The Inter-American Development Bank Meets in Canada: Development-Induced Displacement not on the Agenda

By Riahl O'Malley
International Team - Nicaragua
Witness for Peace

The Inter-American Development Bank (IDB) is the largest source of development financing for Latin America and the Caribbean. Today bank ministers, bureaucrats, corporate executives and (some) civil society representatives are meeting in Calgary, Alberta for its annual meeting.

The Program of Activities displays a variety of development buzzwords such as investment, infrastructure, even climate change, but "development-induced displacement" didn’t make the itinerary. Following a free market development model, IDB policies encourage foreign corporations to pursue infrastructure projects in Latin America and the Caribbean under the pretext of increasing economic growth and reducing poverty. However, these projects often do more harm than good, creating or exacerbating problems in nearby communities. All too often, IDB projects displace massive amounts of people from their homes. For years, affected communities have mobilized to protect their rights. Their voices deserve a spot on the meeting agenda.

In the early 2000s, Plan Puebla Panama, a string of megaprojects partly funded by the IDB, faced mass opposition. Corporations were accused of violating people’s human rights, limiting access to natural resources through privatization and exploitation, breaking promises made to affected communities, and even of sending police and armed forces to remove people from their homes in the interest of foreign investors. (Witness for Peace's Mexico-based International Team recently reported on one such project - an IDB-funded hydroelectric dam proposed in coastal Oaxaca.) The effects have been felt most prominently by indigenous and Afro-descendant communities.

Grassroots opposition pressured the IDB to make “deep revisions” to the program, re-launching and eventually re-naming it the “Mesoamerican Integration and Development Project”. In addition, the IDB underwent an extensive reform agenda to make their projects “more accountable and transparent.” In February of 2010 they approved a new policy to “give better access to communities to express their concerns…” and initiated a policy designed to help minimize involuntary re-settlement.

These reforms, however, have not been effective. The open-ness of public consultations has been highly contested, challenged for having selective participation, distributing inadequate information to participants and for conducting insincere dialogue. And in spite of policy designed to prevent displacement, a report put out last year by the CIP Americas Policy Program found that IDB development projects in Mexico, Colombia, Brazil and Honduras are causing widespread forced migration.

Communities continue to voice their concern. On March 10 of this year an open letter to IDB president Luis Alberto Moreno was signed by presidents of the Tawahka Indigenous Federation of Honduras, Mosquitia Asla Takanka, and the Black-Honduran Fraternal Organization. The letter criticizes the IDB for funding a series of hydro-electric dams built on indigenous Tawahka land, cutting off methods of communication to the rest of the country and affecting their “physical security, nourishment, traditional economy, way of life and cultural integrity.”

In Honduras, this issue is part-in-parcel of a larger human rights crisis. While the post-coup administration remains contested by many Hondurans and unrecognized by a variety of Latin American leaders, the IDB seeks to legitimate President Lobo’s stance in global politics. Next May, IDB President Dr. Moreno will speak at an event called “Honduras is Open for Business,” a forum marketing Honduras as the “most attractive investment destination in Latin America.”

The IDB just announced that it will lend $171 million to Nicaragua over the course of 2011 for electricity, housing and transportation projects. Time will tell the consequences this loan carries.

The United States is the largest shareholder in the IDB and commands 30% of the vote, the largest of any member-nation. Considering widespread concerns over immigration in the U.S., it’s important to note the factors that set migration in motion, including foreign aid and development policy coming from our own government.

Adding consultation to the current free market model is not enough. To remedy problems of development-induced displacement and migration, current development strategies must be fundamentally re-examined to allow deeper revisions to take place.