On the occasion of the 52nd Asian Development Bank (ADB) Annual Meeting in Nadi, Fiji, 1 to 5 May 2019, the Reality of Aid Network and CPDE are releasing this statement that calls on the Bank to reorient its strategy to put people's rights at the core of development, and stop the handover of the development agenda and public resources to corporations.
ADB’s newly-published Strategy 2030 is just a continuation and rehash of the failed Strategy 2020 released in 2008. After a decade of implementation, ADB acknowledges that the long-standing and new challenges and problems in the region have remained unaddressed, and are even getting worse. ADB refers to the remaining 326 million poor (measured by the USD 1.90 poverty line); the rising inequality amidst growth; and the negative impacts of globalisation on inequality.
Yet, ADB still insists on continuing the earlier Strategy’s neoliberal mantra that “integration with global markets has benefited the region” by stressing the importance of “market-oriented reforms”. The Bank’s aggressive promotion of private sector-led growth is particularly concerning for poor workers in the entire region as they are the ones forced to feed corporations’ insatiable hunger for profit. In the context of poor and underdeveloped countries, private sector-led development means violation of labor standards, landgrabbing, internal displacements, and even conflicts and war. ADB’s Strategy 2030, therefore, like its predecessor, cannot be expected to bring about sustainable
Strategy 2030’s strengthening of governance means “undertaking policy reforms and promoting private sector development.” It limits governments’ role in their own economies to the mere promotion of the market and businesses. It also professes to support “policy, regulatory, and tariff-related reforms” to ensure that infrastructure and services are not only maintained but also made “financially sustainable.”
Learning from the development process in various countries in Asia and the Pacific, the role of ADB is to further strengthen funding support and technical assistance for corporations’ participation in development. While Strategy 2030 claims to commit support for small and medium enterprises (SMEs), with the target of accelerating development being ADB's mission, support will be far greater for giant state and trans/multinational corporations.
Such support for corporations has already proven to further magnify poverty and inequality. Various mega-projects carried out by corporations are "land-hungry" - they grab farmers and indigenous peoples’ lands, damage people's agricultural systems, force mass evictions, and inflict human rights violations and environmental destruction. This is further worsened by the proliferation of corruption and deterioration of democratic conditions in various countries.
The Bank’s priority of “fostering regional co-operation and integration” explicitly advocates the further integration of developing countries into global value chains. This forwards the private sector agenda of entering developing country markets. ADB’s Strategy 2030, which outlines its engagement with developing countries until the year 2030, is nothing but a rehash of its previous approach to transferring natural wealth and public assets to private companies across the region.
In line with this, ADB implements a policy to accept the Country Safeguard System (CSS) for borrowing countries to accelerate funding support for both state and private corporations. The actual implementation of CSS is to eliminate barriers for borrowing countries to meet very high ADB standards, the Safeguard Policy Statement (SPS)1. With CSS, ADB's capital finance will roll out healthier and easier, and at the same time ADB can shift the basis of greater accountability to the government of recipient country. However, a process that is undemocratic, untransparent, and
unaccountable will only place the CSS as a simple formality to accelerate the issuance of debt. Profits will increasingly flow to the corporation, the state releases its responsibilities, but on the other hand the people bear all the adverse impacts of “development.”
This formula is also clearly reflected in ADB's implementation of development projects in the energy and infrastructure sectors. While Strategy 2030 claims to prioritise efforts to tackle climate change, it continues to expand funding for coal-fired power plants, promotes carbon trading schemes, and encourages the implementation of carbon capture and storage (CCS) technology which is increasing damage to the environment.
All of these show that ADB is very far from upholding the principles of development effectiveness to which it has committed. There is nothing in ADB’s Strategy 2030 that addresses the narrowing democratic spaces for civil society in development. Its promotion of the corporations is an endorsement of the various forms of attacks on human rights activists and CSOs.
ADB should re-orient its strategy such that it puts people's rights at the core of development and stop the handover of the development agenda and public resources to corporations. In supporting the private sector, it should deliver on its promise of supporting SMEs so that they may realise their full development potential on the one hand, and demand accountability from its partner corporations and governments for the adverse impacts of their development practices. We reiterate our call on them to genuinely uphold the principles of development effectiveness. We also voice our support for the struggles of the people and CSOs in various countries of Asia and the Pacific and the
world, in demanding justice and people-centered, sustainable development.#
1 The Safeguard Policy Statement (SPS) describes common objectives of ADB's safeguards, lays out policy principles, and outlines the delivery process for ADB's safeguard policy. According to the ADB, SPS aims to promote sustainability of project outcomes by protecting the environment and people from projects' potential adverse impacts by avoiding adverse impacts of projects on the environment and affected people, where possible; minimising, mitigating, and/or compensating for adverse project impacts on the environment and affected people when avoidance is not possible; and helping borrowers/clients to strengthen their safeguard systems and develop the capacity to manage environmental and social risks.