Peoples Forum Against Asian Development Bank( PFAADB )www.asianpeoplesforum.net
---------------------------------------------------------------------------------
MEDIA RELEASE January 2007
Thiruvanathapuram and New Delhi
CALL TO KERALA CM: DROP ADB LOAN
Even as the Politburo and Central Committee meetings of the Communist
Party Marxist (CPM) commenced yesterday in Kolkata over 100 groups
from across India, including social movements, trade unions and civil
society organisations, called upon Kerala Chief Minister VS
Achuthanandan to drop the controversial Asian Development Bank (ADB)
loan.
In Kerala, the inking of the ADB funded Kerala Sustainable Urban
Development Project (KSUDP) on December 8 2006 has spiraled into a
major political controversy forcing the CPM to discuss the $316.1
million (Rupees 1422 crores) loan at the Central committee meeting,
according to party sources. The loan amount is to be disbursed to the
5 municipal corporations of Kochi, Kollam, Kozhikode,
Thiruvanathapuram and Thrissur to shore up urban infrastructure and
services.
The open letter to the Kerala CM, under the banner of Peoples Forum
Against ADB, states that the ADB loan will not only fail to deliver on
its stated goal of promoting sustainable development, but would
instead undermine democracy in local governments and lead to
furthering Kerala's burgeoning debt burden now estimated at over
Rupees 40,000 crores.
'Chief Minister VS should stick to his stand that external loans with
conditionalities that are anti people should be dropped. His
government should not be taking decisions that will effectively push
in privatisation of basic services such as water delivery, sanitation
and waste disposal, said writer and activist CR Neelakandan.
Neelakandans views are not unfounded. The KSUDP loan agreement
available from the ADBs website mentions several conditionalities the
state government has to implement to avail the loan amount.
Page 19 of the proposed loan mentions, 'By not later than March 2007,
the Government of Kerala will formulate a policy on conversion of
standposts to individual metered house service connections and/or
metering standposts, for the purpose of efficient demand side
management and reduction of Non Revenue Water'. The ADB also spells
outs its strategy to advance privatisation through the KSUDP which
includes the creation of an enabling regulatory framework and
implementation of charges and fees for urban services at 'reasonable'
levels. The revision of the role of the Kerala Water Authority (KWA)
to facilitate the private sector is an important deliverable to
achieve this.
While this is the first ADB urban loan in Kerala, the letter
underscores the experience of similar ADB loans in neighbouring
Karnataka, as indicative of what is likely to be in store.
The letter mentions that, 'In all 14 ADB towns in Karnataka, projects
are replete with design flaws, poor quality of construction, prolonged
delays in completion and non-disclosure of project information to
local councillors. There were several instances of ADB project
managers coercing local municipal authorities into accepting terms and
conditions that they were unable to justify to the public. The ADBs
insistence that key operations of the project be prepared by expensive
foreign consultancy companies added to the overall debt burden created
by the project. The towns are grappling with repayment schedules due
to erroneous estimates by ADB consultants on raising resources through
new taxes and cost recovery in water distribution. The ADB project was
out of purview of the Karnataka Transparency Act and hence affected
people were unable to use the Right to Information to get vital
information on the project'
Added T Peter from the Kerala Independent Fishworkers Union, 'The role
of local elected representatives and public officials will be
relegated to that of implementers of ADB policy. The ADB loan is a
choice that will benefit some groups (such as consultants and
technocrats) and impose risks on the people of Kerala who will have to
repay the loan. When there are alternatives and choices available,
democratic political processes should be at the centre of
decision-making �not technocrats'
The groups said there was an urgent need for a democratic scrutiny of
all conditionalities and documents related to the ADB loan, including
consultant's reports. The signatories asserted that democratically
elected representatives at the national, state and municipal
corporation level should be the final arbiters of all economic policy.
That the 5 municipal corporations urgently need upgradation of
existing infrastructure brooks no argument. But we also believe that
any government must favour internal resources over institutions such
as the ADB or the World Bank for urban development; this is not only
the most democratic but also the politically correct option. The
possibilities of internal resource mobilization are many in Kerala;
they include commodity taxes on consumer expenditure, addressing tax
evasion in the gold market, collection of tax arrears, under taxation
of the tourism industry and mobilising the domestic savings of the
state (including foreign exchange remittances) which run into
thousands of crores of rupees, concluded Peter.
Other groups that comprise the Peoples Forum include Focus on the
Global South, National Hawkers Federation, National Fishworkers Forum,
Plachimada Solidarity Committee, New Trade Union Initiative, National
Alliance of Peoples Movements, Indian Social Action Forum and National
Forum of Forest People & Forest Workers.
===========================================================================
For more information please call Benny Kuruvilla at 9820181191 -
[EMAIL PROTECTED] CR Neelakandan can be contacted at 944649332 -
[EMAIL PROTECTED]
OPEN LETTER TO THE CHIEF MINISTER OF KERALA ON THE ADB LOAN.
28 December 2006
Sub: Urban Development in Kerala: Opportunity to forge a new vision
Dear Chief Minister VS Achuthanandan:
It is hardly surprising that the proposed Asian Development Bank (ADB)
loan for the Kerala Sustainable Urban Development Project (KSUDP)
amounting to a total of $ 316.1 million (Rupees 1422 crores) has come
up against significant opposition from the people of Kerala, including
your august office.
While much of the debate, so far, has centered on procedural lapses
and the supposed absence of harmful conditionalities there are more
substantive reasons for an annulment of this loan.
Fundamentally Flawed model:
The basic problem is that the ADB's approach is premised on the
ideology that the role of the government is to create an enabling
environment for private sector participation in urban development. In
the KSUDP the ADB clearly spells out its strategy to advance private
sector participation in urban services; a) creating an enabling
regulatory framework b) building technical and managerial skills
within municipal corporations to formulate and manage private
operations c) transparent tendering and contracting processes and d)
implementation of charges and fees at 'reasonable' levels. In the
policy matrix for the KSUDP, the ADB outlines several conditionalities
to achieve this; one of which includes revising the role of the Kerala
Water Authority (KWA) into an enabling regulatory authority that
facilitates private sector participation in the water sector. Other
conditionalities imposed by the ADB include ensuring that all
municipal corporations formulate a policy for reduction of non-revenue
water and conversion of public water standposts to individual metered
connections.
Subverting local self governments:
The KSUDP loan comes with specific project outcomes, international
consultancies and procurement policies over which the Government of
Kerala and municipal corporations have no control whatsoever.
__________________________________________________________________________
PFAADB Secretariat:
Telefax - +91-11-26517814
A -124 / 6, 1st Floor
email �
[EMAIL PROTECTED]
Katwaria Sarai, New Delhi � 110016
www.peoplesforum.net
ADB � QUIT ASIA PACIFIC
The ADB conditionality is that an international consultancy firm will
be the Project Management Consultant and all procurement for civil
works, software, goods and related services will be in accordance with
the ADB's guidelines and much of this will be through an international
competitive process.
The role of local elected representatives and public officials will be
relegated to that of implementers of ADB policy. The ADB loan is a
choice that will benefit some groups (such as consultants and
technocrats) and impose risks on citizens who will have to repay the
loan. When there are alternatives and choices available, democratic
political processes should be at the centre of decision-making �not
technocrats.
Adding to Kerala's debt overhang situation:
It is well known that Kerala is already steeped in debt, leading
economists to classify the states finances as being in a debt overhang
situation. This means a situation when crucial government investment
is constrained by existing high levels of debt. Today the outstanding
debt is over 40,000 crores and another external loan will only put the
state in greater jeopardy.
ADB's dismal track record in urban development:
2 similar ADB projects in Karnataka � the 1995 Karnataka Urban
Infrastructure Development Project (KUIDP-completed) and 1999
Karnataka Urban Development and Coastal Environmental Management
Project (KUDCEMP-under implementation) are dismal failures. In all 14
towns, both projects are replete with design flaws, poor quality of
construction, prolonged delays in completion and non-disclosure of
project information to local councillors. There were several instances
of ADB project managers coercing local municipal authorities into
accepting terms and conditions that they were unable to justify to the
public. The ADBs insistence that key operations of the project be
prepared by expensive foreign consultancy companies added to the
overall debt burden created by the project. The KUIDP towns are
grappling with repayment schedules due to erroneous estimates by ADB
consultants on raising resources through new taxes and cost recovery
in water distribution. The ADB project was out of purview of the
Karnataka Transparency Act and hence affected people were unable to
use the Right to Information to get vital information on the project.
Urgent need for democratic scrutiny of ADB loans:
In India, governments take loans and sign legally binding agreements
with the ADB without the approval of the parliament or state
legislative bodies. Given the far-reaching impact of ADB loans, this
has to change. There are several countries where governments require
some degree of prior approval from parliament for loans from
International Financial Institutions. We believe that democratically
elected representatives at the national, state and municipal
corporation level should be the final arbiters of all economic policy.
It is vital that MPs, MLAs and corporators have the right and
obligation to be fully involved in the development and scrutiny of the
KSUDP project. This is crucial because the ADB is not accountable to
any country's legal system. Its Charter clearly states that it is
immune from all lawsuits and criminal proceedings. The present status
of the KSUDP leaves much to be desired in terms of involvement of
elected representatives.
Time to take a new direction:
That the 5 municipal corporations urgently need upgradation of
existing infrastructure brooks no argument. But we also believe that
your government must favour internal resources over institutions such
as the ADB or the World Bank for urban development; this is not only
the most democratic but also the politically correct option. The
possibilities of internal resource mobilization are many in Kerala;
they include commodity taxes on consumer expenditure, addressing tax
evasion in the gold market, collection of tax arrears, under taxation
of the tourism industry and mobilising the domestic savings of the
state (including foreign exchange remittances) which run into
thousands of crores of rupees.
We are convinced that the ADB loan will not only fail to deliver on
its stated goal of promoting sustainable development, but also would
instead undermine democracy in local governments and lead to
furthering Kerala's burgeoning debt burden.
The neo-liberal logic that privatisation, the ADB and the World Bank
are here to stay has to be politically and economically countered.
Your government has the opportunity to reject the ADB loan and instead
work towards creating an urban model that can deliver on the promises
of development, poverty reduction and environmental sustainability.
We look forward to working with you to achieve this objective.
Signed by:
Kerala Independent Fishworkers Federation
National Alliance of Peoples Movements
Narmada Bachao Andolan
Asia Pacific Movement on Debt and Development (APMMD)
Freedom from Debt Coalition
Philippines Rural Reconstruction Movement (PRRM)
Karnataka Rajya Raitha Sangha (KRRS)
Global Alternate Information Applications (GAIA)
Equations
Nadi Ghati Morcha
River Basin Friends
Environment Support Group
ADB quit Kerala Campaign
Keraleeyam
INSAF
CORE
Urban Research Centre,
Focus on the Global South
Citizens Concern for Dams & Development
Delhi Forum
Samata
National Forum of Forest People & Forest Workers
Mines, Minerals & People
Shaheen Centre
Consumer Protection Forum
Water Initiatives
Civil Society Initiatives on IFIs (NE)
DICE foundation
Intercultural Resources
NGO Task Force on ADB
Nagarika Hitharakshana Samithi
BalakedararaHitharakshana Vedika
Anikethana Trust
India Centre for Human Rights and Law (ICHRL)
Palni Hills Conservation Council
National Fishworkers Forum
Polavaram Project Andolan Samithi
Naga Peoples Movement for Human Rights
Movement Against Uranium Project
Centre for Environment Concerns
Aman Vedika
ITDS
People's Alliance of Central East India
Japan Centre for a sustainable environment and society (JACSES)
Centre for Economic Justice
PAIRVI
Jharkhand Jangal Bachao Andolan
Bureau for Human Rights
Adivasi Mukti Sangathan
Peoples Movement in Subansiri Valley
Krishak Mukti Sangaram Samithi
Arunachal Citizens Right
Indigenous/ tribals Peoples Development Centre
Rural Volunteers Centre
Human Rights Initiative Tamil Nadu
Parisava Badokidara Vedika
Human Rights Law Network
SAKSHI human rights watch
Chatri
Jharkhand Labour Union
Dalit Women Forum
National Hawkers Federation
Net work of persons with disabilities organization ( NPDO)
Lok Raj Sangathan
Consumer protection council
Manthan Adhyayan Kendra
South Asia Network of Dams, Rivers and People
Grassroot options
FIMCOTN
Dwarf Peoples' organization
New Trade Union Initiative
SEVA
Sabala
National campaign on dalit human rights
Women's collective
Bangla Praxis
Nagarik Udyog
Corporate Accountability Desk of the Other Media
Chasma Lok Sath
National Centre for Advocacy Studies
Open Space
Peoples Voice
Gangpur Adivasi Forum
Daluit Mukti Maocha
Plachimada Solidarity Committee
Pani Committee
Kaselu Palu Group (PNG)
Uttaran
AOSED
Save Chara River Campaign
Gono Udhyog Forum
Green Movement of Sri Lanka
National Conference of Dalit Organisations (NACDOR)
South Asia Network on Dams, Rivers and People (SANDRP)
JAGORI � Delhi
Human Rights Forum � Andhra Pradesh
Act Now for Harmony and Democracy (ANHAD) � Delhi
People's Media Initiative , Mumbai
Orissa Development Action Forum, Orissa
People's Science Institute, Dehradun
Kriti Team, Delhi
Collective for Environment, Social and Economic Justice, Chennai
Community Environmental Monitoring, The Other Media, Chennai
KABANI � The other direction � Kerala
Environment support group, Bangalore
Grassroot India Trust
World Peace Envoy Bombay
INDIVIDUAL
Saraswati Kavula, Film maker, Andhra Pradesh
Maj Gen (Retd) S.G.Vombatkere , Mysore
I.K.Sukla
Anivar Aravind, Free Software & Media Hactivist
Bidulata Huika
Badal kumar Tah
Malavika Mohanan
Karen Coelho, Researcher, Chennai
K.C. Santhosh Kumar, Social Activist and Film Maker
J. George
Piyush C.Sharma
M.N.Kotenagabhushan
Simon Joseph M
Sr.Elsa Muttahu
Jim Holdom, New Zealand
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