IFI governance


Destructive development: A case of ecological debt in Bangladesh

20 November 2009 | Guest comment

‘Development’ has become synonymous with destruction in Bangladesh as many of the so-called development projects, financed mainly by the international financial institutions (IFIs), have huge negative impacts on the ground. Project interventions under IFI loan packages, which are prepared by hired consultants and negotiated with the bureaucracy without assessing the ground reality and demands of communities, have seriously threatened ecosystems and people’s livelihoods. Even though there are a few examples of preparing projects with the participation of the concerned stakeholders of the areas, there is no case of the public being made aware of the agreement between the parties — the recipient government and lending agencies. Thus the projects exploited communities at large in many ways, to the benefit of lending agencies and multinational companies.

There are many cases of ‘ecological debt’ in Bangladesh. Ecological debt refers to the responsibility of the global north for the over-exploitation of natural resources and the imposition of policies that undermine sustainable development. It implies that the global North must pay reparations to Southern countries, to fund sustainable development and adaptation to ecological problems.

Examples where ecological debt has been incurred include a 1997 explosion at Magurchara gas fields, which was under the control of US company Occidental. It damaged gas resources worth $1 billion and caused $2.5 billion of environmental damage, including to farmland and 29 tea gardens. Only $10 million was provided in compensation. The Flood Action Plan by the World Bank, Khulna Jessore Drainage and Rehabilitation and Sundarbans Biodiversity project by the Asian Development Bank (ADB), are only a few examples of ‘ecological debt’ among many.

IFI projects have seriously threatened ecosystems and people's livelihoods, creating 'ecological debts'.

Another significant example of ‘ecological debt’ is the case of a shrimp culture project in Chakaria, Cox’s Bazaar in Bangladesh. Chakaria Sunderban is the oldest and second largest mangrove forest of Bangladesh, located in the south-eastern part of the country alongside the coastline of the Bay of Bengal. In 1903, 8,510 hectares of forest came under institutional regulation, of which 1,600 hectares were distributed to landless families in 1926 by the then British government. Maps from 1926 and 1975 show that these communities maintained forest coverage. The forest possesses a unique ecosystem and a secure area for wildlife, as well as providing goods and services for people’s livelihoods. The annual economic value is estimated to be between $200,000 and $900,000 per hectare, and thus the whole forest has vast economic value.

In the 1980s, the World Bank and ADB funded the shrimp culture project under the structural adjustment programme (SAP). The purpose was to promote export-oriented shrimp cultivation for potential markets in the US and EU. Between 1977 and 1993, when the project ended, the whole forest was converted to shrimp cultivation, salt-belts and human settlements, which had devastating consequences.

The project led to the loss of plant varieties and ecological diversity, leaving thousands of people displaced and vulnerable. Mangroves had provided important protection from cyclones. In 1991, the super-cyclone Marian hit the country, leaving 138,000 people dead. Cyclones like Marian in 1991, Sidr in 2007 and Aila in 2009 caused damage worth $4.7 billion. People in the area think that they are insecure because the destruction means they are now exposed to cyclones, which are becoming increasingly severe and frequent as climate change takes hold.

However, the Bank project report said that there was no negative environmental impact from this project and other adverse effects were minimised. There was huge social, economic and ecological injustice for the communities of Bangladesh. The beneficiaries of the project were non-locals: business groups and companies, consultants and organizations including the lending agencies like the Bank and ADB.

There is an urgent need to claim reparations for the damage caused by such exploitation. Civil society in both the global South and the North should act immediately in a more coordinated way to change the whole system and envision a just and equitable society.

By Ahmed Swapan, VOICE, Bangladesh