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THE
university symposium last week that featured past
directors general and current officials of the National
Economic and Development Authority (Neda) was most
timely, considering the myriad serious questions that
have arisen lately on what should really be the role of
this main planning agency.
The
immediate spark of all the attention is the high-profile
role of former Neda chief Romulo Neri in the Senate
inquiry into the $330-million national broadband network
(NBN) to be funded by a Chinese government loan and
implemented by a Chinese state-picked telecom supplier,
ZTE Co.
And yet,
Mr. Neri aside, there have really been many other issues
raised in the past few years about the role of the Neda,
especially considering the well-founded observations
that it has increasingly been marginalized and
bullied—both as the result of a President who is more
politician than economist, and because of the relatively
more aggressive posturing of others in the Cabinet
vis-à-vis the socioeconomic planning secretary.
One of
the most important issues arising from the NBN-ZTE deal
is the central role the Neda can play in fostering
accountability and transparency, while ensuring that all
big-ticket national projects are examined with a
fine-toothed comb, both for their economic validity and
financial sense.
There
was a prevalent sense that had the Neda played a more
active role in vetting the NBN and its twin, the cyber
education project (CEP), a lot of the dirty accusations
and the suspicion of wrongdoing might have been avoided.
Well,
from the University of the Philippines School of
Economics symposium now come some useful insights that
might be worth considering if we want to avoid similar
future headaches and, worse, a return to the
rent-seeking behavior that attended the project cycle in
the Marcos years, leaving the Filipino people with the
huge burden of repaying loans loosely drawn on behalf of
taxpayers to benefit private, crony interests.
One key
suggestion comes from Prof. Solita Monsod, who said the
government must push for international competitive
bidding for foreign-assisted projects. She also advised
that bilateral loans, which by their nature are the ones
often implicated in allegations of overpricing and
wrongdoing, be best reserved only for small projects
that do not require big funding.
The big
ones like the NBN and CEP must undergo international
competitive bidding, she added.
She
pointed to a ready and useful reference the Paris
Declaration on Aid Effectiveness, which called for
greater transparency in the delivery and management of
foreign aid to achieve the UN Millennium Declaration and
the Millennium Development Goals.
Concurring in her view—and adding their own useful
insights—were former Neda chiefs Cielito Habito, Dante
Canlas and Felipe Medalla.
Mr.
Habito said that while donor-driven projects may be
tolerated when it comes to grants, an entirely different
and stringent means for vetting, which should imply an
active Neda role, is called for when it comes to those
funded by foreign loans.
Mr.
Medalla urged caution in grabbing foreign loans,
considering the balance of payments surplus that can
cover for some government projects. In a sense, he
cautions against borrowing—especially borrowing big—just
for the sake of it, or just because the conditions for
borrowing are okay.
To do so
would fall into the same trap that befell the Marcos
regime in the ’70s, when it borrowed as if there was no
tomorrow, because the petro dollars were coming out of
Arab ears. This time around, it’s the Chinese who want
to put their huge cash hoard (more than a trillion US
dollars in reserves) to good use.
Besides
the Paris Declaration, Mr. Canlas points to another
useful document: Organisation for Economic Cooperation
and Development rules on international competitive
bidding for bilateral negotiations.
When it
comes to bilateral loans, Mr. Habito notes that to its
credit, Japan stands out for allowing international
bidding—a matter it takes so seriously that even with
several bilateral loans, projects are awarded to, say,
Korean contractors and suppliers.
Now, why
would the views of these ex-Neda chiefs matter, one may
ask? For one, they had distinguished themselves during
their terms and presided over some of the Neda’s most
productive years.
Monsod,
even her critics would concede, did quite a good job in
turning around the organization as the first post-Edsa
planning chief, making it primus inter pares in the
Cabinet and marshalling the organization as one mean
machine, equipped to handle the two big challenges of
that era: first, in streamlining the country’s
statistical and financial reporting systems, and second,
in prepping the government for the sudden gush of
foreign assistance from multilaterals and foreign
governments sympathetic to the fledgling, restored
democracy under Cory Aquino.
Under
her, the Neda gained universal respect and its technical
staff—the best and brightest in the bureaucracy—had the
highest morale and, thus, did their work with passion.
The statistical agencies were working in sync,
dispelling the lingering suspicion that data fudging had
become routine because of the martial-law legacy.
At her
prodding, the four agencies that routinely—but
independently of each other—did reports on the country’s
fiscal operations and status finally collaborated with
each other, especially in tracking and reporting the
country’s indebtedness; an issue because of the
Marcosian legacy of $26 billion in foreign debts.
In the
days of Mrs. Aquino the temptation was always there to
throw caution once again to the wind and grab the monies
offered by multilateral and bilateral donors.
And yet,
far from blindly endorsing, the Neda then adopted a
deliberate, organized, cautious approach to the
thankless task of vetting projects. In fact, to some
observers who closely followed the Neda in those days,
it is this same deliberateness that partly cost Monsod
her job: the new cronies and people looking to cash in
on projects galore had ganged up on her. But that’s
another story.
The
point is that by the time the Coordinating Council for
the Philippines Assistance Program was set up to hijack
the Neda’s role in vetting projects, the foundations had
been laid down: never again can just anyone push through
a foreign-funded project, especially if loan- and
donor-driven, without frank, intelligent discussion
among experts and officials in and out of government.
The ZTE
episode simply jolted us to the reality that we’re back
to square one, and could get stuck in a deeper rut as we
did in the heyday of Mr. Marcos’s friends, if we don’t
wise up. |
