BY XIAOYI (BAKER) LU
Xiaoyi (Baker) Lu is a first-year IDEV student in Washington, D.C. He worked on the issue of civil society organizations in the International Financial Institutions class offered by Professor Cinnamon Dornsife at SAIS.
On January 16, 2016, the Asian Infrastructure Investment Bank (AIIB) began its first day of operation. Since then, AIIB has approved projects spanning over 100 countries in more than ten sectors. AIIB has already committed US$11.25 billion to the approved projects and plans to commit another 9 billion for the remaining projects.[1]
AIIB’s growth in terms of cooperation with civil society organizations (CSOs), however, has been relatively trivial. Unlike the Asian Development Bank (ADB) and the World Bank (WB), AIIB has no dedicated webpage for CSOs, no established department to work with CSOs, and no regular meetings to consult with representatives from CSOs. Although AIIB has started to build some public consultation mechanisms, like the Project Affected People’s Mechanism, some exports observers[2] have gone as far as advising “not [to] come to [AIIB] when there is potential or real harm under borrower systems.”[3]
AIIB’s lack of engagement with CSOs is puzzling, given the new bank’s focus on infrastructure, a sector that can immensely benefit from CSOs’ involvement. Community-based CSOs have unique knowledge of the local population and could help AIIB in reviewing project plans. Moreover, CSOs’ ability to mobilize resources could be critical for some projects’ success.[4] CSOs’ can also provide AIIB with a new perspective of development and help it create innovative projects to address people’s needs. Finally, CSOs can be effective channels to voice people’s sufferings and hold AIIB accountable for the repercussions of its projects. In short, engagement with CSOs can help AIIB’s projects and impacted communities become more resilient, mediating possible shocks these projects and communities might suffer.
ADB, WB, and CSOs
The Asian Development Bank (ADB) has a long history of engagement with CSOs. In 1995, the ADB Governance Policy explicitly included expanding cooperation with NGOs as a component of the efforts to improve ADB’s governance. In ADB’s 2019 CSO report, the bank announced that 90% of its projects in 2019 had CSO engagement.[5] Similarly, in 1981, the World Bank Board of Directors approved the first policy note on CSOs, making it explicit that the Bank needed to work with CSOs to promote development. From the international level to individual country consultations, CSOs frequently participate in WB’s projects. [6] With these facts and statistics in mind, it is not an exaggeration to claim that cooperation with CSOs is not only a commonly practiced norm but also a shared value in the ADB and WB.
Consultation
When ADB and WB’s loan and technical assistance projects require detailed information on the targeted location and local population, CSOs often come to help as consultants. Their staff members, who work side-by-side with the local communities, have comprehensive understandings of people’s needs and concerns. CSOs thus become the channels between the residents and these institutions, assisting them in integrating the local population’s needs or concerns in the project identification and design.
The Second Integrated Road Investment Program in Sri Lanka is an example of how CSOs became effective consultants with their knowledge of the local population. Initiated in 2017, the project aimed to upgrade and maintain more than three thousand kilometers of rural connected roads and thereby stimulate social and economic development in Sri Lankan villages. The ADB approached several local community-based CSOs for this project and asked them for consultation. The CSOs then went to rural communities and gathered information through ‘household surveys, group discussions, and a transect walk.’[7] These inputs from CSOs helped ADB understand which road sections need the most attention and was instrumental in the bank designing the project to benefit the subsections of the population with limited resources.
Projection implementation
CSOs sometimes go beyond consultation and participate in project implementation. This often occurs when there is a need for the local population to actively participate. For infrastructure projects, local residents’ participation is particularly useful to accelerate the implementation process and ensure the continuity of the project. Also, CSOs’ involvement in the implementation can raise ownership of projects among the local community.
Innovation
CSOs have played an essential role in bringing innovative ideas to ADB and WB’s projects. Among CSOs possessing unique knowledge of the local community or a specific policy area or both, some of them create their own projects to help local communities and have enjoyed huge success. Those projects can then provide ADB and WB with an alternative view of development. In some cases, after realizing the success and potential of a CSO’s project, the ADB will directly work with that CSO and apply the project in other parts of the world.[8]
Take BRAC’s Ultra-Poor Graduation (UPGP) as an example. As an international development NGO, BRAC created UPGP in 2002. UPGP treats poverty as a holistic issue and aims to solve this problem through multidimensional interventions. Since its creation, UPGP has been carried out in 40 different countries and demonstrated its effectiveness.[9] Recognizing UPGP’s potential benefits, in 2019, ADB partnered with the Philippines government and granted 1.24 million dollars to create a pilot UPGP project in 29 barangays.[10] ADB will conduct its final impact evaluation in 2020 and hopes to understand the benefits of UPGP. If able to provide the effectiveness of UPGP, ADB plans to apply UPGP to help the resettled population due to infrastructure projects in all other countries that work with ADB.[11]
Accountability
As a large bureaucratic organization, WB understands that voices of concerns or objections may not reach the decision-making level. Therefore, WB values the role of CSOs and has created various mechanisms in which CSOs can raise impacted people’s grievances caused by the bank’s practices. As time has passed, these mechanisms have proved that they are not a rubber stamp for the WB’s projects and indeed can alter ‘lending to recipient countries.’[12] By actively letting CSOs engage through these mechanisms, the WB has successfully increased accountability in its project and policy processes.[13]
The AIIB should learn from ADB and WB to promote cooperation with CSO
The experiences of ADB and WB in cooperating with CSOs provides AIIB with invaluable insights and implications. The current lack of cooperation with CSOs is striking for AIIB, which claims to be a “lean, clean and green” organization.[14] ADB and WB’s demonstrate that cooperation with the civil society is beneficial for MDBs, specific projects, impacted populations, state and local government. Fortunately, since AIIB is relatively new as compared to other MDBs, it can learn lessons from ADB and WB and become more engaged with CSOs.
Currently, although AIIB mentions the role of CSOs in its projects, there remains much to be done. Compared to ADB, which publishes annual reports on cooperation with CSOs, and the World Bank’s biannual Civil Society Policy Forum, AIIB is far behind. AIIB should publish its own reports and documents on CSOs, establish routine meetings with CSOs, create a webpage for CSOs, establish a CSO office, and raises awareness of CSOs’ importance in its various departments. Only after these efforts can engagement with CSOs become a norm and standard in AIIB’s operations.
Furthermore, AIIB should appoint CSO representatives in each project country and encourage representatives to connect with local CSOs. Infrastructure should address communities’ needs, and CSO representatives can effectively reduce the information gap between local communities and the bank’s Beijing HQ.
AIIB should also adopt the norm of allowing CSOs to be involved in the project design and implementation process. CSO’s participation in infrastructure projects can save time and human resources for the project team, while raising public ownership of the project and ensuring the continuity and sustainability of the project in the future. With its infrastructure expertise, AIIB should publish a detailed guideline on how to incorporate CSOs in infrastructure projects and ask its project countries to follow this guideline in the implementation process of projects.
Finally, CSOs’ participation in accountability should be strengthened in AIIB’s organizational structure. It is inspirational to observe that AIIB’s Project-affected People’s Mechanism (PPM) went into effect on March 31, 2019.[15] AIIB’s next move should be to establish a mechanism under the PPM to better communicate with Indigenous Peoples Organizations. Infrastructure projects always impact the local population since they need to bear the negative externalities of constructing these projects. Therefore, AIIB has a responsibility to adopt a mechanism like the one from WB to better communicate with indigenous peoples and their organizations.
ADB and WB can help AIIB cooperate with CSOs
This learning process for AIIB should not be a passive one and will necessitate participation from both the ADB and WB. Since AIIB poised itself as a cooperator with other MDBs, there are plentiful opportunities that ADB and WB can use to help AIIB foster stronger ties with CSOs.[16]
As a new member in the world of MDBs, AIIB is not reluctant to work with other players, especially ADB and WB. To date, AIIB has already approved co-financing 17 projects with ADB and 26 projects with WB (including International Finance Corporation), as well as two projects with both. The amount of co-finance is around 10.33 billion dollars, constituting 47.08% of all the approved financial amount. [17] In other words, nearly half of AIIB’s commitment involves ADB and WB.
Therefore, when ADB and WB uphold their practices and standards regarding engagement with CSOs, they automatically help AIIB staff learn more about civil society engagement. Among the co-financed projects in which the ADB or WB is the leading lender, CSOs can participate as they would in other ADB and WB projects. As a result, although AIIB does not have an established framework to engage with CSOs, its staff members can still enjoy the benefits of having CSOs’ involvement thanks to the ADB and WB’s policies. As more and more staff members of AIIB perceive the positive effects of CSO’s engagements, an incremental appreciation of CSOs’ importance can be expected, which is vital for building a more robust relationship with civil society in the future.
While other MDBs can help AIIB better cooperate with CSOs, it should be emphasized that it is the AIIB that needs to take the initiative. If AIIB asks for help, it can be expected that ADB, WB or any other MDB will answer the call and support the new bank in building better engagement with CSOs. However, if AIIB does not make a move first, it will be unrealistic to expect other MDBs will approach and help. Undoubtedly, these moves need tremendous time, effort and courage, but the sooner AIIB takes its steps, the better for all stakeholders.
PHOTO CREDIT: Free use image from Canva Pro.
References
[1] Asian Infrastructure Investment Bank. 2020. “Project Summary - Projects.” AIIB. https://www.aiib.org/en/projects/summary/index.html (October 25, 2020).
[2] Urgewald e.V.
[3] Horte, Korinna and Knud Vocking. The Asian Infrastructure Investment Bank (AIIB): Transparency and Accountability. Urgewald e.V., 2018. Pg.8.
[4] Asian Development Bank. Civil Society Organization Sourcebook: a Staff Guide to Cooperation with Civil Society Organizations. Manila: Asian Development Bank, 2009. Pg.6.
[5] Asian Development Bank. Highlights of ADB’s Cooperation with Civil Society Organizations 2019. Manila: Asian Development Bank, 2020. Pg.3.
[6] World Bank. “Civil Society.” World Bank. Accessed October 25, 2020. https://www.worldbank.org/en/about/partners/civil-society/overview.
[7] Asian Development Bank. Highlights of ADB’s Cooperation with Civil Society Organizations 2017. Manila: Asian Development Bank, 2018. Pg.19.
[8] Elaine Thomas, Virtual discussion with the author, November 17, 2020.
[9] Karin Schelzig and Palak Rawal. Testing the Graduation Approach in the Philippines. Asian Development Bank. 2020. Pg.1.
[10] BRAC. Ultra-Poor Graduation in the Philippines. BRAC. 2019. Pg.1.
[11] Schelzig and Rawal. Testing the Graduation Approach in the Philippines. Pg.4.
[12] Buntaine, Mark T. “Accountability in Global Governance: Civil Society Claims for Environmental Performance at the World Bank.” International Studies Quarterly 59, no. 1 (2014): 99–111. https://doi.org/10.1111/isqu.12145. Pg.99.
[13] Ebrahim, Alnoor, and Steve Herz. “Accountability in Complex Organizations: World Bank Responses to Civil Society.” SSRN Electronic Journal, 2007. https://doi.org/10.2139/ssrn.963135. Pg.27.
[14] Griffith-Jones, Li Xiaoyun, and Stephen Spratt, “The Asian Infrastructure Investment Bank: What Can It Learn From. and Perhaps Teach To, the Multilateral Development Banks?”, Evidence Report No 179, Rising Powers in International Development, Institute of Development Studies, 2016. Pg. 19.
[15] Asian Infrastructure Investment Bank. “How We Assist You.” Project-Affected People's Mechanism. Accessed October 25, 2020. https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/how-we-assist-you/index.html.
[16] Asian Infrastructure Investment Bank. Articles of Agreement. Beijing: AIIB, 2015.
[17] Asian Infrastructure Investment Bank. “Project List - Project.” AIIB. Accessed November 29, 2020. https://www.aiib.org/en/projects/list/index.html?project_type=Cofinanced.