Billions Spent on Wasteful, Harmful Asian Development Bank Projects

On July 23rd, Environmental Defense and ADBwatch released a study estimating at least 70% of Asian Development Bank (ADB) funded projects in Indonesia, Pakistan, and Sri Lanka fail to produce lasting economic or social benefits. The report, The Asian Development Bank: In Its Own Words (available at, is based on publicly available ADB Operations Evaluation Department (OED) audit documents, and comes as NGO (non-governmental organization) representatives from around the world gather in Manila this week for the annual meeting of the NGO Forum on the ADB. NGOs have called for urgent and far-reaching reforms of the Bank, including "the full and unconditional cancellation of illegitimate debts."

Indonesia and Pakistan are, respectively, the Asian Development Bank's first and second biggest cumulative borrowers, while Sri Lanka is an example of a country targeted for "post-conflict" loans. By 2002, the ADB had lent $18.3 billion to Indonesia, $12.6 billion to Pakistan, and $3 billion to Sri Lanka. Projects that the ADB rated "successful" included those with massive unmonitored resettlement components, and those where (according to the ADB's audit documents) "record keeping also seems have been abandoned" and "rapid deterioration of project infrastructure was inevitable."

"Without drastic reform measures, it is clear that the ADB will continue to be an engine for economic failure, environmental destruction, and growing social and political instability throughout the Asia-Pacific region," said Environmental Defense senior scientist Stephanie Fried, one of the co-authors of the study. "Donors have a responsibility to hold the institution to account for this disturbing record," said co-author and Environmental Defense policy analyst Shannon Lawrence.

The study finds approximately 60% of loans to the three countries underwrote projects rated "generally successful" by the Bank. Bank documents, however, disclose that half of the projects that it characterizes as "successful" in fact are of questionable sustainability, indicating that the project failure rates are astonishingly high. The study finds that as many as seven of 10 ADB funded projects in Indonesia, Pakistan and Sri Lanka – potentially over $23 billion dollars worth – will fail to provide lasting economic or social benefits for these indebted countries.

The report provides detailed excerpts from 22 recent Asian Development Bank project audit documents from the agriculture, education, health, roads, marine, resource mapping, urban development, water supply and finance sectors, all drawn from the Bank's public documents.

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