An investment trap

When Bangladesh became independent in December 1971, it turned to the international community for assistance to shore up the Tuined economy and to usher in "development" at last. The Government and foreign donors quickly made water development their main focus. As a result, over 15 years till 1987, water alone bought in U$ 1.023 billion worth of external assistance..In 1964, the then Government of Pakistan had embarked on an ambitious Water Master Plan, which included 63 major flood control and irrigation projects. The assistance sought was from the World Bank. The control over water development thus conceded to international donors was a feature which was carried over to independent Bangladesh..The Government of Bangladesh exercises little control over foreign aid in general, and clearly this is even mere true in water resources. There is no perspective plan for the development of the water sector and the aid agencies are free to implement their own individual policies. Today, Dhaka´s water bureaucracy functions largely under external dictates of several donor agencies. This had led to piecemeal and haphazard planning, and the formulation and implementation of projects without the concurrence of the communities whose life rhythms are affected..GIVING AND RECEIVINGWhy is aid given to the water sector at all? There as no uniform policy either of the government or of the donors. Even though the donors function under different mandates, they all cluster around the water. Looking at the work definitions of the agencies hardly helps to understand why they do what they do. The aim of external assistance in Bangladesh is said to be to promote poverty alleviation, self-reliance, socio-economic development and transfer of technology. Apparently, the overwhelming focus on water is geared towards fulfilling these goals. The fact that water projects invariably have dealt with high-cost structural solutions might or might not have to do with the attraction this sector holds for donors and consultants..The World Bank concedes in its 1990 country paper, that "experience has demonstrated that the current approach of choosing water development projects on an isolated basis often suffers from a number of problems with potentially serious adverse implications for the economic viability and environmental impact of the project." But it has been hard for both the Government and the donors to shake the old habit of ending one project and starting another. Much of the blame for this must be shared by the World Bank itself, which contributes more than 42 per cent of aid that is given to Bangladesh in the water sector..The Bangladesh Water Development Board (BWDB) has benefited greatly from external assistance, but whether it has been able to benefit the country is another matter. Over the years, the Board has built up a huge roster of employees, including 827 graduate engineers, 844 diploma technicians, 235 agriculturists and other science graduates, 250 non-technical graduates, 4,251 technical support staff, and 5,281 non-technical support staff. The Board has, however, only four economists and neither a sociologist or an environmentalist..The achievements of the BWDB in relation to poverty alleviation, employment generation in the major flood control drainage and irrigation projects are miniscule. Project evaluations are replete with reports how flood-plain agriculture has been dev a stated by water-logging, salinisation and lost productivity. Comments such as the following, from a 1989 report, are common: "…the potential rate of which was projected earlier for the Chandpur Irrigation Project is now thought to be of the order of five per cent, and the potential rate of return of 24 to 30 per cent earlier for the Muhuri Irrigation Project is now thought to be ten percent.".While such reports are to be commonly found, the country continues to take up more foolish projects upon the advice of aid agencies, which, too, rarely look back at the poor performance of the work they have financed..The Bangladesh water bureaucracy has been completely under the spell of what are knows as the "major flood control drainage and irrigation projects". These massive projects, all of questionable value, include the International Development Association (IDA)-funded Chandpur Irrigation Project, which is to provide flood control and drainage for 53,846 hectares, and irrigation for 29,000 hectares. The Meghna-Dhonagoda Irrigation Project is funded by the Aid agencies play a near-dictatorial role in Bangladesh´s water sector..Food plains have become the grazing grounds for foreign experts. Implementation of the Flood Action Plan could wreak country-wide environmental devastation..IDA and is to control floods over 19,000 hectares and irrigate 14,170 hectares. Other large projects include the Muhuri Irrigation project, the Barisal Irrigation Project, and the Chalan Beel Project. Until 1988, of 12 major flood control and irrigation projects, only three had been evaluated. Even then, the studies were conducted soon after project completion, when all the negative impacts were not yet evident..PROJECT MECHANISMThe Bangladesh Government exercises minimal control over the projects, from stage of selectingconsultants for feasibility surveys, through implementation and evaluation. A unified procedure for scrutinising proposals does not exist. In fact, the only common feature among the many water projects in the country is the near-total control every aid agency exercises over its project..As far as UNDP and EEC grants are concerned^ the donors prepare the short-list of consultants, invite proposals, and make the final selection of projects with BWDB´s concurrence. The donors may, and sometimes they do, override the Board´s objections when selecting consultants. For example, consultants to be paid from EEC funds for small scale flood control and drainage (SSFCD) projects and from UNDP grants were selected directly by the donors without the BWDB´s concurrence..For Dutch projects, the consulting firms are selected and´appointed by the Netherlands Government without any participation of Bangladeshi officials. This is also true for all Canadian International Development Agency (CIDA) projects. The Government is merely informed of decisions that are taken. In one extreme case, CIDA even awarded the task of preparing a feasibility study of the eastern rivers of Bangladesh to a Canadian consultant without informing BWDB..Under existing procedures, individual experts are appointed by their respective firms without there being a need to get clearance from the Government. In the absence of guidelines for the hiring of experts, there have been instances when graduates fresh out of college have been appointed as resident engineers for projects that have the potential of affecting millions.As far as the management of the aid funds goes, all are administered by the agencies.. DONOR-AIDED DISASTERThere are many examples of failed water projects, which were undertaken purely because of the easy availability of donor money and advice. These projects also highlight the not-so-heartening role of donor-appointed consultants. While consultants do not always provide bad advice, they do so often enough for Bangladeshi experts to question the reason for their role in water development. The Meghrta-Dhonagoda Irrigation Project is a multipurpose effort to address flood protection, irrigation, drainage and agricultural development. The project area of 190,000 hectares comprises 14 local government units of Matlab Upazila, Chandpur district. Thirteen expatriate experts/ consultants were hired, whereas six would have been sufficient. The project was delayed due to lack of a proper management of construction activity. Despite the number of consultants many critical flaws in design were discovered and had to be corrected by BWDB engineers. There were considerable lapses by the consultants in awarding local contracts. Investigations in 1987 by the Government´s Economic Relations Division revealed that the ADB had used "excessive influence" over the project, particularly in setting up the terms of reference and selection of the Chu Kaihatsu Corporation of Japan as the main consultant..Another ADB-aided embankment project in greater Khulna District, according to a 1991 report has resulted in water-logging of the Beel Dakatia over the last decade. The result has been large-scale destruction of cropland, homesteads, livestocks and vegetation. The very process of formation of new lands within the beets (depressions) has stopped due to construction of embankments..The Land Reclamation Project is a Dutch-funded multipurpose project to research, plan and implement land reclamation schemes. The project was begun in J 977 and shelved in 1991, without any significant benefit accruing to the targetted communities. Right from the start, about half of the aid funds went into the pay envelopes of Dutch consultants. By way of contrast 0.33 per cent, 0.98 per cent and 1.26 per cent were spent during 1977-84, 1985-86 and 1987-89, respectively, for the training of Bangladeshis in project-related work..To cite just a few other examples: the donor-conducted feasibility study of the Khulna Coastal Rehabilitation Project was of such poor quality that even the BWDB had difficulty accepting it The Feni River closure as designed by Dutch consultants was projected to cost U$48 million, but some alert Bangladeshi engineers redesigned the structure and brought down the cost to U$ 17.4 million. Those behind the Karnaphuli Irrigation Project seemed to do everything wrong: farmers were not consulted during the project design phase and their protests delayed acquisition of land; the relief pumping stations were found not to be essential; most of the wet season paddy did not receive supplementary irrigation as promised; the projections for dry season paddy were found to be wrong; and because irrigation structures have prevented fish migration, fisheries have suffered.. THE BIG PLANToday, the donors are busy in the planning for a ten billion dollar "Flood Action Plan". After the 1988 deluge, foreign governments and agencies were keen on financing even more flood-control projects. Several studies were carried out by UNDP, USAID and the governments of Japan and France. All except USAID´s report advocated "structural solutions", that is, the building of embankments and other water control structures to mitigate flood hazards. Past experience has shown clearly, however, that such structural solutions. have been inadequate and inefficient. Despite all the interventions made over the past decades (for ex ample, the floods of 1954,1955,1974,1987 and 1988, all inundated between 36,000 and 82,000 sq km of Bangladesh´s area..In June 1989, the Government of Bangladesh requested World Bank/IDA to coordinate the various international efforts and to prepare a programme of studies and pilot projects. In the words of the Bank, the programme is to "resolve the major outstanding issues and result in a comprehensive and cost-effective long-term approach to flood control that would command broad international support.".The question Bangladeshi experts ask is, why all these issues had not been addressed earlier by the Bank which, after-all, has been running a virtual "parallel government", as a professor from the University of Ottawa stated recently. How is it that the Bank was hurriedly able to formulate a plan, something it had been unable or unwilling to do over the 30 years that it had played the role of policy-maker for Bangladesh´s water sector?.The Flood Action Plan projects thus far financed by the World Bank and 18 other donors have already generated tremendous negative economic and environ-mental consequences. Even the Bank admited recently that "the current approach of choosing water development projects on an isolated basis often suffers from a number of problems with potentially adverse impacts" in terms of economic viability and environmental factors..Having thus acknowledged the problems that have dogged the major flood control projects, whose total costs have amounted to a billion dollars and more, the World Bank went ahead and formulated a plan to carry out 26 studies. The other donors. (UNDP, United Kingdom, Japan, EEC, ADB, Canada, Finland, United States, Sweden, Switzerland, the Netherlands, Germany and Denmark) endorsed the Bank plan in December 11-12 at a meeting held in Lancaster House, London..As yet, the people of Bangladesh do not know what is going on in the air-conditioned offices of the international consultants located in the posh Dhaka neighbourhoods. What is becoming clear, however, is that the World Bank´s plan is based on poor data and does not seek to learn from mistakes made in the past. The donors, after all, do not hold themselves accountable to anybody and are, it seems, destined to repeat their mistakes at the expense of the Bangladeshi population..The 26 studies, at their initial stages, will cost U$ 150 million, which is funded as grants-in-aid. This may be regarded as the seed money which helps set the long-term investment trap -a trap which will drop on Bangladeshis again and again over the next 20 years..Many Bangladeshi and foreign scientists believe that the Flood Action Plan, if implemented, because of its extensive reach will bring grave imbalance to the entire ecosystem of Bangladesh. And it is not very uplifting to learn from experts that the Flood Action Plan components, divided as they are among various donors and different projects, consider environmental issues in isolation. Neither do the plan components seem to question how poverty is to be alleviated when poor Bangladeshis will have to bear a heavy loan burden far into the future. If the investment of US 17 billion as aid since the Liberation in 1971 has led to such little improvement in terms of poverty, can this new, expensive initiative do much better?.The poor of Bangladesh will be excused if they begin to feel that the Flood Action Plan is just another experiment of the World Bank, akin to its Structural Adjustment Facility, and the Extended Structural Adjustment Facility. The poor of Bangladesh wish they knew when these experiments with their poverty will finally be over.