Consumers Domain
By Ian Seruelo

ADB's meddling

“ Do not meddle in the affairs of wizards, for they are subtle and quick to anger. ”—J. R. R. Tolkien

Stop meddling in the economies of Asian countries and the imposition of neo-liberal policies!

This is the call of the Freedom from Debt Coalition (FDC) and Jubilee South who recently protested in front of the main office of the Asian Development Bank (ADB) in Pasig City. ADB is now having its 38th Annual Meeting of its Board of Governors in Istanbul, Turkey.

“Capitalizing on high growth to achieve sustained poverty reduction, accelerating financial cooperation and bond market development” – these are the current concerns of the ADB meeting for regional integration in Asia and the Pacific.

FDC said that these concerns underscore only one thing – that the ADB will remain in its market-locked, private sector oriented state of mind and continue to act as the frontrunner of the International Monetary Fund's and the World Bank's neo-liberal designs on the region.

In a joint statement, FDC and Jubilee South, an international organization of South (poor or third world) countries, said that, for almost four decades past, many other well-documented indicators of appalling human conditions in Asia are instructive of how ADB has been doing "development" and "poverty reduction" work. Partnering with two other leading institutions-the IMF and the World Bank-the ADB aggressively pushes for the privatization of basic social services in the region.

We are all familiar with these international financial institutions (IFIs) and they wield the debt of South countries, especially the Philippines, as leverage to put in place policies like water and power privatization, as part of requisites for loan approvals and good credit ratings.

FDC is correct in stressing that such policies are poverty-inducing, not poverty-reducing. The experiences of countries like Indonesia and the Philippines in these aspects are more than enough proof of this fact – constantly rising tariffs, poor quality water, the lack of transparency and accountability on the part of private water firms and their failure to implement promised infrastructure improvements.

Clearly water is such a basic commodity that should not be placed in the hands of foreign private interests. Unfortunately, access to water, a basic right that should be guaranteed all human beings, is increasingly pinned on one's ability to pay.

According to the FDC statement, for countries in the region, the so-called "power sector reform" or simply power privatization has not led to public benefits but has created more problems especially for poor households and communities. Prices are skyrocketing and corruption is increasing.

In fact more financial problems have been spawned from the sovereign loan guarantees and other perks extended by host governments to independent power producers, in accordance with the IFIs' directives to draw in private investors into the power industry.

Debt stocks have also ballooned due to the huge costs needed to reform the sector and make it more appealing investment sites for giant power firms.

Well, we all know that one main reason of the financial collapse of Napocor was the onerous contracts it signed with these private power producers. Consequently, it is us consumers and taxpayers who will carry the burden as power rates continue to soar and as the National Government is now shouldering the debts of Napocor.

And now, with the passage of the new VAT law which lifts the tax exemption from power generation, tsk, tsk, it seems that there will be no relief from the increasing cost of power. But well, that will be a different story…

(For comments and suggestions, please email ianseruelo@yahoo.com or send SMS to 0919-348-6337.)