CSEET CURRENT AFFAIRS- INTERNATIONAL AFFAIRS - PART 4

THE BAY OF BENGAL INITIATIVE FOR MULTI-SECTORAL TECHNICAL AND ECONOMIC COOPERATION (BIMSTEC)

It constitutes seven Member States: five deriving from South Asia, including Bangladesh, Bhutan, India, Nepal, Sri Lanka, and two from Southeast Asia, including Myanmar and Thailand. the name of the grouping was changed to ‘Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation’ (BIMSTEC).

The objective of building such an alliance was to harness shared and accelerated growth through mutual cooperation in different areas of common interests by mitigating the onslaught of globalization and by utilizing regional resources and geographical advantages.

Being a sector-driven grouping, cooperation within BIMSTEC had initially focused on six sectors in 1997 (trade, technology, energy, transport, tourism, and fisheries) and expanded in 2008 to incorporate agriculture, public health, poverty alleviation, counter-terrorism, environment, culture, people-to- people contact, and climate change. Subsequently, following steps to rationalize and reorganize sectors and sub-sectors, cooperation was reorganized in 2021 under the following sectors and sub- sectors led by the respective Member States:

Sectors

H. E. Mr. Tenzin Lekphell assumed office as the Secretary-General of BIMSTEC on 06 November 2020. He is the third BIMSTEC Secretary-General.

Purpose of BIMSTEC

• To create an enabling environment for rapid economic development through the identification and implementation of specific cooperation projects in the already agreed areas of cooperation and such other areas that may be agreed upon by the Member States. Member States may periodically review the areas of cooperation.

• To accelerate the economic growth and social progress in the Bay of Bengal region through

joint endeavours in a spirit of equality and partnership.

• To promote active collaboration and mutual assistance on matters of common interest in the economic, social, technical and scientific fields.

• To provide assistance to each other in the form of training and research facilities in the

educational, professional and technical spheres.

• To cooperate more effectively in joint efforts that are supportive of and complementary to national development plans of the Member States which result in tangible benefits to the people in raising their living standards, including generating employment and improving transportation and communication infrastructure.

• To cooperate in projects that can be dealt with most productively on a regional basis among

the BIMSTEC Member States and that make best use of available synergies.

• To maintain peace and stability in the Bay of Bengal region through close collaboration in combating international terrorism, transnational organized crimes as well as natural disasters, climate change and communicable diseases.

• To maintain close and beneficial cooperation with existing international and regional

organizations with similar aims and purposes.

• To endeavour to eradicate poverty from the Bay of Bengal region.

• To establish multidimensional connectivity, promote synergy among connectivity frameworks in

the region, as a key enabler to economic integration for shared prosperity.

• To promote trade and investment as a major contributing factor for fostering economic and

social development in the region.

ASIAN DEVELOPMENT BANK 1960

The Asian Development Bank (ADB) envisions a prosperous, inclusive, resilient, and sustainable Asia and

the Pacific, while sustaining its efforts to eradicate extreme poverty in the region.

ADB is composed of 68 members 49 of

which are from Asia and the Pacific region.

Areas of Work

The ADB is committed to achieve a prosperous and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. It assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development.

As a multilateral development finance institution, ADB provides:

• loans

• technical assistance

• grants

ADB maximizes the development impact of its assistance by:

• facilitating policy dialogues, providing advisory services, and

• mobilizing financial resources through co-financing operations that tap official, commercial,

and export credit sources.

Financing and Investment by Asian Development Banks Private Sector Financing

ADB undertakes non-sovereign operations to provide financing to eligible recipients in developing member countries (DMCs). Non-sovereign operations comprise the provision of any loan, guarantee, equity investment, or other financing arrangement to privately held, state-owned, or sub-sovereign entities, in each case, (i) without a government guarantee; or (ii) with a government guarantee, under terms that do not allow ADB, upon default by the guarantor, to accelerate, suspend, or cancel any other loan or guarantee between ADB and the related sovereign.

Loans and other debt instruments

ADB offers hard currency loans, both senior and subordinated, as well as mezzanine financing. ADB also offer local currency loans in selective markets on a case to case basis. Interest rates and other terms vary, depending on a company’s or project’s needs and risks.

• Rates - In pricing its loans, ADB considers prevailing market rates in the relevant country and sector, factoring in country and transaction risks. ADB provides floating rate loans at a spread above the Secured Overnight Financing Rate (SOFR) or Euro interbank rate, depending on the currency. It also offers fixed-rate loans at the fixed-rate swap equivalent of floating-rate loans.

• Fees - Market-based fees are charged.

• Security - ADB will seek security appropriate for the loan and type of financing.

Equity investments

ADB may invest directly in an enterprise. It offers financing through equity investments, including direct equity investments in the form of common shares, preferred stock, or convertibles. Equity investments in enterprises, especially financial institutions, occur before an initial public offering.

Once the objective of its investment has been achieved, ADB will divest its shares at a fair market price.

ADB may also invest in a private equity fund, up to certain exposure limits. ADB will reserve the right to appoint a nominee to the advisory board of the fund. It will maintain frequent contact with the fund manager and require detailed quarterly reports on the fund manager’s investment, monitoring, value addition, and, eventually, divestment progress. With the same frequency, ADB will closely monitor financial performance as measured by net asset value.

Guarantees

ADB extends guarantees for eligible projects which enable financing partners to transfer certain risks that they cannot easily absorb or manage on their own to ADB. Guarantees can be provided when ADB has a direct or indirect participation in a project or related sector, through a loan, equity investment or technical assistance.

Loan Syndication

ADB partners with commercial banks, impact investors, institutional investors, and development finance institutions to provide debt for projects through B loan, complementary financing scheme, and parallel loan structures.

Blended Finance

Blended concessional finance is the combination of concessional finance from donors or third parties, with the normal account finance of development finance institutions (DFIs) and/or commercial finance from other investors, used to develop private sector markets, address Sustainable Development Goals, and mobilize private resources.