The menace of climate debt

NewAge, July 25, 2008. Dhaka, Bangladesh

It is becoming increasingly crucial that governments such as ours adopt training programmes to help bureaucrats across the board attain a more nuanced understanding of climate change, writes Mahtab Haider*

THIS week, New Age reported that tensions have peaked between the environment ministry and the Economic Resources Division of the finance ministry after the latter expressed a sudden interest to negotiate for World Bank loans to tackle climate change. According to the report, the ERD – Bangladesh’s foreign assistance gatekeeper under the finance ministry – is keen to avail loans from a multi-donor trust fund operated by the World Bank, while the environment ministry insists that foreign assistance in the area of climate change should predominantly be in the form of non-repayable aid and grants. 

The ERD is perhaps unaware that in its keenness to flex its muscles in attracting climate change funding, it has contravened one of the principled positions that Bangladesh has taken at various times in international climate negotiations. It has consistently been Bangladesh’s position as a member of the least developed countries group at global negotiations, that developed countries – whose industrial excesses are largely to blame for global warming – must compensate the LDCs and the developing world for the climate cataclysms that they are now experiencing. This is premised on the idea that 140 million Bangladeshis should not have to pay with lives, livelihoods, and destitution, for the environmental consequences of the industrialisation of Western Europe, the US and a clutch of other countries over the past century. In that sense, Bangladesh and the members of the LDC group, as well as a number of small-island states have a moral claim on cash compensations that cannot be hinged on conditionalities that typically accompany traditional grants and aid.

In an interview with New Age ahead of the high-profile Bali climate change summit last year, the environment adviser CS Karim rightly invoked the ‘polluter pays’ principle to justify this position that Bangladesh had adopted and continues to campaign for. ‘They owe us compensation as we are prime victims of a crime that we had no part in,’ Karim told New Age. This idea is also the basis for Article 4.3 of the United Nations Framework Convention on Climate Change – the core document which sets the terms of reference for all global negotiations on climate change. Furthermore, Bangladesh also leads the LDC group in its political negotiations at the annual Conference of Parties, and it would be foolhardy for the country to risk alienation in the LDC group by availing loans for adaptation funding, when it has played such a strong role in the past in dismissing the idea of loan financing for adaptations. So, while the ERD clearly has expertise in handling the foreign assistance that Bangladesh receives in other areas, it should learn to take the cue from its colleagues in the environment ministry in order to avoid risking Bangladesh’s standing at international negotiations for a pittance in World Bank loans. 

The conflict is not unexpected, and it certainly has been brewing awhile, indicative of the end of an era. The environment ministry has, over the past two decades, developed a certain expertise in dealing with the issue of climate change, and has a historical understanding of Bangladesh’s position at international negotiations on climate change. But, as governments across the world are learning, climate change is no longer an issue that concerns any single line ministry exclusively, and calls for a far more holistic developmental view of the challenges. In the coming decades the whole spectrum of government ministries and agencies will have to face up to the fallout from climate change in their relevant areas of work. As a rise in global temperatures causes crop failures or falling yields requiring action from the agricultural ministry, the health ministry will find malaria or dengue morbidity rising, and the disaster management ministry will find itself tackling a rising frequency of tropical cyclones along the coast. And that’s just a few predictable outcomes of only one of the gamut of climate variations that countries like Bangladesh will encounter. This means, it is becoming increasingly crucial that governments such as ours adopt training programmes to help bureaucrats across the board attain a more nuanced understanding of climate change, building on the general doomsday scenario of coming floods, cyclones and droughts that they currently might have. 

The reason this inter-ministerial coordination is fast becoming an imperative also has to do with Bangladesh’s profile as a climate change victim. In the past year, since the Intergovernmental Panel on Climate Change released a series of reports affirming that the science of global warming is as robust as can be, Bangladesh has received widespread media attention as the country that will confront some of the biggest challenges posed by global warming. With the heightened call for global action on climate change, the amount of foreign assistance available to tackle climate change has been steadily rising, especially for Bangladesh, with a scrum of NGOs eager to be seen funding climate research or action in the disaster-prone country. Given this scenario, the ERD requires specific sensitisation on why it is important that we are selective in whom we accept assistance from, and what form this assistance can take. In 2007, Bangladesh spent $1,551.3 million in hard-earned foreign currency on servicing its external debts – roughly 18 per cent of total government expenditure. During that same year, public spending on education and health were 16.5 per cent and 7.4 per cent respectively – revealing the extent to which a debt trap can cripple the development of a country. For every dollar in foreign grant aid received, the government spends over $1.5 in debt service to foreign creditors annually, a 2003 study revealed. In such a scenario, it is difficult to grant the ERD the benefit of doubt for its evident inability to fathom the economic consequences of the new debt it seeks to create, especially since the World Bank is known to have significant sway in the ERD’s decision-making process. 

Most of all, it is important for all government agencies to realise that the World Bank’s role in disbursing loans and grants faces widespread criticism in the group that Bangladesh leads. Our own experience with the bank has been no sweeter either; between 1980 and 1990 – during a decade of military dictatorships characterised by rampant corruption and political oppression – Bangladesh’s debt figure tripled to $12,439 million, with the bulk of this surge in lending to autocratic regimes coming from the International Development Association, the soft-loan window of the World Bank. It is also a fact that as one of the three implementing agencies of the Global Environment Facility which has hitherto been responsible for dispensing funds for adaptations measures in the LDCs and the developing world, the bank has a controversial track record. Members of the LDC group have time and again pointed out that the bureaucracy and the technical requirements that needed fulfilling to qualify for such funding was often rigged against the least developed world. So much so that the Bali Summit last year saw immense pressure from the G77 group and the LDC’s to place future adaptations funding beyond the ambit of GEF control. 

Negotiations are currently ongoing to determine the nature and the format that future adaptations funding will take in a post-2012 era after the Kyoto Protocol expires. As one of the countries of the LDC group that is seen to have a strong moral case for demanding compensations and non-repayable assistance to tackle the fallout of climate change, Bangladeshi bureaucrats must realise that they are also burdened with a grave responsibility which they must not squander in our interests, and as a leader of those who share those interests. 



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