050107: 'Poor further left out in bank paradigm'

By Rommer M. Balaba

Reporter

THE Asia-Pacific Economic Forum’s Eminent Persons Group’s recommendations for the Asian Development Bank’s new banking paradigm further leaves out the poor, for which it is supposedly geared, in favor of perpetrating private sector interests, according to a nongovernment organization monitoring the bank’s operation. Hemantha Withanage of the NGO Forum on the ADB added that the bank’s continuing involvement in public-private partnerships to promote infrastructure development among its developing member-countries was off-tangent with its objectives.  “That it is not a tool for poverty alleviation per se . . . being a development bank for the poor, ADB must re-think private sector involvement given that the latter’s profit-oriented mindset does not jibe with operational policies,” said Withanage.  “What is evident from our standpoint is that the [Eminent Persons] Report is pushing for the Bank to shift its poverty reduction goal to a financial intermediary agenda,” said Withanage. And, echoing the sentiments of civil society groups, she lamented the continued control of non-regional Bank members over those within the area. “Should it not be high time for regional members, who are more knowledgeable of their development needs and priorities but less empowered to do so, to take major control of the Bank that has been specifically created for them?” he asked. “We think the reason is purely for business.” The Eminent Persons Group’s support “for a more conducive policy framework and enabling environment for the private sector to take over public services and utilities” likewise seemingly conflicts with the Bank’s approaches on energy and environment, for example, with its promotion of public-private partnerships, he added. “If we look closely at the way the Bank has disbursed its lending money in the last four decades, we can see that its true priorities have betrayed the original and current overarching goals,” added Withanage. The Eminent Persons Group has recommended that the Bank’s future lending should support inclusive growth, environmentally sustainable growth and a shift to a regional and ultimately global focus for the Asia-Pacific region “to complete its transformation to the next stage of development.” ADB’s loan approvals last year went up 28 percent to $7.4 billion for 67 projects while the amount of grants fell to $583 million, less than half of the $1.1 billion in 2005; and used mostly for mitigating the destruction wrought by the December 2004 Asian tsunami and the earthquake that struck Pakistan in October 2005. The ADB is holding its 40th Annual Meeting of its Board of Governors in Kyoto this week, where member-countries including civil society organizations will discuss, among others, the Bank’s environmental and social safeguards, including those concerning green energy and indigenous groups as well as regional integration and SME financing.

 

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