Increased ADB Capital to Hike Ecological Damage


This article was published on May 02, 2009 on

MANILA, Philippines - The Asian Development Bank’s (ADB) decision to triple its capital base may lead to a corresponding increase in social and environmental harm across the region, a group which monitors the lender’s activities said.

The ADB’s capital hike “could easily translate into a more than 200 percent increase in social and environmental harm," the NGO Forum on ADB said in a statement datelined Bali, Indonesia.

The announcement was made on Saturday during the ADB’s 42nd annual meeting which opened on the same day in Bali.

During the event, community representatives reportedly questioned ADB president Haruhiko Kuroda about the fund hike’s implications, given the region’s experience of forced displacement and environmental degradation caused by ADB projects.

On Thursday, the ADB’s Board of Governors agreed to triple ADB’s capital base from $55 billion to $165 billion, which will allow the lender to “substantially increase its support to countries affected by the global downturn," the bank said in a statement.

Earlier, the ADB said that the purpose of the capital increase is to help the poorest countries in Asia to meet the United Nations’ Millennium Development Goals (MDGs), which intends to halve global poverty, among others.

However, the move is “irresponsible" and “dangerous," Red Constantino,
executive director of the NGO Forum on ADB said, citing the ADB’s long-term strategic framework called Strategy2020.

The capital hike will only allot funds to private sector clients and big infrastructure projects, “which do not translate into benefits reaching the poorest of the poor, and instead often exacerbates inequality," the group said.

In Nepal, local communities and organizations are raising significant concerns about the proposed ADB-funded West Seti Hydropower Project, a massive proposed dam for one of the most remote and ecologically sensitive areas of Nepal, the group said.

Over 30,000 people will be affected by this project and at least 20,000 will be forced to move from their traditional lands and homes, the group added, saying that the proposed resettlement sites are the homelands of indigenous Tharu people.

“The ADB is planning to move tens of thousands of people onto our lands but there has been no free, prior, informed consent from Tharu people," Said Raj Kumar Leky, Secretary General, Tharu Welfare Society.

“For over a decade we have been asking and asking for a complete copy of the environmental impact assessment in local languages," said Ratan Bhandari, whose family will be relocated from their ancestral lands if the project goes forward.

“Our people have never been told that the land they will be moved to may be contaminated by arsenic and is aleady occupied by Tharu people. There has been a stunning lack of consultation about this project which will devastate our environment and local livelihoods," Bhandari added.

This has prompted Stephanie Fried of Environmental Defense Fund to say that “these social and environmental failings are not unique to West Seti."

The same failures “are reported by communities impacted by ADB-financed projects across the Asia-Pacific region," she said in the same statement issued by the NGO Forum on ADB.

“Globally, this is a real opportunity to rethink development finance. Will the ADB use its capital increase in a responsible manner or will it continue business as usual at the cost of local people and the environment?" she said.

“In the midst of global calls for increased regulations around financing, the ADB will be going against the current if is does not strengthen its social and environmental safeguard policies," said Joanna Levitt of the International Accountability Project in the same statement. “Without real improvements, we can expect to see more reckless use of Bank funds, resulting in more disastrous projects." - GMANews.TV
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