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The Asian Development Bank as a
Global Risk Regulator in Myanmar
Adam Simpson & Susan ParkPubl ished onl ine: 16 Dec 2013.
To cite this article: Adam Simpson & Susan Park (2013) The Asian Devel opment Bank
as a Gl obal Risk Regul at or in Myanmar, Third Worl d Quart erl y, 34: 10, 1858-1871, DOI:
10. 1080/ 01436597. 2013. 851911
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The Asian Development Bank as a
Global Risk Regulator in Myanmar
ADAM SIMPSON & SUSAN PARK
ABSTRACT The Asian Development Bank (ADB) is engaged in development
pro-jects throughout the Greater Mekong Subregion, although for most of the past two decades it has boycotted Myanmar (Burma) because of donor government sanctions. Despite being criticised for its neoliberal focus and its lack of trans-parency and accountability, the ADB’s operations compare favourably to those of
the Myanmar government and many transnational corporations constructing and
financing projects there. This article engages with the concept of risk, which increasingly frames how development in fragile states like Myanmar is under-stood, to critically analyse the ADB’s nascent re-engagement in Myanmar
accord-ing to the risks this poses for five constituencies: the ADBitself; donor states; the
Myanmar government and military; private capital; and marginalised communi-ties. While deeper engagement in Myanmar poses different risks for each group, critical analysis suggests that theADB must increase the genuine participation of
civil society actors in its activities to address the most significant risks of all, those facing marginalised communities.
Introduction
During the past 25 years international financial institutions (IFIs) such as the
Asian Development Bank (ADB) have played a contentious role in the global
South but they have been noticeably absent from Myanmar (Burma). The ADB
has not provided significant assistance to Myanmar since the 1988 government
crackdown, largely as a result of Western attempts to isolate the country’s
mili-tary-dominated government.1 In response to the new government’s programme
of reforms, however, it has now tentatively recommenced activities in the coun-try.2 Engaging critically with the notion of risk, this article suggests that, despite the financial, political, reputational and security risks posed by re-engagement
with Myanmar,ADB involvement in the state could do much to alleviate the most
pernicious risk of all: the existential risk posed to marginalised domestic commu-nities in areas affected by large-scale energy projects, which are often driven by
Adam Simpson is at the Centre for Peace and Security, Hawke Research Institute, University of South Austra-lia, GPO Box 2471, Adelaide SA, Australia 5001. Email:Adam.Simpson@unisa.edu.au. Susan Park is in the Department of Government and International Relations, University of Sydney, Sydney, NSW 2006, Australia. Email:susan.park@sydney.edu.au.
ISSN 0143-6597 print/ISSN 1360-2241 online
private actors.3 The possible benefits of ADB engagement may be found in the
Greater Mekong Subregion (GMS) programme, which involves large-scale
infra-structure projects. ADB involvement provides a minimum level of social
protec-tion, as required for all ADB loans,4 but successful implementation requires
genuine consultation with activists to ensure their effectiveness. The change in the ADB’s policy towards Myanmar has not satisfied everyone: Western govern-ments are highly supportive and sanctions have slowly eased but activists are
divided on the merits of ADB engagement. Nevertheless Myanmar’s moment of
transition provides the opportunity to mitigate the ongoing existential threat that rapacious capitalist development currently poses to marginalised communities.
Full ADB engagement with Myanmar poses a variety of risks for the mainfive
constituencies affected: the Bank itself; donor states; the Myanmar government and military; private capital; and marginalised groups.5 In evaluating these risks, a critical approach is adopted that prioritises the welfare of marginalised Myanmar communities. Such an approach seeks to promote change through
‘more progressive, emancipatory values’.6 It reveals how risk is understood by,
and applies to, each of the five groups of actors, where the greatest risk, the existential threat to project affected groups, is perceived but generally not prioritised. TheADBcould be a ‘global risk regulator’,7 if it were able to mitigate the worst aspects of rapacious capitalist development in Myanmar, while furthering‘market building’.8 The initial overview of risk in development below
is followed byfive sections on how the risks associated withADBre-engagement, particularly within the context of the GMS, relates to each of the five affected constituencies.
Risk in international development
Risk is ‘a probability, not necessarily calculable in practice, of adverse
conse-quences’.9 Risk is a concept increasingly used across disciplines to examine
everything from health hazards, financial crises, and terrorist attacks.10 It is investigated here because it dominates our understanding of economic, techno-logical and social innovation, which is fundamental to international development
financing. Much contemporary risk analysis follows Ulrich Beck’s
conceptualisa-tion, where risks are real (as opposed to socially constructed) and generated by individuals in modern industrial societies,11while hazards are naturally occurring events that adversely affect people. The rise of risk stems from the technological
nature of modernity, which exposes us to human-made risk, but also from ‘the
underlying matrix of socio-cultural attitudes within modernity that created a fetishism with risk aversion’.12 Risk aversion has arisen from our belief in our
ability to control our environment. For the purposes of this article, identifying the risks inherent inADBre-engagement with Myanmar, according to the interests of the constituencies involved, reveals that the most harmful risks to margina-lised communities are often relegated to the bottom of the hierarchy of interest and risk calculations. This prioritisation is inverted here, as risks to marginalised
groups are our primary concern. This approach fits Eschle and Maiguashca’s
notion of‘critical scholarship,’which is:
research that explicitly recognises and takes responsibility for its normative orienta-tion; that aims to empower a marginalised and oppressed constituency by making them visible and audible; and that attempts to challenge the prevailing power hierarchies, including in terms of the construction of knowledge.13
Within international development financing, risk is calculated and costs and
benefits weighed according to the financial risks associated with investments and loans. Financiers, including the ADB, undertake risk assessments that are ‘an outcomes-driven analytical tool, providing researchers with measurable outcomes amenable to technocratic and professional application in both public and
commercial settings’.14 Controlling and assessing the likelihood of adverse
consequences gives financiers the ability to determine whether they are willing to bear the financial costs associated with engaging with fragile states, which hinges on the ability for loans to be repaid and the project’s likely economic rate
of return.
For donors allowing the ADB to re-engage in Myanmar carries significant
political risk: where the intended and unintended consequences of donor policies towards autocratic or illiberal states with known human rights violations may lead to a significant political backlash from activists domestically. While political and economic reforms in Myanmar are reducing the severity of the risks, civil conflicts and human rights abuses continue.
From its perspective the Myanmar government could improve its international political reputation by signing ADB loan agreements. Doing so, however, carries significant political, economic and security risks for the government and the military, as engagement with the ADB would necessarily lead to greater transpar-ency and conditionality in ADB-financed projects, which in turn could destabilise the government’s control over resources.
For private capital reputational risks are additional to the financial risks of specific projects, where international media attention, activist campaigns and the threat of litigation may undermine the benefits of operating in fragile states,
although regional transnational corporations (TNCS) currently operating in
Myanmar have largely avoided reputational costs. The opening of Myanmar to infrastructural and energy projects by private financiers has, however, produced significant ‘global’ risks for Myanmar’s poor, marginalised and ethnic groups in
the form of heightened security risks at the project level.15 As discussed further below, these security risks are existential in kind, and include but are not limited to: forced labour, systematic rape and sexual assault, land confiscation, summary execution and torture.
Although the risks facing private capital are well entrenched within ‘the
modern’, the risks faced by minorities and the poor in Myanmar are more
difficult to classify. From Beck’s perspective the risks to villagers are the
traditional ‘hazards’ of hunger and security. The difference here is that, while
many villagers live traditional pre-industrial lives, their insecurities have been largely human-generated by an oppressive, violent, industrialised, military state. Although these existential risks are acknowledged by many actors operating in Myanmar, they are generally not prioritised, meaning that within the current hier-archy of risk this existential threat is unlikely to be addressed. ADB activities, on
the other hand, are at least nominally undertaken to reduce poverty and stimulate economic growth. The rest of the article therefore examines the risks to the five constituencies identified here regarding ADB engagement, assessing first the ADB as a global risk regulator.
TheADBas global risk regulator in Myanmar
Development projects in Myanmar, as in other fragile states, carry greatfinancial risk in terms of the ability to finish the project on time and under budget. This reflects the difficulties of operating in an unstable political and security environ-ment. Nonetheless, theADBaims to provide loans to states that cannot access
pri-vate capital for development. For the ADB project-level decision making is
undertaken by Bank management but its overall direction reflects its member
states’interests. Japan and the USA are theADB’s largest shareholders,16 and they
heavily influence the direction ofADBassistance.17 The USA has played the cen-tral role in determining ADB policies, particularly in isolating Myanmar since 1988.18 This accounts for the Bank’s absence from the country, despite signifi
-cant overall engagement with theGMS.
ADB staff consider the organisation to be ‘risk averse’ and they accept that‘a lot can go wrong’ with any undertaking in Myanmar.19 However, these risks are
not that different from those faced by the ADB in other fragile states such as Afghanistan. TheADB’s decision making regarding Myanmar is driven by power-ful donor governments, which align bank operations with their broader foreign policies, particularly on issues that are subject to domestic political pressure.20
ADB engagement in Myanmar has been inextricably linked to the US and EU
sanctions regime, while the ADB management has used Myanmar’s arrears as a
convenient impediment to engagement. With the sanctions regime falling away throughout 2012 the ADBre-established a small in-country office late in the year, although the initial activities were restricted to capacity assessments.21
Under sanctions the ADB provided indirect technical assistance for projects in
Myanmar through the GMS programme.22 This was insignificant compared with
the direct assistance it proffered to other non-democraticGMSstates such as Laos and Vietnam. As a result of Western isolation policies,ADBfunding was provided to NGOs, consultants and intermediaries rather than to the government. Much of this related to so-called ‘GMS Flagship Initiatives’, such as the East–West
Economic Corridor (EWEC) and the Southern Economic Corridor (SEC). These
projects aim to facilitate trade and investment and to reduce poverty across the region, and continue the ADB’s traditional emphasis on large-scale infrastructure projects for market building.23
The emphasis on private enterprise within the GMS programme fits the ADB’s
neoliberal approach to development. A staff member freely admitted that ‘the
Washington Consensus still applies’ in theADB,24 although another argued that a shift had taken place since the 1990s.25 The most significant GMS infrastructure project that theADBhas supported is the Nam Theun 2 (NT2) Hydropower Project in Laos, for which it provided technical assistance and US$120 million in loans
and guarantees,26 despite reservations in some quarters of the ADB about its
involvement.27More importantly it also played a key risk mitigation role for pri-vate capital, which reduced the costs associated with investing in the project.
The ADB’s role in development has been contentious, with Rosser arguing that it has adopted a coercive neoliberal approach ‘driven primarily by a concern to
manage the risks to developed countries posed by instability, conflict, crime and disease in fragile states, rather than developmental considerations’.28 If this
con-cern was the overriding priority of the ADB then developed states saw little risk of contagion from the maladies facing Myanmar as the latter received no funding under this programme, despite satisfying the requirements to be classed as a
‘fragile state’: having weak governance, weak rule of law and civil unrest,
partic-ularly in minority ethnic areas. Likewise there has been a continued absence of Myanmar, a UN-designated Least Developed Country since 1987, from partici-pation in the Asian Development Fund (ADF), which the ADB set up specifically to fund fragile and low income states.29 Myanmar has been a pariah state
regard-ing official ADB funding, yet bypassing Myanmar impeded the ADB’s regional
integration attempts even as it grappled with political, economic and environ-mental constraints on its activities within the GMS.30
The neoliberal agenda pursued by theADB has the potential to undermine social democratic systems,31but theADB’s agenda could also actually improve on exist-ing development programmes in Myanmar, which is characterised by embryonic democratic institutions and limited social welfare provision. It is here that the ADB, as a global risk regulator, could make a significant difference by enforcing economic and social conditions. With rapidly increasing business investment in large-scale energy projects primarily from TNCS from China, Thailand and Singa-pore, the ADB could provide greater transparency, accountability and public par-ticipation in development. Although criticised for lacking these very features,32 theADB’s social and environmental safeguards, information disclosure policy and
accountability mechanism are virtuous compared with those of many TNCS
cur-rently operating in Myanmar.33 The country has been largely unregulated with
regard to investment that has caused widespread social and environmental harm.
In Myanmar civil society activists often see the ADB as mitigating the worst
impacts of projects and providing a modicum of improved governance with respect to safeguards and transparency compared with the onslaught of invest-ment fromTNCSfrom illiberal states.
For example, in relation to the NT2 project described earlier, some anti-NT2 activists accepted that the involvement of the ADB(and the World Bank) allowed NGOs to access information and exert pressure that would have been impossible otherwise, despite valid criticisms of the depoliticised participatory processes followed by the IFIs in the project.34 Villagers relocated by the project were
‘better off’ than elsewhere in Laos, ‘where there are no legally binding
obligations to attend to villagers’ or NGO concerns’,35 and where rural people ‘frequently do not even have access to the electricity produced by dams that have
displaced them’.36 The ADB has also been viewed as a moderating influence in
Nepal, where Aid/Watch argued that ‘while the ADB has many opponents, there
is a concern among NGOs in Nepal that [if] the ADBpulls out... a greater share of investment from less transparent actors with lower standards’would result.37
Engagement by the ADB and other IFIs is therefore sometimes accepted by activists because of the often-bleak alternatives available. Katie Redford, the
co-founder of the NGO EarthRights International, summarised the feeling of many
activists:
Our perspective on multilateral development banks has changed over the last 10 years; it used to be that they were pretty dismal in terms offinancing harmful pro-jects. Now, there are other institutions [such as Chinese corporations] that are even worse; in comparison, they could come out looking pretty good. So in a way, with the safeguards and protections that they do have, we’re loving them…kind of.38
Despite this evolving viewpoint Redford still opposes ADB engagement in
Myanmar, reflecting concerns, also shared by other activists, over the Bank’s
ability and willingness to follow through on its standards.39 In projects elsewhere the ADB has been criticised for increasing poverty and destroying livelihoods.40 Yet with ongoing genuine engagement with transnational and local activists this could be overcome. While one activist on the Board of the Bank Information Centre who dealt extensively with the Bank suggested that it was essentially
‘clueless’ about the concerns of Myanmar’s civil society groups, and actually ‘the worst’ of all the multilateral development banks in this regard, the ADB has
received relatively little NGO attention. Despite limitations in resources and the
entrenched political and economic forces they face, NGOs could replicate and
enhance reform at theADB as they have at the World Bank.41
Even without rigorous civil society oversight, the transparency and oversight provided by the ADB might help alleviate the existential risks faced by ethnic minority villagers who live in the vicinity of the projects. For example, the lar-gely animist Karen of eastern Myanmar could face relocation from their ancestral lands through which the ADB’s economic corridors travel.42 Existential risks to
marginalised communities are very real in a fragile state that has suffered half a century of brutal authoritarian rule. ADB could also reduce the reputational risks faced by foreign capital in a regulatory environment where numerous large gas and hydropower projects around the country receive government approval with-out any significant environmental or social impact assessments. When a project is undertaken in a non-democratic state characterised by multi-ethnic civil
con-flict, the scope and variety of risks to communities increase. ADB engagement
would mean enforcing its own social protection measures as per its lending agreements, even while it takes into account regional TNC interests in Myanmar. Understanding the reasons for the Bank’s reticence in these activities requires
examination of the risks for theADB’s donor states.
Political risk and revitalised donor engagement with Myanmar
Myanmar’s political and security atmosphere eased significantly following the
elections of November 2010, after which formal political power shifted from a military junta to a nominally civilian government. Aung San Suu Kyi, the National League for Democracy (NLD) General Secretary, and 42 of her NLD col-leagues entered parliament after winning seats in by-elections in April 2012.
Censorship rules were eased and in April 2013 private daily newspapers appeared on Myanmar’s streets for the first time in 50 years. The reforms led to
a gradual easing of Western sanctions. US and EU sanctions had been in place since the 1990s, requiring annual renewal by their respective legislative bodies, although many of the US restrictions could be lifted without Congressional
approval.43 These sanctions had made an impact on development in Myanmar:
in 2003 the US Burmese Freedom and Democracy Act banned imports from Myanmar, resulting in a collapse of the textile industry.44
Section Five of the Burmese Freedom and Democracy Act called on the US representative at theIFIs ‘to oppose, and vote against the extension by such insti-tution of any loan or financial or technical assistance to Burma’, leaving theADB without formal US support for engagement. The US vote did not constitute a veto but its influence resulted in an absence of funding. The official reason given by theADB for withholding assistance was Myanmar’s arrears. Until recently this
meant that most ADB staff were not permitted to visit Myanmar unless
accompa-nying anIMFArticle IV team or as part of aGMSprogramme.45
In December 2011 thefirst signs of a significant easing of restrictions occurred during a visit to Myanmar by then US Secretary of State Hilary Clinton. Clinton
announced that the USA would gradually end its obstruction of IFI and UN
Development Program (UNDP) activities in Myanmar. Thefirst formal impediment
toADBengagement was removed in February 2012 when Clinton signed a partial
waiver of the 2000 Trafficking Victims Protection Act (TVPA), allowing the US to
‘supportIFI assessment missions and appropriate technical assistance that do not
require a vote from an IFI board’.46 Despite the symbolism of the decision this was regarded as a‘baby step’by ADBstaff, and one that required all the political
capital in Washington to achieve. Even after an informal board meeting in Man-ila to discuss the decision, the team still ‘hadn’t even started’ talking about a
lending programme.47 The waiver allowed limited ‘technical assistance’ but this
did not include ADB’s defined‘Technical Assistance’ programmes. Other restric-tions remained: the activities funded were required to be worth less than $1.5 million; the funds could only be used for regional programmes rather than for Myanmar specifically; and the ADBwas required to use bilateral funds rather than its own. While countries such as Australia were keen to provide such funding,48 these limitations have ensured that the re-engagement with Myanmar has been gradual.
As some civil society actors in the USA and UK still argue against ADB
engagement with Myanmar, any significant problems that occur as a result of re-engagement could stimulate domestic civil society pressures on donor govern-ments. Nevertheless, under the sanctions regime the ADB was indirectly pursuing economic projects in Myanmar with the unfortunate effect of being unable to apply its own social safeguards, information disclosure policy and accountability mechanism for people negatively affected by ADBfinanced projects.49As a result, the ADB’s position on Myanmar satisfied neither those who supported the ADB’s role in the country nor those who opposed it. There will always be political risk in operating within fragile states but refraining from engagement with Myanmar
neither advances the ADB’s role in promoting economic growth and regional
integration nor protects affected communities through its safeguard measures in a state that desperately needs it.
Risks for the Myanmar government and military
For elements of Myanmar’s government and military engaging with the ADB
might require efforts at transparency and accountability in political and economic governance that are generally unwelcome. Yet it could also provide new sources of both cheap capital and infrastructure development that allow small and medium enterprises toflourish without challenging military control. Encouraging collaboration with the ADB could also bring further diplomatic cooperation from Western countries and increased international political legitimacy. There are few serious risks facing the military if the ADB fully engages with Myanmar. Within the country the debate over sanctions was acrimonious,50and, although sanctions
were supported by the NLD, views started shifting in 2011 among domestic
opposition groups. Aye Tha Aung, the General Secretary of both the Arakan
League for Democracy (ALD) and the Committee Representing the People’s
Parliament (CRPP), and a senior actor in the opposition movement, acknowledged that sanctions were ‘not as effective as they should be due to China, India and
Thailand’ and that, if IFI’s managed to bring more transparency, then greater
engagement with the ADB ‘could be worth it’.51 The political opposition
movement is not opposed to the extension of markets in Myanmar, although the NLD argues that foreign investment must observe guidelines aimed at‘conserving the ecological environment, protecting the rights of workers and promoting civil society’.52
Regardless of the opposition, the government does not need ADB funding to
maintain its dominant role in the country, so there is little economic leverage to be gained by restricting access. Given the historic and ongoing dominance of the military in all sectors of the country,53 there are unlikely to be any more signifi -cant shifts in the domestic political system beyond the military’s ‘disciplined’
democracy in the near future, so the best prospects for improved development are to leverage change through the present political opening.54 The situation tilts the balance of political and security risks faced by the government and military
in favour of the ADB developing projects such as those related to the GMS in
Myanmar.
Financial and reputational risks for private capital in Myanmar
The most significant factor in Myanmar’s maldevelopment has been its domestic
governance. As Steinberg notes, during military rule ‘the unpredictability of
corruption and rent-seeking activities (in contrast to predictable corruption)…
probably had [an even greater] negative impact on investment than sanctions’.55
Two decades of rampant capitalism have combined the worst of neoliberalism and rent-seeking cronyism. There is little doubt that the role of China, India,
Thailand and other Asian countries in competing to gain access to Myanmar’s
resources has enriched the military leadership and staved off financial collapse for the government in the short term, allowing the military to remain the
dominant political force. Together with the siphoning off of gas revenues there are also internal contradictions in the country’s economy that, without outside
assistance, will make it difficult for resource-based revenues to translate into
gen-uine economic growth.56 The 1988 and 2007 protests in Myanmar were built on
economic privations within the general population. Without a concerted effort to distribute economic wealth more equitably the military-backed government faces the risk of further dissent as inequalities deepen in places such as Yangon, where accommodation costs have dramatically increased.
The absence of both private and public Western actors in Myanmar over the
past two decades left an economic vacuum that was filled by regional economic
actors with less democratic oversight, who invested in mining, gas and hydropower.57 Such investments increased over the 2000s, with the result that the economic sanctions applied by the USA and Europe to disrupt the economic
fortunes of Myanmar’s elites proved largely ineffectual. The potential for
Western sanctions to undermine the Myanmar regime came to an end when the
revenues from the Yadana Gas Pipeline started flowing in earnest in 2000,
ushering in an era of resource-based foreign exchange income that proved a lifeline for the regime.
While unjust outcomes may stem from the operations of IFIs in illiberal and
fragile states, these must be balanced against the current largely unchecked
investment environment when considering ADB funding to Myanmar. The ADB
may be able to shed light on existing opaque capitalist structures. Managing the risks associated with any kind of investment in Myanmar is fraught thanks to the difficult political environment that private and public actors face,58 but ADB engagement has the potential to alleviate some of those political and financial risks. As well as on account of its abundant energy sources, international capital is attracted to Myanmar’s weak labour and environmental regulations, which has
stimulated the interest of corporate capital on schemes such as the Dawei Development Project. Lax regulations have been matched, however, by weak and arbitrary justice and economic systems that increase both the personal and
financial risks of investing in Myanmar.
The ADB could dilute the financial risks for private capital in Myanmar by
funding and guaranteeing projects as it has done with the EWEC and the Nam
Theun 2 Dam. The ADB acknowledges that the early stages of the GMSeconomic
corridors will be funded by public sources, and its Board has now approved the initial funding,59 but it clearly sees its role as guarantor of long-term stability for private project investment. While this primarily interests large capital, small capital would also see an environment of reduced risk for commerce. Myanmar may continue the unchecked privatisation of state assets that began after 1988, and which accelerated to fever pitch in the lead up to the 2010 elections,60 and created an opaque crony capitalism nirvana for the senior military and their close
business associates.61 ADB engagement with Myanmar has the potential to help
minimise the extant corruption and patrimonial favouritism in the specific
projects its funds by increasing transparency and competition from both domestic and international capital. While these activities lessen the risk for private capital, more importantly they may also limit the risks faced by project-affected margina-lised communities.
Existential risk for marginalised communities
While risks to other constituencies require consideration, from a critical perspective the security risks to local communities, particularly marginalised ethnic villagers living in the vicinity of large projects, are the most important. These insecurities include existential risks, such as forced labour, systematic rape and sexual assault, land confiscation, summary execution and torture.62 Notably, although the International Labour Organization (ILO) has received hundreds of reports of forced labour across the country, there have been none from the EWEC corridor area,63 and, although ADB staff have not been visible on the ground, the international interest in the project may have minimised its occurrence. Historically most major development projects in Myanmar have been undertaken
with the involvement of TNCS from across the region, with little or no social
assessment. Some of these projects, such as the northern Shwe Gas Pipeline Project, are also accompanied by an expansion of brothels and prostitution, often for Chinese workers, and by the abuse of local ethnic women by the military.64
There are many other risks for women, specifically associated with road
developments, including the spread of HIV/AIDS and trafficking. With regard to the EWEC the ADB, unlike private investors, acknowledges that these risks exist and has made efforts to mitigate them.65 Involvement of the ADB together with civil society groups across the economy could encourage greater protection for women. Civil society activists from inside and outside Myanmar, including exiled Karen activists from EarthRights International, have acknowledged that, if
theADB does engage with Myanmar, it could bring in more effective governance
guidelines than a Chinese or Thai corporation, which could in turn increase monitoring by domestic civil society.66
Land confiscation linked to major development projects is a widespread
problem for ethnic minority villagers in Myanmar, even outside conflict zones.67 According to activists, if the military forces the confiscation, there is often no compensation, while this is more likely, if still inadequate, if international actors reach a villager first.68 The presence of ADB representatives early on in the
development of a project such as the EWEC could help ensure that displaced
villagers receive significant compensation, as with many of the residents of the Nakai Plateau on the NT2 site in Laos.69 Most projects in Myanmar are unlikely to satisfy the level of free, prior and informed consent of indigenous peoples affected by development projects supported by activists and the International Finance Corporation,70 but the level of displacement under the ADB is likely to be less, with compensation higher, than would otherwise be the case. Likewise
risks of summary execution and torture, although ever present in Myanmar’s
civil conflict zones, are likely to be reduced in areas where ADB workers or
contractors are visibly operating, particularly if extensive engagement with local communities is undertaken.
Although the wealth generated by the EWEC and other corridors will tend to be more dispersed than is the case with the NT2, and therefore more difficult to control, the ADBcould also provide guidance on the direction of revenue streams from the project towards ‘public interest’ areas such as education and health, as
it has done on other projects.71 The entry of Aung San Suu Kyi and theNLD into
parliament also suggests it will be easier to hold the government to account by providing an outlet for delivering ADB-related reports into a formal political setting. These outlets could create opportunities for developing a more equitable and transparent distribution of revenues.
Conclusion
The ADB has engaged in market building activities across theGMS that have been criticised by activists for limitations in transparency, accountability and social and environmental safeguards. Nevertheless, the existence of such processes compares favourably with the existing situation in Myanmar. In other countries local NGOs have preferred ADB engagement to ‘less transparent actors with lower
standards’. As a local Myanmar activist argued, if ADB projects increase the
involvement of local people in decision making and management, they are promoting a shift to progressive democratic governance, regardless of other outcomes.72
While domestic civil society activism has grown significantly in Myanmar,
particularly since the reform process began in 2011, it remains curtailed by political limitations and the absence of actors like the ADB, who often engage in partnerships with civil society. The ADB’s presence might provide a stimulus to formalise civil society participation in development decision making, a goal also being pursued through the Extractive Industries Transparency Initiative. The development of social policy options surrounding the ADB’s economic corridors provides a clear opportunity for engaging the Myanmar government and civil society actors. Activists could focus such engagement towards empowering women and minorities in the corridor regions, including around education, health and land tenure.
Each of the five constituencies examined have conflicting interests and risks that are not easily ameliorated. Myanmar’s political and economic reforms have
reduced the risks associated with ADBengagement but the ADB’s potential role as a global risk regulator is double-edged: facilitating large-scale development projects in Myanmar could further entrench the military and may provide opportunities for corruption, the forced relocation of villagers and environmental destruction, regardless of its safeguard policies. If a project goes ahead without
ADB funding, however, the funding may come from regional TNCS without any
social protection provisions. Nevertheless, the desire by the Myanmar government for international legitimacy should not be underestimated and the appetite for ADB policy, project andfinancing expertise may well prove enticing enough to accept social protection restrictions. At present the clearest risks pertain to marginalised ethnic minorities and the poor. TheADB could use its role as a global risk regulator to promote development in Myanmar. If accompanied by genuine engagement and collaboration with domestic and transnational civil society actors there is the potential to reduce the existential security risks facing these long-suffering marginalised peoples.
Notes
1 Myanmar Country Coordinator, interview with author,ADBOffices, Bangkok, 19 June 2012. The Myanmar
government also suspended debt repayments at this time, which officially haltedADBassistance, although
the arrears could have been waived at any time, as was done for other countries like Afghanistan, if a politi-cal consensus among donor countries was reached. In January 2013, in response to Myanmar’s reforms, this consensus was reached and the arrears of some $450 million were cleared with a new $512 million policy-based loan.
2 Head,ADBExtended Mission in Myanmar, interview with author,ADBOffices, Yangon, 13 June 2013. 3 Asian Development Bank, Myanmar: Energy Sector Initial Assessment, Manila: ADB, 2012, at
http://www.adb.org/sites/default/files/myanmar-energy-sector-assessment.pdf, accessed 1 June 2013; and A Simpson, ‘Challenging hydropower development in Myanmar (Burma): cross-border activism under a regime in transition’,Pacific Review, 26(2), 2013, pp 129–152.
4 Asian Development Bank, Safeguard Policy Statement, Manila: ADB, 2009, at http://www.adb.org/sites/
default/files/pub/2009/Safeguard-Policy-Statement-June2009.pdf, accessed 20 April 2012.
5 Asian Development Bank,Myanmar in Transition: Opportunities and Challenges, Manila:ADB, pp 31–34,
athttp://www.adb.org/sites/default/files/pub/2012/myanmar-in-transition.pdf, accessed 1 June 2013. 6 I Bruff & Daniela Tepe,‘What is criticalIPE?’,Journal of International Relations and Development, 14(3),
2011, p 355.
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Quarterly, 74(3), 2003, pp 337–348.
8 T Carroll,‘Introduction: neo-liberal development policy in Asia beyond the post-Washington Consensus’,
Journal of Contemporary Asia, 42(3), 2012, pp 350–358.
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10 D Jarvis,‘The expanding universe of risk’,Contemporary Politics, 10(3–4), 2004, pp 305–317.
11 U Beck,Risk Society: Towards a New Modernity, London: Sage, 1992; and D Jarvis,‘Risk, globalisation
and the state: a critical appraisal of Ulrich Beck and the world risk society thesis’,Global Society, 21(1), 2007, pp 30–31.
12 Jarvis,‘The expanding universe of risk’, p 306.
13 C Eschle & B Maiguashca,‘Bridging the academic/activist divide: feminist activism and the teaching of
global politics’,Millennium: Journal of International Studies, 35(1), 2006, p 120.
14 Jarvis,‘The expanding universe of risk’, p 305. 15 King & Narlikar,‘The new risk regulators’.
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17 C Kilby, ‘Informal influence in the Asian Development Bank’, Review of International Organizations, 6(3–4), 2011, pp 223–257.
18 S Park,‘Institutional isomorphism and the Asian Development Bank’s accountability mechanism: some-thing old, somesome-thing new; somesome-thing borrowed, somesome-thing blue’,Pacific Review, 27(2), forthcoming 2014.
19 ADBTeam Leader and Chief Economist, Thailand Resident Mission, interview with author,ADBOffices,
Bangkok, 10 February 2012.
20 DI Steinberg,‘The United States and Myanmar: a “boutique issue”?’,International Affairs, 86(1), 2010,
pp 175–194.
21 Head,ADBExtended Mission in Myanmar, interview with author.
22 Asian Development Bank, Strategy and Action Plan for the Greater Mekong Subregion East–West Economic Corridor, Manila:ADB, 2010, at http://www.adb.org/sites/default/files/pub/2010/gms-action-plan-east-west.pdf, accessed 20 April 2012. The Greater Mekong Subregion (GMS) comprises Cambodia, China’s Yunnan Province and Guangxi Zhuang Autonomous Region, Laos, Myanmar, Thailand and Vietnam. 23 S Singh,‘World Bank-directed development? Negotiating participation in the Nam Theun 2 hydropower
project in Laos’,Development and Change, 40(3), 2009, pp 487–507; and L Soutar,‘Asian Development
Bank–NGOencounters and the Theun-Hinboun Dam, Laos’, in B Rugendyke (ed),NGOs as Advocates for
Development in a Globalising World, London: Routledge, 2007, pp 200–223.
24 Myanmar Country Coordinator, interview with author,ADBOffices, Bangkok, 10 February 2012.
25 ADBTeam Leader and Chief Economist, Thailand Resident Mission, interview with author,ADBOffices, Bangkok, 10 February 2012.
26 Asian Development Bank,37734:GMSNam Theun 2 Hydropower Development Project, 5 March 2012, at http://www.adb.org/Projects/project.asp?id=37734; and A Simpson, ‘The environment–energy security
nexus: critical analysis of an energy“love triangle”in Southeast Asia’,Third World Quarterly, 28(3), 2007, pp 539–554.
27 ADBMyanmar Country Coordinator, interview with author,ADBOffices, Bangkok, 12 May 2011.
28 A Rosser, ‘Risk management, neo-liberalism and coercion: the Asian Development Bank’s approach to “fragile states”’,Australian Journal of International Affairs, 63(3), 2009, p 377.
29 Asian Development Bank, Asian Development Fund, 6 December 2011, at http://www.adb.org/ADF/ about.asp.
30 A Oehlers,‘A critique ofADBpolicies towards the Greater Mekong Sub-region’,Journal of Contemporary
Asia, 36(4), 2006, pp 466–467.
31 KR Raman, ‘Asian Development Bank, policy conditionalities and the social democratic governance:
Kerala model under pressure?’,Review of International Political Economy, 16(2), 2009, pp 284–308.
32 See, for, example, Oehlers,‘A critique ofADBpolicies towards the Greater Mekong Sub-region’; Raman,
‘Asian Development Bank, policy conditionalities and the social democratic governance’; and Rosser,‘Risk
management, neo-liberalism and coercion’.
33 ADB,Safeguard Policy Statement; and Park,‘Institutional isomorphism and the Asian Development bank’s
accountability mechanism’.
34 T Carroll,Delusions of Development: The World Bank and the Post-Washington Consensus in Southeast Asia, New York: Palgrave Macmillan, 2010.
35 Singh,‘World Bank-directed development?’, p 496.
36 IG Baird, K Barney, P Vandergeest & B Shoemaker,‘Reading too much into aspirations: more explorations
of the space between coerced and voluntary resettlement in Laos’, Critical Asian Studies, 41(4), 2009, p 606.
37 Aid/Watch,Selling Power in the Dark: The West Seti Hydropower Project, Nepal, Erskineville, NSW: Aid/ Watch, March 2009, p 12.
38 Katie Redford, Co-Founder/Director, EarthRights International, interview with author, Washington, DC, 21 March 2011.
39 Human Rights Watch (HRW) Staff Member, interview with author,HRWOffices, Washington, DC, 22 March
2011.
40 C Lang & B Shoemaker,Creating Poverty in Laos: The Asian Development Bank and Industrial Tree Plan-tations, Briefing Paper, World Rainforest Movement, April 2006, athttp://www.wrm.org.uy/, accessed 1 February 2010.
41 Identity withheld, interview with author, Washington, DC, March 2011. See, for example, S Park,World Bank Group Interactions with Environmentalists: Changing International Organisation Identities, Manchester: Manchester University Press, 2010.
42 A Simpson, ‘Gas pipelines and green politics in South and Southeast Asia’,Social Alternatives, 23(4),
2004, p 31.
43 MF Martin, Burma’s April Parliamentary By-elections, Washington, DC: US Congressional Research Service, 2012.
44 T Kudo, ‘The impact of US sanctions on the Myanmar garment industry’, Asian Survey, 48(6), 2008,
pp 997–1017. Emphasis in original.
45 ADBMyanmar Country Coordinator, interview with author,ADBOffices, Bangkok, 12 May 2011; and World Bank Country Program Coordinator (Myanmar), interview with author, World Bank Offices, Washington, DC, 22 March 2011.
46 Clinton,Determination with Respect to Foreign Governments’Efforts Regarding Trafficking in Persons— Burma, Washington, DC: US Department of State, p 2.
47 ADBMyanmar Country Coordinator, interview with author,ADBOffices, Bangkok, 10 February 2012. 48 Australian Ambassador, interview with author, Australian Embassy, Yangon, 10 February 2012. 49 ADB,Safeguard Policy Statement.
50 I Holliday,‘Doing business with rights violating regimes: corporate social responsibility and Myanmar’s military junta’,Journal of Business Ethics, 61(4), 2005, pp 329–342.
51 Aye Tha Aung, interview with author, translated from Arakanese by Zaw Myat Lin, General Secretary,ALD,
Yangon, 27 December 2010.
52 National League for Democracy,Sanctions on Burma: A Review by the National League for Democracy, Yangon: National League for Democracy, 8 February 2011, at http://www.nldburma.org/media-press-release/press-release/213-a-review-on-sanctions-imposed-on-burma.html, accessed 1 July 2011. 53 R Egreteau & L Jagan, Soldiers and Diplomacy in Burma: Understanding the Foreign Relations of the
Burmese Praetorian State, Singapore:NUSPress, 2013.
54 I Holliday,Burma Redux: Global Justice and the Quest for Political Reform in Myanmar, Hong Kong: Hong Kong University Press, 2011.
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Tan, Myanmar: Beyond Politics to Social Imperatives, Singapore: Institute of Southeast Asian Studies, 2005, p 93.
56 S Turnell,‘Finding dollars and sense: Burma’s economy in 2010’, in SL Levenstein (ed),Finding Dollars, Sense and Legitimacy in Burma, Washington, DC: Woodrow Wilson Centre, 2010, pp 20–40.
57 M Callahan,‘Myanmar’s perpetual junta’,New Left Review, 60, 2009, pp 27–63; and A Simpson,Energy,
Governance and Security in Thailand and Myanmar (Burma): A Critical Approach to Environmental Politics in the South, Farnham: Ashgate, 2014.
58 J Haacke,‘The Myanmar imbroglio andASEAN: heading towards the 2010 elections’,International Affairs, 86(1), 2010, pp 153–74; and C Roberts,Asean’s Myanmar Crisis: Challenges to the Pursuit of a Security
Community, Singapore: Institute of Southeast Asian Studies, 2010. 59 Head,ADBExtended Mission in Myanmar, interview with author.
60 Ba Kaung,‘Selling off the state silver’,The Irrawaddy, March 2010, athttp://www.irrawaddymedia.com/
article.php?art_id=17928, accessed 5 March 2011, p 35.
61 L Jones,‘The political economy of Myanmar’s transition’,Journal of Contemporary Asia, February 2013,
DOI:10.1080/00472336.2013.764143.
62 Simpson,Energy, Governance and Security in Thailand and Myanmar.
63 Steve Marshall, Liaison Officer,ILO, interview with author, Yangon, 17 February 2012.
64 Phyo Phyo (pseudonym for activist with Shwe Gas Movement), interview with author, Yangon, 7 January 2011.
65 Asian Development Bank,Proceedings of the Twelfth Meeting of the GMSSubregional Transport Forum (Stf-12) (Da Nang, Viet Nam, 12–14 August 2008), 2008, at http://www.adb.org/sites/default/files/ gms-stf12.pdf.
66 Bobby Maung,CEO, Network Activities Group, interview with author, Yangon, 7 January 2011; Debbie Aung Din Taylor, International Development Enterprises, interview with author, Yangon, 9 January 2011; and Chana Maung, Southeast Asia Office Director, EarthRights International, interview with author, Chiang Mai, 10 December 2010.
67 N Hudson-Rodd & S Htay,‘Farmers, land and military rule in Burma’, in N Cheesman, M Skidmore & T
Wilson (eds), Ruling Myanmar: From Cyclone Nargis to National Elections, Singapore: Institute of Southeast Asian Studies, 2010, p 148.
68 Phyo Phyo, interview with author.
69 Singh,‘World Bank-directed development?’.
70 International Finance Corporation,‘IFC’s access to information policy’, 2012, athttp://www.ifc.org/wps/
wcm/connect/91bfd5004997b5969cc3fcb2b4b33c15/AIPFinalVersion.pdf?MOD=AJPERES, accessed 24 July 2013.
71 Former Senior Advisor to theGMSprogramme, interview with author,ADBOffices, Bangkok, 10 February 2012.
72 Win Myo Thu,MDand Founder,ECODEV, interview with author, Yangon, 5 January 2011.
Notes on contributors
Adam Simpson is Director of the Centre for Peace and Security in the Hawke Research Institute and School of Communication, International Studies and Lan-guages at the University of South Australia. His teaching and research focuses on international relations, human rights, environmental politics and energy
secu-rity. He is author ofEnergy, Governance and Security in Thailand and Myanmar
(Burma): A Critical Approach to Environmental Politics in the South (2014, Ashgate) and his work has appeared in a range of edited books and international journals such as Pacific Review and Environmental Politics. He has also previ-ously published inThird World Quarterly.
Susan Park is a Senior Lecturer in International Relations at the University of Sydney. She researches and teaches on international organisations. Her research examines how international organisations take up ideas and how this shapes their identities. She has published in a range of international relations journals includ-ing International Politics, Global Environmental Politics and Global Gover-nance. Her co-edited bookOwning Development: Creating Policy Norms in the IMF and the World Bank (Cambridge University Press) was published in 2010
as was her sole authored book: World Bank Group Interactions with
Environ-mentalists(Manchester University Press).
