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Wednesday, October 26, 2016

Why President Duterte Must Rid the Philippines of Foreign Aid Addiction

An addiction is a compulsive and irrational set of behaviors focused on obtaining whatever one is addicted to. It is also sometimes described in terms of one's physical and psychological dependency to the source of addiction, so much so that one cannot function without it. 

The dependency can be so strong that addicts can be controlled by the mere the promise of providing or threat of denying them their source of addiction.  So much so that this control can over-ride their desire to maintain moral integrity and worse, cancel out their instinct for self-preservation.

Perhaps, in making the case that the Philippines is addicted to foreign aid, one would think that they'd have to cite a stark example such as the case of Africa in 2008 by Sierra Leonean reporter Sorious Samura's:
Mr Mwenda says that much of the money which comes from the international donor community "lines the pockets of civil servants, high end health workers and politicians". 
Samura meets Mike Mikula, one of three former Ugandan health ministers investigated over the alleged embezzlement of tens of millions of aid dollars. 
Mr Mikula denies any wrongdoing, but admits that the ordinary citizens of Africa do pay a heavy price because of corruption in the continent.
In the case of Africa, Samura made the case that governments would not be able to address the shortage of food and medical services without foreign aid.

In "Do Corrupt Governments Receive Less Foreign Aid?" written by Alberto Alesina and Beatrice Wederand published in the American Economic Review, foreign aid corruption is further described:
“The critics of aid programs argue instead that, contrary to the more or less sincere intentions of the donors, corrupt governments following very poor policies receive just as much aid as less corrupt ones. Furthermore, financial assistance does not often reach the really needy in developing countries, but instead is wasted in inefficient public consumption (see Workld Bank, 1998). Many critics make an event stronger argument, namely, that no only are corrupt governments not discriminated against in the flow of international assistance, but, in fact, foreign aid fosters corruption by increasing the size of resources fought over by interest groups and factions.
However, despite widespread poverty and the exigencies brought about by massive natural calamities, the Philippines doesn't appear to be a clean cut example of foreign aid addiction in terms of complete and chronic dependence, or in terms of a glaring disparity between the foreign aid received and the amount of people benefited by it.

That is, until, you encounter the idea of the functional addict or someone who is able to hide the excesses of and their dependency on alcohol or drug use. 

For the most part, it would seem that the Philippine government can function to a large extent without foreign aid and yet it still finds reasons to draw on the aid offered by foreign countries.

Granted that drawing on foreign aid may appear to have been given thorough justification, what is rarely challenged are the real costs and hidden concessions attached to the foreign aid. 

At this juncture, it would be good to remember that a number of books and articles have already been written regarding the real costs and hidden concessions a country must fulfill for foreign aid.

One theory played out in these writings is how the United States of America pursues its so called imperialist ambitions through shifting modes of military occupation and disguised control of a conquered nation's politics and economy. 

Philippine ruling and policy-making elites had so internalized the neoliberal model that the 1994-97 IMF extended fund facility was considered the country’s “exit program” from the IMF. Certainly, government commitments under the “last” two IMF programs, in 1994-97 and 1997-2000, are a virtual road map of Philippine economic policy: oil deregulation, banking sector liberalization, a regressive and inequitable taxation system (including the EVAT), rice and corn import liberalization, retail trade liberalization, and power “reforms. 
(Note: All of these policies were enacted during the Ramos Administration who recently voiced his disagreement with Duterte on foreign policy regarding the US.)
Granting that the IMF, World Bank, and other sources of aid are the means by which a country is subjugated to the interests of foreign monopolists, it would appear that a recent statement by President Rodrigo Duterte against the Paris agreement on climate change is a direct attempt at avoiding further entanglement that would compel the country to work against its own interests:
Duterte said he would not honor the historic Paris agreement, which requires nations to act on climate change by reducing greenhouse gases. He also accused industrialized countries of “dictating the destiny” of developing ones by requiring them to limit carbon emissions. 
We have not reached the age of industrialization. We are going into it. But you are trying to (cite) agreement that will impose limitations on us. We maintain the present emission. That’s stupid,” Duterte said during the sendoff of Philippine Olympians bound for Brazil. 
Duterte has described the Paris climate deal as “stupid” and “absurd.” He also argued that while the Philippines had backed the agreement, he would not honor it because he was not the one who signed it. 
The Senate has yet to ratify the agreement, but for that to happen, the Palace must send it to the upper house of Congress for ratification.
If what Duterte said is true (and to this author, it appears so), why did the previous administration support the Paris agreement?

In the months prior to the signing of the Paris Agreement, Climate Change Commission Secretary Mary Ann Lucille Sering came out in several news articles where she said that French Prime Minister Francois Hollande offered a 50 million Euro loan facility and that the Philippines could also now tap $10 Billion from the Green Climate Fund.

Of course, Sering's words in the article feigned reluctance and offered assurances that the funds either in grants or loans would accessed judiciously and not be squandered in corrupt deals. 

"As head of state, President Duterte should honor the Paris agreement if we also want other countries to rally behind us in our monumental victory in the West Philippine Sea arbitration case,"
More substantial than refusing to transmit the Paris agreement to the senate for ratification, president Duterte's statements against American president Barak Obama and American ambassador Philip Goldberg as well as his ordering of US troops to pull-out of Mindanao and the cancellation of joint Philippine-US military exercises signifies further attempts to wrest control from foreign powers and monopolies.

Duterte punctuated this in a speech made during his visit to China where he said that the Philippines would separate from America politically and economically.

In a later speech upon his arrival in Bei-Jing, Duterte further explained that the Philippines would no longer dovetail American economic and political policies for its engagement with Asia and China in particular.

For me however, what encapsulated his position on US military aid and spelled the consequences on siding with the US against China was what he said on his intent to end the Philippine US war games:
"I am not ready to commit the soldiers of this country just to be massacred and besides—besides t***** ina, ang battleground, ang Palawan? Naloko na," Duterte said. 
The 1951 Mutual Defense Treaty dictates that both nations would support each other if either one of the Philippines or the US were to be attacked by an external party.
But is the US really going to help the Philippines in case war erupts? In the months leading up to the 2016 presidential elections, Duterte bared his thoughts on the US' stand on the Philippines' row with China:
If America cared, it would have sent its aircraft carriers and missile frigates the moment China started reclaiming land in contested territory, but no such thing happened,” said Duterte.
Instead of coming to our aid, some sectors say that we were given the runaround and had to submit the case for arbitration. Even given that the ruling favored the Philippines, Duterte said that it would be unenforceable and virtually useless.

There was an uproar from certain quarters over Duterte's statement, claiming that his declaration of "separating" from the US in terms of policy and economics would bring disaster to the country in the form of development aid drying up and American business investments leaving. 

One of former DILG Secretary and former Senator Mar Roxas' allies, Senator Frank Drilon warned that Duterte's constant insults against the UN, EU, Australia, and the US would stop the flow of foreign aid.

But the loudest howls of protest against Duterte's decision to separate from the US came from those who supported the presidential candidacy of Roxas. But it's no wonder because the Gerry Roxas Foundation manages a $24 million fund (P1 billion) grant from the United States Agency for International Development (USAID).

Scheduled to end by 2018, the USAID's Philippine American Fund was supposed to support so called priority activities, namely:
- Promotion of New Business and Entrepreneurship
- Advancing Integrity and Transparency in Government
- Combating Trafficking in Persons
- Combating ‘Last Mile’ Challenges to Literacy through Innovation
- Improving Natural Resource and Environmental Management
Unlike other efforts supported by the USAID, the funding for Phil-Am Funds activities seems to center around the provision of services more than the acquisition and distribution of actual goods.

While the Roxas foundation lists the names of grantees and the titles of the projects undertaken, it doesn't provide much information on how the funds were actually spent. 

An old timer in the NGO movement that I talked to says that in all likelihood, much of the money was spent on salaries of people and fees for "consultancy" services.  The only way to figure out if the grantees actually did what they were supposed to do would be to audit each one of them and that process may take a lot of time. The problem with this, he says, is that most of these expenses merely appear on paper and such could be "manufactured" in such a way that it could pass an audit even by the USAID.

With that in mind, the question now arises whether there is a possibility that the Phil-Am Funds were used as part of Roxas' political campaign funds? Could it still be funding a black propaganda campaigns against Duterte?

To put it more tersely, could the likes of Jim Paredes, Leah Navarro, Carlos Celdran and Cynthia Patag be drawing their salaries from Phil-Am Fuds?

Then again, even as the USAID supports transparency in governance, Roxas still hasn't fully accounted for the typhoon Yolanda funds which amounts to billions of pesos and likewise is hounded by unliquidated cash advances amounting to P7 Billion. 

More so, Phil-Am Fund support for improving natural resource and environment management in the Philippines comes under question int he face of the fact that Roxas' the mining firm of a key ally was recently shutdown for environmental regulation lapses. This is on top of the proliferation of illegal mining activities all over the country. 

In reaction to questions raised against the USAID funding to be managed by the Roxas foundation, high ranking Liberal Party official Vicky Garchitorena came quick to defend the integrity of the USAID as well as the Roxas foundation:
"I am outraged at posts that impugn the credibility and integrity of the USAID and the Gerry Roxas Foundation regarding the possible misuse of the Philippine American Fund. This program was envisioned to allow smaller foundations and NGOs to be able to access USAID funds by using an intermediary. GRF won the competitive bid. I was the first Chief of Party of the program." 

Now with two more years in its 5 year program, the question now arises: How sure are we that the Phil Am Fund won't be used to help derail President Duterte's administration?


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