The Asian Development Bank Institute (ADBI), led by its new head Masaru Yoshitomi, has mounted an attack on the IMF‘s use of conventional policies for dealing with the crisis in Asia and plans to hold meetings and seminars to challenge the IMF‘s approach at the Bank/Fund annual meetings. The ADBI is promoting alternative economic approaches, such as provision of ample liquidity and low interest rates, and plans to train Asian officials in these alternative approaches. The Institute’s challenge to the IMF has revived a proposal to establish an Asian Monetary Fund and to consider regional currency arrangements in Asia.
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Mr Yoshitomi’s appointment reflects Japan’s desire to establish the credibility of the ADBI as a centre for alternative monetary and development paradigms.
The Asian Development Bank itself is also pursuing a more independent line from Washington. The new head, Tadao Chino, has not signed a proposed memorandum with the World Bank, and has called for flexibility for development banks to decide on the policy paths to give more constructive competition among different development institutions and ideologies.
The US government demanded that the ADB cooperate more closely with the World Bank. The acting-US governor at the ADB, Edwin Truman, attacked the ADB for not “adhering to, and promoting, updated features of the international architecture” such as good governance, transparency, participation and accountability, and urged it to sign the memorandum with the World Bank defining what each institution will do in Asia. Threatening to withdraw US financial support, Mr Truman insisted that the ADB “must tighten its loan conditionality and systematically link lending allocations to monitorable, transparent, performance criteria”, and improve its own governance and accountability. The US line is supported by the European G7 governments who are also threatening to withhold future financial support. India and China opposed moves to link ADB lending to new conditionality.
