Unjustifiable Bank domination over climate funds in Bangladesh

20 November 2009 | Guest comment

Given the patterns of differentiated, historical responsibilities for addressing climate change, the costs for developing country adaptation should be seen as debts to be borne by the still largely responsible industrialised world, debts that cannot be repaid by loans, or even by ‘grants’. The notion of climate debt is beyond the so called donor-recipient or patron-client relationship.

With this in mind, the management and governance of climate funds in a transparent and accountable manner is a critical area of concern. The establishment of the Multi-Donor Trust Fund (MDTF) in Bangladesh adopts a donor driven framework, its policies are quite bureaucratic and strongly controlled by the World Bank. Furthermore, there are no logical grounds to accept the Bank’s authoritative role over the MDTF.

Following the massive destruction of cyclone Sidr, international financial institutions and developed countries said explicitly that helping Bangladesh on climate change-related issues was on their list of priorities, and they would consider the creation of a MDTF for Bangladesh to support climate change adaptation.

What mandate does the World Bank have to implement climate funds given its background of destroying ecological goods and services in Bangladesh, as well as in many other countries around the world?

The ‘draft concept note’ prepared by the government of Bangladesh on the MDTF suggested that the secretariat be based in the World Bank office in Dhaka. The Bank would co-chair the management committee, and administer, manage, supervise and monitor implementation of the MDTF’s projects and programmes. For this job, the Bank will charge a fee of $8 million. All implementing agencies will have to follow the Bank’s guidelines and policies on project implementation and procurement.

In addition to the role of fund management, the Bank will execute parts of the MDTF including analytical work and capacity building activities, which includes review and revision of government policies and development planning. The Bank will therefore be both administrator and executor. Such a dual role of the Bank will create unlawful space for the Bank to influence project design and approval. It’s a hypocritical position of the Bank and in terms of auditing, it’s an offence.

Donors have so far promised $98 million over five years for the MDTF; $96 million from the British government and $2 million from the Danish government.

It has been clearly stated in many policy documents and multi-lateral discussions that climate financing mechanisms should be developed and provided by the developed countries in addition to their existing aid commitment of 0.7 per cent of their GDP, as compensation for their historical responsibility as the main drivers of current global climate change. Thus UK financial support for Bangladesh’s effort to tackle the consequences of climate change should not come at the expense of existing UK-funded aid programmes.

There are major civil society criticisms of Bank-financed projects in Bangladesh which have often created ecological hazards and destroyed ecological goods and services. One Bank-financed project caused the wholesale destruction of a natural forest, Chokoria Sunderban, the oldest mangrove forest in the subcontinent. The Chakaria Sunderban lost all its 20 species of trees with the expansion of a shrimp cultivation project supported by the Bank and Asian Development Bank (ADB).

Chokoria Sunderban was a part of the global public commons which once provided ‘public goods’, such as the capacity of the atmosphere to absorb CO2. On the other hand, the goods and services of Chokoria Sunderban, to which we all have an innately equal claim, have been destroyed by the World Bank and ADB credit.

Here the pertinent question is: what mandate does the World Bank have to implement climate funds given its background of destroying ecological goods and services in Bangladesh, as well as in many other countries around the world?

By Md Shamsuddoha and Rezaul Karim Chowdhury, Equity and Justice Workding Group, Bangladesh