From the streets of Seattle to the parklands of Washington, the siege of
the world’s multilateral institutions recently shifted across the Pacific
to picturesque Chiang Mai in northern Thailand, where thousands of people
descended on the Annual General Meeting of the Asian
Development Bank (ADB).
At the same time as Treasurer Costello announced an Australian
contribution of $120 million to the Asian Development Bank in the Federal
Budget, thousands of those whom the money is supposed to benefit marched
upon the opening session of the ADB meeting. The images of angry protesters,
barracades and baton wielding police were not dissimilar to those emanating
from last years’ protests against the World Bank and World Trade
Organisation in Washington and Seattle.
But there are two critical differences between last years’ US protests
and last week’s in Thailand.
The first is that nobody could dismiss the Chiang Mai protestors as
bleeding heart white middle class liberals with no experience of poverty.
Front and centre in Chiang Mai were thousands of ordinary villagers
dispossessed of their lands, livelihoods and rights by ADB funded projects
including hydro-electric dams, industrial complexes and chemical intensive
The second difference is that whilst Australia has little leverage over
the WTO and World Bank, we play a pivotal role in the Asian Development
Bank. Australia is the Bank’s fifth largest shareholder and has committed
$1.35 billion of taxpayer’s funds to the Bank’s soft loan facility –
the Asian Development Fund – through our aid budget over the years.
Treasurer Peter Costello is a Governor of the Bank. Former Federal Court
judge John Lockhart is one of the Bank’s Executive Directors, representing
a constituency which holds just over 8% of voting power in the Bank.
The voices of dissent in Chiang Mai were many and varied. Teachers
protested the impact of ADB-supported education sector privatisation on poor
families. Environmentalists were protesting the impact of ADB- supported
hydro-electric dams on river systems. Health professionals protested ADB
support for the corporatisation of public health services, and workers’groups
protested those ADB loans conditional upon the abolition of minimum wages.
Weaving its way through this myriad of grievances is a common thread –
accountability. The lack of accountability of the Bank to both those
impacted by its activities - and to the taxpayers in donor countries such as
Australia whose funds bankroll the ADB.
Australia is a case in point. As a major donor to the ADB, the Australian
government has no effective mechanism to monitor how Australian aid funds
are utilised by the Bank, nor to assess the impact of these funds in
More alarming from a public policy view however, is the fact that
Australian taxpayer funds committed to the Bank may undermine Australia’s
own bilateral aid program in the region. Community Aid Abroad’s
experiences in Laos provide one example.
Working with Australian Government aid funds, we have successfully worked
with local government and communities in the Vang Vieng District to manage
their resources in a sustainable manner for more than a decade. Many
villagers now however wonder what it was all for after the ADB funded the
construction of a hydro electric scheme which drained their river of water
and reduced fish stocks, posing serious food security and health risks for
The events of recent days in Chiang Mai will provide much to ponder for
the many donor governments – including Australia – already expressing
disquiet about the Bank prior to the protests. The next few months are a
decision time for donor Governments considering the Banks’ request for up
to $10 billion to fund its future work.
Amidst the chaos of protest in Chiang Mai, one
thing is clear. With a chequered history of supporting projects which damage
the environment and undermine the rights of poor men and women in
communities, the Asian Development Bank must be brought to account for the
impact of its projects on those living in poverty.
As a major donor to and shareholder of the
Bank, the Australian Government has an obligation to ensure accountability
of the Bank to both Australian taxpayers and to the communities impacted by
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