Australia and the Asian Development Bank in the Mekong region

by Charlie Pahlman*

Australia plays a significant role in the Mekong region through bilateral, multilateral and private sector programs and projects. Australian official bilateral aid to countries in the Mekong region has been increasing steadily over the past decade, along with direct foreign investment by Australian companies. Australia's involvement, through both aid and trade, can be seen in a range of sectors throughout the region, including eucalyptus plantations in north-east Thailand, the controversial Nam Theun 2 hydroelectric project in Laos, the Friendship Bridge across the Mekong River, and the promotion of Australian coal for environmentally and socially destructive power plants in southern Thailand.

One significant way in which Australia is involved in the region is through the Asian Development Bank (ADB). Australia is the 5th largest shareholder in the ADB, and the fourth largest contributor to the Asian Development Fund (ADF), the soft loan arm of the ADB. Australia has so far contributed some AUD$1.4 billion to the ADF alone.

Why does Australia give so much money to the ADB, despite the negative impacts on local people and communities in recipient countries, which have been described in detail by so many other speakers at the conference?

One reason is that the Australian government has no adequate mechanism for independently overseeing, monitoring and evaluating the effectiveness and impact of ADB operations in recipient countries. Only a handful of government staff are responsible for managing Australia's relationship with the multilateral development banks, and therefore depend almost entirely on the ADB for information. It can be argued that much of the ADB's rhetoric about 'poverty alleviation' is targeted at these donor governments.

Another reason for Australia's involvement in the ADB is that Australia's contributions to the ADB directly (and indeed indirectly) benefit Australian private companies and institutions. Australia gets more money back from the ADB in the form of procurement and consultancy contracts than it contributes to the ADB.

For example, the largest single recipient of ADB consultancy contracts in Australia is the Snowy Mountains Engineering Corporation (SMEC), which is linked to the Snowy Mountains hydroelectric scheme, the environmental impacts of which have been the subject of considerable public controversy. With no political support for the construction of more large hydro dams in Australia, SMEC is able to export it's 'expertise' to countries in the Asia Pacific region through international institutions like the ADB. Not surprisingly, SMEC has been involved in some way in most of the major dam projects proposed in the Mekong region.

It can be argued the ADB is little more than a crude mechanism for using public funds to subsidise the private sector in the donor countries, all in the name of 'development'. It is accountable neither to the people whose lives are impacted on by ADB activities in recipient countries, nor to the people who foot the bill - i.e. taxpayers in donor countries like Japan and Australia

The ADB is riddled with irreconcilable contradictions. While it seeks to impose far-reaching market reforms and the removal of state subsidies to the social and agricultural sectors in countries like Thailand, the ADB itself depends on public subsidies for its very existence. While it preaches 'good governance' to governments in the region, the ADB itself is unaccountable, undemocratic and secretive. Far from promoting sound economic development, the ADB itself distorts the market in favour of corporations and private sector interests.

Although Australia has been a member of the ADB since it was established in 1966, it is not well known among the Australian public. Even social justice organisations and activists who have long been involved in campaigning on issues related to the World Bank and IMF do not know much about the ADB - even though Australia arguably has much more influence in the ADB than it does in the World Bank.

An increasing number of Australian citizens are now starting to ask questions about the use of Australian public funds for funding the ADB, especially in the context of the current round of negotiations between donor country governments and the ADB about the replenishment of the ADF. Australian citizens are demanding greater transparency and accountability from the Australian government and the ADB - and are calling for an end to destructive projects that undermine people's livelihoods and natural resources.

The Mekong region has been a central focal point for the interest in Australia about the Asian Development Bank. As part of a campaign to generate more public interest and scrutiny in these issues, a coalition of NGOs, academics and community groups are organising a conference entitled 'Accounting for Development - Australia and the Asian Development Bank in the Mekong Region', which will be held June 23-24 in Sydney Australia.

The conference will explore the links between Australia, the Asian Development Bank, focusing on the rights, livelihoods and environment in the Mekong region. Some of the conference themes include;

Livelihood and development dilemmas in the Mekong Institutions, Governance and Civil Society The ADB - Whose agenda? Australia and the ADB - influence, accountability and responsibility

The conference program features a range of highly qualified speakers, including: WaldenBello (FOCUS on the Global South), WitoonPermpongsacharoen (Towards Ecological Recovery and Regional Alliances), ProfessorPasuk Pongpaichit (Chulalongkorn University), Dr Philip Hirsch (Sydney University), JohnLockhart (Australian Executive Director with the ADB), Lee Rhiannon (member of the NSW Legislative Assembly), SatoruMatsumoto (Mekong Watch Japan)

Other speakers include representatives from government and NGOs in both Australia and the Mekong region, as well as representatives from the Asian Development Bank.

The conference is jointly organised by The Australian Mekong Resource Centre (AMRC), Community Aid Abroad - Oxfam Australia, Australian Council for Overseas Aid (ACFOA), AID/WATCH, ACT Mekong Group and Jubilee 2000. To register for the conference, or if you require more information, please contact:

The Administrator, The Australian Mekong Resource Centre (AMRC) Tel: (61-2) 9351 7796 Fax: (61-2) 9351 3644 Email: [email protected] Address: AMRC, c/o Division of Geography, School of Geosciences, University of Sydney, NSW 2006 Australia

* Charlie Pahlman worked for many years in Thailand and the Lao PDR with small-scale rural development projects, including sustainable agriculture, community forests, small-scale irrigation etc. He is now based in Canberra, Australia, and is a member of the ACT Mekong Group, which works to generate greater public interest and scrutiny of Australia's role in the Mekong region. This article is a summary of the presentation he made to the People's Forum 2000, which was held from May 3-5, 2000 in Chiang Mai, Thailand.