ADB's Board of Governors approved a US$1.42 billion net income allocation from its ordinary capital resources. — Photo courtesy of ADB
The Board of Governors of the Asian Development Bank (ADB) approved the bank's financial statements for 2023 and an allocation of US$1.42 billion in net income from its ordinary capital resources.
This decision was made during the Governors' business session on Sunday, marking the highest net income allocation in ADB's history.
The allocable net income for 2023 will be allocated as follows: over $1 billion will be allocated to ADB's ordinary reserve to support the bank's capital growth and provide an earnings base to generate income. Additionally, $292.5 million will be allocated to the Asian Development Fund, which offers grants to ADB's poorest and most vulnerable developing member countries; $110 million will be allocated to the Technical Assistance Special Fund, which provides technical assistance grants to borrowing members for project preparation and technical or policy studies; and $15 million to the Asian Pacific Disaster Response Fund, which provides immediate post-disaster grants to developing member countries for restoring lifesaving services.
Allocable net income is defined as net income after appropriation of guarantee fees to the special reserve and certain adjustments reported in the cumulative revaluation adjustments account.
In a submitted written remarks to the session, Đào Minh Tú, Deputy Governor of State Bank of Vietnam discussed three areas under this year’s theme of “Bridge to the Future” that he believed ADB can further strengthen its pioneering role in driving international development agenda.
“I commend ADB’s recent shift to be the Climate Bank of Asia Pacific and great efforts to implement the $100 billion climate finance ambition. This is very much relevant to the region that is highly vulnerable to climate risks but having limited resources to effectively address them, and disproportionately suffering from the imbalance of climate costs and benefits.”
Tú said that at the heart of climate actions are material incentives at scale for countries to mitigate higher costs and risks of greener solutions. In this regard, it is imperative that ADB explore possible use of its own resources to offer meaningful incentives at a sufficient scale, in addition to ongoing efforts to mobilise more and more concessional co-financing for climate operations.
“With its strong experience in implementing green investment, ADB should clearly link such incentives with measurable greener outcomes, with the ability to revoke them if such outcomes are not achieved. This will set a model for countries to consider adopting for national level initiatives,” he added.
The deputy governor also emphasised the need for ADB's proactive efforts in addressing the region's short-term focus issue of uncertainty and volatility in the global and regional economy. This issue poses significant risks in terms of slower growth, weakened private investment and consumption, as well as stresses on public finance and balance of payments.
“Lastly, with the relative and gradual shifting of global growth drivers to Asia Pacific over the past decades, many economies in the region have reached middle-income status but still with significant development challenges in certain pockets of vulnerable communities. Governments of those economies have also experienced significant institutional capacity development and strengthening, while still requiring external support in new and emerging areas which can be transformative drivers of growth and development in the future. ADB could be more strategic in delivering stronger impact of its resources by adopting a more flexible approach in engaging with economies’ stakeholders following national systems,” according to the statement.
He emphasised that Việt Nam has already taken significant steps in this direction, such as implementing a comprehensive digital transformation strategy and promoting green and circular economic models.
“We are pledged to continuing this journey, with the support of ADB and our other partners. Going forward, we remain committed to our mission of promoting sustainable economic growth and financial stability in Việt Nam, and to working closely with our partners and stakeholders to build a more resilient and inclusive financial system. We believe that by continuing to pursue a forward-looking and proactive approach, we can help ensure that our economy and society are well positioned to navigate the challenges and opportunities of the future.” — VNS