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Over the years increasingly institutions like World Bank and other MDBs have started using post-disaster situations and climate change as an opportunity to bring in policy reforms. Post disaster rehabilitation and recovery programmes provide institutions an easy entry with little resistance to the massive policy reforms that come along. Also, the language of resilience and sustainability is built into the narrative, which find very little resistance. Institutions like the WB are taking multiple roles of assessment, planning, financing project through development policy loans and monitoring specially in cases of disasters. It is a classic case centralization of powers. World Banks language of resilience, sustainability and post disaster recovery needs to be decoded. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality.
In an article on “The Rise of Disaster Capitalism” in the Nation Naomi Klein points out, “governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. But shattered countries are attractive to the World Bank for another reason: They take orders well. After a cataclysmic event, governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. And with the local population struggling to find shelter and food, political organizing against privatization can seem like an unimaginable luxury.1”
In the recent years India has witnessed an increase in climate disasters and the World Bank has used every opportunity to bring in the post recovery and rehabilitation projects, which come along with policy reforms. Post 2013 till now, India has witnessed some major disasters. The responsiveness of the Bank to these disasters has been of an opportunity for implementing economic and governance reforms under the garb of disaster preparedness, rebuilding and building resilient infrastructure. The Uttarakhand floods, Cyclone Phailin, Cyclone Hudhud, flooding in Srinagar and the larger valley region, the Kerala floods and being some of the disasters for which, the World Bank has supported the GoI in conducting rapid post-disaster damage and needs assessments in the first four listed disasters. The assessments provided clear guidance on the post-disaster recovery path that needed to be taken. Subsequently, emergency projects were prepared and are currently under implementation. These projects focus on recovery and reconstruction as well as strengthening long-term resilience and emergency response capacity at the State level in the affected States2.
In 2018 and 2019 Kerala saw floods and landslides paralyze almost the entire state. The disasters had a huge negative impact on the biodiversity of Kerala and the already fragile environment. In 2018, a prolonged southwest monsoon over the state of Kerala resulted in one of the worst floods in 100 years, causing estimated losses of US$ 4.25 billion. This post disaster situation has been used as lucrative opportunity by institutions like the World Bank into financing programmes focused on disaster management with rehabilitation, post disaster recovery, building resilience as hook words. The Bank has found an easy entry point for development policy loans and other financing, which are coupled with policy reforms as well.
TheWorld Bank in October 2018 extended a support of up to $500 million to the Government of Kerala’s comprehensive flood recovery efforts and to build greater resilience to future shocks3. In June 2019 the World Bank board approved The First Resilient Kerala Program Development Policy Operation as a Development Policy Financing of 150 million USD4.The proposed operation supports Government of Kerala (GoK’s) resilient recovery from August 2018 floods. The proposed programmatic operation, the first in a series of two Development Policy Loans (DPLs), will support policy and institutional reforms recovery, mainstreaming long-term resilience to disaster risks and climate change into sectors of key importance.
The most problematic aspect of the reforms is that they are expected to mainstream disaster risk reduction and climate resilience into critical infrastructure development and service delivery. The priority sectors include water supply, sanitation, solid waste management, transport, and agriculture. The World Bank’s long-standing agenda of privatization is actualized through these reforms.
This case is very similar to what happened in Indonesia post the 2004 Tsunami disaster, where post disaster funding pushed privatization. With project loans worth $ 1.1 billion and the policy reform support loan, the Bank pushed for privatization and other new regulations that would support economic liberalisation. From this loan, came Indonesia’s new law on oil, gas and electricity that allows for the privatization of respective state-enterprises5.
In the post covid time the MDB’s have already invested close to 5.5 billion USD in India as support for dealing with the crisis. The world bank’s 1 billion USD supported COVID-19 (Coronavirus) Emergency Response and Health Systems Preparedness Project does not only look into immediate support for the public health systems, there is also considerable focus on integrating systems with push for private entities like health insurance companies to integrate with government schemes. We have already in India seen the fallouts of such systems.
India’s also negotiated a Development Policy loan for ‘Accelerating India’s COVID-19 Social Protection Response Program’ with World Bank . Development Policy loans have strings attached in terms of a neo-liberal agenda. These are loans given by the World Bank on the condition of policy changes, which are promised by a country and in line with the Country Partnership Framework for the country. Many of the reforms, which were announced in the financial package, are directly from the reform book of International Finance Institutions who have been demanding a rollback of labor regulations, environmental regulations, power sector reforms and relaxation of the land acquisition laws.
Asian Development Bank has funded USD 1.5billion COVID-19 Active Response and Expenditure Support Program(CARES) project which will support the government mitigate the severe health, social, and economic impact caused by the coronavirus disease 2019 (COVID-19) pandemic. ADB with its operation in health sector has altered and influenced health sector policies in India for sometime now. This emergency operation is built upon previous and ongoing health sector operations and policy dialogues. Since, the first health sector operation in India in 2013 through the support to the National Urban Health Mission (NUHM), ADB’s health sector engagement has been increasing. Following the launch of Ayushman Bharat in 2018 and implementation of NUHM under the National Health Mission, ADB is now developing a program to support delivery of comprehensive primary health care in urban areas (2020 pipeline).
Asia Infrastructure Investment Bank has invested 1.25 billion in COVID response. They have funded two projects both co- financed one with ADB and other with the World Bank. As usual AIIB is riding the back of lead financiers, exhibiting its commitment to COVID without accountability on their end. New development Bank has provided a loan of USD 1billion for Emergency Assistance Program in Combating COVID-19 for support in public health and social safety sector.
The total lending of USD5.5 billion is not huge for a 3 trillion economy and whose annual budget is over Rs. 25 lakh crore. But the influence to change the economy and the mosaic of this country, through these investments, is huge and disproportionate to their lending.
The World Bank and other MDBs are increasingly taking up all the roles of assessment, planning, financing projects and financing through development policy loans . The World Banks language of resilience, sustainability and post disaster recovery needs to be demystified. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality. With economies globally in shambles and in need for additional support, this vulnerable situation should not allow MDBs like the World Bank to push their agenda of disaster capitalism with ease.
Indian groups submit recommendations for AIIB’s review of their Environmental and Social Framework
The Asian Infrastructure Investment Bank (AIIB), after four years of its operations, is undertaking a review of its environmental and social framework. 30 Indian Civil Society Organizations submitted their recommendations and concerns regarding the process of review and it’s content and scope.
As one of the biggest recipients of AIIB’s funding, this process has significant meaning for India especially, given the context and trajectory of development followed. India, in recent times, has focused on developing massive infrastructure, which require enormous investments. This resulted in India opening itself to mega projects financed by international, national and private financial institutions. In these circumstances, it is essential for Multilateral Development Banks like AIIB to develop robust, comprehensive and strong environmental and social policies which are implemented and monitored well. To merely rely on the country systems is not enough; rather the ESF should go beyond the country system to strengthen them further. At a time when other MDBs are also undergoing review of their policies, AIIB should take a progressive leap as the first MDB from the global south to show its commitment towards building infrastructure through robust policies and with entire commitment towards protecting people and the environment.
In the four years of operation, AIIB’s membership has grown to 102 approved members worldwide and has funded 64 projects across Asia to the tune of USD12.24 billion. India alone has received investments close to USD 3 billion for the 14 approved projects. These projects include investments in energy, transport and water sectors. Of the 14 approved projects 4 are financial intermediary projects and 4 are co-financed projects. Of the current approved portfolio for India, 33.33% projects are co-financed and the other 33% are financial intermediary projects while only 33% constitutes stand alone projects. Co-financed and FI projects with current policies only bring limited liability and accountability for AIIB. The AIIB’s current ESF is not adequate to prevent risk and harm arising from this form of lending. The policy is inadequate and needs to be relooked. In its brief lending history, AIIB has funded several projects of mega scale which are been marred by massive environmental and social concerns like the Mumbai Urban Transport Project – Phase III (MUTP), Bangalore Metro Rail Project – Line R6 both projects of massive scale. The now scrapped Amravati Sustainable Capital City Project, which was being considered by AIIB for financial support as a co-financer along with World Bank as the lead financier, also speaks volume for the need to have multiple checks and balances.
Currently, 5 projects worth USD1.7 billion are proposed for financing in India. These include energy, water and transport sector Projects. Chennai Metro Rail Phase 2 Project – Corridor 4 is one of them, which is a co-financed project. The other to proposed project to watch out for is Karnataka Rural Water Supply Project (KRWSP) worth UDS 400 million which will basically promote Public-Private Partnership (PPP) models in water supply and sanitation.
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