The total external debt of underdeveloped Asian countries has increased but poverty persists in the region, showing the weakness of so-called development aid given by the Asian Development Bank (ADB) and other lending institutions.
According to research group IBON, ADB loans have instead greatly contributed to worsening the quality of life of millions of people in Asia and the Pacific. In fact, after almost five decades of ADB lending, the people of the underdeveloped countries of Asia and Pacific region endure economic backwardness and remain deeply indebted. The underdeveloped ADB member countries’ combined external debts of US$2.1 trillion in 2006 (44 countries) has even increased to US$2.4 trillion in 2009 (45 countries). ADB loans constitute a significant part of this debt, which governments spend billions of dollars for as repayment.
According to IBON, the ADB’s lending has not gone towards development. It has instead resulted in huge amounts of debt used for projects that have caused damage to people’s livelihood and welfare, as well as to the environment. Loans have been used to leverage policy conditionalities which have made public utilities more expensive, undermined social services of health and education, and destroyed local agriculture and industry. There has even been debt which was effectively used to repay past debt, the research group said.
It is thus not surprising that two-thirds of the world’s poor and half its undernourished people are said to be in Asia and the Pacific, even as the region has supposedly seen rapid growth and touted as a major economic growth force by 2015. The rapid economic growth recorded merely reflects greatly increased commerce and other economic activity whose benefits have accrued to a few. The region also accounts for 40% of children who die before age 5, 60% of those without safe water and 70% of those without access to improved sanitation.
The last decades have also seen widening disparities within and between countries in the region. These are the necessary result of the distorted economic model pushed by the ADB, among others, through its loans. In this model, the economy, labor and natural resources are exploited for profit rather than to improve the welfare of people. (end) IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.