May 19, 2013 | 07:31 AM (BD Time)
19 May, 2013 Sunday
World Bank, climate funds and Bangladesh
The geophysical situation of Bangladesh has made the country critically sensitive to climate change, resulting in serious impacts of climate change. With a population density of 988 people per square kilometer, making it the 12th most densely populated country in the world, it faces unique challenges and threats because of climate change. Eighty percent of its area consists of floodplains created by more than 300 rivers and channels, including three major rivers: the Ganges, the Brahmaputra, and the Meghna. Bangladesh forms only a small part of a large regional hydrologic system-less than 10 percent of the river basin falls within the national territory. Its southern part is nestled in the Bay of Bengal with a 710 km long coastal belt that is home to nearly 35 million people. Bangladesh's geographical position and very high population density makes it extremely vulnerable to natural disasters including floods, droughts, and cyclones. Global climate change has increased these vulnerabilities manifold. Being one of the most critically sensitive countries to climate change, it has been a prominent recipient of climate finance, albeit with a cost. With the failure of climate talks at Cancun, the role of the World Bank as manager of funds for climate change adaptation and resilience funds has emerged. Coincidently, this happened at a time when the Bank was adapting itself to the changed geopolitics of financing and grappling to reinstate its dominance among developing economies. Considering Bangladesh's recently ended political crisis, weak economic condition, challenges of a huge population, lack of resources and now the onslaught of climate change, very little option is left but to accept these climate funds of which most are managed by the Bank.
Duplicity of roles, lack of transparency and democratic process in allocating funds, among other reasons, led civil society organizations oppose the location of funds mandated by the United National Framework Convention on Climate Change (UNFCCC) at the World Bank.
World Bank Group's longstanding commitment to financing carbon intensive development projects has raised serious questions about its climate strategy in the past and will continue to be an issue in the future. Developing countries have been raising the issue of fairness of the funding. While it's the developed nations that have been responsible for climate change disasters, countries like Bangladesh are given costly loans, rather than grants, putting additional burden on the economy and making them further vulnerable. Bangladesh being one of the most vulnerable to climate change has been pledged almost US$120 million by the developed economies under a climate change multi-donor trust fund named Bangladesh Climate Change Resilience Fund (BCCRF). The BCCRF is a Donor Fund for support to contributions in the area of Climate Change in Bangladesh. It is jointly developed by Sida, DfID, the EU, Denmark, and the World Bank. The purpose of the fund is to contribute to the implementation of the Bangladesh Climate Change Strategy and Action Plan, developed by the Government of Bangladesh. The idea is for the fund to develop into a dominant tool for contributions in the area of Climate Change in Bangladesh, and eventually to merge with the National Climate Change Fund. The World Bank has been appointed as trustee and fund administrator.
Nearly US$200 million (Taka 14 billion) that the Government of Bangladesh (GoB) has earmarked for its climate change adaptation and mitigations measures under the Bangladesh Climate Change Trust Fund by 2010. BCCRF, as insisted by the donor countries, is being administered by the World Bank (WB) on payment of 10-15% management fee.
Bangladesh is far from receiving its fair share of the firm commitment of US$30 billion to be provided by the developed economies by 2012 which include funds from UK, Denmark and Sweden. The estimated share for Bangladesh is more than US$5
billion. If the present allocation for BCCRF is any indication, then most likely the developed economies are once again reneging on their commitments to shoulder the burden of climate change measures in developing nations although the latter contributed next to nothing for the consequences they are facing on the climate change front, a damage caused solely by the wasteful consumption of the developed nations.
Apart from that Bangladesh has also received funds for Pilot Project for Climate Resilience from the CIF managed by the Bank.
The world today spends nearly US$300 billion in annual subsidies on fossil fuels, a lion's share being given by the developed economies. If there is a strong political will, meeting the required US$500 billion will not be difficult.
Civil society representatives have expressed concern over the involvement of World Bank in administering the climate funds Bangladesh has received from the Donor countries. The issues of accountability remain of great concern. Groups have voiced their concern regarding the transparency and accountability with regard to the disbursement of funds. The government has not disclosed any agreement made with different bilateral and international agencies nor prepared a proper implementation policy for present climate funds allocation.
Role of MTDF: The 'draft concept note' prepared by the Government of Bangladesh on the MDTF suggested that the secretariat be based in the World Bank office in Dhaka. The Bank would co-chair the management committee, and administer, manage, supervise and monitor implementation of the MDTF's projects and programmes. For this job, the Bank will charge a fee of $8 million. All implementing agencies will have to follow the Bank's guidelines and policies on project implementation and procurement.
In addition to the role of fund management, the Bank will execute parts of the MDTF including analytical work and capacity building activities, which includes review and revision of government policies and development planning. The Bank will therefore be both administrator and executor. Such a dual role of the Bank will create unlawful space for the Bank to influence project design and approval. It's a hypocritical position of the Bank and in terms of auditing, it's an offence.
The multi dimensional role of the Bank is a complete antithesis to the very principle of democratic system. The multiple roles of fund manager, administrator, auditor, policy developer all in one entity are principally flawed. Also, charging a fee for administrative costs is from the fund amount is not fair.
Also, Bangladesh has pledged US$200 million for the MDTF. This is against the principle of polluter pays which is an internationally accepted environmental law principle.
Civil society groups have time and again protested the role of World Bank in MTDF.
"Bangladesh should not contribute in the MDTF as Bangladesh is not responsible for climate crisis. This is to mention that Bangladesh is also contributing to the MDTF; as per initial proposal Bangladesh will contribute around 23 million pounds in 2008-2009, while UK will contribute 75 million pounds for a five year period (60 million pounds to the trust fund, million pounds for other DFID programme, and 3 million pounds for research). The contribution of UK in Climate Change adaptation in Bangladesh is too low while, being an affected country, contribution of Bangladesh is more than double than the UK" pointed out civil society groups in Bangladesh.
Protesting the involvement of WB in climate fund management the civil society in Bangladesh argues that the WB and other IFIs are more interested in getting their money back than in protecting Bangladesh's interests. Bangladesh had to pay US$1.5 billion for external debt servicing, which accounts for around 18% of total government revenue expenditure, 2.4% of Bangladesh's GDP, which are t
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