Several developing countries in Asia Pacific continue to struggle against Coronavirus despite the wealth of information and best practices from other developing countries which have already flattened the curve. In many parts of South Asia and Central Asia, for instance, civil society organisations (CSOs) have reported that their governments are still unable to provide adequate social protection for the most vulnerable despite the ballooning debts allocated for pandemic response and recovery.
The Asian Development Bank (ADB), the leading international finance institution (IFI) in Asia Pacific, held its 53rd Annual Governors’ Meeting (AGM) last August 17-18, 2020 tackling the issues and responses of the region in addressing COVID-19 and its impacts. The meeting encompassed topics ranging from the effective responses of Asia Pacific countries to the “new” policies that aim to reshape Asia Pacific economies post-pandemic.
The Reality of Aid – Asia Pacific (RoA-AP), however, believes that this modern-day crisis demands a shift from the dominant neoliberal model of development to a human rights-based sustainable development in order to cater to the needs of the people, capacitating and empowering them to rise above poverty and other forms of structural inequalities.
What does development look like for the ADB?
In one of the virtual sessions, the invited speakers referred to ADB as akin to a “family doctor”—a trusted and reliable entity, crucial in salvaging the critical state of Asia Pacific economies. It is, in the annual meeting’s suggestive image of the ADB, meant to be a savior of countries from the pitfalls of this crisis.
ADB President Masatsugu Asakawa clarified that responding to the pandemic is not their lone job, but rather a collective effort that involves regional cooperation and inclusive intergovernmental processes necessary to curb the virus. Along with Asakawa’s call for solidarity is ADB’s push to mainstream the role of private corporations in achieving sustainable development.
Such push to further increase private financing for development is prominent all throughout ADB’s Strategy 2030, which claims to be aligned with the Sustainable Development Goals (SDGs). But evidence-based research from CSO members of RoA-AP show that ADB and its private sector partners face serious accountability issues for impeding peoples’ development through funding profit-oriented projects that have led to human rights violations, forced displacement, or environmental degradation in rural communities. CSOs and peoples’ organizations protested these impacts, especially since affected communities were rarely consulted before project implementation and grievance mechanisms were inadequate.
CSOs and peoples’ organizations thus regard ADB’s policies as geared toward investing in private corporations, and not in sustainable development. With how ADB’s AGM unfolded, these policies are not likely to change in the near future without the collective, continuous, and sustained engagement from the people.
“New” policies toward the region’s economic recovery
ADB’s AGM served as a platform for the Bank to present its vision for a post-pandemic society, which includes the establishment of a regional hub for domestic resource mobilization (DRM) and international tax cooperation (ITC) in Asia Pacific. In order to make a country self-sustaining, they need to find “new” ways of allocating and earning funds from their own domestic resources. For the ADB, this includes maximizing natural resources, human capital, local investments, and local businesses. But the most effective way to earn high and sustained revenues is to profit from the hard work and behavior of a country’s constituents.
But these “robust tax systems” are just another tool of passing economic and fiscal burdens to the people. Working peoples are already heavily taxed, yet developing countries are still drowning in debts, ironically funded and loaned by the same institutions that advocate for “sustainable” development. This is a constant, vicious cycle of gaining revenues from the people, investing in projects that often hamper development, and leaving communities in worse conditions while corporations are profiting millions of dollars from these investments.
In addition to taxation and DRM, the ADB also delved into micro, small and medium enterprises (MSMEs) and digitalization. MSMEs are considered as “fragile entities to financial crises”, and thus need more lenient loans when it comes to interests and collaterals, as well as subsidies from national governments. Various local banking institutions have already formulated policies encouraging capitalists to invest in MSMEs. While they are treated as another driving force to generate money for supply chains captured by corporations, MSMEs actually have “significant roles in the development of Southern economies and which are closest to communities’ daily economic and social life and needs,” according to IBON International.
Digital infrastructure is another contentious area. To address the scaling up of business entities and educational institutions in terms of e-commerce and e-learning, the ADB vowed to continue investing in technological development through coordinating with other IFIs and co-financing with the private sector. However, the presence of private investments may only make online education, for instance, more inaccessible to impoverished and far-flung communities as digital infrastructure may be geared toward profiteering instead of public service.
The political and economic agenda of the ADB seems to be crafted with the intention to revitalize the neoliberal framework of development, which serves mostly the elite and not the most vulnerable in this economic and health crisis, thus perpetuating privatization of basic social services and undemocratic practices that impede genuine peoples’ development.
Development must prioritize people over profit
In the margins of ADB’s annual meeting, the People Over Profit (POP), a workers-led, global campaign network that unites working peoples, social movements and NGOs across the globe to stop free trade agreements (FTAs) and corporate plunder t, led CSOs and peoples’ organizations in a forum that unpacked and analysed the neoliberal framework of the ADB. The People Over Profit believes that although ADB provides loans, grants, technical assistance, and equity investments to its developing member countries, the Bank’s agenda has not always been about the economic development of the marginalized and vulnerable, but rather of elite governments and corporations.
Dr. Azra Talat Sayeed, Executive Director of Roots for Equity in Pakistan, expounded on ADB’s ideology as subscribing to 1) “neoliberal orthodoxy of free markets as the most efficient way to allocate scarce resources and to create opportunities; 2) [that] the government should reduce its role in the economy and create an enabling environment for corporations; 3) privatization, liberalization, and deregulation; and 4) [that] neoliberal globalization will bring prosperity, freedom, and democracy.”
In this sense, the ADB’s policies perpetuate existing inequalities for the sake of profit and privatization of development. This definitely excludes the people as main actors of development and tangles them in revenue-generating schemes, which are detrimental to workers, peasants, Indigenous Peoples, women, and other sectors fighting for their basic human rights.
Inequalities continue to persist because of such neoliberal approaches, further widening the gap among peoples—a conflicting reality from Asakawa’s statement in the annual meeting that the gaps in between crises are being filled by IFIs. The Bank’s key projects that prioritize public-private partnerships and liberalization of investments and trade only aggravate the gaps in the current social and economic fabric of the Asia Pacific society.
While ADB’s Strategy 2030 calls for a “prosperous, inclusive, resilient, and sustainable Asia Pacific”, the Bank and its efforts are clearly missing these goals, hence the need to underscore the people’s demands to ADB.
How should ADB’s strategy translate to a people-centered development?
Prosperous. For a more prosperous Asia Pacific, the Bank must stop corporate bailouts, and instead bailout the people and the workers by supporting the growth of local industries and MSMEs. Development actors must foster effective development cooperation and shift the landscape of the region to self-sustaining economies.
Inclusive. Inclusivity demands the participation of CSOs, peoples’ organizations, and affected communities to better crafta genuine people-centered development plan. The Bank must support development programs and strategies that uphold human rights standards and development effectiveness principles.
Resilient. For the region to be truly resilient, ADB (including other IFIs) should cancel onerous debts that do not directly benefit the people, provide more grants over loans, and invest in human capital and basic social services.
Sustainable. A people-centered, sustainable development shall stem from the democratic participation of a society and the collective effort to build a national plan that is aligned with people’s needs and rights. Funding for such a national development plan must prioritize health, education, and other public services to create a truly sustainable society.
CSOs have long been asserting the shift to a human rights-based approach to development as the key framework in addressing poverty and inequality. If ADB is indeed committed to uphold human rights standards and development effectiveness principles, its nature must be people-centered in order to genuinely foster progress among Asia Pacific economies.
This means that ADB and its partners must respect and honor peoples’ participation in every stage of development, implementation, and evaluation of funded projects. Moreover, national governments, as duty-bearers, must do their crucial role in the equation – heed their constituents’ demands in terms of addressing poverty and inequality under a human rights-based approach, facilitate an enabling environment for civil society to engage all development actors, and hold corporations accountable for rights violations in communities.