Plea for SAR to commit $126m to fund

PUBLISHED : Tuesday, 05 December, 2000, 12:00am
UPDATED : Tuesday, 05 December, 2000, 12:00am

The Government is seeking legislators' approval to donate US$16.28 million (about HK126.82 million) as its contribution to the Asia Development Bank (ADB)'s seventh replenishment of its Asian Development Fund (ADF).

The donation would be paid over four years, from next year to 2004, in four promissory notes. But the ADF would cash the notes over seven years, which means Hong Kong would actually be paying the money over a longer period of time.

The Government believes law makers should agree to the proposal because it shows Hong Kong's commitment to the region and to international financial institutions.

The proposal, advanced by the Executive Council and ordered by Chief Executive Tung Chee-hua, is awaiting the approval of the Legislative Council's finance committee on December 15.

The ADF, established in 1973, is the bank's concessional lending window - for reducing poverty and making improvements in the basic quality of life in Asia's poorer countries.

At present, 27 developing member countries of the bank are eligible for the fund's resources.

The ADF lends the funds at low interest of between 1 per cent and 1.5 per cent a year, with up to 32 years maturity. Repayments are used to make other loans.

The key beneficiaries of ADF loans are countries with an average gross national product per head of US$450.

Hong Kong, with a per capita gross domestic product of US$23,659 last year, was one of the richest centres in the region, and continued participation in the ADF was consistent with supporting development efforts, the Government said.

The seventh replenishment involves a total of US$5.6 billion, of which US$2.74 billion will come from the ADF's internal resources and the rest from donors' contributions.

This US$2.86 billion from donors represents an increase of 5.9 per cent from the last programme.

The SAR's contribution of 0.57 of a per cent of the total, is derived from a burden-sharing formula and is 5.6 per cent higher than its 1997 sixth replenishment donation.

Hong Kong, a full member of the ADB, began contributing to the ADF in 1983 and has participated in four previous replenishments.