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ADB’s Lending Portfolio Is Never Neutral

Updated: Jan 12, 2019

NGO Forum on ADB, an Asian led network of over 250 organizations has expressed its disappointment on how Asian Development Bank (ADB) sees their lending activity as ‘politically neutral’. In the meeting between the Management and the Civil Society Organizations (CSOs), Forum Executive Director Rayyan Hassan directly asked the question to ADB President Takehiko Nakao “How will ADB ensure the poorest people in the middle of an oppressive regime or in the face of conflict derive development outcomes, have access to transparency, dignity, human rights and accountability from ADB – financed development projects”. Hassan made mention of the current situation in the Pacific, where local people are fighting for rights to self - determination including West Papua. He stated that 80 countries in Asia where ADB is lending are in some form of conflict e.g. Sri Lanka, Myanmar, India, Pakistan etc. Although ADB says its development loans are politically neutral, NGO Forum on ADB disagrees. Hassan added, “Mr. President in a state of conflict development finance is never politically neutral - within authoritarian regimes, ADB loans are not politically neutral; in junta rule, ADB loans are not politically neutral”. “These are being hyped as development, but even the private sector is hesitating to consider it as asset class” Titi Soentoro of Aksi Indonesia. There are a couple of projects as an evidence of ADB’s co-financed projects falling under bundled infrastructure and emphasized that these de-risks projects’ bankability, while the true risk is being born by the natural environment, the local people living by the project sites, and even future generations. ADB President Nakao in his remarks also said, “I would like to ensure that ADB makes better use of ICT to expedite the disclosure and consultation process. It will make consultation more effective.” This statement is alarming as an actual face – to – face consultation might be reduced further to pave way for video – conferencing type of consultation process. This mechanism is being pushed for in the guise of efficiency but it often results to a less meaningful consultation process. According to Mr. Apolinar Tolentino of Building and Wood Workers International – Asia Pacific, “The ADB up to now fails to have a stronger commitment and protection of workers. It does not have a standalone labor safeguards policy which falls short as compared with World Bank and the International Finance Corporation at least in policy principles.” As the ADB is scaling up to large infrastructure projects, workers’ health and safety remain to be appallingly weak. In response, Pres. Nakao retorted that “We can consider (the demand for stand-alone safeguards on labor).” This forceless response to the ADB President himself is unacceptable. Project concerns on Myanmar, Mongolia, and Georgia were also brought to the attention of ADB President Nakao during the meeting with CSOs. “In Ulaanbaatar, people are increasingly getting homeless. They are losing their lands and livelihoods and health problems are getting rampant,” according to Sukhgerel Dugersuren of OT Watch. The ADB is supporting a USD 104 million loans to Mongolia on Ulaanbaatar Urban Services and Ger Areas Development Investment Program. A complaint is currently lodged at ADB’s Accountability Mechanism now. Lastly, Sreedhar Ramamurthi of Environics reminded the Bank about their commitment regarding the legally binding Paris Agreement and yet the Bank continues to fund coal, fossil fuels, and other dirty energy, “ADB should have decarbonize 5 years ago, Mr. President. To continue to find justifications for gas, coal and fossil fuels through a turn of phrase in policy documents is completely unacceptable”.


Written by Jen Derillo. Jen is NGO Forum on ADB's Program Coordinator for Communications.


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