ADB running out of money
Updated
The Asian Development Bank says unless it gets a fresh injection of funds from donor countries it will be out of money by 2010.
Presenter: Joanna McCarthy
Speakers: Nelson Salangsang, a former Asian development Bank Liaison officer for the Australian Trade Commission; Stephanie Lusby, Policy and Advocacy Director, Jubilee Australia; James Ensor, Director of Public Policy at Oxfam Community Aid Abroad
McCARTHY: The Asian Development Bank says if it doesn't get a rapid influx of donor money it will be out of funds in less than three years. It says the global food crisis could set the Asia--Pacific region back decades, plunging millions of people back into extreme poverty. The bank says the crisis has led to soaring demand on its core activities, providing loans and technical assistance for infrastructure projects.
But the ADB pleas are meeting with scepticism.
LUSBY: It's just completely erroneous claim on behalf of the bank. As an institution, it's been struggling for relevance for a really long time and this food crisis is not something that's just happened overnight.
McCARTHY: Stephanie Lusby is from Jubilee Australia, and NGO advocating debt relief for developing countries.
LUSBY: And in a lot of instances, particularly in countries such as Vietnam, Thailand, even Papua New Guinea, closer to home for us. It's been the banks own policies that have facilitated the current crisis that we see the world in at the moment.
McCARTHY: What kind of policies have exacerbated the crisis?
LUSBY: A focus on export orientated agriculture and development and to use the Papua New Guinea example again, a continued focus on oil palm growth, rather than encouraging Papua New Guinea to grow its own rice.
McCARTHY: Australian aid agency, Oxfam agrees that many of the banks activities are harming local communities. Its policy director is James Ensor.
ENSOR: Over past years, the ADB's funded projects in some instances have resulted in environmental, social and economic damage to poor communities.
So, for example, in Sri Lanka, a four lane highway that was built with ADB funds resulted in displacing many, many families without any compensation prior information.
In Pakistan, a large scale irrigation project caused flooding of communities, disrupting their irrigation systems, their livelihoods and their cultures.
So we've seen a number of instances, if you like, unintended consequences that poorly designed projects.
McCARTHY: Stephanie Lusby says the bank has lost sight of its original mission.
LUSBY: The bank itself is trying to go more into high risk high return programs which has essentially meant that it's lost focus from what it should be doing, which is to assist erradicating extreme poverty in our region. So for the bank to have any place at all, it needs to bring its focus right back to poverty alleviation and leave commercial ventures ostensibly to commercial banks.
McCARTHY: These concerns are shared by Washington. The ADB's second largest donor after Tokyo. The US is staying silent on whether it's willing to increase its overall funding, but it's been much more prepared to voice criticism of the bank. It says it's too focused on investing in middle income economies like China and India, to the exclusion of poorer parts of the region.
Stephanie Lusby again.
LUSBY: I really don't think it's an either or question. I think what we've seen with China and India, is their growth and the fact that for those countries, while certainly extreme poverty in those countries, there has been efforts from groups like the Asian Development Bank that have assisted them lifting out of poverty. But certainly there needs to be a greater focus on not just helping the poorest nations, but helping the poorest groups within those nations.
McCARTHY: There are those who say the ADB knows it needs to change and is prepared to do so. Nelson Salangsang is a former Asian Development Bank liaison officer for the Australian Trade Commission.
SALANGSANG: And you could see that the bank actually recognises the need to change, reading from the speech made by the president of the Asian Development Bank. I think we could see more and more focus on the climate change mitigation, for example. More projects with community development and environmental components and the focus and capacity development in communities is also becoming more pronounced, the tendency to focus on the social sector, education and health means a significant recognition of the social impact of globalisation. So I think the spirit is there to change within the Asian Development Bank.
