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SAYING
the Asian Development Bank (ADB) suffers from a “crisis
of legitimacy,” freedom-from-debt activists picketed the
ADB headquarters in Manila on Monday, calling on the
bank to abandon its new long-term strategic framework (LTSF)
for the 2008-2020 period.
The LTSF,
also called Strategy 2020, would only “lead to a bleak
future for the country’s poor,” said the members of the
Freedom from Debt Coalition (FDC), Jubilee South-APMDD
and Task Force Food Sovereignty.
Despite
the call of various civil-society groups to stop its
privatization policy, the ADB had said it will still
push for more private-sector participation in the Asia
and the Pacific region following the release of its new
LTSF during the Bank’s 41st Annual Governors’ Meeting in
Madrid, Spain.
In a
creative protest outside the bank’s main headquarters in
Mandaluyong City, members of the debt groups on Monday
echoed the opinion of civil-society groups participating
in Madrid, asking the ADB to junk the framework.
Beckie
Malay, FDC vice president, said that with the LTSF, the
ADB is virtually delivering the country into the hands
of the profit-oriented private sector, thus perpetuating
decades marked by increasing debt alongside marginal
development—results of compliance with ADB prescriptions
of reforms anchored mainly on just increasing
privatization.
“Instead
of helping our government strengthen its institutions,
the ADB, through this Strategy 2020 and using our debts
as leverage, pushes for more aggressive private-sector
participation. It is ironic that while it is governments
which gave mandate to the bank, it is now deciding to
move away from funding Asian governments,” Malay
lamented.
In its
LTSF, the ADB gears itself toward greater support for
“stronger private-sector involvement in development,”
promising to scale up its private-sector operations from
12 percent in 2007 to 50 percent by the year 2020.
RP’s
privatization experience
In 41
years of operation, the ADB pushed the privatization of
some of the country’s most basic utilities. It gave one
of the largest loans of a multilateral lender to the
Philippine government just to reform the power sector
toward total private-sector control, the FDC recalled.
The ADB released $300 million for the Power Sector
Restructuring Program (PSRP) Loan in 1998 and 2001 to
ensure the passage of the Electric Power Industry Reform
Act (Epira), which mandated marketization and open
access of the whole industry.
“At
present, we are in debt by as much $192.7 billion
because of the PSRP, having already paid a part of the
loan,” said Malay.
The
water sector was also a victim to the ADB’s “sinister”
policy reforms, the FDC added. One of the eight water
projects funded by the ADB, the Umiray-Angat Transbasin
Project (UATP), had an accompanying advisory technical
assistance (TA) grant of $582,000 to introduce
private-sector participation in the operation and
management of Metropolitan Waterworks and Sewerage
System activities.
Even the
food sector was affected by the ADB’s vision, the FDC
continued. In 2000 an agreement between the government
and the ADB took effect for the Grains Sector
Development Program, an integrated package of policy and
institutional reforms, sectoral investments and advisory
TA aimed at pushing for the privatization of the
state-owned National Food Authority, liberalizing grains
trading and encouraging greater private investment in
the food and grains sector.
Malay
said the loan forced the government to comply with all
international trade agreements on corn-tariff reduction
as conditionality.
“ADB
moved to other sectors, as well, from education, to
environment, to local government, also to push, with as
much unwavering zeal, the same neoliberal reforms it had
pushed in the power, water and grain sectors. After 41
years of harmful existence, ADB remains unrepentant and
continuous in its pursuit for a privatized
Philippines,”
said Malay.
“Unfortunately for all Filipinos, these privatization
schemes only led to crisis after crisis after crisis,”
said the debt watchdog, adding, “It didn’t work before;
it won’t work in the future.”
The
reforms pushed by PSRP, for example, only boosted rising
prices of electricity in the Philippines, now one of the
highest in the world at about P11 per kilowatt-hour as
of July last year.
Since
the MWSS privatization, the price of water jumped from
P2.61 per cubic meter for Manila Water and P4.96 for
Maynilad in 1997 to the present P19.73 and P32.93,
respectively.
In
addition, said the FDC, “the subsidy gap in NFA and the
agricultural production owing from ADB’s policy
prescription of leaving the affairs of agriculture to
the whims of the private sector left the Philippines
vulnerable to the rice price shocks in the rice export
market. From being a net exporter of rice in 1968, a
year after ADB had been set up in the Philippines, the
country had been reduced to importing about 2.2 metric
tons this year.”
Manila
owes the ADB the largest among all the multilateral
lenders. As of April 2007, its outstanding debt to the
ADB was $3.04 billion or 9.19 percent of the total
national government foreign debt, said the FDC.
“With
the ADB as a partner to so-called development, the
Philippines’ GDP growth rate dropped from an average of
8.26 percent annually from 1947-1966 to an average of
only 3.95 percent from 1967-2007. Poverty continues to
be unabated, made worse even by skyrocketing prices in
electricity, water and food,” said Malay. |
