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The
political implications of the ZTE-NBN scandal are
difficult to forecast and may not even be as important
as the ultimate economic fallout to the country.
The
issue of “government corruption” is not the issue in any
of the public investigations. The issue is the supposed
“corrupt officials in government.” Again, the standard
philosophy is that if you find honest people, then the
government will be honest. That may be a noble idea, but
in practice it falls short of providing solutions.
At the
end, the real problem on the minds of foreign investors
who want a commercial relationship with the national
government is this: Is the Philippine government a
viable and mature enough institution to conduct
business, or are Philippine government officials just
too dishonest to do business with?
Foreign
businesses have a tendency to follow the “local” rules
and do whatever those rules require, be it bribes,
kickbacks or whatever. They care very little as to the
face that is connected to the hand asking for money.
They pay and are happy with a profitable deal.
The
blame is usually put on the government or the corrupt
officials in the government, but in truth, the foreign
company is as much part of the problem as any of the
participants. The
United States
recognized this fact by passing legislation known as the
Foreign Corrupt Practices Act (FCPA). Simply put, US
corporations or individuals who make corrupt payments to
foreign officials for the purpose of obtaining or
keeping business face criminal charges and penalties.
Thirty-three countries are signatories to a treaty
following the same rules as the FCPA: the Philippines
and China are not a part of that treaty arrangement.
As easy
as it would be to place the ZTE issue as pro-GMA vs
anti-GMA, this is not accurate.
The
Philippines is building an impressive record of
accomplishment, under multiple administrations, of
national government contracts with foreign companies.
The successful bidding of the Manila Hotel is cancelled
after a foreign groups wins. Then the reclamation
project headed by Amari Coastal Bay Resources Corp., a
Thai-Filipino company, became what former senator
Ernesto Maceda called the “grandmother of all scams.”
Fast-forward to the Naia Terminal 3 fiasco and now the
broadband deal. Tell me again which foreign company in
their right mind would even think about doing business
with the Philippine government?
If this
is a “people” problem, then there is no other choice
than to wait until the “right” officials occupy all
government positions; elected, appointed or civil
service. Call me when that happens in a few decades.
The
other possibility is that there is a systemic problem
with government that goes far beyond the people
involved.
Elected
officials, for the most part, absolutely hate trying to
solve problems caused by the system and not by “people.”
It requires them to think and figure out a feasible
solution. That’s hard work and requires some
intelligence and expertise. It is always easier to blame
and replace individuals.
The FCPA
recognized that businesses are going to do fairly much
whatever it takes to win government contracts,
regardless of who the individuals are in the company. So
that law required, in effect, for companies to “prove”
they did not pay any bribes in the awarding of a foreign
government contract.
A press
statement from the Office of Sen. Mar Roxas II: “Senator
Mar Roxas stressed the need to reform the rotten
procurement system of the government. The Liberal Party
president pointed out that the crux of the NBN
controversy is how the government’s policy in pursuing
the NBN project changed overnight, from doing it through
a build-operate-transfer [BOT] arrangement with the
private sector to borrowing $330 million to finance it.”
Forget the specifics of this deal and the potential
claim that Senator Roxas is merely trying to feather his
presidential ambitions. His point is valid.
Forget
any thought that ZTE might just be another greedy
foreign company trying to bribe its way into the
Philippines.
Their press release is accurate. “This episode certainly
brings unforeseeable negative influence on bilateral
economic cooperations between China and Philippines,”
ZTE said. “So far, almost every project undertaken by
Chinese companies has been put into inequitable
suspicion.”
And
forget about the current hearings “being in aid of
legislation.” Until the legislature decides to pass laws
that provide for a proper and honest, as Senator Roxas
calls it, procurement system, this current episode will
just be another addition to the list of government
failures, and that list will never stop growing.
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