People's Domain

[Opinion] PPP and the role that ADB play

The Asian Development Bank (ADB) held its 47th Annual Governors’ Meeting in Astana, Kazakhstan this May to revisit and assess the targets it set during its 41st Meeting six years ago. Then ADB President Haruhiko Kuroda outlined a new framework called “Strategy 2020” which aimed to establish a “New Asia”.

Kuroda’s vision was to reshape, redirect, and reposition ADB by adopting more innovative and effective development role in Asia as a rapidly changing region.

Among the most relevant feature of ADB’s Strategy 2020 for the Philippines is what is now commonly known as PPP or the promotion of Public-Private-Partnership. Apart from intensified privatization of the energy and water sector, ADB’s direction brings into public realization why our own government under the administration of President Noynoy Aquino has been providing the private sector a bigger room to dominate the area of energy and water.

This is the reason why attempts to privatize the water district continues even in Iloilo and even in other places in the country. In addition, it also points out why private sector’s role in the energy sector is expanding, not only to dominate the market, but to monopolize a section of the power industry.

Midway to 2020, however, the ADB’s redirection effort resulted into continuous rates increases and constrained access especially of poor households and communities to power and water services. It has also dislocated entire rural and indigenous communities especially on large dam projects and inflicted massive environmental damage. This is prominent in Asian countries from Indonesia, Thailand, India, Pakistan, Bangladesh, Nepal, Sri Lanka and the Philippines.

The Asia-Pacific Movement for Debt and Development (JS-APMDD) aptly described ADB’s effort by emphasizing that “we are not fooled by the spin of PPPs. Substantively, PPPs in their many, seemingly harmless forms, remain vehicles for leveraging private and institutional investors by ensuring that privatization’s prime operating principle of full cost recovery continues to hold sway.”

Indeed, it requires no re-emphasis that one of the sessions in Astana had taken a deeper look at how ADB can help bridge the ’bankability gap’, as an impediment to ‘successful’ PPPs.

This is concretely expressed on ADB’s recent intervention which approved a $400-million loan to help make the energy sector become more “affordable, reliable, sustainable and secure”. The loan assistance was aimed to speed up industry effort and somehow brought trickle down effects in the form of more jobs in order to become consistent with ADB’s mandate of reducing poverty levels. We in the Philippines is not insulated from ADB’s continuing intervention in the energy power sector through efforts such as strengthening the power end-user movement and by reviewing legislations governing the power sector.

ADB also actively provided funding support for private investments in fossil-fuel projects, particularly coal: thus contributing to the grievous harm inflicted on the environment and communities, and the worsening of the climate crisis.

Moreover, ADB also persisted in providing preference to the private sector as the engine of growth and the driver of its mandate of poverty reduction in the Asian region. Along with the World Bank, the ADB further drums up these hollow claims by instantly calling for governments to mobilize public resources to leverage private sector investments. It has grown more persistent and aggressive in facilitating instruments like equity funds, bonds, and public guarantees of risk, liabilities and profits, which tap into public money to attract private sector investments. Strategy 2020 commits a big leap in support of private sector development, from devoting 12-percent of operations in 2007 to 50-percent by year 2020.

This is the same storyline in many parts of Asia and it prompted analysts and watchdogs like JS-APMDD to intensify call for the overhaul of an ADB-supported electricity sector reform law or the Electric Power Industry Reform Act. The EPIRA has offered more burdens to people and communities for it was meant to benefit corporations, not people.

Many countries in Asia are saddled with debts lent by ADB for projects that in truth only serve its narrow interests and agenda. We must repudiate these debts as illegitimate for the damage that it wrought not only on communities, peoples and the environment today, but for compromising the future of generations yet to come.

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