By Eugene Simonov
Rivers without Boundaries
On 10
May 2018, the Asian Infrastructure Investment Bank (AIIB) launched public
consultations on its Draft Transport Sector Strategy. The AIIB claims that the
draft strategy outlines AIIB’s vision to develop sustainable and integrated
transport systems that promote trade and economic growth in Asia. AIIB’s
intended approach will embrace innovative and proven technologies, as well as
promote environmental and social sustainability. While the energy sector
presents a larger infrastructure demand need in Asia, the transport
infrastructure sector arguably presents the bigger challenge.
Together
with the draft strategy is the Transport Sector Study – a rather eclectic paper
telling how the Strategy should look like, but which somehow is not fully
aligned with the contents of the Draft Strategy.
“Connectivity
infrastructure is crucial for trade and economic growth in Asia and beyond,”
said AIIB Vice President for Policy and Strategy Joachim von Amsberg, “we
welcome inputs and comments from all interested parties to assist us to further
refine our transport sector strategy. “However, unlike the Energy Strategy,
which was discussed in two rounds, public consultations are going to be held in
just one shot. The public consultations period will last for eight weeks,
starting from May 10, 2018, to July 4, 2018. Written comments must be submitted
by July 4, 2017, to ts.consultation@aiib.org.
The
draft Strategy says: "It is necessary to develop sustainable transport
that is financially and economically viable, fiscally responsible,
environmentally sustainable, and socially acceptable" which is a complete
disregard for sustainability. As we all know, development of transportation
systems is one of the leading causes of environmental degradation and social
tensions with key impacts related to:
1. Penetration of trade and industrial
activities in previously unaffected areas which creates demand for plundering
of natural resources with poor safeguards in place to confront it;
2. Fragmentation of natural ecosystems resulting
in decreasing viability of wilderness areas, species populations, and ecosystem
services;
3. Massive displacement of local communities,
conflicts related to hardships caused by transportation;
4. Intrusion into indigenous lifestyles,
influx of migrant workforce, forced transformation of local cultures, and
ruining of local productive system by the influx of imported goods;
5. Political conflicts due to expected shifts
in power and influence due to new transportation routes;
6. Huge, usually inefficient use of resources
for development of major infrastructure and inefficient use of energy for
transportation of massive amounts of commodities (many of which could be
procured locally) across the globe;
7. Massive pollution from fuels and lubricants
used in machinery and additional pollution from waste generated along the
transportation routes;
8. Greenhouse gas emissions generated through
full cycle of developing, using, and maintaining transportation systems.
Both
the Strategy and the "Study" paper partially address these concerns
and only #8 from this list of factors have to be assessed and framed within
such planning document on transportation. This means that AIIB has practically
zero environmental and social responsibility at the strategic level of
planning.
Meanwhile,
all factors of negative impact listed above are very evident in Asia, and
especially along the Belt and Road economic corridors; from the tropics to the
Arctic:
• Mekong River’s natural riverbed is planned
to be blasted and ecosystems destroyed to give way to inland water
transportation from China to Thailand and beyond;
• Myanmar wilderness is being severely
dissected by planned transportation corridors with conflicts bursting out in
politically unstable indigenous areas;
• In Russian Far East Primorsky Province,
three corridors connecting China to the Sea of Japan threaten populations of
tigers, leopards, and other rare wildlife;
• A bridge and road to a pulp mill planned in
intact forest ecosystems across transboundary Amur-Heilong river from
Heilongjiang to Zabaikalsky Province in Russia will result in fragmentation and
devastation to the last areas of old growth boreal ecosystems and subordinate
the area to resource needs of China, which lacks pulp and timber due to forest
bans;
• Dredging in Ob River Mouth to facilitate
passage of gas-carriers delivering LNG from Port Sabetta - the location of new
Russian-Chinese Yamal LNG project threatens large fish stocks on which
indigenous people of the Arctic depend;
The
Strategy does not address key questions of broader sustainable development. It
has a very backward view of "changing demand conditions and
technologies". It basically limits possible innovation to
"upper-middle and high-income” countries, where basic transport provision
has been met, projects financed by AIIB will come with additional focus on
spreading green transport technologies and uplifting transport
productivity." Does this directly imply that in low-income countries the
AIIB does not plan to promote new green transport technologies?
Little
is said in the draft Strategy on what is being transported and how\why it is
expected to change in the next few decades. For example, coal makes huge
percentage of past and current shipping (at least in Russia Coal is the King of
railroads) but may go down if cleaner energy systems prevail. In broader
developments, countries like China are reshaping their export capabilities and
instead of shipping around bulk products (like steel or cement) seek to export "overcapacity"
to produce steel and cement closer to emerging markets. Finally, in many
sectors, it is expected that much of the production of everyday goods may be
localized and production facilities scaled down to produce items needed by
local clientele (3-D printing is just one extreme example of the trend).
The
stated choice of the AIIB is to support destructive mode of business as usual
and deliberately close its eyes on well-known social and environmental
externalities. The Strategy supports infrastructure for the sake of
infrastructure, thus not connecting it to well assessed societal good, but
simply serving those who benefit from large infrastructure development:
construction companies, traders, producers of machinery and construction
materials, high officials benefitting from association with large projects,
politicians using such projects to promote themselves. The three indicators
suggested for monitoring\judging success of projects have little to with
sustainable development e.g. Passengers handled per annum \Tons of freight
handled per annum\ Private capital mobilized.
The
Strategy and the accompanying “Study” does not address proper assessment of
alternative options which are absolutely key issues in planning of
transportation routes. The strategy has a complete inappropriate section on
"promoting environmental and social sustainability", which
"requires projects to minimize environmental and social impacts during
project implementation and operation, in line with the requirements of AIIB’s
Environmental and Social Framework and Policy". Thus, it deliberately
skips most important stages of Project Identification and Project
Design\Planning at which most decisions regarding choosing right alternatives
and promoting sustainability could be practically made. It is only on the
latter part partial mitigation is feasible at higher costs. All it has to say
about the key question of spatial planning is the commonsensical phrase
"Avoiding excessive traffic requires better land use planning" with a
footnote hinting that the question is NOT going to be addressed within this
strategy. At the same time, the AIIB does not condition application for
projects by the presence of broader spatial development plans that pass
strategic environmental assessments.
Development for Whom?
From
the "Developing strategic partnership" section, we learn that civil
society, local communities or local self-governments are not among partners to
deal with when identifying new projects, while commercial banks, institutional
investors, and infrastructure funds are. The absence of local communities on
the list of partners is not just an omission, but a sign of continued contempt
for local people and their legitimate concerns, which was openly proclaimed by
the AIIB President at a workshop during the 1st Annual Meeting of the Bank in
Beijing in 2016.
Although
deprived of any coherent section on environmental and social provisions, the
Study correctly calls for "Clearly defining a set of priorities for the
transport infrastructure sector and adopting a framework to allow effective
project selection”. The set of priorities should include modal and cross-border
connectivity and environment sustainability. Some assessment of projects’
strategic value, how well they are integrated with national plans, how
important they are in the overall network should be built into the project
selection criteria.
Given
the obvious absence of conceptual framework on sustainable development,
productive ideas, and green daring, the AIIB could opt to focus at the
beginning on a safer field of Upgrading of existing infrastructure. However,
this is listed as the last choice out of 4 and instead co-financing of "trunk and strategic
infrastructure" (whatever those buzzwords mean) is declared as near-term
focus without any clear justification for the choice. In general, the AIIB
seeks to fund "Projects with a significant economic return but without
sufficient financial return that would attract stand-alone private
finance" as other MDBs routinely do.
Another
interesting feature is the proposed use of the AIIB’s Special Fund to support
the preparation of cross-border projects, including those in middle-income
countries (earlier we thought that fund is for the poorest countries). My
reading is that "middle-income countries" for AIIB means first of all
China, whose Belt and Road Initiative is “serviced” by the Bank’s operations.
In
summary, we see that AIIB has failed to develop a draft of its Transportation
Strategy for it lacks the essential rigor, key questions, and any criteria and
indicators allowing to assess and monitor the sustainability of projects. All
it does is to create channels to spend money on conducting the business as
usual. In a sense, this draft strategy is a large step backward from its energy
twin, which, however crooked, was at least setting some meaningful objectives
related to sustainable development although this too has failed to develop a
path to achieve them.
The
future is highly uncertain but at the same time full of revolutionary promises
already supported by obvious precedents, trends, and commercialized
technologies. Anyone who wants to participate in shaping this future takes
responsibility to choose what trends and needs to follow to support the overall
better outcome.
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