US to pitch for higher lending rates at ADB meet

MANILA: The United States will argue for higher lending rates and weaning some countries off development lending at an Asian Development Bank meeting this weekend, a US Treasury official said.

The proposed changes at the ADB’s annual meeting are similar to reforms the United States argued for at the World Bank last month that led to an increase in lending rates for developing countries with higher incomes.

The administration of US President Donald Trump had chided the World Bank’s lending to higher-income countries such as China, saying they should “graduate” to non-conces- sional loans.

“Some of the reform priorities that we pursued at the World Bank a few weeks ago are also things that we are prioritising in the strategy discussion here,” a senior US Treasury official told reporters on the sidelines of the ADB meeting here.

“Among those is a commitment to improving and developing a differentiated pricing strategy that encourages countries to seek financing from markets, rather than the bank, when those alternatives exist,” said the official, who spoke on condition of anonymity.

He did not specifically name China, but said countries now have better access to capital markets and the ADB should wean them off its development loans. Washington also preferred that taxpayer money go to the poorest countries, the official added.

The ADB, a Manila-based development lender whose major donors are Japan and the United States, finds itself at a crossroads as its members gather to debate a new strategy to run until 2030.

Founded in 1966 with a mandate to lift hundreds of millions of Asians out of poverty, the ADB has 67 member countries ranging from struggling Bangladesh and Pakistan to booming China and India.