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ADB rules out funding to India 'for the moment'

Like the World Bank, the Asian Development Bank, or ADB, is not likely to soon restore the level of funding that India received from the multilateral agency before its May 1998 nuclear tests that attracted global economic sanctions.

ADB president Tadao Chino in Washington gave an indication to this effect yesterday. It would be difficult for the bank ''for the time being'' to grant loans for non-basic human needs project, thus ruling out funding for India's infrastructural projects, he said.

Cinnamon Dornsife, US alternate executive director at ABD, who was present there, also ruled out the possibility of India getting funds for the development of its infrastructure.

''The current US policy at the moment for multilateral development banks is that we support basic human needs lending for India, but other lending, we are not instructed to support at this time," she remarked.

The United States is one of the major partners in ADB and its writ runs on its lending operations. Chino said India, on an average, had been getting loans to the tune of $ 1.5 billion a year from ABD before its nuclear tests in 1998, but with sanctions in place, its funding was reduced to $ 625 million last year.

The World Bank had also cut to half its lending programme for India.

According to ABD charter, Chino pointed out; economic considerations should be the principal factor in its operations.

"We are processing India's loan applications with the co-operation of its government all possible projects and programmes which seem to be necessary and useful for the economic development of India," he added.

However, he acknowledged that "whether we can bring India's proposals to ABD's board of directors or not depends on the judgement at the time.'' he said.

"If the major shareholders are against the extension of credit to India, it is very difficult for us to put the proposals to the board of directors, because there is no prospect for their approval."

Chino said, "As usual and on a routine basis, we are making preparations'' to make available funds to India, "but whether we can bring this to the board of directors for approval will depend upon various considerations."

Though he did not elaborate his point, he was obviously referring to the non-proliferation benchmarks that the US and the Group of Eight, or G-8, wanted to be addressed to before the lifting of the sanctions.

Chino noted that even under the sanctions the extension of credit and assistance were possible if the project for which the funds had been asked were qualified for the basic human needs category.

However, ADB was trying to make available to India ''quite a considerable amount'' even with the sanctions in place, he added.

"Once the environment improves, we can bring these loans for projects and programmes for India to the board of directors and we can realise this assistance,'' Chino said.

UNI

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