International Business

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Siddhartha Law College, Dehradun

Dated: 05/05/15

“IBRD, ADB”
Project submitted for the partial fulfillment for the degree of B.B.A. LL.B.

Batch (2013-2018)

Submitted to: -

Submitted by:-

Mrs. Reeta Rautela

Ankit Sharma

(Assistant professor)

B.B.A. LL.B. (4th sem.)

Subject Name: International Business

Siddhartha Law College, Dehradun
(Affiliated to Uttarakhand Technical University, Dehradun)

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ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without the kind
support of my faculty teacher Mrs. Reeta Rautela. I would like to extend my sincere thanks to
all of them.
I am highly indebted to Siddhartha Law College for their guidance and constant supervision as
well as for providing necessary information regarding the project & also for their support in
completing the project.
I would like to express my gratitude towards my parents, my teacher, and my friends for their
kind co-operation and encouragement which helped me in completion of this project.
My thanks and appreciations also go to my colleagues in developing the project and people who
have willingly helped me out with their abilities.

Ankit Sharma
B.B.A.LL.B. (2nd Year)

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TABLE OF CONTENTS
1) INTRODUCTION………………………………………………....4
2) WORLD BANK OR IBRD………………………………………..4
3) ORGANISATION STRUCTURE…………………………………4
4) CAPITAL RESOURCES OF WORLD BANK……………………5
5) OBJECTIVES OF WORLD BANK……………………………….5
6) FUNCTIONS OF WORLD BANK………………………………..5-6
7) ASIAN DEVELOPMENT BANK………………………………...6-7
8) MEMBERSHIP…………………………………………………...8
9) ORGANISATION STRUCTURE………………………………..8
10) MANAGEMENT……………………………………………..8
11) HISTORY OF ADB…………………………………………..8-10
12) PROJECTS AND PROGRAMS………………………………11
13) HOW ADB’s ASSISTANCE IS FINANCED…………………12-13

INTRODUCTION
IBRD:- The International Bank for Reconstruction and Development (IBRD), commonly
referred to as the World Bank, is an international financial institution whose purposes include
assisting the development of its member nation’s territories, promoting and supplementing
private foreign investment and promoting long-range balance growth in international trade.
The World Bank was established in December 1945 at the United Nations Monetary and
Financial Conference in Bretton Woods, New Hampshire. It opened for business in June 1946
and helped in the reconstruction of nations devastated by World War II. Since 1960s the World
Bank has shifted its focus from the advanced industrialized nations to developing third-world
countries.

Organization and Structure:
The organization of the bank consists of the Board of Governors, the Board of Executive
Directors and the Advisory Committee, the Loan Committee and the president and other staff
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members. All the powers of the bank are vested in the Board of Governors which is the supreme
policy making body of the bank.
The board consists of one Governor and one Alternative Governor appointed for five years by
each member country. Each Governor has the voting power which is related to the financial
contribution of the Government which he represents.
The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six
largest shareholders, namely the USA, the UK, West Germany, France, Japan and India. The rest
of the 15 members are elected by the remaining countries.
Each Executive Director holds voting power in proportion to the shares held by his Government.
The board of Executive Directors meets regularly once a month to carry on the routine working
of the bank.
The president of the bank is pointed by the Board of Executive Directors. He is the Chief
Executive of the Bank and he is responsible for the conduct of the day-to-day business of the
bank. The Advisory committees appointed by the Board of Directors.
It consists of 7 members who are expects in different branches of banking. There is also another
body known as the Loan Committee. This committee is consulted by the bank before any loan is
extended to a member country.

Capital Resources of World Bank:
The initial authorized capital of the World Bank was $ 10,000 million, which was divided in 1
lakh shares of $ 1 lakh each. The authorized capital of the Bank has been increased from time to
time with the approval of member countries.
On June 30, 1996, the authorized capital of the Bank was $ 188 billion out of which $ 180.6
billion (96% of total authorized capital) was issued to member countries in the form of shares.
Member countries repay the share amount to the World Bank in the following ways:
1. 2% of allotted share are repaid in gold, US dollar or Special Drawing Rights (SDR).
2. Every member country is free to repay 18% of its capital share in its own currency.
3. The remaining 80% share deposited by the member country only on demand by the World
Bank.

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Objectives:
The following objectives are assigned by the World Bank:
1. To provide long-run capital to member countries for economic reconstruction and
development.
2. To induce long-run capital investment for assuring Balance of Payments (BoP) equilibrium
and balanced development of international trade.
3. To provide guarantee for loans granted to small and large units and other projects of member
countries.
4. To ensure the implementation of development projects so as to bring about a smooth
transference from a war-time to peace economy.
5. To promote capital investment in member countries by the following ways;
(a) To provide guarantee on private loans or capital investment.
(b) If private capital is not available even after providing guarantee, then IBRD provides loans
for productive activities on considerate conditions.

Functions:
World Bank is playing main role of providing loans for development works to member countries,
especially to underdeveloped countries. The World Bank provides long-term loans for various
development projects of 5 to 20 years duration.
The main functions can be explained with the help of the following points:
1. World Bank provides various technical services to the member countries. For this purpose, the
Bank has established “The Economic Development Institute” and a Staff College in Washington.
2. Bank can grant loans to a member country up to 20% of its share in the paid-up capital.
3. The quantities of loans, interest rate and terms and conditions are determined by the Bank
itself.
4. Generally, Bank grants loans for a particular project duly submitted to the Bank by the
member country.
5. The debtor nation has to repay either in reserve currencies or in the currency in which the loan
was sanctioned.

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6. Bank also provides loan to private investors belonging to member countries on its own
guarantee, but for this loan private investors have to seek prior permission from those counties
where this amount will be collected.

Asian Development Bank:Structure and Functions of Asian Development Bank (ADB)
The Asian Development Bank (ADB) is a multilateral development finance institution whose
mission is to reduce poverty in the Asia Pacific region.
Although the ADB claims to operate in the interest of Asia’s poorest citizens, civil society groups
have long been concerned about the ADB’s role in promoting sustainable and equitable growth in
the region.
The ADB was founded in 1966 with the goal of eradicating poverty in the region. With over 1.9
billion people living on less than $2 a day in Asia, the institution has a formidable challenge.
It plays the following functions for countries in the Asia Pacific region:
i. Provides loans and equity investments to its Developing Member Countries (DMCs)
ii. Provides technical assistance for the planning and execution of development projects and
programs and for advisory services
iii. Promotes and facilitates investment of public and private capital for development
iv. Assists in coordinating development policies and plans of its DMCs
Though well-intentioned, ADB-funded operations have been responsible for causing widespread
environmental and social damage, adversely affecting some of the regions poorest and most
vulnerable communities.
Though publicly financed by taxpayer dollars, ADB activities (and those of other multilateral
development banks) are often carried out without the informed participation of affected people,
Non- Governmental Organizations (NGOs), or, in many cases, the elected officials in the
borrowing countries.
A global movement to reform the ADBs has based its activities on the assumption that
sustainable development and poverty alleviation are impossible without informed public
participation in the decision making process.
Civil society concerns with the ADB include:
i. Access to information about the ADB’s operations
ii. Public participation in the design, implementation, monitoring and evaluation of ADB projects
iii. The social and environmental impacts of ADB programs and projects and the Bank’s
accountability for those impacts
iv. The ADB’s private sector lending
v. The ADB’s role in regional and sub-regional economic cooperation
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The Bank Information Center, in collaboration with its partners, works toward democratizing the
ADB so that social and environmental considerations are incorporated in the Banks’ decision
making processes and operations.
ADB’s Vision – An Asia and Pacific Free of Poverty
ADB is an international development finance institution whose mission is to help its developing
member countries reduce poverty and improve the quality of life of their people.
Headquartered in Manila and established in 1966, ADB is owned and financed by its 67
members, of whom 48 are from the region and 19 are from other parts of the globe. ADB’s main
partners are governments, the private sector, non-government organizations, development
agencies, community- based organizations and foundations.
Under Strategy 2020, a long-term strategic framework adopted in 2008, ADB will follow three
complementary strategic agendas: inclusive growth, environmentally sustainable growth and
regional integration.
In pursuing its vision, ADB’s main instruments comprise loans, technical assistance, grants,
advice and knowledge. Although most lending is in the public sector and to governments ADB
also provides direct assistance to private enterprises of developing countries through equity
investments, guarantees and loans. In addition, its triple-A credit rating helps mobilize funds for
development.

Membership:
From 31 members at its establishment in 1966, ADB has grown to encompass 67 members of
which 48 are from within the Asia and Pacific region and 19 outside. Georgia is the 67 thand
newest member, having joined ADB effective 2 February 2007.
Organization Structure:
The highest decision making tier at ADB is its Board of Governors, to which each of ADB’s 67
members nominate one Governor and an Alternate Governor to represent them. The Board of
Governors meets formally once a year at an Annual Meeting held in a member country.
The Governors’ day to day responsibilities are largely delegated to the 12-person Board of
Directors, which performs its duties full time at ADB’s Head Quarters in Manila.
The ADB President, under the Board’s direction, conducts the business of ADB. The President is
elected by the Board of Governors for a term of five years and may be re-elected.
Management:
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The President is Chairperson of the Board of Directors and under the Board’s direction conducts
the business of ADB. He is responsible for the organization, appointment and dismissal of the
officers and staff in accordance with regulations adopted by the Board of Directors. The
President is elected by the Board of Governors for a term of five years and may be reelected. He
is also the legal representative of ADB.
On 17 April 2006, the Board of Directors approved the recommendation on the reassignment of
the functions and duties of the operations vice presidents. The President has also approved the
structure of the four realigned regional departments, effective 1 May 2006.
The President now heads a management team comprising four Vice-Presidents and the Managing
Director General, who supervise the work of ADB’s operational, administrative and knowledge
departments.
History of ADB:
ADB was conceived amid the postwar rehabilitation and reconstruction of the early 1960s. The
vision was of a financial institution that would be Asian in character and foster economic growth
and cooperation in the region then one of the poorest in the world.
A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by
the United Nations Economic Commission for Asia and the Far East in 1963, set that vision on
the way to becoming reality.
The Philippines capital of Manila was chosen to host the new institution, the Asian Development
Bank which opened on 19 December 1966, with 31 members to serve a predominantly
agricultural region. Takeshi Watanabe was the first President.
For the rest of the 1960s, ADB focused much of its assistance on food production and rural
development. The next three years saw ADB’s first technical assistance, loans (including a first
on concessional terms in 1969) and bond issue (in Germany).
In 1970s:
Assistance expanded in the 1970s into education and health and then to infrastructure and
industry. The gradual emergence of Asian economies in the late 1970s spurred demand for better
infrastructure to support economic growth. ADB focused on improving roads and providing
electricity.
When the world suffered its first oil price shock, ADB shifted more of its assistance to support
energy projects, especially those promoting the development of domestic energy sources in
member countries.
Co-financing operations began to provide additional resources for ADB projects and programs.
1970 saw ADB’s first bond issue in Asia worth $16.7 million in Japan.
A major landmark was the establishment in 1974, of the Asian Development Fund to provide
concessional lending to ADB’s poorest members.
At the close of the decade, some Asian economies had improved considerably and graduated
from ADB’s regular assistance.
In 1980s:
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It was also becoming clear that the private sector was an important ally in driving growth. ADB
thus in the 1980s made its first direct equity investment. ADB also began to use its track record
to mobilize additional resources for development from the private sector.
In the wake of the second oil crisis, ADB continued its support in the 1980s to infrastructure
development, particularly energy projects. ADB also increased its support to social
infrastructure, including gender, microfinance, environmental, education, urban planning and
health issues.
In 1982, ADB opened its first field office, a Resident Mission in Bangladesh to bring operations
closer to their intended beneficiaries. Later in the decade, ADB approved a policy supporting
collaboration with non-government organizations to address the basic needs of disadvantaged
groups in its developing member countries.
In 1990s:
The start of the 1990s saw ADB begin promoting regional cooperation, forging close ties among
neighboring countries through an economic cooperation program.
In 1995, ADB became the first multilateral organization to have a Board-approved governance
policy to ensure that development assistance fully benefits the poor. Policies on the inspection
function, involuntary resettlement and indigenous peoples designed to protect the rights of
people affected by a project were also approved.
ADB’s membership, meanwhile, continued to expand, with the addition of several Central Asian
countries following the end of the Cold War.
But in mid-1997, a severe financial crisis hit the region, setting back Asia’s spectacular economic
gains. ADB responded with projects and programs to strengthen financial sectors and create
social safety nets for the poor. ADB approved its largest single loan-a $4 billion emergency loan
to the Republic of Korea and established the Asian Currency Crisis Support Facility to accelerate
assistance.
A milestone came in 1999 when, recognizing that development was still bypassing so many in
the region, ADB adopted poverty reduction as its overarching goal.
Into the 21st Century:
The new century brought hope and tragedy, as well as a new focus on helping its developing
members achieve the Millennium Development Goals and to enhance development effectiveness.
In 2003 saw severe acute respiratory syndrome (SARS) hit the region, making it clear that
fighting infectious diseases was a public good that required regional cooperation. ADB began
providing support at national and regional levels to help countries more effectively respond to
HIV/AIDS and the growing threat of.
ADB had to respond to other unprecedented natural disasters, committing more than $850
million for recovery in areas of India, Indonesia, Maldives and Sri Lanka hit by the Asian
tsunami disaster of December 2004 and a $1 billion line of assistance to help victims of the
October 2005 earthquake in Pakistan.
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As 2007 drew to a close, ADB celebrated 41 years of fruitful cooperation with the governments
and peoples of the Asia and Pacific region, looking back on phenomenal economic growth in the
region alongside abiding development challenges.
Now in 2008, it is looking to the future with its Strategy 2020 that will determine the
organization’s future direction and vision for the next dozen years.
Priorities:
Dynamic economic development has substantially helped reduce poverty in Asia and the Pacific.
Despite some spectacular progress over the last few decades, the region remains home to two
thirds of the world’s poor. The number of people living in absolute poverty remains high at 903
million (2005).
While growth between 2005 and 2008 has further reduced poverty, the food and fuel price crisis
in 2008 and the global recession starting 2009 has slowed down progress in poverty reduction
substantively.
The region’s economic growth has been accompanied by widening disparities both within and
between countries. Such disparities, together with climate change and the mounting
environmental costs of growth, threaten to undermine the region’s development and stability.
Partner governments therefore, emphasize the need to make growth and social development in
the region more inclusive.
To fulfill its mission and realize its vision of an Asia and Pacific free of poverty, ADB will follow
three complementary strategic agendas, as set out in Strategy 2020, ADB’s long-term strategic
framework: inclusive growth, environmentally sustainable growth and regional integration.
Inclusive growth and social development, addressing the environments of the poor and ensuring
that the vulnerable and poor benefit from regional integration are ADB’s specific contributions to
poverty reduction in the Asia-Pacific region.
In this context, it will focus on five core areas of operation:
i. Infrastructure
ii. Environment, including climate change
iii. Regional Cooperation and Integration
iv. Finance Sector Development
v. Education
ADB will continue to operate on a more selective basis in health, agriculture and disaster and
emergency assistance.
ADB will focus its efforts on five drivers of change in the region:
i. Private sector development and private sector operations
ii. Good governance and capacity development
iii. Gender equity
iv. Knowledge solutions
v. Partnerships
Operations:
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ADB works in partnership with governments and public and private enterprises in its developing
member countries on projects and programs that will contribute to economic and social
development, based on the country’s needs and priorities.
In 2008, ADB approved loans worth $10.5 billion for 86 projects, most of which went to the
public sector. Technical assistance, which is used to prepare and implement projects and support
advisory and regional activities, amounted to $274 million. Grant-financed projects totaled $811
million.
Projects and Programs:
In the past 40 years, ADB has supported projects in agriculture and natural resources, energy,
finance, industry and non-fuel minerals, social infrastructure and transport and communications.
More than half of ADB’s assistance has gone into building infrastructure – roads, airports, power
plants and water and sanitation facilities. Such infrastructure helps lay the foundation for
commerce and economic growth and makes essential services accessible to the poor.
Countries with limited debt repayment capacity in the region receive additional help through the
Asian Development Fund (ADF), set up in 1973, to provide grants and low-interest loans.
Since 2000, ADF has helped build 38,000 schools and build or improve 6,700 health facilities. It
has helped provide over 200,000 safe water connections; irrigate more than 300,000 hectares of
land; and build or rehabilitate 42,000 kilometers of roads. ADB is quick to help when catastrophe
strikes. It provides assistance in the wake of natural disasters, such as earthquakes and landslides,
as well as in post-conflict situations.
Assistance to its developing member countries creates an enabling environment for private sector
development. ADB also directly finances private sector projects to assist commercial investors
and lenders. ADB has a triple-A credit rating and actively mobilizes financial resources through
its co-financing operations, tapping official, commercial and export credit sources.
Partnerships:
ADB consults people from all sections of society to ensure that its projects, programs and
strategies address their needs. The Country Partnership Strategy (formerly Country Strategy and
Program), the main planning document at the country level, emphasizes consultations with the
government, the private sector, civil society and all project stakeholders.
The strategy functions as a business plan composed of individual loan and technical assistance
projects and programs planned for priority sectors and themes.
To ensure coherence over a wider geographical area, Regional Cooperation Strategies and
Programs are prepared for the five sub-regions covered by ADB’s regional operations.
The various stages that a project undergoes in its planning and execution from country
programming to project completion and evaluation is collectively known as ADB’s project cycle.
Financial Resources:
Carrying a triple-A credit rating, ADB raises funds through bond issues on the world’s capital
markets. It also utilizes its members’ contributions and retained earnings from lending
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operations. These sources comprise ADB’s ordinary capital resources and account for 74.1% of
lending to ADB’s developing member countries.
Loans are also provided from Special Funds Resources financed mostly from contributions of
donor members for ADB’s concessional loan and technical assistance programs.

How ADB’s Assistance is financed:
Ordinary Capital Resources (OCR):
These are a collection of funds available for ADB’s lending operations, replenished by
borrowings from the world’s capital markets. OCR loans are offered at near market terms to
better-off borrowing countries.
Asian Development Fund (ADF):
Funded by ADB’s donor member countries, ADF offers loans at very low interest rates and
grants that help reduce poverty in ADB’s poorest borrowing countries.
Technical Assistance (ТА):
Assists countries in identifying and designing projects, improving institutions, formulating
development strategies, or fostering regional cooperation. ТА can be financed by grants, or more
rarely loans through ADB’s central budget or a number of special lands provided by ADB’s
donor members.

Innovation and Efficiency Initiative (IEI):
In 2005, new financing instruments and modalities were introduced under the IEI. These new
financing instruments are intended to provide ADB clients and operational teams with additional
alternatives to help finance development projects.

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