Pillars for the Future of Development Finance in Asia

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After much anticipation, the Asian Development Bank (ADB) recently released Strategy 2030, its long-term corporate strategy to respond effectively to Asia’s changing needs. As the ADB looks to the future of development finance in Asia, it must keep community engagement, including access to effective remedy, at the forefront.

 

Strategy 2030, then in draft form, was heavily showcased during May’s ADB annual meeting in Manila, Philippines. The strategy includes plans to increase private sector lending as well as the use of country systems in lieu of ADB safeguard policies for public sector operations. Strategy 2030 also cites the bank’s commitment to the Paris Agreement and the Sustainable Development Goals as the overarching objectives of the strategy document. However according to the joint submission of NGO Forum on ADB, a close partner of Accountability Counsel, Strategy 2030 still lacks adequate guidance on how will ADB concretely contribute in achieving the targets set forth in these key global agreements.

 

Importantly, although Strategy 2030 does contain some commitments to work with civil society organizations (CSOs) in the design and implementation of projects, little mentioned in the strategy is how the ADB plans to ensure that local communities direct the course of development in Asia and have access to accountability and remedy in the event of any negative impacts from financing.

 

Of course, the ADB is not the only actor in the region, and questions about the future of development in Asia span various institutions. China’s “One Belt, One Road” initiative will pour over $1 trillion dollars into the region and beyond. The Asian Infrastructure Investment Bank, a China-led multilateral bank that opened in 2016, is ramping up operations. How can the ADB and other financial institutions ensure that communities’ rights are respected in the course of undertaking projects in the region? When rights are violated or communities have concerns about projects, how can these institutions ensure that communities have effective venues to raise and address these concerns?

 

Not focusing sufficiently on community input can be disastrous. As Rayyan Hassan from NGO Forum on ADB raised during a session in Manila hosted by the ADB’s independent accountability office, communities often lack information about projects that may negatively impact them, owing to ineffective consultation and information disclosure processes. Fear, insecurity, and anger then build into grievances.

 

Accountability Counsel has seen this scenario play out time and again through our casework, both in Asia and across the world. For example, the World Bank’s accountability office confirmed that the communities in Sindhuli, Nepal affected by the 220 kV Khimti-Dhalkebar Transmission Line had not received proper information and consultation about the health, safety, and economic impacts of the bank’s project, leading to misunderstanding, violence against peaceful protesters, and significant project delays. Similar concerns are being raised by communities in Lamjung, Nepal who are affected by the European Investment Bank (EIB)-funded Nepal Power System Expansion Project, which is integrated with the ADB’s South Asia Subregional Economic Cooperation Power System Expansion Project. Given the local communities’ recent advocacy with the EIB, it appears here again that international financiers have to do more to ensure that their development projects maintain a high standard of information disclosure, consultation, and participation in order to “do no harm” and truly improve lives in Asia.

 

As the ADB and others look to the future of development in Asia, they must put measures in place to ensure that communities’ voices are fully respected in the course of projects. This includes strong environmental and social safeguard policies surrounding project design and implementation. As CSOs highlighted during the ADB annual meeting, strong environmental and social protections are particularly important as these institutions increase the focus on private sector investment, which has historically received less oversight. This also includes comprehensive and accessible project information for communities and ongoing inclusive consultations, right from the project design phase.

 

Crucially, respecting community voices also entails ensuring that communities have access to an effective accountability office to address any project-related harm, including the denial of information and consultation around the project. To be effective, these offices must operate according to principles including legitimacy, transparency, and fairness. The ADB’s accountability office, comprised of the Compliance Review Panel and the Office of the Special Project Facilitator, is well established but could be improved, particularly in the area of structural independence from the ADB. As the ADB rolls out Strategy 2030, the bank should place particular attention on strengthening the accountability office to ensure that it is an effective, legitimate avenue for community engagement and provides a meaningful remedy for the harms communities have suffered or will potentially suffer.

 

Through Strategy 2030, the ADB seeks to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. This is only possible if the ADB, and other financial institutions and actors in the region, put communities first. Community engagement, including access to an effective accountability office, is vital for ensuring that future development in Asia reflects the needs and priorities of its people.