ADB: Banking on Misery in Asia and the Pacific

Revolutionary Worker #1102, May 13, 2001, posted at

For the last 35 years, the Asian Development Bank has met behind closed doors to make decisions that affect the lives of millions of people living in countries in Asia and the Pacific. This year, from May 9-11, the ADB will hold its annual meeting in Honolulu and activists are determined to protest and expose how the plans from this meeting, will, once again, lead to further exploitation of poor countries by imperialism.

What is the ADB?

The Asian Development Bank provides development loans to countries of the Asia-Pacific region--with the aim of opening up this whole region to imperialist penetration and control. The ADB was formed in 1966 as a vehicle for regional suppression of national liberation struggles, especially in Vietnam. Some of its first projects were undertaken in cooperation with U.S. pacification plans for the region. Today there are many liberation struggles being fought throughout Asia and the Pacific--including Maoist People's Wars in Nepal and the Philippines. And the ADB continues to fund projects designed to strengthen imperialist control and defeat any struggles which threaten neo-colonialism.

The ADB is based in Manila and has 60 member countries. Rich countries that provide funds for the loans are called "donor countries," and countries that receive the loans are referred to as "recipient countries." Donor countries include the U.S., Japan, Australia, Germany, France and other wealthy nations. Recipient countries are poor, oppressed countries in Asia and the Pacific. Among the largest debtor countries to the ADB are Indonesia, Pakistan, the Philippines, India and Vietnam. Countries that owe more than 50% of their external debt to the ADB include Bhutan (73%), Nepal (68%), Samoa (62%), Mongolia (52%), and Solomon Islands (51%). The ADB expects to disburse $6 billion in loans at its meeting in Honolulu.

The ADB is a for-profit bank that makes its money by making loans to some of the poorest countries in the world. To guarantee repayment it holds the country's resources--labor power and raw materials--as collateral. It funds infrastructure projects like dams and communications systems that benefit the capitalists but impoverish the poor. It makes agricultural loans that force peasants to plant export crops that require huge inputs of fertilizers and pesticides, depriving poor farmers of food crops and polluting the land and water on which the people rely. It provides loans to Asian and Pacific countries to bring in Western "consultants" to design laws that enable imperialist corporations to exploit these countries more efficiently.

The more money a country contributes, the more control it has in the ADB. The U.S. and Japan are the two largest ADB funders and so they are the main players in the ADB--and both are trying to use it to hold on to, and carve out, a larger empire. There is fierce rivalry between Japan and the U.S. which is being played out within the ADB. The U.S. and Japan, which each have a 16% share, together control 32% of the voting power within the ADB. So they have the most control over which projects are funded, the conditions imposed on loans, and the awarding of contracts to private companies. Typically, contracts for building ADB-funded infrastructure projects are awarded to corporations from rich donor countries. So huge chunks of the ADB loan are siphoned back into the economies of rich countries--even before the loan is repaid.

ADB Projects of Destruction

A fact sheet put out by ADB Watch in Hawai'i provides some examples of what ADB projects have meant for the people:

Greater Mekong Subregion: Since 1992, the ADB has been a key player in the push to build dams, roads, railways and other infrastructure in the Greater Mekong Subregion, which covers the six countries of Thailand, Laos, Vietnam, Cambodia, Myanmar and the Yunnan province in China. This year more than 40% of the ADB's loans will be for projects in this region. Over 50 potential dam sites on the Mekong river and its tributaries have been identified. If only a handful of these projects are constructed, thousands of people will be displaced and their livelihoods threatened, fertile farmland and rainforests submerged, and some of the world's most productive fisheries destroyed.

Nam Hgum Hydro Dam in Laos: The dam flooded forests, wiped out fish stocks, and opened up the watershed to logging. As a result, dozens of displaced communities are impoverished, trying to eke out an existence on surrounding hillsides, without access to safe drinking water, schools, and other basic needs. Meanwhile, drought has reduced the dam's generating capacity by one-third, making it an unreliable source of power.

Singkarak Hydropower Project in West Sumatra, Indonesia: Completed in 1998, this hydro-dam has devastated fisheries and fishing communities, disrupted water supplies in two river systems, and opened up the area to logging. It has wiped out fish stocks and threatened local wildlife, including the endangered Sumatran tiger. Water flows have been drastically reduced, which has increased skin and intestinal illnesses.

Mae Mob Power Project in Thailand: This project, which includes a lignite mine and a lignite-fired power station, has been identified as one of the largest sources of poisonous sulfur dioxide emissions in Southeast Asia. At least 42,000 people living near the plant suffer chronic respiratory diseases, breathing problems, and skin disorders. Livestock have become ill and died. Large orchards, vegetable gardens and rice crops have been hit with acid rain. Streams and waterways are blackened by poisonous emissions, as well as by the run-off from lignite mining operations.


The ADB funds and manages SAPs (Structural Adjustment Programs), which aim to bring about economic, political and military changes that facilitate neocolonial domination. A leaflet put out by People Against Imperialist Globalization in Hawai'i gives some examples of how SAPs do this:

Infrastructure: By providing easier military and foreign corporate access by way of roads, railways, airports, and seaports. Such infrastructure is geared to the extraction of natural resources by foreign companies.

Legal System: By "liberalizing" trade and making it easier for economic domination by foreign capital--for example, passing laws which allow majority and/or complete foreign ownership of local businesses.

Privatization of land: By titling land which outlaws traditional agricultural practices, such as shifting cultivation, community-owned village land, etc. This is done in order to allow for takeover by large agricultural companies and integration into the capitalist global market.

Privatization of natural resources: Profitting from things which were previously free to people, such as water. In many places, Nepal for instance, Coca-Cola has become more readily available (but still too high-priced for the overwhelming majority of people) than clean water, because of water's privatization and its export in mass quantities to India.

Exploitation of natural resources: Facilitating profits and extraction of raw materials by foreign companies, the building of dams, clear-cutting of forests and other environmentally destructive projects which have no local benefit. For instance, the clear-cutting of rainforest in Indonesia for timber to be exported to Japan.

Displacement of people: Forcing large sections of the population, especially indigenous people, to leave their homelands and ways of life and move to the cities, where they face extreme levels of poverty, labor exploitation, health dangers, and social oppression. In some cases people are also forced to move onto areas full of land mines and semi-flooded areas, which causes sicknesses like malaria and cholera.

Restructuring of the economy: Restructuring local economies to benefit the imperialist countries and their corporations. This results in the shift in focus from subsistence and self-sufficiency agriculture of food crops such as rice, corn, and taro to growing cash crops, like coffee, sugar and opium, for export.

The Myth of "Poverty Reduction"

In the name of "rapid modernization," ADB loans pave the way for investment by foreign corporations--drooling at the prospects of sweatshop conditions and wages--and huge profits. And countries that accept ADB loans must also agree to all kinds of conditions and austerity programs that further impoverish the poor in order to pay back the loans. The ADB declares that "poverty reduction" is its most important mission. But in reality, for poor and oppressed countries--which are already dominated by foreign capital--ADB loans mean increased debt, further impoverishment, more environmental destruction, the bankruptcy of small farmers, more economic instability, and a growing gap between the rich and poor.


ADB Fact Sheet by ADB Watch, Hawai'i

It's Right to Rebel Against Imperialist Globalization, leaflet by the RCP, Hawai'i

What is the ADB and Why Must It Be Shut Down?, leaflet by People Against Imperialist Globalisation

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