CSO Aid Observatorio Synthesis Report

April 2023

Overview

The CSO Aid Observatorio is a CSO-initiated and maintained database of development projects funded through bilateral Official Development Assistance (ODA) or international finance institutions (IFIs). CSO reports offer on ground narratives and evidence-based analysis of development projects in fragile nations and developing countries. The impacts of the projects are monitored and evaluated in terms of Development Effectiveness Principles and of the following areas: 1) human rights, 2) democracy, 3) peace and security, and 3) environment or climate. Relevance and linkage to achieving the Agenda 2030 Sustainable Development Goals (SDGs) are also assessed.

As of February 2023, the platform now houses a total of 61 projects as it has been updated with 44 new projects funded by various actors and from across the Asia-Pacific region. The first Synthesis Report from April 2020 can be found here.

Table 1. Overview of the 44 new reports.

Financing

Out of the 44 new projects monitored by CSOs and uploaded in the Observatorio, majority of the projects, or 37 projects, are funded by IFIs. The remaining projects are funded by donor countries (Japan, Iran and the European Union), fellow CSOs and a multinational corporation. Bilateral aid was coursed to infrastructure projects, while CSOs mobilized much-needed assistance in the aftermath of disasters.

Figure 1. Financing of development projects.

Half of these IFI-funded projects are financed by the Asian Development Bank (ADB), followed by the International Monetary Fund-World Bank (IMF-WB), the Asian Infrastructure Investment Bank (AIIB) and the China Development Bank (CDB). While some of these projects are co-funded with other IFIs and donor countries, the ADB has been securing its place as a major source of development finance in the region, able to mobilize USD 6.08 billion for 21 projects. The IMF-WB tails behind with 12 projects totaling USD 3.12 billion, and the AIIB with three projects costing USD 653.5 million.

CSOs in the region have long criticized the role of IFIs as they have allowed for further corporatization of development, as countries incur debts and face policy conditionalities while private sector partners pocket the profit. To allow for more private sector roles, IFIs have also pursued infrastructure-led development, with big-ticket items implemented without inclusive consultations, robust safeguards and accountability mechanisms, to the detriment of people’s rights, lives, and the environment.

Figure 2. Availability of grievance mechanisms. 

Uneven financing of the SDGs

In line with the prominent role of IFIs in the region, there is a stress on pursuing infrastructure in the region. This stress on infrastructure also leads to the uneven attention towards the SDGs, with SDG 8 (decent work and economic growth), SDG 9 (industry, innovation and infrastructure) and SDG 11 (sustainable cities and communities) financed the most. While some sectors like health, poverty and education are also targeted, these are largely in the form of loans given during the COVID-19 pandemic and aftermath of disasters. This sets the region back further, with already insufficient progress in addressing climate change, gender equality and hunger.

Figure 3. Target SDGs of development projects.

Infrastructure-led development

IFIs have been coursing much of the financing to the energy and transportation sectors. With the push for the energy transition, there is an emphasis on the construction of renewable energy plants. To foster economic growth through enhanced connectivity within and across countries, transportation projects in the form of highways, roads and railroads are also financed by IFIs. Urban development and tourism projects also entail large-scale construction, and are marketed as emerging zones for economic activity.

Figure 4. Distribution of development projects per sector.

While development actors have pursued infrastructure projects in the name of economic growth and enabling access to goods and services, these have largely contributed to negative impacts on marginalized sectors and communities, with threats of land grabbing, large-scale displacement, loss of livelihood, and absence of Indigenous Peoples’ free, prior, informed consent (FPIC). The construction of such projects also led to immense environmental impact, inducing pollution, loss of biodiversity, deforestation, leading to risks of landslides and flooding. While affected communities have highlighted the adverse impacts of these projects to their lives and environment, they are being silenced and threatened by security forces. As they face threats of reprisals and retaliation, this worsens conflict and negatively impacts the peace and security of marginalized communities. The bulk of development financing injected into large-scale infrastructure projects that are pursued without sufficient consultation and consent of affected communities have only worsened the state of human rights, climate crisis and conflict.

Mobilizing assistance for crises

The remaining projects tackled mobilizing assistance for emergencies, such as the COVID-19 pandemic and natural disasters. CSOs monitored six projects tackling disaster risk reduction and reconstruction, while five projects targeted health or strengthening national systems for pandemic response. While financing must be quickly mobilized to attend to these crises, a lot of this emergency financing is disbursed in loans, which only contributes to the debt distress faced by developing countries.

A total of USD 830.24 million has been mobilized for the pandemic alone, with majority of this financing given as loans, to be repaid once the country recovers from the impacts of the pandemic. IFIs also require recipient countries to adopt policies that further promote the privatization of social goods and services, rather than strengthening public systems to become resilient in times of crises. Furthermore, the aid allocated during times of emergency is often subjected to corruption, which hinders marginalized sectors from receiving the just and sufficient assistance they urgently need.

Recognizing that the Asia-Pacific region is at the forefront of the climate crisis, there is also assistance to reconstruct housing and schools during the aftermath of landslides and earthquakes. Mitigation measures are also pursued, with projects on enhancing resilience towards the impacts of climate change and natural disasters. However, in tackling the impacts of climate change on the global South, there is a need for additionality in climate finance, especially in loss and damage funds. Recognizing that these disasters are products of centuries of exploitation and environmental destruction by the global North, their historical responsibility in the form of climate finance must be sufficiently provided to frontline communities.

Furthermore, situations of emergency also call for renewed partnerships with local actors to deliver aid efficiently and effectively. However, projects in the CSO Aid Observatorio show the complete lack of inclusive and participatory consultations and partnerships with CSOs and affected communities. Majority of the projects have negligible or narrow processes of consultations with CSOs, which contributes to the negative impacts of development projects on affected communities and sectors.

Figure 5. Character of CSO consultations in development projects.

Recommendations

Therefore, civil society organizations call development actors to:

1. 1. Meet and exceed the 0.7% GNI target without further delay and separate from in-donor refugee costs, debt cancellation and principal purpose projects for climate finance
   2. Meet the 0.2% GNI commitment to LDCs and other countries in chronic conflict and state of fragility
   3. Establish a human rights-based framework, provide an enabling environment for civil society and anchor all forms of development finance on the four development effectiveness principles
   4. Provide grievance redress mechanisms to affected communities and sectors, both at the project and institution, ensuring that the complaints and grievances are adequately addressed
   5. Increase country programmable aid, grants, demand-led technical cooperation, and support for domestic resource mobilization rather than loans, informal and formal tied aid
   6. Deploy ODA only in projects/activities directly related to building capacities of developing country private sector, i.e. small-scale enterprises that support the creation of decent jobs and livelihoods
   7. Stop shaping humanitarian, development, and peace-building strategies according to donors’ own foreign policy, geopolitical and security interests
   8. Respond to the climate emergency without diminishing ODA and/or provision of loans for these purposes
   9. Pursue the localization agenda that allows for people’s democratic ownership over their own development priorities and empowers local actors to effectively and efficiently respond to crises