ADB in Bangladesh: Who losses who gains

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ADB in Bangladesh Who losses who gains

www.equitybd.org
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Introduction

• A multilateral financial institution to support
  member developing countries for poverty
  reduction
• In 1973, ADB started its activities in
  Bangladesh.
• During last 3 decades, ADB finance policies
  influenced most of the sectors in Bangladesh.
• ADB influence Sectors wise policy and strategy
  formation
• ADBs conditional (!) loan for poverty reduction,
  good governance, reducing corruption etc.

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ADB and its beginning

• - Processes of formation in March, 1963
• in the Philippines
• In 1966 ADB formally started its activities
• 67 member countries 48 from the Asia Pacific and
  rest 19 from other parts of the world.

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What ADB do?

• Organize Policy dialogue, Loan support,
  Investment in share market, grantee and technical
  support etc.
• In 2006 ADB provided 7.4 billion dollar loan
  support in Transportation, communication, fuel,
  law, public policy sectors.
• 67 project through 80 loan contract

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Whats ADB really do?

• From the beginning of last two decade ADB
  provided loan for
• Agriculture and big infrastructure development.
• Presently investing in export oriented
  industries.
• Since 1990s, policy formation of poor countries
  (Like WB and IMF)

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What is real work of ADB?

• Since 1990, ADB included the following
  neo-liberal economic conditions in its financing
  agreement
• 1. Market infrastructure development, increase
  competition and price setting.
• 2. Privatization of state owned industries and
  institutions.
• 3. Formation of separate law and policy for
  different sectors
• 4. Liberalization of investment and industrial
  law for foreign investors.
• 5. Withdrawal of subsidy from public service
  sector.
• 6. Creating space for the MNCs for exploration
  and marketing of natural recourses
• 7. Reduce state role from the service sector.

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Owners of ADB

• The USA manages and controls all functions
• Both the USA and Japan own 15 share each.
• USA and other Europium countries play major role
  in decision making and policy formation.
• In all cases ADB promotes the interest of the
  MNCs through
• Privatization
• Encouraging investment in privet sector

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How ADB defines Good Governance?

• Financial reform
• Dismantling state owned institutions
• Identifying process of Budget preparation.
• Democratization, Human rights, standardize of
  wages, gender discrimination, environment etc.
• Reduce corruption through privatization

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ADBs formation and activities

• - ADB itself a undemocratic institution
• - Rich countries domination
• As per UN
• 1 country 1 vote, But ADB practice 1 dollar 1
  vote.
• - The rich countries possess 55 of votes

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Voting rights in ADB

• USA 12.9,
• Japan 12.9,
• Chain 5.5,
• India 5.4,
• Indonesia 4.7,
• Pakistan 2.1,
• Bangladesh 1.1,
• Myanmar 0.8,
• Nepal 0.4,
• Afghanistan 0.3.

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Meaningless of Transparency and accountability

• Researchers, CSOs, NGOs, even ADBs audit
  statement has proved that-
• ADB activities are not transparent and
  accountable to the people.
• No scope of participation in development
  planning.
• Not democratic and transparent
• - In the name of inspection facilities ADB
  started its internal accountability system but
  failed
• - In 2003 ADB formed a new accountable working
  strategy
• 1. OSPF(Office of the Special
  Facilities)
• 2. The complacence Review panel.

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ADB is beyond any law and regulatory system

• As per constituency, ADB enjoys immunity
  facilities.
• - Poor countries are not entitle to file any
  case against ADB
• - But rich countries can get facilities for
  filing case.

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Influencing in state politics

• As per constitution, ADB will not intervene in
  state politics But,
• In Bangladesh, ADB is making comments and
  advising state authority about political leaders
  and politics.

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ADBs destructive activities in Asia

• Policy imposes for privatization.
• Establishing Neo-liberal economics
• Privatization of public commons
• Eco Park is an example.

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What about Development!

• ADBs failed projects
• According to ADBs audit
• - In Indonesia, 2002 11 billion out of 16
  billion was failed project loan. - In
  Pakistan 2.6 billion (40) out of 6.5 billion
• - In Srilanka 1.2 billion (80) out of 1.5
  billion.

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ADB toward increasing Corruption

• - ADB itself a corrupted institution.
• - Lobbing in favor of MNC for
• - Tender
• - Pricing
• Evident of corruption
• In Indonesian Health project to increase
  quality facilities
• In Srilanka In 1998-99 Rs 19.9 trillion in the
  name of poverty reduction
• which spent for election campaign
• In Thailand, The loan money of water purifying
  project spent for land purchase
• For this project approved loan was 13.612 TB
  but expenditure was 22.995 TB.
• In Bangladesh In the name of Water, Forest,
  Power and Energy managementADB finance projects
  polluted water, caused deforestation, and damaged
  natural resources

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Whats ADB doing in Bangladesh

• Through Govt.
• - Up to 31st Dec 2006, ADB loan was 829.97
  U
• through 176 project.
• - technical assistance of 17.95 U under 318
  project
• Through others
• - 8 big project 24, 22,80000 U ( Meghena
  Power plant and Grameen Phone Company)

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ADB Policy and Strategy in Bangladesh

• - Since 1980, working as financing institution
  to increase GDP
• - Playing role as a policy maker.
• - focusing to privatization
• - Opening market for MNC

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Promoting interest of the MNCs  

• Dev. Project of ADB caused
• - Deforestation
• - Permanently water logging
• - Salination of drinking water sources
• - Destruction on natural aquatic systems
• To create investment space for MNC,
• - Destroyed Jute, Still and other basic
  industries.
• -Disempowered govt. institutes.
• - Commercialized Education and Health sector
• - Helped MNC to establish control over countrys
  Oil, Gas and natural resources

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Unexpected interfere in the state policies

• - Interfered in the preparation of PRSP
• - Influencing in the formation of state laws and
  regulatory like revised energy law and regulatory
  law etc.

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ADBs loan Increasing interest and condition

• - Decreased ADF in last decades
• - Introduced OCR loan.
• Statistic
• Out of 310. 45 million committed loan
  during1999-2000 to 2006-2007 39 was converted
  to OCR loan
• - 2006-2007 fy loan 50 million out of 59.85
  million was OCR (84)
• - In power sector 40 million dollars, out of
  46.50 million, was OCR.

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Sector wise financing

• As of end 2004,
• Public sector lending was dominated by four
  sectors
• Energy (34),
• Transport and communications (25),
• Social infrastructure (20), and
• Agriculture and natural resources (19).
• Lending in the other sectors, including finance,
  governance, and multi sector operations remains
  relatively small, although these sectors have
  been given more prominence in recent years.

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 Responsibility of the fail project

• 54 loans (for 51 projects) were post evaluated.
• 39 were classified as generally successful,
  compared with an ADB average of 56. Over half
  (52) were partly successful,
• 9 were unsuccessful compared with ADB averages
  of 32 and 11, respectively.
• This figure clearly indicated that ADB projects
  in Bangladesh are mostly unsuccessful,
• ADB will not take the responsibility of the fail
  projects

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ADB financing on Agriculture Decreased
productivity

• Corporatization of agricultural sector
• Replaced small farm/land holders.
• Increased private intervention in agricultural
  input market, made farmers dependent on MNCs
  costly and non-quality agricultural inputs.
• Small farm holders and landless day labor which
  constitute around 50 of the population is the
  ultimate loser.

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ADB in Fuel sector

• Till date ¼ of ADBs investment went to fuel
  sector
• Main objective To privatize this sector or
  dismantle state role over this sector
• ADB is emphasizing on
• 1. Private investment
• 2. Including international investors and
  gas export through setting
• inter-country distribution pipeline
• ADB finance policies resulted - Increasing
  Gas price (20 times during last 30 years)
  - Complete disempowering of state institutions
  like Petro Bnagla

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Advocacy for Asia energy

• Asia energy
• If it implement open-pit coal mining in Fulbari,
  Dinajpur will cause
• - Pollution of 6 districts,
• - Massive Deforestation,
• - Water pollution
• - Homeless of some 50,00 people
• - Damaging agricultural land
• - Affecting Sundarban
• In a result, Bangladesh will get 6 as royalty
  and 75 coal will be exported.

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ADB in Power sector

• Forcing privatization of power sector.
• - Since 1994, 3 contracts signed for technical
  assistance U 34 million.
• Main objective Separation of Management and
  distribution system.
• - 1991 DESA,
• - 1996 PGCB, PDB
• - 2002 gave 8.5 million loans for sector reform
  and privatization

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Railway

• ADB will give loan U 1200 million for railway
  privatization.
• - 110 million for staff termination.
• As per MOU between ADB and railway 2 private
  companies will be formed for
• 1. Passengers support
• 2. Transportation

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Water

• To privatize the safe water distribution
  management system
• To declare water as commercial good.
• To increase water pricing

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Commercialization of Education system

• 1. Primary Education
• - PEDP-2,
• From 2002 to 2008, now extended for 2009.
• 2. Secondary Education
• - SECIP (ADB No 37307-01)
• 3. Higher Education
• Commercialization of education 20 years
  strategic plan is
• - Increase number of private universities
• - Increase tuition fee

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Planning for Cittagong port

• Dhaka Chittagong Economic Corridor
• By 2020, redesign all infrastructures and
  communication facilities.
• - increase production of power and gas
• - Privatization of taxation system.

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Roads highway authority

• Prepared policy, legal environment and its
  enforcement activities.
• As a result
• - Privatizing roads and highway authority
• - Introducing user fees for roads and highways.

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• Thanks
• www.equitybd.org