The Asian Development Bank (ADB) will not change its decision to admit China as a member despite protests from founder member Taiwan bank president Masao Fujioka said. Chinas admission in March 1986 and the decision of the bank to change Taiwans name to Taipei China caused a Taiwanese boycott of the ADBs last annual meeting in Manila. Fujioka tolds in an interview that Taiwan had been invited to the banks 20th annual meeting starting April 27 in Osaka but the situation remains the same. The banks board agreed to change Taiwans name to Taipei China Fujioka said. We have tried to maintain our channels of communication through the Taiwanese director but we are not negotiating with a view to changing our agreement with China he said. ADB figures show China has the largest shareholding among the banks developing members with 7.2 pct of its equity. Fujioka said a stalemate also continued with Vietnam which complained at last years meeting that for several years the ADB had unilaterally stopped advancing loans. An ADB spokesman said the last loan of 40.67 mln dlrs was made to the then Republic of Vietnam (South Vietnam) in 1974. Vietnam said last year that only 23 mln dlrs of that loan were disbursed. The banks 1986 annual report said of 11 loans approved for Vietnam eight had been closed two were suspended and only one was under administration at the end of 1986. Cumulative disbursements to Vietnam at the end of 1986 totalled 25.3 mln dlrs or 99.5 pct of the total amount of effective loans the report said. The situation (in Vietnam) is not conducive to bank operations Fujioka said. Vietnam continues to be a member. We would like to help it but new loans seem to be difficult. Its not a question of political instability the environment has to be right for banking operations. He said with the first loans made to India in 1986 and lending operations in China scheduled to start this year the ADB had now acquired a truly Asian character. Although Chinas finance ministry had gained five years of experience in borrowing from the World Bank ADB loans would be routed through the countrys central bank Fujioka said. Its been a very slow start Fujioka said. We identified three projects (in China). One disappeared and we now have only two left. He said the ADB might lend China between 200 and 300 mln dlrs in 1987 for an investment bank and an energy project. He did not foresee an expansion of lending to India. The ADB in 1986 approved two loans to India totalling 250 mln dlrs. There is a sort of agreement that our loans to India should be modest and that the World Bank should be the major lender Fujioka said. He did not give details. Fujioka said the ADB saw its lending to the private sector serving as a catalyst. The banks new private sector division in 1986 approved three loans totalling 11.46 mln dlrs without government guarantees. In addition the ADB approved four equity investment projects totalling 8.15 mln dlrs. This raised to 15.18 mln the cumulative approvals since equity financing commenced in 1983. But Fujioka said the ADB should not compete with private banks. We have a narrow path to walk he said. He said he was happy with the decision of the banks donor countries to increase the ADBs fund for soft loans. The fourth replenishment of the soft-loan window the Asian Development Fund brought it to 3.6 billion dlrs from 3.2 billion Fujioka said. In particular the United States has maintained its 16 pct share said the ADB chief. He said there had been disagreements with the U.S. Which holds 14.9 pct of the banks equity over lending policies. The U.S. Complained in 1986 the ADB was granting bad loans in its impatience to hit lending targets. I suspect there is some arm-twisting he said. I find some developed countries are more interested in the procurement side instead of the development side. Fujioka said he said he foresaw increased sectoral lending and a gradual dilution of the ADBs project-tied lending. Fujioka said project lending was expected to drop to 63 pct of total loans in 1987 from 66.5 pct in 1986 and 77.5 pct in 1985. He said sectoral lending was projected to rise to 20 pct in 1987 from 12.8 pct in 1986 and 7.5 pct in 1985. He said the bank would try to reduce some of its liquid assets by repaying borrowings carrying high interest rates. On the other hand we must maintain our presence in major financial markets he said. Why should we not take advantage of historically low interest rates?
ADB'S FUJIOKA SAYS STALEMATE WITH TAIWAN CONTINUES