Ashok Saikia of India, who currently holds the position of ED, sacked Bangladeshi bureaucrat Saiful Islam as the AED. "Nima Wangdi from Bhutan replaces Islam," said ADB Secretary Jeremy Hovland.

Since joining the ADB in 1973, this is the first time Bangladesh has lost the office, sources at Economic Relations Division (ERD) said.

In line with the ADB constitution and norms, India represents the constituency comprising India, Bangladesh, Bhutan, Laos and Tajikistan in the ADB board of directors, with Bangladesh acting as the alternate representative. In this pentangular group, Bangladesh is the second largest stakeholder, after India, while Bhutan the lowest, ADB sources said.

"Our 12-member board of directors represents the 63 ADB member countries. As a result, some directors represent several countries," said Hovland, explaining the bank's organisational structure.

He said, "Each director also appoints an alternate director. But the arrangement for such an appointment is an entirely internal affair of the constituency members. The ADB does not get involved in these matters."

Besides the privilege to choose, the ED also enjoys the power to sack the AED at will, ADB sources said.

It was the same ED Saikia who appointed Saiful Islam as his alternate after the BNP-led coalition had come to office in 2001.

FROM CONFLICT TO EVICTION
Sources said the replacement is the end result of a conflict between India and Bangladesh inside the bank that emerged during the tenure of the last caretaker government. The discord took a serious turn two months ago, but Dhaka failed to resolve it.

In late 2001, during the fag end of the last caretaker government, Saikia, who already had an Indian adviser in the ADB, created the position of a second adviser, according to ERD sources. He wanted to appoint another Indian in that post. This prompted Dhaka to write a letter to Saikia, objecting the move and asking him to take an adviser from Bangladesh instead.

"The language of that letter offended the executive director, especially since the matter is entirely at his personal discretion," said an ERD source.

The difference of opinion, which was apparently buried after the 2001 elections, with a new government stepping in, resurfaced soon after Islam's appointment as the AED, sources said, with Saikia raising a range of objections against him.

Finance Minister M Saifur Rahman.

About two months back, Saikia wrote a letter to Finance Minister Saifur Rahman, who represents Bangladesh in the ADB as one of its governors, stating that he can no longer keep Bangladesh in the position of AED and is considering other options.

ERD sources said this prompted Saifur to write to the Indian finance minister, his Indian counterpart in the ADB, requesting him to stop such a move, which he termed unthinkable, as Bangladesh has been holding the office for over 30 years.

But there was no response from New Delhi to Saifur's request and Saikia went ahead with moving Bangladesh out of the office.

"If India did not like Saiful Islam, all it had to do was to ask Bangladesh to send a replacement. What it has done instead is unthinkable. Although he has the power, the ADB executive director does not hire and fire people like this as a norm," quipped a source close to ADB.

Established in 1966, the Manila-based ADB has 23 offices around the world with more than 2,000 employees drawn from over 50 countries.

Among the 45 ADB members from the Asia and the Pacific, India is the third largest shareholder, Bangladesh the 13th, Tajikistan 22nd, Lao 30th and Bhutan 33rd.

REACTION OF ISLAM
In a written farewell speech on Wednesday, Islam told the ADB board, "It is a universally honoured general principle that the constituencies would be run on democratic norms which in essence means that important decisions would be taken on the basis of adequate mutual consultation among the constituent member countries. Usually this is how things are run but what if a major shareholder ignores the established norm and imposes its unilateral decision? And that too on a vital matter like changing a 30-year arrangement of representation on the Board of Directors? Apparently, there is nothing in the rules that can prevent recurrence of such incidents. It is high time that the Board of Directors and the Management gave a hard look to these matters."

He censured the bank's organisational framework and its 'apparent' abuse by the Indian ED, saying, "Harmonisation should not be viewed only in the context of legal provisions and procedural similarity with our comparators. It also needs to be internalised. It is rather difficult to rationalise the present formation of constituencies represented in the Board of Directors. There is wide divergence in the number of constituent countries in a group and inter-constituency voting power and a lack of geographical contiguity. An analysis reveals that among the multi-country constituencies voting power variation is as high as nearly 50%. This has resulted in some distortion in the matter of representation."