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Thursday, 1 September 1994
Page: 820

Senator MARGETTS (4.35 p.m.) —The Asian Development Bank, ADB, is in many respects a regional version of the World Bank. It includes five countries, mainly in East Asia, although it has European and North American donor members and includes some central Asian ex-USSR nations also covered by its sister bank, the European Bank for Reconstruction and Development.

  Like the World Bank, the Asian Development Bank has traditionally concentrated on assistance through funding big infrastructure projects. Like the World Bank but a bit more slowly, the ADB is now starting to incorporate environmental and social objectives in its programs and to incorporate these as factors into its programs which are not primarily intended to achieve environmental and social ends. Like the World Bank, it is also an institution committed to a certain view of the role played in development by trade and financial deregulation and the proper role of government in the economy.

  While more informative than similar reports on the World Bank put out by Treasury, this report is still mainly descriptive in a way that tells very little. It describes functionally what the ADB is rather than what it is doing; the issues facing it, or Australia's position on these issues, what we are promoting and so on.

  Australia commits 25 per cent of its aid budget to multilateral organisations like the World Bank and the ADB. The proportion of such multilateral aid is increasing and so reporting on this is just as important as reporting on AIDAB. Reports should be at least as inclusive, especially since AIDAB is here and reasonably transparent. The ADB has headquarters in other countries, making information more difficult to access, and is generally unknown and relatively unseen compared with AIDAB and the World Bank.

  The annual report to parliament should include some breakdown of the projects being funded and to what extent, what their current status is, which projects have been reviewed and what the reviews showed. I would also like a clear outline of major policy issues dealt with by the bank and Australia's position in the negotiations. If these organisations are to be major recipients of aid money, there must be more accountability and transparency.

  While it is beginning to improve its position, the Asian Development Bank suffers many of the same problems as the World Bank. These include a heavy weighting toward big infrastructure projects—dams, electricity projects, roads, et cetera. As with the World Bank, there are criticisms about the appropriateness of these projects and their social and environmental impacts.

  While there are now some programs intended to address these issues directly, the aid record is full of inappropriate and poorly designed projects, including environmental and social projects. While employing a few people to assess the social and environmental impacts of projects, the big multilateral banks and agencies have not always been very good at listening to them. Projects also tend to continue leaving out people, and do not incorporate community self-determination or community control of projects very well.

  Another issue I raise briefly is that of the increasing tendency to promote the profits to be made from aid. The report notes that we have made far more from support of the bank than we have contributed to it. It says:

We made this money from goods sold to the bank through its procurement programs.

The `we' is used loosely in this case—the `we' who fund the bank being the government while the `we' who make the money through procurement is private industry.

  I note that this emphasis on the benefits of aid is increasingly being found elsewhere in relation to other aid programs, such as the recent `A profit in our country' seminar at Parliament House on the economic benefits of our agricultural research aid. That was said to generate profits here at roughly double the rate of assistance. This is sometimes promoted as the win-win model of aid. While I understand that this is partially a means of promoting aid in the face of those who would cut any expenditure that does not generate profit, it is a trend that disturbs me. It does so because where the assistance programs begin to be evaluated on the basis of how much profit they return, the whole notion of assistance becomes distorted.

  I have no problems with the idea in principle of `win-win' aid, but I know that where aid dollars are short and the need is great, programs that do not generate an obvious benefit for the donor may miss out. They are not `win-lose' programs; they are simply real assistance. One of the things that concerns me especially is that what I would call real assistance—assistance to communities in genuine hardship that work with the communities to generate the capacity to sustainably improve their lives—are those which are least likely to generate a profit in the donor country. They are nonetheless the projects which will give the greatest assistance in the most equitable and least domineering way.

  The final issue I would like to raise at greater length is that of bank support of structural readjustment policies in line with those of the World Bank and the IMF. This is not explicitly stated anywhere, but comments about bank assistance to improve the domestic and economic policy environment of recipient nations is basically jargon for the structural readjustment push. Structural adjustment in this context basically means opening economies to imports and foreign investment and reducing government domestic economic controls to foster the private sector. (Extension of time granted) It usually means that pressure is applied for fiscal management, meaning cutbacks to social, education and health programs.

  While the ASEAN nations have been growing fast enough that the impact is not so obvious, the Asian Development Bank is not only concerned with ASEAN, but includes Bangladesh, Pacific island states and so on. Structural adjustment programs can have devastating effects. In many of these countries such policies work counter to attempts to promote equity. The rapid shift away from traditional agriculture to a more mechanised agriculture with greater concentration of land ownership has seen millions of people shifted from a hard life in the country on small farms to a life in the squalor of urban shanty towns. The push for rapid modernisation in company with free market development has meant that the inherent inequities in many traditional societies are translated into massive inequalities in wealth and access to resources.

  It is entirely immoral for the ADB, the World Bank or Australia, within these agencies or outside them, to push for structural readjustment which would act directly against the interests of people in these nations. Thailand is a nation with a relatively good outcome, arguably because of its success in population control. Yet the problems are still rife there. Indonesia, the Philippines and other nations have even greater problems.

  I strongly urge that Australia stop pushing for structural readjustment type programs in other nations and international forums and that it actively promote instead a policy of development where equity and general wellbeing have precedence over pushing for free market development that helps mainly national elites and trans-national corporations.