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THREE
separate but interrelated stories, all having to do with
this resource-strapped country’s use of official
development assistance (ODA), appeared in this paper’s
Tuesday issue.
In the
first story
(Neda-ICC improves monitoring of ODA-funded projects),
the Investment Coordination Committee (ICC) of the board
of the National Economic and Development Authority (Neda),
in a bid to improve the monitoring of ODA-funded
projects, is requiring implementing agencies to submit
more detailed information on projects with cost
overruns.
More
specific information and data was meant to allow the
Neda-ICC to determine what part of the cost overrun can
be pinned on foreign-exchange rate changes, price
changes, and duties and taxes, among others.
In the
second story
(WB
Examines RP’s low disbursement rate),
the World Bank blamed on four factors the continuing low
level of loan disbursements in ODA-funded projects: the
lack of readiness to implement certain projects, the
complexity of project design, slow progress in policy
reforms on which the release of loans hinges, and delays
in budget approval and/or release by the government.
In the
third story
(VAT
holds 9 yen-loan projects), nine
projects endorsed under the 26th, 27th and 28th yen-loan
packages were hanging in the balance as Tokyo waits for
Manila to reimburse the Japanese companies that were
charged the value-added tax (VAT), but which the
Philippine government promised to waive.
What
thread runs through all three stories? Simply this:
that, more than two decades after the Philippines, as
the world’s showcase of a revived democracy, received a
flood of ODA of all types and volumes, the country has
reached a point where the use of ODA now
benefits—supposedly—from a more deliberate, more
painstakingly studied strategy in order to optimize the
use of such foreign resources, not to mention the
benefit of learning from past mistakes. Hence the reams
of expert studies, in and out of government, local and
international, on how well or how badly we’ve been using
ODA to pursue development goals.
The
country has, since 1986, sought to be more meticulous in
screening proposals for ODA funding, especially since
the donors themselves have changed their political and
economic priorities.
Recently, some Filipino officials were quoted saying
that the country is slowly weaning itself away from ODA,
and relying only on ODA for programs and projects—and
reforms—that could suitably be funded by foreign funds,
because the local private sector is not interested to do
so, or the State can better channel its scarce funds to
other priorities.
All this
sits quite logically with the other parts of this
administration’s policies—especially with President
Arroyo’s insistence that projects that can be handled by
the private sector be spun off to them as
build-operate-transfer (BOT) undertakings or similar
setups; and that enterprises and operations still in
State hands, but which the private sector can more
efficiently handle, be privatized pronto.
It’s
easy to see where she’s going on this: she needs the
scarce resources of the state applied to those
“legacies” she has identified—the vital economic
infrastructure and social services that constitute her
“payback” to a people who have borne the brunt of fiscal
discipline (read: more, new taxes; tight spending) since
the reform wave of 2004.
Given
all these, it is thus difficult to understand the logic
in her acquiescence to committing the people to pay two
Chinese government loans, “soft” their terms might be,
to fund two cyber projects that, on their face, have
good underpinnings but are being carried out in a lousy
way.
The
projects—the national broadband network (NBN) and the
cyber-education network—were dealt with in a
paper by UP School of Economics professors,
who delivered the most scathing, but clear, economic
arguments against them.
First:
the need for them is suspect because the cyber corridor
needs, not two additional State-owned backbones besides
the two existing private ones, but rather the so-called
last-mile connectivity to provide access to final users
like communities, households, schools, LGUs and
government agencies still delinked from the two existing
private backbones.
Second:
taxpayers shouldn’t pay loans for projects that the
private sector can handle and pay for.
To be
sure, the professors have no quarrel with the
President’s vision of a “cyber corridor” as outlined in
last year’s State of the Nation Address.
“That
vision, as fleshed out subsequently in the Commission on
Information and Communications Technology’s strategic
ICT road map, called for greater broadband access,
interoperability and connectivity, and for the diffusion
of such cost-saving technologies as VOIP
(voice-over-Internet protocol) and digital
conferencing,” the professors recalled in their
analysis, reported on exclusively in this newspaper on
Monday.
The
authors also agreed with the government’s original mode
for developing and expanding that cyber corridor; that
is, a public-private partnership, where the private
sector is “implementor” and the government the “enabler”
in the context of the ICT road map.
The
DOTC’s Philippine Information Infrastructure Program
also envisioned the “development of a robust and
expanded digital infrastructure with the private sector
playing a major role.” The thrust was to enhance the
interoperability and the connectivity of all networks to
attain “universal access” at affordable cost.
Thus, it
was clear that the original government plans “at no
point envisioned a separate backbone to be financed,
owned and operated by, and dedicated to the needs of the
government. At worst, what was recommended was a
market-mediated build-operate-and transfer plan.”
Meeting
her Cabinet on November 21, 2006, President Arroyo was
said to “have taken the [correctly] adamant position
against government spending for any backbone.” She
wanted, at most, a BOT arrangement without “take-or-pay”
provisions—the culprit behind the huge losses of the
National Power Corp., in turn at the root of our fiscal
woes.
Between
November 2006 and April 2007, when President Arroyo
allowed two commercial agreements to be forged in China,
for a $329-million 20-year ODA loan for the NBN and a
$500-million loan for the cyber-ed project, a public
suddenly left with the huge bill of foreign loans is now
left wondering what occasioned the 180-degree
turnaround.
Interestingly, the loans fit just well into the
scaled-up cost of the NBN, from P5.1 billion to a
whopping P19.3 billion; and the cyber-education project,
actually a component of the original NBN as an
“e-Education program,” providing universal connectivity
and content for the nation’s public schools, also saw
its cost bloated from an initial P5.2 billion to P24.6
billion.
It’s
said that “connectivity” is crucial because it eases the
“digital divide” between the “haves” and “have-nots” and
the powerful and powerless. But when ordinary folk must
suddenly pay through their nose for such “connectivity”
and may thus end up feeling more victimized than
alleviated, what is that scam called: “digital
multiplication”? |
