U.S. vote underlines unease about ADB policies

By Raju Gopalakrishnan

MANILA (Reuters) - A row has broken out between the Asian Development Bank and the United States, one of its biggest donors, over the multilateral agency's lending policies and function, bank and other officials say.

Just over two weeks ago, Washington voted against the ADB's long-term strategy, which charts the policies it hopes to adopt until 2020, the ADB's Web site www.adb.org says.

Britain abstained, but the rest of the 12-member board of the Asian multilateral lender approved it. The ADB holds its annual meeting in Madrid on May 3-6, where the strategy will be discussed by the bank's governors.

"We opposed the long-term framework because we believed it needed further improvements including an increased focus on the very poorest countries in the region and a better results measurement framework," a U.S. Treasury Department official said in Washington.

The official added that Washington nevertheless remained committed to the ADB and its aim of reducing poverty in Asia, but officials in Manila said they were concerned that U.S. funding commitments could be cut because of the row.

Bank officials said the U.S. disquiet appeared to be focused on the ADB's lending policies to middle-income countries, such as India and China, the fastest growing economies in the world.

When the ADB was formed in 1966, much of the region was mired in poverty and in need of help, but this was no longer the case.

"Asia has changed much quicker than the ADB," said an official, who declined to be named.