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Bangladesh rejects climate fund from UK

Feb 15, 2010

Dhaka has rejected Britain’s offer of £60m fund for climate change through World Bank saying that it would have unfavorable conditions attached to it. Activists from Britain and Bangladesh suggest that an alternative mechanism could be worked out to distribute all the money through a national board.

Bangladesh: The Bangladeshi government is refusing to accept a £60m donation from Britain to help it cope with the impact of global warming, because of a dispute over how the money will be provided.

Bangladesh Climate

Officials in the Department for International Development (Dfid) are insisting that the money, part of a pledge to provide developing countries with climate finance, is channelled through the World Bank.

Bangladesh has objected to the role of the bank, which it says will attach unfavourable “strings and conditions.”

Britain is expected to press Bangladesh to change its mind at a two-day meeting in the country starting tomorrow. If it refuses, the money may be withdrawn. The row comes days after Gordon Brown accepted a UN offer to co-chair an advisory group responsible for climate change financing.

“If this money is channelled through the World Bank and the IMF it will attract strings and conditions which are not favourable to Bangladesh,” said a spokesman for the Bangladeshi government. “If the money goes [via the bank] then it does not go to its real purpose. [We] want it to go through the UN.”

The Guardian revealed last summer that under the UK plan, known as the Multi Donor Trust Fund for Climate Change, £4.9m of the pledge will not reach Bangladesh but will be siphoned off by the bank as administration costs.

Campaigners from the World Development Movement (WDM), Jubilee Debt Campaign and Friends of the Earth plan to protest tomorrow at Dfid over the UK proposals. They are also concerned that further payments planned for Bangladesh are loans, the repayment of which they say will force the country further into debt.

Tim Jones of the WDM said: “The UK must be careful not to fall into the pattern of its former colonial ways by imposing conditions on an independent country. The World Bank is a deeply mistrusted institution that through its lending to developing countries has increased inequality, carbon emissions and debt in those countries.”

A group of 30 British and Bangladeshi campaign groups has suggested an alternative mechanism under which Bangladesh would distribute all the money through a national board.

Md Shamsuddoha, a campaigner with Justice and Equity Bangladesh, said: “Channelling climate funds through the World Bank is a trickery of the British government to weaken the argument for channelling funds through the United Nations or national funds.

Developing countries are opposing involvement of the World Bank in the management of climate finance because of its long history of imposing economic conditions on developing countries, fuelling unjust debts and promoting dirty development."

The £60m fund has also drawn criticism from the Bangladesh government because it will be paid from within existing Dfid budgets, potentially draining resources from other projects. Britain has pledged several times that such climate finance should be provided on top of existing aid commitments.

A Dfid spokesperson said: “The government of Bangladesh will have full control over how the fund will be spent, with the World Bank simply administering the money. This approach is a tried and tested financial mechanism that ensures UK investment is used effectively.”

"The World Bank has a proven track record of administering funds on behalf of contributing donors and recipient governments."

Source : Guardian
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