How civil society makes itself irrelevant

FOR as large and energetic as the population of so-called civil society groups in the

Philippines is, when one looks at the big picture over the past couple of decades, it becomes apparent that civil society has had an undersized impact on broader national policy. If you have ever wondered why that is so, an article earlier this week (Wednesday, May 24) in Eco-Business provides an excellent example.

The story, written by Hannah Alcoseba Fernandez (I’m not picking on her, she does a good job) has the headline, “ADB’s bid to expand private sector financing for climate goals reignites worries about lack of social safeguards,” and details some of the reactions to the multilateral development bank’s plan to mobilize more private-sector investment to meet its challenging climate finance goals. At its recent annual meeting in South Korea, the bank launched a new $15-billion climate finance facility and aims to ramp up funding for climate response to $100 billion from its own substantial resources. For the Philippines, among the top recipients of ADB financing, it plans to lay out about $4 billion this year for various projects.

The ADB, however, estimates that developing Asia needs approximately $13.8 trillion between 2023 and 2030 to meet infrastructure needs for growth and climate resilience, And not all of that money is going to be found in the coffers of development finance institutions. Hence, just like every other such institution around the world, the ADB is actively seeking ways to draw private-sector investment into climate response and development initiatives.

This does not sit well with “rights advocacy groups,” including one of the Philippines’ most uselessly obstructionist groups, the Freedom from Debt Coalition, which worries that private-sector involvement “would mean projects falling short of meeting due diligence and transparency standards, or that conditions set by private-sector players would impact local communities, given the ADB’s less-than-ideal track record.”

And what is the “less-than-ideal” example? Why, the Electric Power Industry Reform Act (Epira) of 2001, of course, the passage of which was a condition set by the ADB, the World Bank and the Japan Bank of International Cooperation for the National Power Corp. (Napocor) to be eligible for more loans to dig itself out of its financial morass. Said the head of the Freedom from Debt Coalition, “Promises of cheaper power, universal coverage and efficiency in service delivery were all broken. The policy even allowed cherry-picking and monopolization by the big corporations.”

And the alternative, at the time or even now, is what, exactly? While most agree that Epira has some significant flaws and needs to be overhauled, the context of the financing institutions’ involvement in pushing it at the time is completely lost by that sort of shallow, populist complaint. At the time, the Philippines was saddled with a badly-run, loss-making state power sector, unable to reliably provide for immediate energy needs, expand to meet growing demand, and in fact, probably just a couple of years from collapsing completely. Epira, from the institutions’ perspective, was to ensure that if they did spend money to help the country fix the mess, it would not be wasted, because the primary objective of providing electricity would be handled by the private sector, not the State that had already demonstrated it was spectacularly incompetent to do so. From a financier’s point of view, there is no point in providing a bailout to a troubled sector or business, if the source of the trouble is not removed.

What promises about what Epira could accomplish was the sales pitch of the Arroyo government to get the thing passed; that it hasn’t worked out as well as some would have liked is a consequence of poor implementation, and to some degree, the original model having outlived its usefulness. It was what was needed at the time, and in the absence of a practical alternative being presented by its more idealistic critics, the only realistic alternative is still the same one now as it was then, an inefficient, costly and destined to fail state-owned power sector.

The ADB’s response to these criticisms was priceless. The article notes, “In response to Eco-Business’s queries, the ADB said it will not comment further as the examples brought up to highlight the issues with private-sector financing by the rights advocacy groups are over two decades old.”

Good for you, ADB. That is exactly the reaction that this sort of clueless nonsense deserves.

If civil society groups such as the Freedom from Debt Coalition would spend more time listening and studying than running their mouths, they would quickly learn that the ADB is very likely the best available advocate for the sorts of concerns that they have. The safeguards and compliance policies imposed by the bank are painstakingly detailed, rigorous, and enforced with brutal consistency, and cover everything from financial soundness to applicability to the Sustainable Development Goals, to social, environmental, and gender impacts for every project or assistance package, regardless of its size or where the money ultimately comes from. The policies are so rigid, in fact, that the ADB recently joined with other multilaterals in telling the Green Climate Fund to get stuffed when the latter requested that they follow its less-stringent safeguard policy rather than their own.

As I have said in the past and will keep saying, any sort of activism, whether concerned with climate change, energy policy, or anything else, cannot be effective unless it is grounded in reality. Unfortunately for most “civil society,” it seems reality is an inconvenience, but since they can’t make it go away, all they accomplish is to marginalize themselves.