APPENDIX
Memorandum by the Department for International
Development
Asian Development Bank (Seventh
Replenishment of the Asian Development Fund) Order 2001
1. Section 4(1) of the Overseas Development and Co-operation
Act 1980 provides that if the Government of the United Kingdom
of Great Britain and Northern Ireland ("the United Kingdom")
becomes bound by arrangements for the making of any further payment
to an international development bank beyond the initial subscription
to the capital stock, the Secretary of State may, with the approval
of the Treasury, provide an Order for the payment out of money
provided by Parliament of any sums required by him for any of
the purposes specified in that subsection.
2. The United Kingdom is a party to the Agreement
Establishing the Asian Development Bank which entered into force
on 22 August 1966 (Cmnd 3762). The purpose of the Asian Development
Bank in April 1973, is to provide resources on concessional lending
terms for the less developed members of the Bank.
3. The United Kingdom has so far contributed a total
of some £410 million to the Asian Development Fund as follows:
| Initial funding (1973) |
£11.4 million |
| First replenishment (1976) | £18.9 million
|
| Second replenishment (1979) | £59. 3 million
|
| Third replenishment (1983) | £71.9 million
|
| Fourth replenishment (1987) | £95.1 million
|
| Fifth replenishment (1993) | £86.3 million
|
| Sixth replenishment (1997) | £67.0 million
|
4. Authorisation by Order made by statutory instrument
did not apply to the United Kingdom's contributions to the initial
funding and first replenishment. Parliament was informed of the
initial contribution to the Asian Development Fund by means of
a written reply to a Question in the House of Commons on 7 May
1974 (Vol. 873 No 35 cols. 135-136) and of the first replenishment
of the Fund by a written reply to a Question in the House of Commons
on 24 June 1976 (Vol. 913 No. 130 col. 600). Under Section 7(2)
of the International Finance, Trade and Aid Act 1977 (succeeded
by the Overseas Development and Co-operation Act 1980), a draft
Order (subsequently 1979 No. 1225) was approved by the House of
Commons on 27 July 1979 covering the United Kingdom's contribution
to the second replenishment. It became effective in October 1979.
The United Kingdom's contribution to the third replenishment was
approved by the House of Commons on 20 December 1982 under cover
of a draft Order (subsequently 1983 No. 697) under section 4(1)
of the Overseas Development and Co-operation Act 1980. It came
into operation in May 1983. The United Kingdom's contribution
to the fourth replenishment was approved by the House of Commons
on 16 December 1986 under cover of a draft Order (subsequently
1987 No. 1252) under Section 4(1) of the Overseas Development
and Co-operation Act 1980. The United Kingdom's contribution to
the fifth replenishment was approved by the House of Commons on
22 March 1993 under cover of a draft Order (subsequently 1993
No. 1060) under Section 4(1) of the Overseas Development and Co-operation
Act 1980. The United Kingdom's contribution to the sixth replenishment
was approved by the House of Commons on 17 July 1997 under cover
of a draft Order (subsequently 1997 No. 2713) under Section 4(1)
of the Overseas Development and Co-operation Act 1980.
5. Negotiations for the seventh replenishment of
the Asian Development Fund were concluded in September 2000. Resolution
No. 276 of the Board of Governors of the Asian Development Bank
was adopted on 13 December 2000; a copy of the Resolution has
been laid in the House of Commons Library. The Resolution provides
that the Bank is authorised to accept from certain member countries
contributions amounting to a total not less than US$2,772,774,
320.
6. The purpose of the Order, the draft of which is
now laid before the House of Commons, is to enable Her Majesty's
Government:
(i) to make a further
contribution to the Asian Development Fund of a sum not exceeding
£84,718,086, which the Asian Development Bank is authorised
to receive under Resolution No. 276. This amount represents the
United Kingdom's share (4.8 per cent) of the agreed donor replenishment
of $2.774 billion for the four-year period 2001-2004;
(ii) to redeem non-interest-bearing and
non-negotiable notes or other obligations issued by the Government
in payment of the contribution.
7. The Seventh Replenishment, and any instruments
of contribution deposited in connection with it, will not become
effective until instruments of contribution have been deposited
in an aggregate amount equivalent to at least 50% of the donor
contributions. In connection with the payment envisaged in Article
2 of the draft Order, no obligation will arise until an instrument
of contribution is deposited by the United Kingdom and becomes
effective. Payment is to be made in four annual instalments by
non-negotiable, non-interest-bearing promissory notes expressed
in pounds sterling and subsequently encashable on demand. Article
3 provides for redemption of these promissory notes.
8. The presentation of the draft Order for approval
of the House of Commons is in order to secure the support of the
House of Commons before the deposit of an instrument of contribution
and to authorise the making of an Order which would justify the
payments involved. Only when the obligations have come into existence
would the Secretary of State have power to make an Order in the
terms of the draft and, accordingly, only then would she make
it. This procedure was considered in the context of the draft
Inter-American Development Bank (Seventh General Increase) Order
1989 by the Select Committee on Statutory instruments in its Sixth
Report (HC 48-vi 1988-89) and it was found that there was not
technical reason for the House not to approve that draft Order.
March 2001
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