ADB, NGO Forum at odds over values behind annual governors’ meeting

A civil society organization is claiming that the annual governors’ meeting of Manila-based Asian Development Bank (ADB) promotes private profit in the face of unmitigated environmental and social risks.

The NGO Forum on ADB tagged the 51st Annual Board of Governors’ Meeting of ADB as simply marketing to entice new fund sources for the bank’s infrastructure projects across the world.

“This 51st AGM, the NGO Forum on ADB explicitly states ... is nothing but a marketing ploy for attracting new financial players into an asset bubble,” it said.

The ADB said in February it hopes to increase lending to the Philippines in support of the government’s massive infrastructure spending program.

For NGO Forum, however, “infrastructure does not address local peoples’ needs.”

The Philippine is hosting the annual meeting from May 3 to May 6, with Finance Secretary Carlos Dominguez III as chairman of the ADB Board of Governors.

“Infrastructure is not an asset class for private investment and profit gains. The role of the ADB as per its Strategy 2030 approach paper demonstrates the bank’s intentions to shift its portfolio in an attempt t to compete in fast-tracking loans with China-led AIIB (Asian Infrastructure Investment Bank),” the NGO Forum said.

"While lending rates may go up, the environmental and social risks through private sector operations remains unmitigated. Consequently, there is no indication on how private sector investments will manifest into particular projects. While bunk loans will flow quickly, the Forum fears various dirty energy projects like coal plants and heavy-handed hydro-projects may push through without public accountability,” it said.

ADB is firm

But the ADB is firm in the position that its projects are safeguarded by policies which apply to all components, whether it fully financed the project or in partnership with governments.

“ADB’s safeguard policy applies to all ADB-financed or administered sovereign and non-sovereign assistance and to all project components regardless of source of financing,” the bank said in a separate statement issued in response to the allegations of NGO Forum.

“It also applies to projects financed through financial intermediaries. ADB monitors and supervises safeguard implementation by its clients, including periodic site visits, and works with clients to address and safeguard issues when they arise,” ADB noted.

The bank noted said it will continue to work with stakeholders to address poverty and other concerns through infrastructure financing.

“Many developing member countries continue to face challenges caused by entrenched poverty and vulnerability, global economic uncertainty, inequality, climate change and environmental degradation, urbanization, and aging,” it said.

“ADB aims to build on its strengths in infrastructure financing and regional cooperation, strengthen its capacity in social sectors, and expand private sector operations, including public-private partnerships, to help its developing member countries address these challenges,” it said.

Benefits

The bank cited the benefits of working with the private sector such as job creation, innovation, and ushering the marginalized into mainstream economy.

“The private sector is also critical in addressing the huge long-term financing needs for infrastructure in the region, which exceed $26 trillion, or $1.7 trillion per year,” it said.

“Through its private sector operations under Strategy 2030, ADB will seek to promote sustainability via high standards of corporate governance, integrity, transparency, and social and environmental safeguards,” it added.

The lender also noted its long-term plan—Strategy 2030— has yet to be finalized. It will be a subject of discussions during the annual meeting.

“Under its Strategy 2030, still under discussion, ADB is committed to fulfilling its vision of a prosperous, inclusive, resilient, and sustainable Asia and Pacific region,” it said.

“Strategy 2030 reflects feedback on a wide range of stakeholders, including policymakers in developing and developed countries, academics, and civil society organizations, as well as ADB Board members and staff,” the bank noted.

On Wednesday, delegates taking part in the annual meeting have started to arrive in Manila, with the police deploying over 7,000 personnel to secure the event and its participants.

The DOF in February said around 3,000 delegates are expected to take part in the annual meeting, but the ADB has updated and pegged the number to over 4,000 participants.

“Over 4,000 participants from across Asia, North America, and Europe are expected to attend the meeting from 3 to 6 May,” the bank said. —VDS, GMA News