Asian Development Outlook 2021
Source : Down to Earth
GS II : Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests GS III : Indian Economy
Why in News ?
Report published in Asian Development Outlook 2021. Pandemic could put India’s economic recovery at risk, according to a new report by leading financial institution, the Asian Development Bank (ADB).
- The report assessed 45 economies in the Asia and Pacific.
Key Facts
Pandemic was the biggest threat to Asia and the Pacific. This was mainly due to delay in vaccine rollouts or major new outbreaks.
- The ongoing second wave of the novel coronavirus disease (COVID-19) put India’s economic recovery at risk according to the Asian Development Bank (ADB).
- Asian Development Outlook 2021 explain the 45 economies that excluded Japan, Australia and New Zealand, were to grow 7.3 per cent this year.
- If a healthy global recovery and early progress on COVID-19 vaccines.
- India’s economy, was expected to grow 11 per cent in fiscal year 2021 amid a strong vaccine drive.
- India’s gross domestic product (GDP) was expected to expand 7 per cent in 2022.
- South Asia’s gross domestic product growth was expected to rebound to 9.5 per cent.
- The region’s growth is forecast to moderate to 5.3 per cent in 2022.
- Excluding high income newly industrialised economies a growth of 7.7 per cent is forecast for this year and 5.6 per cent for next year.
- Growth was forecast to be the strongest in east.
- East Asia’s GDP was expected to grow 7.4 per cent in 2021 and 5.1 per cent in 2022.
- At the same time south Asia, central and southeast Asia as well as the Pacific were to see more moderate growth.
- China’s GDP was forecast to expand 8.1 per cent in 2021 and 5.5 per cent in 2022.
- Average inflation in the region was forecast to fall to 2.3 per cent in 2021, from 2.8 per cent in 2020.
Asian Development Bank
The Asian Development Bank was conceived in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world.
- It is headquartered at Manila, Philippines.
- ADB now has 67 members of which 48 from within Asia and Pacific while remaining 19 from outside.
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific and non-regional developed countries.
- ADB assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development.
- The ADB was modeled closely on the World Bank and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions.
- Board of Governors
- It is the highest policy-making body of the bank.
- It is composed of one representative from each member state.
- The Board of Governors also elect the bank’s President who is the chairperson of the Board of Directors and manages ADB.
How ADB IS Funded ?
- ADB raises funds through bond issues on the world’s capital markets.
- ADB also rely on its members’ contributions, retained earnings from its lending operations, and the repayment of loans.
- As of 31 December 2016, Japan holds the largest proportions of shares at 15.67%.
- The United States holds 15.56%, China holds 6.47%, India holds 6.36%, and Australia holds 5.81%.
India and ADB Relation
- India is a founding member and the fourth largest shareholder.
- India is planning to set up a ADB‘s regional hub at New Delhi.
- In India, ADB finances projects such as
- East coast economic corridor
- Solar rooftop investment program
- Mechi river bridge project in Indo-Nepal border
- TAPI gas pipeline
- South Asia Subregional Economic Cooperation (SASEC) Program
- Supporting fiscal reforms in West Bengal State
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