thus allowing them a share of the regional voting pool. The AsDB’s LDCs (Less Developed
Countries) do not, then, have a blocking vote, although they are able to sometimes advance their
issues due to discrepancy among developed members. Evidently, the RDBs that were created by
the ambition of the regional members institutionalized these members’ powers.
The ratings of the banks are important to this analysis in so far as the institutions regard
high ratings (AAA is the highest) as essential, and they are determined to follow policies that
will reinforce high ratings. This form of ranking, they believe, attracts investors and legitimizes
the financial viability of the banks in the eyes of donors. Since ratings are inextricably linked to
donor profiles, the Board members’ financial portfolios are crucial. These observations by rating
agencies signify the importance of the lenders’ profiles and their involvement in the institution in
determining the banks’ rating. It again serves to highlight the fine line between wanting to be
independent and the need for hegemon or developed countries’ support. For example, it is clear
that rating agencies do not consider the work and portfolio of the AfDB as important as the
supporters it has. Thus, even if one objects to the ways in which RDBs get evaluated, investors
are concerned with ratings and therefore the banks themselves view high credit ratings as
essential in maintaining their good standing (it should be emphasized that ratings are determined
by the rating agencies based on the portfolios of the principal contributors – states. Therefore, a
bigger involvement of non-regional, developed countries, will automatically secure higher
ratings).
The hegemon(s) and the institution:
It is a common belief among critics that multilateral financial institutions are ‘political’.
The World Bank and IMF have been heavily attacked for being instruments of American foreign
policy, part of the “Washington Consensus”.
But the founders’ intention was not to create a
‘political’ institution, at least not as stated in the Articles of Agreement. For example, the
following two sections from the Articles of Agreement of the WB illustrate the desire of the
drafters to avoid influencing or being influenced by political interests of members:
36
The organizational arrangement of the AsDB is similar to that of the AfDB’s and IDB’s structures. The Board of
Governors and Board of Directors preside over the institution, and the President has many of the oversight and
evaluation offices directly under his/her supervision.
37
See Stiglitz 2002 and Thacker 1999.
38
See Stiglitz 2002 and Gilpin 1987.
19
Convention