ADB Projects in Shrinking Democratic Spaces
Legal Rights and Natural Resources Center (LRC/Friends of the Earth Philippines)
The Asian Development Bank (ADB) and the Philippines have been working together since five decades ago, with the headquarters of the Bank given a home in Manila. Today, the ADB is one of the largest official development assistance (ODA) partners of the Philippines. As of April 2018, the Philippines has received more than USD16 Billion from the ADB in the form of loans and grants. Around USD1 Billion more have been released to private Philippine companies also in the form of loans and investments.
According to the ADB, the Philippines is entering the “golden age for economic growth”. Over the next decade, the government is set to embark on an ambitious USD180-billion infrastructure spending dubbed as the “Build Build Build” program, which is said to transform the Philippines’ economy. According to the Department of Finance (DOF), the government is looking at 75 flagship projects, which are all large-scale infrastructure projects. These include: six airports, nine railways, three bus rapid transits, 32 roads and bridges, and four seaports.
During a loan signing at the ADB in January of this year, the Department of Public Works and Highways (DPWH) said, "2017 was a very aggressive year, but we can expect more projects to be online in 2018." According to the DOF, 15 projects totalling 1.18 trillion pesos are already in pre-construction stages. And the bulk of these projects will be funded by foreign loans.
Duterte’s Build, Build, Build flagship project is expected to widen the trade deficit that reached a record high in November 2017. Moreover, according to economists, as construction picks up, steel and machinery imports are likely to grow. This can then put pressure on the value of the Phlippine peso, which is reaching its highest levels in a decade, according to Japanese news agency Nikkei.
Another notable trend is the country’s growing debt, which amounts to PHP6.89 Trillion (roughly USD131 Billion) as of March 2018. This is a staggering increase of 11% from last year.
Governance and democracy
The political, social and governance challenges the country is facing likewise needs a critical examination. According to international economic experts, the country’s biggest problem may not be debt but rather the government's ability to get things moving cleanly. As reported by Nikkei, investors still complain of red tape and corruption.
The Duterte government has pushed for a Federal-parliamentary form of government purportedly as a response to the problems of unequal wealth distribution and the centralization of power at the national government. However, Civil Society Organizations (CSOs) and communities have warned the government that a push for a Federal-Parliamentary form of government through a Charter Change may not be ideal. The regional political structures in the country are not ready for such changes. Political dynasties, patronage politics, corruption, lack of regional agenda, as well as unclear wealth-sharing and fiscal systems signal that Federalism is not only appropriate but unnecessary. Moreover, the proposed changes to the Constitution are dangerous as it seeks to remove progressive and protectionist provisions. Communities and advocacy groups believe that more than economic growth, the government should respond to issues on governance, human rights, and the erosion of the rule of law.
Since President Duterte came to office in 2016, the Philippine’s “war on drugs” has resulted in the deaths of thousands of mostly poor Filipinos. Philippine Drug Enforcement Agency (PDEA) data indicates that police operations resulted in the deaths of 3,906 suspected drug users and dealers from July 1, 2016, to September 26, 2017. But unidentified gunmen have killed thousands more, bringing the total death toll to more than 12,000, according to Human Rights Watch and credible media reports.
CSOs and international groups, including the United Nation Human Rights Office of the High Commissioner (UNHR OHC), have urged the Philippines to “observe its obligations under international law to protect the human rights of indigenous peoples, including in the context of armed conflict. The authorities must ensure that all human rights abuses are halted and that there is justice and accountability for past attacks. This includes killings and attacks allegedly carried out by members of the armed forces against the indigenous communities.”
Early this year, UN Special Rapporteur Vicky Tauli-Corpuz, an indigenous woman leader, was named in a government petition filed in February in a Manila court, and accused of terrorism and alleged membership to the New People’s Army and the Communist Party of the Philippines along with over 600 others. According to an official statement of the UNHR, “The accusation against her comes after the public comments made, jointly with other Special Rapporteurs, in relation to the militarization, attacks and killings of indigenous Lumad peoples by members of the armed forces in Mindanao; this accusation is considered as an act of retaliation for such comments.”
In December 2017, IP leaders of TAMASCO, a T’boli IP organization in Brgy Ned, Lake Sebu were killed in a military operation, erroneously tagging them as armed communist rebels. The IP leaders, led by Datu Victor Danyan, have been fighting for their ancestral domains since decades ago. The military conducted a military operation, bombing the community, killing and wounding T’boli women and men, and displacing hundreds of families. LRC has directly worked with this particular indigenous community in Mindanao, who have been defending their rights to their territories as indigenous peoples, not in any way as members of any armed communist groups.
The government claims that the Philippines is now in its “golden age of infrastructure.” Although the Build, Build, Build program of the government has been embraced by the private sector, the question remains… where will the government source out the resources needed for the USD 180-Million infrastructure program?
The initial plan was for the government to make reforms in its tax system. Dubbed TRAIN (Tax Reform for Acceleration and Inclusion), the government intends to rely heavily on government appropriation, not on foreign debt. TRAIN was aimed to raise additional revenues, but clearly this will not be enough even as it bleeds the poor dry, as the inflation rate spiked and prices of basic goods and services increased. In reality, according to research group Ibon, the infrastructure program would be mostly debt-funded, which may result in a debt crisis.
ADB in the Philippines
The ADB’s portfolio in the Philippines amounts to USD 17.92 Billion as of December 2017. This includes grants and loans to sectors such as energy, agriculture, finance, education, transportation, water and health. Of these, there are several infrastructure projects that are worth noting, including the Infrastructure Preparation and Innovation Facility (IPIF). This project will support only a small slice of the country’s huge infrastructure investment needs. But the facility will allow the government to accelerate project implementation and bring in international expertise and innovative practices in undertaking sophisticated, large-scale projects. Other noteworthy projects are the Expanding Private Participation in Infrastructure Program, Subprogram 2, amounting to USD 300 Million, and the “Improving Growth Corridors in Mindanao Road Sector Project.” This project, worth USD 380 Million, shall trigger important safeguard policies of the Bank, particularly on indigenous peoples, involuntary resettlement and environment. This will impact not only on the environment, but also on the culture, lives and livelihood of indigenous communities in Mindanao.
And with the Martial Law in effect in the entire island of Mindanao, what assurance will the communities have that any critique or resistance to these “development projects” shall not be branded as armed rebellion, much like what happened in Lake Sebu? By ADB’s own accounting, the sectors in Asia which have received the most amount of loan financing and technical assistance per decade over the past 50 years have been
(1) Energy (first and third decade) (2) Agriculture and Trade (second decade) (3) Transportation/ Infrastructure projects (fourth and fifth decade)
Overall the sectors which have the most loan portfolios and technical assistance in aggregate are
(1)Transportation/Infrastructure (26.83%) (2)Energy (22.37%) (3)Finance (14.38%) (4) Agriculture/Trade
Transportation and Infrastructure have been directed at developing massive super highways, ports, and airports. These mega structures, sometimes spanning several regions, cut across key biodiversity areas and culturally important heritage sites or indigenous territories. And based on past experiences, these massive infrastructure projects will impact on the lives and livelihoods of the marginalized and most vulnerable, like indigenous and upland poor communities.
It is worth noting that in ADB’s own Handbook on Resettlement the ADB admits the negative effect of ADB projects on communities necessitated the creation of policies around involuntary resettlement and the violation of rights of indigenous communities. The evaluation showed that around half of the total number of public sector loan projects funded by the ADB caused involuntary displacement of communities. The number could be higher if all private sector projects were required to have resettlement plans. However, since some arrangements for the private sector were under equity investments, co-financing or non-guaranteed loans, only 4% of the private sector loans were required to undertake resettlement plans.
Democratic space and community resistance
ADB’s proposed agendas of prosperity, inclusiveness and resilience and the proposed strategic priorities mentioned above fail to consider one important but worrisome trend in the region – the shrinking democratic space for civil society groups. This is evident in the growing incidences of human rights violations, which have a chilling effect on communities’ and civil society groups’ participation in both formal and informal governance mechanisms. This is a development which not only impinges on the rights of the people, but also weakens the democratic processes in countries. This can be remedied by strengthening the governance mechanisms and institutions. But more than that, there is also an urgent need to strengthen public participation and grassroots movements such that there is a genuine engagement with the government.
One of the most notable examples of community resistance to large infrastructure projects is in Kalinga, Cordillera. Macli-ing Dulag was a leader of the Butbut tribe of Kalinga province in the Philippines. He is best known for his opposition to the Chico River Dam Project, which led to his assassination. Macli-ing Dulag wanted just one thing, that the ancestral domain and territory he had always called home remain intact. The Chico River Dam Project, funded by the World Bank (WB), planned to build at least four dams in the river. The trapped waters would have drowned thousands of hectares of land including villages, pasture lands, ricefields, sacred burial grounds, and communal forests.
This kind of community resistance will always be present as long as there will be projects driving communities away from their territories.
Therefore, what the ADB should prioritize is to strengthen governance, prioritize people and environment and uphold social justice and human rights. The Bank should not rely on a country system with weak rule of law, restrictive laws on NGOs, and increasing militarization. ADB should not fund authoritarian regimes or governments who fail to offer space for CSOs and communities.
Strengthening governance and institutions would be a very relevant strategic priority for the Bank, especially in these times of political challenges and shrinking space for participation. The strategy for strengthening governance and institutions in each country has to coincide with upholding and respecting social justice and human rights.