World Bank Financing Concerns in India’s North EastThe Annual Meetings of the Boards of Governors of the International Monetary Fund (IMF) and the World Bank Group (WBG) concludes recently at Bali, Indonesia from 8th till 14th 2018 with much polemics. The annual meet discussed measures to deepen financing for development on realizing 2030 development agenda and of course to promote economic growth across the globe, even as the trade dispute between USA and China dominates the annual meeting. In a development with potential implications in Manipur, leaders of the Association of Southeast Asian Nations (ASEAN) reaffirmed their commitment to open trading systems that have underpinned their economic growth. The ASEAN leaders met on 11 October in Bali on the sidelines of the annual meeting of the IMF and World Bank, to intensify efforts to reach a “substantial conclusion” to the Regional Comprehensive Economic Partnership, focusing on free trade by end of 2018. The RCEP that would include China, India and Japan would complement India’s Act East Policy to foster free trade with South East Asian countries.
The IMF World Bank annual meeting in Bali also brings forth inherent contradictions. Civil Societies from across the globe denunciated the IMF / WB meet, raising concerns with these institutions, impacts of their neoliberal policies, the high Indebtness of developing countries due to the policy prescriptions and conditionalities and subsequent impoverishment of communities affected by its policies and projects financed by it. Community leaders raised concerns how World Bank funded projects like the Nam Theun II dam in Laos, Sesan II Hydroelectric project in Cambodia, Lafarge mining and high voltage transmission and distribution lines in North East India undermined indigenous peoples rights and relation with their land and forest. Civil societies also raised concerns with overt focus on infrastructure financing and privatization of development processes, while also claiming that World Bank funded natural resource extraction projects are marred with unaccountability of the corporate bodies involved. Elsewhere, the Peoples Coalition on Food Sovereignty (PCFS) raised concerns with the impacts of World Bank financed use-certificate model of land reform in Ethiopia, covering 6.3 million land certificates since 2003. PCFS complained the same land reform program led to land grabbing of around 2.5 million hectares of land, even as World Bank claimed the project conferred land rights to women.
The restrictions imposed by the host Indonesian Government on the organizing of the Peoples Global Conference on IMF / World Bank led to much controversy, as civil societies elaborated how the restriction is much akin to the realities of exclusion of communities, unaccountability of corporate bodies and state repression in projects financed by World Bank. The restriction is also a clear indication of the shrinking space for civil societies and the undemocratic nature of development decision making.
The contradictions evident in Bali necessitates a deep introspection on the increased involvement of World Bank (WB) and other international financial institutions (IFIs) like the Asian Development Bank (ADB) in financing development processes in India’s North East (NE) amidst India’s Act East Policy. The World Bank financing in India’s NE intensified since India adopted its Act East policy. India is the largest recipient of loans from the World Bank, amounting to $102.1 billion, between 1945 and 2015 as on 21 July 2015. As of 31 December 2015, India’s loans from the WB stands at $104 billion (IBRD—$54 billion and IDA—$50 billion) . As early as June 1991, India launched a comprehensive economic reform program, with World Bank support of US$ 500 million under its structural adjustment program (SAP) and vigorously pursued privatization process. After becoming a member of the World Trade Organization (WTO) in 1995, India initiated rapid privatization of almost all sectors .
World Bank Financing in North East India: In the year 2006, the World Bank conducted a Study focusing on water and natural resources management in India’s NE and developed the North East Strategy Report, entitled “Development and Growth in North East India”, The Natural Resources, Water and Environment Nexus”. The World Bank report prescribed that NE should focus on economic liberalization processes and free enterprises . The report also emphasized the need to build enabling institutional capacity and change at the local, state and central level to promote water and forest development, including development of hydropower and renewable energy across NE. The Bank is now focused on financing major infrastructure projects across NE, including road projects in Mizoram, the 400 KV high voltage transmission and distribution lines, mining in Meghalaya.
Infrastructure Road Projects: The World Bank accorded much thrust in financing infrastructure projects, especially roads, high voltage transmission and distribution lines. The World Bank on 12 June 2014 approved a $107 million credit for the Mizoram State Roads II – Regional Transport Connectivity Project to improve transport connectivity for the landlocked state of Mizoram and to enhance Mizoram and other northeastern states’ road links with neighboring countries . The Mizoram State Road project earlier financed by the World Bank from 2002 till 2009 and implemented by RBM Tantia, Baghareetha Private Limited, CCAP Limited and Termat Engineering and Infrastructure Private Limited has marred with project delays and inadequate compensation and rehabilitation of affected communities.
Lafarge mining in Meghalaya: The International Financial Corporation, one of the financial lending arms of the World Bank along with several other financial institutions, including ADB, the German Development Bank (DEG) etc have co-financed the limestone mining operation in the State of Meghalaya with Lafarge Group of France and Cementos Molins of Spain. The Lafarge Surma Cement (LSC) Project, run by French multinational Lafarge received a loan of $45 million from the IFC in 2003. The violation of India’s forest laws, the Forest Conservation Act, 1980 and the Forest Rights Act, 2006 is very much evident in the case . In January 2014, the Khasi people affected by the IFC and the ADB funded limestone mining filed a complaint with the Compliance Advisor Ombudsman (CAO), the IFC’s accountability mechanism. The Khasi people complain that Lafarge have illegally infringed upon their land without consent while also causing environmental destruction and sought justice .
Energy Projects: Financing of Energy projects and related infrastructures constitute a major focus of the World Bank financing in India’s North East. The World Bank Board on June 24, 2016 approved a US$ 470 million loan to support six states in the north eastern region of India to augment their transmission and distribution (T&D) networks . The Power Grid Corporation of India Limited (PGCIL) in India signed agreements with Assam, Meghalaya, Mizoram, Manipur, Nagaland and Tripura for implementation of the 'North Eastern Region Power System Improvement Project’ in January 2014. The World Bank financed a major portion of the Rs. 8,150 crore ambitious projects as loan for power transmission lines, transmission sub-stations and related works. The PGCIL provided technical and managerial support for inter-state transmission and distribution systems . There are widespread concerns that the financing of the 400 KV high voltage transmission and distribution lines by the World Bank in North East will facilitate not the construction of more than 200 mega dams, which has met with strong objections from indigenous communities in NE for social and environmental impacts.
Issues around WB funded projects and development processes across India’s NE
Non-recognition of Indigenous Peoples rights: The undermining of the free, prior and informed consent of indigenous peoples is a significant concern in the financing of multiple projects by financial institutions across the North East region, including the massive infrastructure financings, roads, high voltage transmission and distribution lines, extractive industries and the policy dilutions guided by financial institutions. The installation and erection of the High Voltage transmission and distribution has been carried out forcibly relying on the law enforcing agencies and in forceful clearing of vegetables, plants and in removing houses for stringing the wires. The stringing of high voltage transmission lines are directly laid over the houses of communities without the consent of the affected families and without considering social, health and environment impacts on them. The primary impact of WB funded Lafarge mining in Meghalaya is loss of land due to arbitrary land transfer that undermines traditional decision making institutions. The land transfer to the mining companies in the case of Lafarge mining involves the violation of the Meghalaya Transfer of Land (Regulation) Act of 1971 , which was enacted to protect land from alienation.
Loss of Livelihood: Loss of livelihood has occurred due to take over of agricultural land and forest resources for Lafarge mining project. Rice, betel nut, oranges are some key produces of Shella, however a large portion taken by Lafarge has kept out local people to do their activities. The loss of agricultural and forest land has deprived local affected Khasi people from their ancestral land but also from their meager livelihood source. About Ten houses are directly affected in Sagoltongba Village in Manipur by the World Bank financed high voltage transmission lines. Trees, bamboos, vegetables etc which surrounds the houses are destroyed by project official and lines are stringing over houses without affected families consent. Residents of Balongdai village in Tamenglong are worried of passing under the high voltage wires to work in their agriculture land. Villagers are worried as the PGCIL warned them not to venture under the high wires once the high voltage transmission lines commence full operation.
Environment Impacts: Assessing the detailed impacts of World Bank financed projects on the land, people, environment, culture; health etc with rightful participation of communities remains a challenge. The impacts of World Bank funded 400 KV high voltage transmission and distribution lines, such as the impacts of electromagnetic waves on humans have not been conducted. The limestone mining by Lafarge in Meghalaya with IFC financing is afflicted with violation of Forest Conservation Act, 1980 and the Forest Rights Act, 2006 by IFC . The use of heavy explosive materials in blasting hills for limestone led to cracks in earth and drying up of water sources and spring .
Impacts of Privatization: The creation of an enabling environment for private sector across India’s NE is evident in the increased financing by IFIs. World Bank, ADB and JICA etc embarked on a development framework and processes oriented towards a completely liberalized environment and trade rules imposed by the World Trade Organization (WTO) that include the removal of all barriers to trade and business and an emphasis on private sector oriented development. India developed the PPP policy in 2011. Section 4 of the PPP policy 2011 underscored the Government’s intends to increase interface with financial institutions and the private sector . The Government of India introduced a new Draft Energy Policy in July 2017 to promote energy projects throughout India again with emphasis on private sector role. There is a process to weaken the Forest Rights Act of 2006 and the Land Acquisition Act of 2013. The policy prescription of IFIs for increased role of private sector in all the sectoral financing has led to intensification of privatization of services, such as water and power supply.
Undermining Human Rights and IFIs won Safeguards: The non-application of human rights standards and the violation of own safeguard standards of IFIs is also a major concern. The Lafarge has failed to adhere to the World Bank safeguard policies on Indigenous Peoples, Rehabilitation and Resettlement etc. The pursuance of World Bank financed high voltage transmission and distribution line in Manipur also failed to apply its safeguard policies on rehabilitation and resettlement, disclosure of information and on impact assessments on indigenous peoples.
Conflict and fragility: The pursuance of unsustainable and destructive development processes pushed indigenous peoples to the periphery of survival, compelling them to consolidate and deepen their struggle for their self-determined rights, for defense of their land, their livelihood, and survival and for the rights and dignity as peoples. Increased restriction on the function of human rights organizations and targeting of human rights leaders is also an increasing phenomenon in Manipur and across India’s North East. The violation and curtailment of peoples’ rights, destroying their environment, their polity and self-determination further induced multilayered tensions and conflict. The persisting conflict situation in places like Manipur and the Government’s insistence on militaristic forms of development, including increased curtailing of civil society voices and spaces becomes a reality of concern. India’s militarization through enactment of special legislations and emergency laws in contravention of international laws, which has been extended repeatedly, is primarily considered as central to ensure India’s control and provision of security for key infrastructures essential for advancing India’s commercial and political interest in NE India and beyond. There are concerns that the continued imposition of Armed Forces Special Powers Act, 1958, that derogate right to Life and right to justice also facilitates neoliberal model of development and corporatization and plunder of land and resources.
Conclusions: The IMF / World Bank Annual meeting brings forth the necessity to reflect the realities and challenges of World Bank financing in India’s North East region and beyond. The decisions adopted in Bali will have far reaching implications in the region. For instance, the overt focus on financing infrastructure projects, privatization of development and fostering free trade and privatization of development in the IMF / World Bank meeting will further reinforce the persisting neoliberal development model pursued in India’s North East with increased assault on peoples land and natural resources. Indeed, the projects financed by World Bank and other IFIs are focusing on infrastructure projects, ranging from road projects, water ways, high voltage transmission and distribution lines. The high voltage transmission and distribution lines across North East India will only facilitate the construction of more than Two Hundred mega dams across the region. Such overwhelming emphasis on privatization and the role of corporate entities led to uncontrolled plunder of natural resources in the region and privatization of services, with subsequent impoverishment of communities.
Many of the project financed by the World Bank such as the limestone mining by Lafarge in Meghalaya has failed to respect the indigenous peoples’ customary laws and relationship with their land and resources. Such projects pursued in the pretext of combating poverty, ending inequality and fostering sustainable development only wrought more sufferings and inconveniences to communities. The implementation of World Bank standards on advancing indigenous peoples rights, environmental sustainability, rehabilitation and resettlement etc remains another serious concern across the NE region.
The failure to involve indigenous peoples affected by the dominant development introduced in South Asia and the militaristic approach adopted in pursuing such development model by the participating States, Corporate bodies and IFIs and the complete exclusion from development decision making and non-recognition of their rights will only fuel multilayered conflict.
The rightful involvement of communities and civil societies in development decision making financed by IFIs remains a clear concern. The organizers of the Peoples Global Conference against IMF and World Bank expressed concern with the closing down of their summit by Indonesian Government and for stopping them to raise critical voices of dissent of World Bank and IMF policies. The IMF and World Bank caused the deplorable condition of peoples of poor and underdeveloped countries suffering from years of economic plunder by transnational corporations, abetted by IFI financing. The concerns raised by civil societies, especially the voices of those affected by the neoliberal policies and unsustainable development projects need be seriously considered for any effort to bring equality and to end poverty. Suppressing the legitimate voices raised by communities and their organizations will only constitute muffling much needed democratization and also to serve the real development objectives.
The critical perception of financing by World Bank and other IFIs is critical as Manipur and other North East States developed grandeur plans to realize Sustainable Development Goals and climate change mitigation plans, with financing World Bank, ADB and JICA. The free trade agenda pursued by ASEAN countries alongside with other emerging economics like India need be carefully examined for their relevance and impacts in Manipur. The realities of challenges of World Bank funding across North East India, in South East Asia, such as Nam Theun II dam and land grabbing in Ethiopia etc should be an eye opener for indigenous peoples of Manipur, to be more critical of the development processes facilitated by World Bank. Otherwise, the pursuance of very development model causing resource plunder, environment impacts and unsustainability will intensify marginalization, impoverishment of indigenous communities, while complicating the pattern and manifestation of conflict. A development model rooted in the wishes and aspirations of the indigenous people, rooted in human rights, protection of environment integrity, focusing on alternative development model compatible to the economic and political needs and wishes of all marginalized communities is much crucial to usher meaningful and sustainable development and to end poverty and inequality in Manipur and in NE region.
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