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Ever
since the food and energy crisis came out in the open, a
raging debate involving public institutions, big
business, and key government officials, including
President Arroyo, erupted. Yet, while the exchanges were
intense and sometimes dramatic, the substance of the
discussions was rather superficial, if not
one-dimensional.
Finger-pointing, mudslinging and populist posturing
dominated the supposedly joint pondering for concrete
proposals and solutions. We believe, at the very least,
all parties wanted to wash their guilty hands of any
responsibility regarding the current mess. At best,
everybody wants to rake in huge profits, politically and
economically, out of the predicament by cutting each
other’s throats.
Nowhere
in the picture was any truthful search for the
derivation of all these crises and economic maladies in
order to arrive at sound proposals. Except for the
social movements, cause-oriented groups and well-meaning
economists, almost all were contented in throwing all
sorts of prescriptions, proposals and recommendations
without the benefit of a clear and thorough diagnosis of
the problem.
Many are
asking: What caused this problem? Certainly, there are
many legitimate causes and all must be dealt with
decisively. But, truth be told, if we really want to
seriously answer the question why we are in this mess in
the first place, we in the Freedom from Debt Coalition (FDC)
assert that one just needs to look at the
Philippines’
enduring debt problem in order to find out.
Due to
the failure of succeeding post-Marcos administrations to
concretely solve the compounding debt problem—an
elemental social-justice issue before and after the fall
of the dictatorship—today’s generation of Filipino
citizens are paying for that historical disappointment
with such tremendous consequences.
In the
agriculture sector alone, succeeding administrations
from the time of President Corazon Aquino had used
borrowings as a major source of financing, heavily
depending on debt to implement its programs and
projects.
The
agricultural agencies themselves facilitated this by
calling on lenders to finance domestic projects, labeled
as foreign-assisted projects, usually through official
development assistance and other forms of “concessional”
financing, many of which were challenged as fraudulent
or anomalous, if not illegitimate.
Why?
Because a large part of the people’s resources are being
allocated to debt payments instead of to social and
economic services. Proof of this, the combined real
national government expenditure for agriculture,
agrarian reform and natural resources per capita dropped
from a meager P 121.24 during the end of the Marcos
years to an insulting P 104.91 under Mrs. Arroyo.
Moreover, the sector became increasingly vulnerable to
the conditionalities attached to many loans such as
liberalization, deregulation and privatization. For
example, in the Grain Sector Development Project of the
Asian Development Bank (ADB) contracted in 1998, and
which calls for the privatization of the National Food
Authority, the government’s rice-procurement agency
which sets the prices for palay, we are still paying an
average of $4 million a year until 2024. This is
regardless of the fact that the project was already
canceled.
Due to
these conditionalities, foreign competitors came rushing
in to the domestic rice market, thereby wiping out local
producers whose value cannot compete with their cheap
prices. Simply put, we became dependent on imported
rice.
However,
agricultural production is increasing; from 7.65 million
metric tons in 1980, it jumped to 16.24 million metric
tons in 2007. The policy conditionalities simply pushed
us to import more and more, from 192,020 metric tons in
1984 to 2.1 million metric tons in 2008.
Accurately speaking, when international markets
collapse, so does our food security. The same goes with
the power sector. We remind the public, the eight- to
10-hour power outages during the early 1990s were caused
by Marcos’s legacy of debt, exacerbated by Aquino’s
“honor all debts” dictum which drained the national
coffers of money to invest in added power-generating
capacity.
Ramos’s
own solution had been simple yet very damaging: rely on
more debt. Using the build-operate-transfer law, he
proceeded to dangle lopsided contracts to attract
investments on the power sector. He issued sovereign
guarantees for private loans and changes in
exchange-rate and oil prices, and even promised, via
take-or-pay schemes, to buy a stipulated amount of
electricity from those who will generate, whether or not
the electricity had been generated or used. With
risk-free capitalism in place, independent power
producers (IPPs) rushed in to take advantage.
As a
result, the National Power Corp. (Napocor) ended up at
the losing end of the contracts with IPPs, running on
billion-peso deficits which the government ended up
assuming. Indebted, the government had no choice but to
rely on multilateral lenders like the ADB and the World
Bank, dangling loans with privatization of the power
industry as primary conditionality. In the end, Napocor
is bailed out, and we taxpayers are paying for its
debts.
Talk
about full circle! Burdensome debt was the culprit of
our power-generating incapacity, which was allegedly
solved by additional indebtedness, and yet, today, we
are not only indebted but we also have the
second-highest electricity rates in Asia and one of the
highest in the world.
Due to
this stupefying somersault of debts and conditionalities,
the country’s power industry evolved into one of the
most complex and esoteric cases of an enduring dilemma
which have mutated into a multiple problem of
corruption, mismanagement, endemic rent-seeking elites
and a fundamentally flawed framework.
Therefore, if the government is serious in structurally
addressing the food and energy crisis, then it must
understand that photo-ops, selective reforms and
“saintly” populist posturing will never fundamentally
solve the problem.
While we
believe all tangible actions and stop-gap measures must
be done to give our people immediate relief, we also
believe the government must seriously address the root
causes of the problem starting with our debt quagmire—an
original sin committed by subsequent debt-addicted
administrations that eventually became the platform of
many contemporary economic crimes and transgressions
such as what we are experiencing today.
Hence,
we enjoin the 14th Congress to help realize our people’s
redemption and deliverance from all these social and
economic ills by leading the path toward a new
development paradigm, toward a reversal of erroneous
economic adjustments imposed by international financial
institutions and a riddance of all illegitimate debts.
Let us
begin this process. In the immediate, the FDC calls on
Congress to exercise its constitutional power of the
purse to investigate, renegotiate and condone all
fraudulent loan agreements whose interest payments they
suspended in the 2008 budget but were expectedly vetoed
by the President.
More
important, we challenge our legislators to rise to the
occasion and pass House Bill 329 calling for the
amendment of Section 26, Chapter 4, Book VI of Executive
Order 292, otherwise known as the Administrative Code of
1987—the archaic institutional mechanism that provides
for the automatic servicing of debt.
The
Filipino people have paid for these debts many times
over. To let our people and their children continue
paying for debts they didn’t benefit from, have only
caused them further destitution or which they don’t even
owe in the first place is truly and without doubt the
greatest sin of all. |
