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12 Things the ADB Does Not Want You To Know! |
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Wednesday, 17 May 2006 |
1. Project Failures-
According to the ADB's own Operations Evaluation Department, 78% of ADB projects in Sri Lanka and 70% of ADB projects in Indonesia and Pakistan are "unsuccessful." Unsuccessful in this sense means economically non-viable or unable to generate socioeconomic benefits commensurate with costs incurred over the long term.
Source: "The Asian Development Bank In Its Own Words: An Analysis of Project Audit Reports for Indonesia, Pakistan, and Sri Lanka", Fried and Lawrence, Environmental Defense, July 2003.
2. Rates of Return-
ADB projects are often a drain on the national treasury. The ADB says that projects should return the entire investment plus at least 10% to the government. But many projects give negative rates of return, losing as much as 70% of the initial investment. Even projects that the ADB considers "generally successful" have rates of return as bad as negative 40%. In spite of these failures, the governments must repay the ADB the full cost of the loan plus interest.
Source: "ADB-Wherefore Art Thou (Reflections of a Board Member who spent three interesting years with the Bank), Stephen Baker, 2001.
3. Debt Burden-
Much of the debt that countries owe to the ADB is for failed projects. The figures are:
Country Debt to ADB Debt incurred by Percentage of debt due
unsuccessful projects to unsuccessful projects
Indonesia $16 billion $11 billion 69%
Pakistan $6.5 billion $2.6 billion 40%
Sri Lanka $1.2 billion $1.5 billion 80%
Figures are in US dollars, as of 2002.
Source: "The Asian Development Bank In Its Own Words: An Analysis of
Project Audit Reports for Indonesia, Pakistan, and Sri Lanka", Fried
and Lawrence, Environmental Defense, July 2003.
4. Corruption-
The ADB's top five borrowers are among the most corrupt countries on earth. They are:
Country Cumulative borrowings
Country ranking (1 - 133);
from ADB in 2003 133 most corrupt
Indonesia $19.3 billion 122
China $13.3 billion 66
Pakistan $13.6 billion 92
India $13.3 billion 83
Bangladesh $7.3 billion 133
Sources: Cumulative borrowings: ADB Corruption: Transparency International's Corruption Perceptions Index, 2003.
http://www.transparency.org/policy_research/surveys_indices/cpi/2003
5. Accountability Under Law-
The ADB is not accountable to any country's legal system. Its charter
clearly states that it is immune from all lawsuits and criminal
proceedings. So if the ADB breaks the law or causes harm, it cannot be
held responsible. The only exception, written into the charter, allows
investors who own ADB bonds to sue the ADB. But poor people negatively
affected by the ADB's projects have no such right. ADB is accountable
only to itself!
Source: Agreement Establishing the Asian Development Bank
6. Internal Accountability Mechanisms-
In place of external legal accountability, in 1995 the ADB created an
internal accountability mechanism called the Inspection Facility.
Finding that this had failed, the ADB replaced it with the
Accountability Mechanism in 2003, which has no power to stop or order
changes in projects. Since 1995, the two mechanisms together have heard
only eight complaints. Of those eight, only one has resulted in a
settlement that affected people were willing to sign.
Source: www.adb.org
7. Transparency-
The ADB's internal documents and its communications with governments
are considered secret and "inviolable". It makes available only the
documents it wishes to disclose. Even its financial records are secret
and are not subject to external audit, making it near impossible to
discover fraud, corruption, and waste. Since it is not accountable to
any legal system, normal laws regarding banking, accounting, and
disclosure of information do not apply.
Source: Agreement Establishing the Asian Development Bank
8. Presidents-
The president of the ADB is always Japanese. This is not a legal
requirement but the result of a "gentlemen's agreement" that ensures
that the president of the World Bank is always an American and the
president of the IMF is always a European. Borrowing countries are not
represented at this level of leadership.
9. Voting-
Unlike the United Nations, the ADB functions on a "one dollar, one
vote" system. The wealthy, donor countries own the largest number of
shares at the Bank and control 55% of the votes on its board. Borrowing
countries, where the Bank actually operates, control a minority of the
votes.
Source: Annual Report of the Asian Development Bank, 2004.
10. Taxes-
The ADB pays no taxes. Even the salaries it pays to its employees are tax-exempt.
Country Votes (rounded)
United States 12.9%
Japan 12.9%
China 5.5%
India 5.4%
Indonesia 4.7%
Pakistan 2.1%
Bangladesh 1.1%
Burma 0.8%
Sri Lanka 0.8%
Nepal 0.4%
Afghanistan 0.3%
Source: Agreement Establishing the Asian Development Bank
11. Political Interference-
The charter of the ADB states that it "shall not interfere in the
political affairs of any member [nation]." Nevertheless, it routinely
demands that countries change their laws and policies as a condition of
making loans.
Source: Agreement Establishing the Asian Development Bank
12. Parliamentary Oversight-
In all the South Asian countries, governments take loans and sign
legally-binding agreements with the ADB without any approval from
parliament. In 76 countries, governments require some degree of prior
approval from parliament.
Source: Environmental Defense - www.edf.org/factsheet |
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INTERNSHIP OPENING AT FOCUS ON THE GLOBAL SOUTH, INDIA |
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Focus on the Global South - India A-201, Kailash Apartments, Juhu Church Road, Juhu,
Mumbai – 400 049. India Tel: +91-22-6592 1141 / 51, Telefax: +91-22-2625 4347.
Email: focusind@vsnl.net / focusind@yahoo.com WEBSITE: http://focusweb.org/india
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