Special Message to the Congress Recommending Approval of U.S. participation as a Member Nation in the Asian Development Bank

To the Congress of the United States:

I recommend that the Congress promptly approve United States participation in the Asian Development Bank.

This new institution expresses the will of Asia to develop her manifold human and natural resources, and thereby to lift the burden of poverty that has been the lot of her people since ancient times.

Conceived and sponsored by Asians, the Bank is open to all countries in that region, regardless of ideology, who are members of the United Nations or its specialized agencies. Of its $1 billion authorized capital, 6570 is to be subscribed by nations in the Asian area.

United States representatives--led by Mr. Eugene Black and a distinguished Congressional delegation--signed the Charter of the Asian Development Bank at Manila last December 4. But only the Congress itself can authorize the final acceptance of U.S. membership.

That is the action I request today.

I.

I take this step because of my urgent belief that the works of peace in Asia--the building of roads, dams, harbors, power plants, and all the other public and private facilities essential to a modern economy--are vital to peace in the entire world.

An Asia torn by conflict, depressed by hunger, disease and illiteracy, deprived of the means and the institutions that alone can offer hope to her people, must ever be a source of turmoil and anxiety for nations beyond her borders, as well as those within. Because this is so--and because we have recognized our moral obligation to our brothers on this earth--the United States has committed itself over a decade and a half to major assistance programs in Asia, making food, development loans, and technical assistance available to those who required our aid.

We have sought no American empire. Our purpose has never been to exploit, but to encourage; not to master, but to magnify the works of those who truly served the Asian people.

Now the Asians themselves have formed an institution by whose hand new works of peace may be accomplished.. They have committed precious resources to that institution. They are determined to join in a cooperative endeavor, uniting the talents and resources of diverse cultures in pursuit of a common vision of progress.

They have asked us to join with them-to subscribe 20% of the institution's total capital--and thus to help make that vision a reality.

I recommend that we respond quickly and affirmatively.

II.

This proposal is neither utopian nor vague. It is the product of careful deliberation by the foremost experts in international finance. It rests solidly on the lessons learned in building the World Bank, and other organs of international finance, into the powerful forces for good they are today. It will take its place among regional financial institutions alongside the Inter-American Development Bank and the newly-formed African Development Bank.

Loan terms will be similar to those offered by the World Bank. Project justifications will be as rigorous as prudent management requires. Special efforts will be made to develop and finance projects involving more than one country, so that the Bank may be an agent of unity as well as development.

The Bank will reinforce existing aid programs in Asia, and thereby multiply their effectiveness. It will link its resources--financial and human--to such institutions as the Mekong Coordinating Committee, already joining the countries of the Mekong River Basin in major water resource projects.

Its Charter permits it to administer special development funds, contributed by either member or non-member countries. Thus it will serve as a channel for funds beyond its own resources.

These advantages are developed further in the Special Report of the Secretary of the Treasury on the Asian Development Bank which accompanies this message.

III.

The largest share of the Bank's subscriptions will be provided by Asians themselves.

The United States has been asked to pledge $200 million, equally divided between paidin and callable shares. The paid-in shares are payable in five equal annual installments of $20 million each, half of which will be in cash, half in the form of a letter of credit.

The callable shares will constitute a guarantee for borrowings by the Bank in private capital markets. They would be drawn on only in the unlikely event that the Bank were unable to meet its commitments.

Our pledge is equalled by that of Japan. India has pledged 193 million; Australia another $85 million. More than $100 million has already been pledged by European countries and Canada, and further pledges may be made.

Joint action with these major subscribers provides another instrument of cooperation between the donors of aid. That is a long sought goal of the United States, for it offers the most efficient use of all the free world's aid resources.

Finally, our commitment to the Asian Bank should have little negative effect on our balance of payments. Procurement financed through the Bank's regular capital will normally be limited to member countries. Purchases of U.S. goods and services will approximately offset the dollar outflow occasioned by our $10 million annual cash subscription.

IV.

The Asian Development Bank is a necessity-not a luxury.

It was needed yesterday. It is needed even more today. Tomorrow, when the demands of Asia's millions on her struggling economies are more pressing still, it can mean the difference between opportunity and chaos.

It is practical and imaginative. It is the product of Asian initiative, and it offers the nucleus around which Asians can make a cooperative response to the most critical economic problems--national and regional.

Because it is all these things, it is also an avenue of good will and sound policy for the United States. For our destination is a world where the instinct for oppression has been vanquished in the heart of man. Given the means to work, to build, to teach, to heal, to nourish his family, man may yet achieve such a world--if not in our time, then in the generations that will succeed us on this planet. I believe the Asian Development Bank is an essential tool in providing the means of life for hundreds of millions of human beings who live between the Capsian Sea and the South Pacific.

It will become a reality when fifteen signatories, ten of them Asian, have ratified the Charter. It appears now that this will be achieved by early Spring. Our own constructive influence in the organization and management of the Bank will be increased if we can become active at its very beginning.

Last April in Baltimore I spoke of our dream of a world "where all are fed and charged with hope." I promised that "we will help to make it so." Our partnership in the Asian Bank is a step in keeping that pledge. It brings us nearer that day when our resources--and the world's--can be devoted to the constructive works of peace, not the destructive forces of war.

I urge the Congress to adopt the Asian Development Bank Act. Asia's future--and the world's--requires it.

LYNDON B. JOHNSON

The White House

January 18, 1966