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Asian Development Banks "Poverty Reduction" (Who's Poverty?) In Remote Watersheds of the Mekong Subregion

ADB's Poverty Reduction and Environmental Management (PREM) in Remote Watersheds of the Greater Mekong Subregion (GMS) TERRA BRIEFING

31 April 2000

Project description:

This ADB-designed project is funded through the Bank's Regional Environmental Technical Assistance (RETA) programme as part of the GMS programme environment sector. The project aims to integrate ethnic minority communities, living in the uplands of the Mekong region into the market economy. This aim is based on the Project Rationale that "poverty" or lack of cash income of rural communities, particularly ethnic minority communities, living in the uplands of the Mekong region poses an environmental threat to the watersheds.

Project Approved:

31 December 1997

Project cost:

US$ 3.2 million.

Project Status:

The PREM project is divided into two phases:

* Phase I with a budget of US$ 2.2 million began in June 1998 and ended in July 1999. The Government of Finland funded Phase I and the Finland-based Helsinki Consultancy Group, a consortium of three consultancy companies, undertook the studies.

Phase I of the project selected six watersheds in the GMS region that are "considered to fulfill the criteria of extreme poverty and environmental degradation," for the following proposed activities in Phase II:

* feasibility study in Nam Ou in Laos,

* Luishahe in Yunnan and Lo Gam in Vietnam;

* Prefeasibility studies in Stung Pursat in Cambodia, and Se San in Vietnam;

* Preliminary field assessments in Mae Kok in Thailand and Myanmar [Shan State]. Phase II has subsequently excluded river basins in Thailand from further study.


Phase II (one year) with a budget of US$ one million began in January 2000. Phase II is funded by the ADB on a grant basis from the Japan Special Fund of the Government of Japan. The consultants are Margules Groome Poyry Ltd. from Australia.

Phase II would prepare a list of "investment proposals" for the watersheds selected in Phase I. The investments are to include "large projects with healthy rates of economic and financial return that are attractive to aid agencies anxious to disburse loans as well as smaller regional or national technical assistance grant packages and small village-based low cost programmes of interest to bilateral donors." (p.32, Final Report)

Key Concerns:

The PREM project cites "poverty" as the main cause of environmental destruction. The project points to the lack of cash income in rural communities as the main cause of environmental destruction and ignores the root causes of environmental destruction including development plans for dams, highways and rapid industrialisation as well as commercial logging, monoculture tree plantations and cash cropping supported by the ADB and other financial institutions.

The project is directed towards providing raw materials and cheap labour for the global economy rather than fulfilling the needs of local communities. The project's broad goals include the extension of commercial markets, expansion of mass tourism, the economic integration of local communities to provide cheap labour, and the commercial exploitation of natural resources through logging and monoculture plantations, all directed towards serving the expansionist interests of the global economy rather than the local-specific social and economic needs of rural communities.

The project proposes a model of problem-solving developed in ignorance of complex local systems of knowledge and natural resources management, and the diversity of cultures, social institutions and local economies, and is therefore incapable of addressing local needs.

Absence of information and participation of rural and ethnic communities. The project rationale, that poverty is the main cause of environmental destruction, is based on a complete absence of detailed information and processes of consultation with local communities, "... detailed data to support and test many poverty and environment indicators was simply not available at watershed or even provincial or national levels.. Second, testing the validity and accuracy of data that were available was simply not possible." (p.16, Final Report)

The project held the following meetings in Phase I:

* Inception Workshop, 4-5 August 1998, Laos;

* Mid-term Review Workshop, 3-4 February 1999, Laos;

* GMS Fifth Meeting of Subregional Working Group on Environment, 11-12 May 1999, Yunnan;

* Final Workshop, 9-10 June 1999, Laos.

It is not clear whether the meetings were able to seek the views and participation of ethnic communities and local people in the selected watersheds. All the project documents are in the English language; the project documents have not been translated into the major languages of the region.

For further information:

'Asian Development Bank: Money and Power in the Mekong Region' Watershed Vol. 2 No. 2 Nov. 96 - Feb. 97. 'Shifting Cultivation: Forest management or forest destruction?' Watershed Vol. 3 No. 1 Jul. - Oct. 97. 'Poverty, periphery and power' Watershed Vol. 3 No. 3 Mar. - Jun. 98. 'Times of change: Swidden cultivation in policy and practice' Watershed Vol. 5 No. 1 Jul. - Oct. 1999

This briefing paper was produced by Towards Ecological Recovery and Regional Alliance (TERRA) for the People's Forum 2000, Chiang Mai, 3-5 May 2000.

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