHERLANDS. THE ATMOSPHERE SURROUNDING
THE SESSIONS WAS TRANQUIL GIVEN THERE WERE NO MAJOR
FINANCIAL ISSUES CONFRONTING THE ADB. MEMBERSHIP FOR
THE PRC AND THE BEGINNING OF AN INDIAN LENDING PROGRAM,
THE PRIMARY OUTSTANDING QUESTIONS, WERE SUPPORTED BY
A NUMBER OF REGIONAL AND NON-REGIONAL GOVERNORS IN
THEIR SPEECHES, BUT THE BANK TOOK NO FORMAL ACTIONS ON
THESE ISSUES. THE 1985 ANNUAL MEETING IS EXPECTED TO
BE IN BANGKOK. END SUMMARY.
2. THE SEVENTEENTH ANNUAL MEETING OF THE ADS TOOK PLACE
APRIL 25-27 IN AMSTERDAM. IMMEDIATELY PRIOR TO THE
MEETING, APRIL 24 THE ADB CO-SPONSORED A WELL-ATTENDED
SEMINAR, EUROPEAN ENTERPRISE AND THE ASIAN CHALLENGE.
THIS WAS THE THIRD ANNUAL MEETING HELD IN EUROPE SINCE
1978. THE U.S. DELEGATION HEADED BY TREASURY ASSISTANT
UNCLASSIFIED
OLL/LD
INCOMING
STAT
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SECRETARY DAVID D. MULFORD INCLUDED FOUR CONGRESSMEN:
JERRY PATTERSON (D-CAL) AND JOHN LAFALCE (D-NY) OF THE
HOUSE"BAMKING COMMITTEE, LOUIS STOKES (O-OHIO) HOUSE
APPROPRIATIONS COMMITTEE, GARY ACKERMAN (D-NY)'; HOUSE
FOREIGN AFFAIRS COMMITTEE AND A NUMER OF CONORESSIONA4
STAFF. U.S. DELEGATION HELD BILATERALS WITH JAPAN, KOREA.
PHILIPPINES, TAIWAN AND AUSTRALIA AND WITH ADB PRESIDENT
FUJIOKA (ALL REPORTED SEPARATELY).
3. ADB PRESIDENT AND THE GOVERNORS SPEECHES WERE
RESTRAINED AND HELD FEW SURPRISES. TO THE EXTENT THAT
THE PRC/TAIWAN MEMBERSHIP AND COMMENCEMENT OF INDIA
BORROWING WERE RAISED, IT WAS IN A LOW KEY NON-CONFRONTA-
TIONAL WAY (REF B). ASSISTANT SECRETARY MULFORD'S
SPEECH DID NOT INCLUDE MENTION OF PRC/TAIWAN AND INDIA
(REF C). THE GOVERNORS GENERALLY WELCOMED THE INTERNA-
TIONAL ECONOMIC UPTURN AND APPLAUDED ASIA FOR HAVING
WEATHERED THE WORLD RECESSION BETTER THAN MOST REGIONS.
GOVERNORS WERE ALSO GENERALLY FAVORABLE TOWARD ADB
EQUITY OPERATIONS INITIATED IN 1983. EURCPEAN,GOVERNORS
TOOK ADVANTAGE OF THE FACT THAT THE MEETING WAS IN
AMSTERDAM TO STRESS POINTS OF EUROPEAN COOPERATION WITH
ASIA AND THE PACIFIC. THE EUROPEANS MENTIONED THE
DESIRABILITY OF AN ADB OFFICE IN EUROPE, WHERE AN
INCREASING PERCENTAGE OF THE BANK'S CAPITAL IS RAISED,
GREATER BANK RECRUITMENT OF NON-REGIONAL STAFF, AND
REQUESTED A SPECIAL CAPITAL INCREASE TO BETTER REFLECT
THEIR LEVEL OF CONTRIBUTIONS TO CONCESSIONAL FUNDS.
A. PRC MEMBERSHIP. ELEVEN GOVERNORS MENTIONED PRC
MEMBERSHIP IN THEIR ADDRESSEES. SURPRISINGLY, FRANCE
DID NOT, AS IT DID LAST YEAR, MENTION PRC ADMISSION.
CANADA LOOKED FORWARD TO IT; AUSTRALIA SUPPORTED IT AND
WELCOMED CHINA'S INTENTION TO PURSUE IT IN A FLEXIBLE
MANNER AND WITHOUT PLACING AN UNDUE FINANCIAL BURDEN ON
THE BANK IN THE MID-TERM; BELGIUM WAS SATISFIED WITH
PROGRESS TOWARDS A SATISFACTORY SOLUTION WITH RESPECT TO
THE CHARTER AND THE SAFEGUARDING OF THE INTERESTS OF ALL
MEMBERS; SWEDEN SAID ADB SHOULD BE OPEN TO ALL ELIGIBLES.
THEREFORE WELCOMED PRC; NORWAY MENTIONED UN UNIVERSALITY,
THEREFORE WELCOMED PRC; DENMARK NOTED PRC INTEREST,
SUPPORTED IT, AND HOPED SOLUTION CAN BE FOUND WITHOUT
FURTHER DELAY; FINLAND SAID THE REGIONAL NATURE OF THE ADB
JUSTIFIES PRC MEMBERSHIP AND IT WISHES TO SEE THAT QUESTION
SOLVED; BANGLADESH SAID ADMISSION IS LONG OVERDUE, NOTED
PRC FLEXIBILITY AND PRAGMATISM AND ASKED OTHERS TO TAKE
NOTE AND ACCEPT PRC AS A FULL MEMBER WITHOUT DELAY;
PAKISTAN MADE ITS USUAL REFERENCES TO THE UN RESOLUTION,
BUT ADDED AN URGE THAT ADB TAKE NECESSARY STEPS TO SORT OUT
AND SETTLE THIS ISSUE ASAP; AND NEPAL CITED A LEGITIMATE
RIGHT OF THE PRC TO BE IN ADB. TONGA, WHILE SUPPORTING
PRC ENTRY, ENDORSED THE POSITION OF THE "REPUBLIC OF
CHINA" AND URGED THAT THERE BE NO CHANGE IN ITS STATUS
AS A FULL MEMBER OF THE BANK.
B. LENDING TO INDIA. THE U.K., FRANCE, CANADA, SWEDEN,
NORWAY, FINLAND, BELGIUM, AMONG OTHERS EXPRESSED SUPPORT
FOR THE INITIATION OF ADB LENDING TO INDIA. ON THE OTHER
HAND, SRI LANKA EXPRESSED CONCERN THAT TRADITIONAL BOR-
ROWERS SHOULD NOT BE DAMAGED BY NEW BIG MEMBER BORROWERS.
C. RESIDENT OFFICES. SEVERAL GOVERNORS. INCLUDING
THE U.S., EXPRESSED SUPPORT FOR THE PRINCIPLE OF MORE
ADB RESIDENT OFFICES. BESIDES THE PROPOSAL FOR AN OFFICE
IN EUROPE, GENERAL BACKING WAS EXPRESSED FOR THE RECENT
BOARD DECISION TO OPEN A SOUTH PACIFIC OFFICE IN VANUATU.
UNCLASSIFIED
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D. POLICY DIALOGUE AND DONOR COORDINATION. GOVERNORS
FROM JAPAN, CANADA, FINLAND, AND THE U.S. MADE A SPECIAL
POINT OF THE NEED FOR CAREFUL ADB COORDINATION WITH THE
WORLD BANK AND IMF. MORE GENERALLY, THESE AND OTHER
DONOR GOVERNORS UNDERSCORED THE KEY ROLE OF POLICY
DIALOGUE IN BANK LENDING, PARTICULARLY AS THE ADB IS
EARMARKING ON MORE INNOVATIVE FORMS OF LENDING.
E. LENDING GROWTH. THE U.S., FRG. U.K., AND FINLAND
AMONG OTHERS, URGED THE BANK TO EXERCISE CAUTION IN
PURSUING LENDING TARGETS, LEST IT SACRIFICE LOAN QUALITY.
F. LIBERALIZATION MEASURES. DEVELOPING MEMBER
COUNTRY GOVERNORS WERE EXTREMELY SUPPORTIVE OF MORE
FLEXIBLE ADB POLICIES INITIATED IN 1983 REGARDING PROGRAM
LENDING, FINANCING LOCAL COSTS, SPECIAL FINANCING
PROGRAMS, AND OTHER MEASURES.
5. IN HIS CLOSING REMARKS ON APRIL 27, PRESIDENT FUJIOKA
ON THE PRC MEMBERSHIP ISSUE SAID "HE HOPED THE STAGE IS
NOW SET FOR A CONSTRUCTIVE DISCUSSION OF THE SUBJECT".
ON THE INITIATION OF LENDING TO INDIA, HE SAID HE WOULD
CONTINUE DISCUSSIONS WITH THE BOARD. ON OTHER ISSUES
RAISED BY THE GOVERNORS FUJIOKA REPORTED THAT MANAGE-
MENT WOULD DO THE FOLLOWING. THE BANK WOULD (A)
CAREFULLY REVIEW THE NEW MEASURES ADOPTED IN 1983 WHICH
LIBERALIZED LENDING POLICIES, (B) TRY TO DO MORE FOR
THE PRIVATE SECTOR, (C) INCREASE EFFECTIVENESS OF THE
POLICY DIALOGUE WITH DMCS, AND (D) DISCUSS THE SPECIAL
CAPITAL INCREASE WITH THE BOARD OF DIRECTORS. HE ALSO
EXPRESSED APPRECIATION FOR RECENT PLEDGES TO THE TECHNICAL
ASSISTANCE SPECIAL FUND, INCLUDING $250,000 FROM THE U.S.
AFTER THE MEETING HE AGREED THAT THE BANK WOULD REVIEW ITS
LENDING RATE POLICY, I.E., CONSIDER THE POSSIBILITY OF
VARIABLE LENDING RATES, AS DOES THE IBRD.
6. COMMENT: THE BANK IS AT A CROSS ROADS. THE INSTITU-
TION UP TO NOW HAS CONCENTRATED ITS EFFORTS ON PROJECTS
LENDING PRIMARILY TO THE FAST GROWING MARKET ORIENTED
ECONOMIES OF SOUTHEAST ASIA AND KOREA (63 PERCENT TOTAL
OF LENDING HAS GONE TO THE ASEAN STATES AND KOREA IN THE
1967-83 PERIOD) TOGETHER WITH CONCESSIONAL (ADF) LENDING
TO SOUTH ASIA (75 PERCENT IN THE SAME PERIOD). A MODEST
INDIA LENDING PROGRAM WILL BEGIN IN THE NEXT 12 MONTHS
WITH EVENTUAL PRC BORROWING IN THE MIDDLE TO LONG TERM
(AFTER 1987) A DISTINCT POSSIBILITY AS WELL. THE INTRODUC-
TION OF LENDING TO THESE TWO GIANTS WILL UNDOUBTEDLY
CHANGE THE CHARACTER OF THE ADB, UP TO NOW CONSIDERED AS
THE MOST SUCCESSFUL OF THE REGIONAL DEVELOPMENT BANKS, IN
WAYS WHICH CANNOT BE FORESEEN. END COMMENT.
SHULTZ
UNCLASSIFIED
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