South Asia

The Pressure to Lend

Both the WB and ADB are under pressure to lend more to borrowing countries. Both organizations are concerned that their portfolios are not growing and large borrowers with high absorptive capacity, like India, Brazil and China, are accessing other forms of financing. To counter this possible loss of business, the IFIs are moving towards greater flexibility and relaxation of their Safeguard Policies, decentralizing decision-making to country offices, upgrading the quality of their technical assistance, and developing new lending products and modalities.

The Privatization Agenda

The IFIs are aggressively pushing a policy of privatization in key sectors like water and health. Lending to high risk infrastructure projects is also on the rise.

Policy Lending

The IFIs have moved from investment (discrete project) lending to policy lending, institutional reform, and sector lending.

The “Knowledge Banks”

The institutions have marketed themselves as knowledge providers to national governments and in some cases have even seconded staff to governments as advisors. Plus many Bank-trained economists transition back to home countries to serve in positions of authority.

Country Systems

The IFIs are keen to promote the use of “country systems” for addressing financial management, procurement, and environmental and social safeguards

A Regional Approach

The Banks are looking for large regional initiatives to support, and the ADB in particular is focusing on regional integration through trans-boundary projects. There is a focus on the extractive sectors.

World Bank Lending Priority Areas in South Asia

• Governance and decentralization
• Poverty eradication
• Health and sanitation (HIV/AIDS)
• Education
• Water sector
• Infrastructure (urban and rural): Roads, bridges, railways, power sector, etc.

Asian Development Bank Lending Priority Areas in South Asia

• Transportation and communication
• Infrastructure including water and sanitation
• Energy and power
• Tourism
• Environment
• Trade, investment and private sector cooperation

Parliamentary Oversight

BIC in South Asia has adopted the Parliament oversight campaign, which aims at a legislation that empowers the Members of Parliament – the elected representatives of the people – to debate, scrutinize, approve and monitor all external borrowings, including from public institutions like the World Bank Group and the Asian Development Bank. We are currently looking at the Parliamentary debates on IFIs from the past 25 years to understand the breadth and depth of these debates and to form the foundation of the campaign. The research also looks at the role of Parliament in enacting some of the legislations promoted/suggested by institutions like the World Bank and in approving some projects which had far reaching impacts on the country.

Coal Financing

In addition to the lack of transparency and oversight of World Bank projects, India faces a growing crisis related to climate change and coal investments. Coal contributes over half of India’s primary commercial energy and will continue to be the primary source of power in the foreseeable future as evidenced by massive expansion plans for thermal capacity in the country. The current thermal capacity is around 113,500 MW but this is slated to increase for more than 500% given the 702,000 MW thermal capacity being considered by India’s Power ministry and related government agencies. This colossal increase alone will result in significant pollution levels, ecological hazards, and a wide range of socio-economic disasters such as loss of livelihood, land acquisition, forced evictions, and intensified resource conflicts. The legal compliance, sustainability, options assessment, effectiveness of government or corporate accountability systems, and climate risks are also equally important issues that are emerging. Human rights, public health and environmental security will seriously be undermined.

It is very critical to target the World Bank Group’s role in India’s coal industry since its lending and non-lending services can either aid or prevent the expansion of coal plants. India remains a major borrower of the Bank’s public and private sector loans, equity investments, financial intermediary lending, risk guarantee and other hard-to-trace financing instruments, with the largest exposure to energy and transport infrastructure. Coal plants, grid-based and coal power connected-transmission projects have the largest share in the Bank’s India energy finance. Until now, the Bank has no leadership and no commitment to radically depart from its fossil fuel lending in India. Its financing of the 4,000 MW coal plant in Gujarat and financial intermediary lending for the 1,450 MW coal plant in Orissa have created a climate, environmental and human catastrophe. Local communities have already lodged multiple complaints and protests but this multilateral institution shows no sign that it is cleaning up its act soon. If the Bank continues its business as usual, it will maintain a significant contribution to a coal-based economy that is largely instrumental in large scale displacement, destruction of forests and prime agricultural land and loss of livelihood.

For more information about BIC’s global climate work, please see the Climate Change Safeguards page.

Project Reports

Tata Mundra Ultra Mega Power Plant Brochure, Bharat Patel, MASS
Sasan Ultra Mega Power Plant Brochure, Awadhesh Kumar, Srijan Lokhit Samiti
The U.S. Export-Import Bank’s Dirty Dollars: Sasan UMPP, October 2014
Reliance Sasan Ultra Mega Power Project: A Case Study, Soumya Dutta, 2014
Vikasa ya Andhera (Development or Darkness), Srijan Lokhit Samiti, January 2014 (in Hindi)
Sasan UMPP, Singrauli Madya Pradesh: A Brief Report, Bank Information Center, September 2013

Civil Society Analysis

Integrated Coastal Zone Management and the World Bank, Bank Information Center, July 2011
Indian CSO and People’s Movements Comments on the IFC Performance Standard Review, February 2011
Indian CSO and People’s Movements Statement on the IFC Performance Standard Review, July 2010
India Urban Infrastructure Report, Bank Information Center, August 2009

World Bank Resources

India Country Page, World Bank Website
Bangladesh Country Page, World Bank Website
Sri Lanka Country Page, World Bank Website
Nepal Country Page, World Bank Website

India IFI Monitor

2015

2014
2013

For other regional contacts, please see BIC’s Asia Program page.