Until recently, the multilateral development banks (MDBs) have stepped up their interventions in setting the development agenda of their borrowing governments. In the six riparian countries of Mekong, the Asian Development Bank’s (ADB) Greater Mekong Subregion Economic Cooperation and World Bank’s (WB) market-led development frameworks are transforming the way the complex governments of Mekong run their economies.
Borrowing governments in Mekong appear to have succumbed to MDB prescriptions in exchange of ‘development aid’. The project and policy lending, technical assistance, and grants do not come cheap as the poorer Mekong countries are made to ‘restructure’ their sectors or their entire economy by redesigning their policy agenda. Reconfigured policies are highlighted by (1) purging or diluting laws that had been protective of national industries and natural frontiers, (2) providing greater flexibility to foreign investments and (3) promoting the private sector as opposed to public sector (though in most cases no specific guidelines are set to privatization, policy directions are set to please the aid donors).
The trade-offs, however, are seen as bitter prescriptions for borrowing governments struggling to overcome their ailing economies due in part to institutionalized corruption, weak governance, low agricultural production, embattled regimes, poor social services and weak industries. For countries that undergo transition from centrally-planned to market-led economies and from civil war to social reconstruction, the cost is high by giving way to MDB policy prescriptions and economic framework designed by foreign consultants.