Policy Brief of the Funding Policy of the Asian Development Bank

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Policy Brief of the Funding Policy of the Asian Development Bank

Executive Summary

The Asian Development Bank, ADB, is an international development finance institution that aims at assisting its member countries in their fight towards the eradication and alleviation of poverty. It also aims at improving the living standards of the people in their member countries. It was established in 1966 and its headquarters are based at Manila (Ali & Son, 2007). It has 67 members who finance it. Out of these, 48 are from the Asian region, with the rest been from other parts of the world. The primary partners of the institution include the private sector, governments, non-governmental organizations, Community-Based Organizations, development agencies, and foundations. The funding policy of the organization, branded Strategy 2020, was adopted in the year 2008 (Rauniyar & Kanbur, 2010). The policy defines the three primary agendas that are followed by the ADB. These are sustainable growth with environmental conservation, inclusive growth, and regional integration.

The recent years have witnessed a steady increase in the amount that has been lent by the Asian Development Bank. In the year 2005, the amount was estimated at USD $5.7 billion, an amount that double to approximately USD $10.5 billion by 2008. This lending has been part of the strategy of poverty elimination in the region (Singh, 2007). Notably, the bank has continued to lend and grow despite facing these global financial crises. Financial analyses and projections show that the organization has benefited from the global crises that it has faced. Donor governments have increased their reliance on the organization as a way of financing developing countries so that they can develop.

During the Annual Meeting of the bank in 2009, the general resources were increased by 200%. This meant that the lending power of ADB was increased by USD $10 million. This funding policy also increased the power of the bank, as well as the impacts that it had on people and the environment (Tham, 2011). However, the efforts that it has utilized in a bid to alleviate poverty among developing countries have failed to bear fruit. This policy brief highlights some of the approaches that have been employed using the funding policy. It also critiques the approaches and suggests various ways of solving the problem of rising poverty in developing countries in Asia. 

Background to the Problem

The Asian Development Bank makes claims that the influence it has on the economy of developing countries has contributed to reduction of poverty in Asia. The bank makes this claim because the rate of poverty is expressed as the number of individuals who live on less than $1 in a single day. As such, the bank uses this mode of reasoning to justify its claims. An example of an area in Asia where the Asian Development Bank has invested, through its funding policy, is the Sekong province that is found in the southern sides of Laos (Zhuang, 2011). By the end of the year 2013, the annual income of Sekong province was estimated to be at USD $120. That shows that the residents were living below USD $1 in a day. However, research conducted by the World Conservation Union indicated that purchasing goods from the forest was cheaper than buying from the market (Rigg, 2012). This study highlighted the critical contribution that human resources played in improving the lives of individuals in developing country. Such resources would enable them to access general health facilities and food.

In this example, the living standards of people in developing countries still experience a decline despite the fact that they have access to natural resources such as forests. As such, this shows that the various approaches that the Asian Development Bank is funding in developing countries to curb poverty have failed to materialize. This is shown by the case of Sekong province. This calls for other alternatives that are more efficient than the existing to help the ADB in curbing poverty through its funding policy. Poverty still lurks in the region.

Options to address the Problem

Poverty tends to be passed from one generation to another. However, the funding policy of the Asian Development Bank can be improvised to help families, children, and communities in the Asian region in breaking the chain of poverty. Some of the tools that can be used in this case include the following.

Provision of Quality Education: The Asian Development Bank should invest in the education system by sponsoring students from poor backgrounds who cannot afford school fees. It should also sponsor higher learning in the region. This would enable children to acquire the basic life skills and knowledge that they require so as to realize their full potential and change their social and economic status. Provision of quality education can also be achieved through training of teachers, construction and maintenance of new learning facilities that are well equipped, and eliminating the obstacles that prevent children in the region from attending schools.

Provision of Quality Health Care: The ADB should adjust its funding policy of the developing countries to aim at ensuring that health care is provided to the people at affordable or no costs. The policy should also focus on building clinics and health care facilities, conducting training programs for nurses and other workers, as well as investing in equipment for use in the health care facilities. The aim of this would be ensuring that children in the region grow up healthy and strong. This is critical because most people in the region cannot afford quality health care due to poverty. As such, death rate has increased significantly, especially as noted among children.

Provision of Water and Sanitation: One of lacking basic amenities in most developing regions in Asia is proper sanitation processes and water. These are essential to the growth and development of children. As such, the ADB funding policy should focus on helping the various poverty-stricken communities in building latrines, water points for the communities, and establishment of organizations so as to ensure that there is continued management, development, and maintenance of the water points that have constructed through the funding policy of the ADB. This would also significantly contribute towards the minimization of deaths due to waterborne diseases due to improvement of hygiene.

Provision of Economic Security: The ADB should purpose to eradicate poverty in the developing regions of Asia and other parts of the world by assisting the inflicted communities to establish and sustain economic security that would enable them to thrive. One of the best ways of doing this is by training individuals from these areas so that they can acquire knowledge and skills that they can use to earn a living, as well as financially supporting their families. This would be significant in eliminating the existing chain of poverty.

Promoting Child Participation: eradication of poverty can also be achieved through child participation. This means that the funding policy of ADB should invest in training children on their rights and creating awareness on child rights in the society. It would also imply that the funding policy focuses on ensuring that children play an active role in poverty eradication. Additionally, it would create a forum for children to express their views and engage in citizenship, as well as making wise decisions that shape their future and that of the community. 

Analysis of the Different Options

Provision of Quality Education: this would be a successful approach towards the elimination of poverty in the affected areas. That is because once children and people have been equipped with knowledge and skills, they can either look for employment or engage in self-employment. Either way, the skills and knowledge would enable them to generate an income, bringing down poverty levels in the area.

Provision of Quality Health Care: this is more oriented towards improvement of the living condition and standards of the people than eradicating poverty. I would recommend a modification of this strategy to ensure that it focuses more on alleviating poverty than providing comfort in the society.

Provision of Water and Sanitation: this is critical in fighting poverty. In most areas that are poverty-stricken, there is poor sanitation and lack of clean, adequate water. As such, people are affected by waterborne diseases that limit their ability to engage in constructive activities such as employment. It would thus reduce death cases resulting from poor sanitation. Presence of clean water and effective sanitation services is a sign of eradication of poverty in the region.

Provision of Economic Security: this is critical in eradicating poverty. It would successfully promote economic growth among the people. Some of the ways of achieving this include offering pensionable jobs and encouraging people to invest in personal schemes. This would efficiently break the poverty chains in the region.

Promoting Child Participation: this is an effective way of fighting poverty. It would play a critical role in preparing children to take the mantle of leadership in the society. As such, they would influence everyone around them in establishing efficient strategies of eradicating poverty. The funding policy should invest in this strategy for a bright future of the poverty-stricken regions. 

My Own Solution to the Problem

There are two basic approaches that I would use to ensure efficient poverty eradication in the areas. One such is through the provision of skills and knowledge. This would enable people to engage in activities that can warrant them a livelihood. Some would use the skills to engage in self-employment while the rest engage in formal employment. Certainly, this would reduce poverty levels.

The second approach would be ensuring that income and resources are redistributed. One of the primary causes of poverty is lack of proper distribution and utilization of resources. Some areas are well endowed with resources at the expense of others. Redistribution of these resources would ensure that every region has resources that the residents can use to generate income. Additionally, income would be redistributed. In these regions, some people earn a lot while the majority of the population sinks in poverty. My recommendation is that a redistribution of income would ensure that the minimum wage is raised so that the income can enable employees to take care of their needs and those of their families.

This shows that despite the efforts that the funding policy has invested in fighting poverty in the affected areas, the vice still looms. However, this can be solved through the possible solutions that have been suggested in this brief. The ADB should focus on investing in such.


Ali, I., & Son, H. H. (2007). Measuring inclusive growth. Asian Development Review24(1), 11

Clement, F. (2010). Analysing decentralised natural resource governance: proposition for a “politicised” institutional analysis and development framework. Policy Sciences43(2), 129-156.

Rauniyar, G., & Kanbur, R. (2010). Inclusive growth and inclusive development: a review and synthesis of Asian Development Bank literature.Journal of the Asia Pacific Economy15(4), 455-469.

Rigg, J. (2012). Living with Transition in Laos: Market Intergration in Southeast Asia. Routledge

Singh, A. (2007). Policy Environment and Regulatory Reforms for Private and Foreign Investment in Developing Countries: A Case of the Indian Power Sector.

Tham, S. Y. (2011). Asian Development Bank Institute.

Zhuang, J. (Ed.). (2011). Poverty, Inequality, and Inclusive Growth in Asia: Measurement, Policy Issues, and Country Studies. Anthem Press.

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