ADB’s Connectivity in Central Asia Minus Sustainable Development

How green is Kyrgyz Republic’s economy or for that matter, are Central Asian economies? Before digging into government’s files, in fact, it is the Manila based Asian Development Bank (ADB) who backs these countries through knowledge and finance would answer this puzzle. As we read, the Bank is presently huddling its 67  country share holders at Astana, Kazakhstan (May 2-5) to revamp the New Silk Route. From ‘good neighbors, good Partners, and good prospects’ through ‘greater connectivity by 2020’ as per the bank’s prescription, the region will be linked to east and west. It is ambitiously provocative. 

This is the second time that the Bank has airlifted its institutional set up to Central Asian countries. The last time it was at Tashkent 2010. The 2015 Annual Governors Meeting (AGM) will be at Baku. Off late, one would wonder, ask or enquire what prompts ADB to show its solidarity to Central Asia and Caucus countries?

Even before US/NATO indirectly declared ‘New Cold War’ against Russian Federation in April, the foundation has been laid by troika- World Bank, EBRD and ADB in former Soviet Republics to utilise unexploited market, business, and expedite resource exploitation. Integration and greater connectivity to the international market (EU/US) are the only means the Bank is focusing in the region. Since 2001, the Bank has been providing knowledge mostly through CAREC Institute and funds through CAREC. Does the Bank has sustainability criteria for its work in the region, especially in Kyrgyz Republic?  Does the Bank follow sustainable development ethos in letter and spirit while supporting Kyrgyz government?

The Strategy 2020- Magna Carta of ADB- promotes inclusive environmentally sustainable growth through its orchestrated operations in infrastructure, environment, regional cooperation and integration, financial sector development, and education. The Strategy 2020 was evolved in a specific narrow global context with locating the relevance of ADB in addressing fractured crisis centric in Asia-Pacific.

However after half a decade, the project success rate as per ADB standard has not reached the target of 80 percent as set in Strategy 2020’s results framework. The project performance have declined dramatically. One of major indicator is complaint filed in its Accountability Mechanism.  Since 2004 till date, 45 cases were being filed in AM and nearly 42 complaints have filed so far in its Complaint Receiving Officer (CRO). From Central Asia and Caucus, 14 cases of project problems have filed in AM.

ADB’s projects performance in Central Asia is not to be enthused. In Tajikistan, out of 17 projects funded by ADB, 17 percent were unsuccessful. Out of nine projects in Kazakhstan, 33 percent were less successful, and 37 percent unsuccessful in 10 projects in Uzbekistan with five percent failed. Out of 23 projects funded in Kyrgyz Republic, 22 percent were less successful and nearly five percent failed. It is obvious to pass on the blame to country governance system for its failure. What have the Bank contributed to enhance the governance system in Central Asia?

Is it sustainable development or path towards green economy?

The Kyrgyz Republic and sustainable Development were born at same time. Immediately After its independence in 1991, the Kyrgyz Republic intended to marry neo-liberal development model by  membership at UN and signing of battery of international commitments including Agenda 21 and Rio Declaration on sustainable development. Since, the poorest among the region-the land locked country has adopted six poverty reduction strategies, two middle term development strategies, including National Sustainable Development Strategy (NSDS) 2013-2017. ADB’s four year country plan (2013-17) for Bishkek has acknowledged and supported NSDS on inclusive growth. However, the NSDS is anchored in three coal-mining projects, and 14 gold, aluminium and tin/tungsten ore sites to be extracted.

Due to high poverty rate, depending on external finance and limited resources, Kyrgyz Republic has been on weak sustainable development path. The Republic suffers from land degradation, deforestation and desertification, climate induced disasters, stress of safe drinking water and human well being. The Human Development Index (HDI) ranks Kyrgyzstan at 125th place among 187 countries and it is below the regional average too. Although, Government expenditure on education sector is 19.4% of GDP, the Kyrgyz Republic has got lowest rate on educational level among 75 OECD countries and partners. The government spends 10.8% of GDP for health sector, which is not enough to maintain national health.

latest UNCEC report (2009) suggests that environmental performance of the country is affected by long and short-term economic difficulties. The state budget allocation for environmental protection has not been significant either. It was reduced to 0.4% of total budget in 2013. Despite international commitments and state legislations, the governments still lacks political will to tackle environmental problems.

(Fig. The state budget allocation in KG Som currency for environmental protection. (Data from Ministry of Finance of the Kyrgyz Republic)

There has been no evaluation of any strategies achievability so far in Kyrgyz Republic. There is no measurable indicators as well in NSDS. The Strategy only have ambitious target as usual like earlier strategies to garner financial assistances from Donors. While UNEP 2011 Green Economy Report prescribed agriculture as a priority sector to be greened, the NSSD puts agriculture sector as a non priority sector as well as Strategy 2020 of ADB. The agriculture sector has been in complex in the mountainous country .

For sure, ADB’s connectivity road map for the Republic and CA has no interest in agriculture sector. Being vast nomadic population and depending on livestock and pastoral land, a large communities are at real danger in the face climate change and needs immediate responses. The multi-donor Central Asian Countries’ Initiative on Land Management (CACILM) program, which started in 2001 and suppose to end in 2015, has gone wayward. Internal evaluation has critically questioned the country’s weak capacity to handle land degradation issue. At the same time, this effort has not been mainstreamed into sustainable management of natural resources in the country or region.

Sustainable development is accountable, transparent and participatory governance system. While the Republic is trying to be transparent post 2010 unrest, it has to demonstrate such actions and sustain in major decisions. Let’s take example of preparation, drafting and approval of NSDS itself.

The President of Kyrgyz Republic validated the NSDS within one month by a Decree without discussion at the Parliament. However, according to Article 75 of the Constitution (2010), Parliament approves national development programs of the country, not the President. In its own Development Strategy up to 2016, Jogorku Kenesh (National Assembly) reiterates the role of Jogorku Kenesh in determining country’s strategic development. The development strategies of the country is driven by individual leader’s aim than addressing regional disparities within the country.

Last week, the government has posted draft of energy/heat tariff for public comment and feedback. As a market model to raise the energy prices to cost‐recovery tariffs is easier said than done in Kyrgyz societies. It has several ramifications and consequences. But country like Kyrgyzstan in which energy sector is the only major component of its GDP and population is generally poor, the hike in energy tariff needs to be carefully and cautiously administered by protecting the large chunk of poor households. The cautious public discussion and approval of tariff is one of the major step in right direction. However, it needs to be seen how far the process is transparent to reflect the wishes of people unlike in NSDS.

Kyrgyz Republic as well as other Central Asian countries urgently need social and sustainability accounting, valuation of environmental degradation which would help better policy formulation, its direction, prioritised sector enhancement and achievable long-term sustainable goals and better governance and environmental justice. As the ADB approved the Mid Term Review of Strategy 2020 which was announced by its President on the opening day of Astana AGM (May 2), not all we are agree to the outcome. While Bank is refocusing its Strategy on 10 priority areas including climate change and regional integration, there are flipsides which allows easy procurements, country safeguards systems and innovative internal  project processing facilities.

Kyrgyz Republic has weak governance system especially in following sustainable development like other Central Asian countries. It is imperative for ADB to build the country capacity with priority requirement of the country and its people than laying connectivity to integration.

Dr Avilash Roul (Ph.D.)

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Avilash closely monitors World Bank, ADB and EBR in Asia, and presently working as a Senior Fellow at Society for the Study of Peace and Conflict at New Delhi, India.