UPSC General Studies Sample Paper General Studies Sample Paper-8

  • question_answer
    Consider the following statements in context of the financing pattern of the Asian Development Bank (ADB).
    1. ADB provides both soft loans and hard loans.
    2. ADB provides loans with as well as without sovereign guarantee.
    3. ADB finances both public sector and private sector projects.
    4. ADB finances only infrastructure projects.
    5. ADB finances projects only in Asia and Pacific region.
    Which of the statements given above are correct?

    A)  1, 2, 3 and 5                

    B)  2, 4 and 5

    C)  1, 2 and 3                    

    D)  3, 4 and 5

    Correct Answer: A

    Solution :

    [a] The ADB offers 'hard' loans from Ordinary Capital Resources (OCR), on commercial terms and the Asian Development Fund (ADF), affiliated with the ADB extends 'soft' loans from special fund resources with concessional conditions. ADB finance for economic and social advancement of its developing member countries. The ADB borrows from international capital markets with its capital as guarantee. Statement 4 is wrong, as it has even lended before for projects like Afghan Diaspora Project, Utah State University Led Projects to bring labour skills in Thailand, Earthquake and Tsunami Emergency Support Project in Indonesia etc. As ADB consist of 67 member countries out 0of 48 are from within the Asia and Pacific region and 19 outside.

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