ADB under pressure on policy as it seeks funds

By Raju Gopalakrishnan

MANILA (Reuters) - The Asian Development Bank is coming under increased pressure to accelerate internal reform and maintain environmental and other safeguards at its projects as it seeks an increase in funding, according to officials and documents seen on Thursday.

The Manila-based development bank is seeking to raise its capital base from about $55 billion to increase non-concessional loans to the crisis-hit Asia region by as much as 50 percent this year to about $11-13 billion.

At an ADB board of directors meeting in Manila this week, several donor nations insisted any capital increase must be accompanied by reforms, said one source who was present.

Some board members are concerned about the bank's review of its energy and social safeguards policies, and the need for internal reforms, including staff management issues.

Non-governmental organisations have blasted the reviews, saying they will lead to relaxation of safeguards and the process was being rushed through without allowing for adequate consultation.

"We find it difficult to foresee a situation where a general capital increase is approved by all stakeholders without agreement from management on a set of clear, time-bound institutional reforms," said U.S. Director Curtis Chin in a statement distributed at the meeting.

"The ADB's environmental and social safeguards must not be diluted. Indeed they should be strengthened. Such a commitment to strengthened safeguards must be clear before any final consideration of an increase in the ADB's capital base."