Inter Press Service
May 5, 2000
CHIANG MAI, Thailand, May 5 (IPS) – The new mantra of ‘poverty reduction’ will
dominate discussions at the Asian Development Bank’s (AsDB) annual meeting, which
starts Saturday in this northern Thai city amid tight security and protests from NGOs.

Critics however feel that this new agenda is little more than rhetoric by a bank
increasingly defensive about its poor record concerning human rights and the
environment in the region, and especially its inability to perform vis-a-vis the recent
Asian economic crisis.

The dramatic change in emphasis was approved by the Manila- based bank in
November 1999, when it changed its focus from being primarily a lending institution to
one that would ”help eradicate extreme poverty from Asia and the Pacific”.

The change came around the same time that the International Monetary Fund began to
emphasise poverty reduction as a major priority issue. According to the AsDB, this
concern stems from the fact that close to 900 million of the world’s poor live in Asia
and the Pacific, and nearly one in three Asians is poor.

The AsDB says that about 40 percent of 66 loans approved in 1999, totalling nearly 5
billion U.S. dollars, were focused on poverty reduction. But critics, mainly from among
social and environmental activist groups, argue while the bank is trying to put on a more
‘human’ face and show concern for the poor, its policies to promote the privatisation of
key sectors such as health, education and water continue to wreak havoc with the lives
of millions of people.

Another major area of focus, dam building, has also come under much criticism for its
negative impact on the environment and on the lives of those displaced.

The AsDB has supported the construction of more than 50 hydro- electric projects on
the Mekong river and its tributaries in Thailand, China, Burma, Laos, Cambodia and
Vietnam. In fact the majority of AsDB loans, more than 21 percent between 1968 to
1999, have gone toward the energy sector, followed by transport and communication.

According the the AsDB’s 1999 Annual Report released last month, 60 percent of the
bank’s nearly 5 billion dollars in public sector lending went toward ”economic growth”
— energy, transport and communications, industry, finance and agriculture.

Only 15 percent went toward poverty reduction goals. Merely 13 percent of all loans
were for education, health and nutrition, water supply and sanitation, and urban sectors,
and just 1 percent went toward women-focused projects.

”For the AsDB, the displacement of people means poverty reduction,” says Grainnne
Ryder, policy director of the Canadian NGO Probe International, which has monitored
the AsDB’s activities in the region for years.

”The AsDB first defines people as poor and as obstacles in their watershed and
dam-building plans, and so then they must be moved. Thereafter jobs can be created
for them as tourist guides, forest guards or even plantation workers,” he adds.

The Bank launched a Poverty Reduction and Environmental Manangment (PREM)
project in 1997 in the remote watersheds of the Greater Mekong Subregion in order to
integrate ethnic minority communities living there into the market economy.

The area covered six watersheds in Laos, Vietnam, Thailand and Cambodia.

Thailand has since been dropped from the project, apparently because of strong
opposition from local villagers.

”The ADB wanted to introduce cash crops so as to increase the incomes of local
villagers,” says Nokmontree from the Thai NGO Project for Ecological Recovery.

”But the local people never saw the AsDB consultants or those making decisions about
their lives. They resented this and accusations that they were causing environmental
degradation and therefore must relocate. They felt the project would not only destroy
their environment it would also impoverish them,” Nokmontree explains.

The AsDB also came under heavy criticism during a parallel NGO meeting held
recently in Chiang Mai, the People’s Forum 2000, for its financial support for a waste
water treatment plant in Samut Prakan province, south-east of Bangkok.

Hundreds of villagers travelled more than 1,000 km to Chiang Mai to accuse the AsDB
of violating three of its own polices — environmental assessment requirements,
anti-corruption practices, and poverty reduction.

”We are moved by your presence here and take very seriously issues brought to our
attention,” said an American government official of the Bank, who came to the NGO
meeting to hear the grievances of more than 1,000 villagers from Samut Prakarn, along
with representatives from Germany and Australia. ”We will brief our management and
staff about your concerns.”

Local people want the AsDB to immediately stop disbursing loans for the project,
which they say will destroy their livelihood by releasing toxic chemical waste water into
fishing areas rich with mussles, shrimps, crabs and prawns.

”How can the ADB say their new povery reduction strategy has changed their
approach?,” asked Shalmali Guttal, from the Bangkok-based Focus on the Global
South.

”Nothing has changed. For them market-led development is still the answer, and
trickle-down growth and privatisation they think will finally help the poor. This has been
proven wrong over and over again,” Guttal added.

Included in the AsDB’s plans for Thailand and the region are loans for the privatisation
of the health and education sectors. A 500 million baht (13.33 million dollar) loan for
social reform programmes in Thailand will help transform state hospitals into public
organisations administered by executive boards, privatise state universities and
vocational training institutes, and reduce the number of primary grade teaching staff.

The reforms will roll back existing state support for free education up to the primary
level, adversely affecting children from less well-off families force universities to
increase their college fees, the NGO TERRA said in a briefing paper.

The privatisation of state hospitals, they added, will result in higher hospital fees,
making it more difficult for the poor to access health services.

“Given the fact that the ADB has significantly contributed to the debt burden of
countries in the region”, asked Guttal, ”how can it now talk about poverty reduction?”

”Does it ever talk about increasing inequality, labour rights, about displacement and the
hardships of women? Their only answer is more debt.

The only thing they help do is create the classical debt-development- poverty triangle,”
Guttal added.