ADB capital boost will not help the poor - NGOs

The Asian Development Bank plan to triple its capital to help the region’s poorest countries has NGOs feeling extremely uncomfortable. Given the bank’s poor environmental and social record, the NGOs fear the bank will do more harm than good.

IRIN

NGOs have criticised a decision by the Asian Development Bank (ADB) to triple its capital, claiming projects it funded have done more harm than good to communities it aims to help.

On April 30, ADB shareholders agreed to increase the bank’s capital base from US$55 billion to $165 billion to allow it to respond to the global economic crisis and help Asia’s poorest countries achieve the Millennium Development Goals, including halving the number of people living in poverty by 2015. In a new report, the ADB said the economic crisis was broader and deeper than the 1997-1998 Asian financial crisis.

The report said an ADB study estimated that 60 million people who would have been lifted out of extreme poverty would remain very poor this year and the figure could reach 100 million by the end of 2010.

ADB President Haruhiko Kuroda said on May 2 that an ‘immense infrastructure deficit’ in Asia was a huge constraint on investment and economic growth and efforts to reduce poverty.

But the NGO Forum on ADB, a network of 250 activist groups that has been monitoring the bank’s activities since 1992, called the move ‘irresponsible and dangerous’, alleging the region had experienced forced displacement and environmental degradation caused by ADB-funded projects.

The NGO Forum said the capital increase was largely designed for private sector clients and big infrastructure, and numerous studies had shown that such financing did not benefit the poorest.

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