THE government plan to have an independent team assess the impact of initiatives for aid effectiveness on the health and rural sectors is definitely a step in the right direction. But it should spur a similar initiative by the government to assess, as well, the impact of foreign aid in other sectors, particularly infrastructure, energy and climate-related programs and projects—not least because economic managers have repeatedly said that, with its huge fiscal gap, the Philippines must rely heavily on other resources, such as official development assistance, to fund crucial investments to spur growth and development.
In announcing the independent assessment on the aid- and rural-sector-related aid’s effectiveness, the National Economic and Development Authority (Neda) said the study was commissioned to assess the implementation of the Paris Declaration (PD) on Aid Effectiveness in the country, along with the principles of ownership, alignment, harmonization, managing for results and mutual accountability. Particularly, the study is envisioned to identify the factors that affected the relevance and implementation of the Paris Declaration, as well as assess the extent that the implementation of such PD had helped improve aid delivery, management and partnerships. With the use of sector studies on health and rural development, the study will assess the plausible impact of aid-effectiveness initiatives on development outcomes, according to the Neda.
The PD is an international agreement among donor and developing countries, as well as multilateral development agencies, aimed at improving the quality of aid and its impact on development.
The review of the impact on the health sector is particularly vital because, besides the pursuit of health reforms, the government is hard-pressed to fulfill its commitments to the health-related Millennium Development Goals (MDGs)—reducing child mortality, improving maternal health, and combating HIV/AIDS, malaria and other diseases. As reports last week showed, the Philippines is facing tough hurdles in meeting its MDG commitments by 2015, and would have to make a review at the United Nations conference on the matter later this month.
The focus on how the rural-development sector has been impacted by development aid is just as crucial because it will focus on specific programs and projects of the departments of Agriculture, Agrarian Reform, and Environment and Natural Resources.
According to Neda Deputy Director General for Investment Programming Rolando G. Tungpalan, “We have to consider the nature of the aid and its impact on our development process. This will put in perspective the financial assistance given by our development partners.”
Tungpalan had noted that the impact of the Paris Declaration should not be limited to the results derived from the sheer volume of aid, but should encompass nonmonetary aspects, such as knowledge transfers and effective partnerships.
That point is quite valid, but it’s equally important for the government to address, while at it, the serious issues raised by civil society about the other hidden costs of certain types of aid, as a result of conditionalities imposed by some donors or redundancy; the bureaucratic red tape and lack of transparency attending the implementation of aid-funded projects; and occasional inconsistencies in the aid policy of some multilateral institutions (the questions raised by some nongovernment organizations, for instance, about the Asian Development Bank funding supposed “clean-coal” energy projects while funding initiatives to mitigate climate change come to mind).
The impact of aid needs constant, thorough review because, like it or not, the country must rely on external assistance to fund vital programs, not only in economic infrastructure but also in human development, considering our heavy reliance on our labor exports. This is a classic example where every peso counts, especially when we’re talking borrowed funds. Speaking of borrowed funds, one is reminded of the Peace Bonds controversy, where well-connected groups got the Arroyo administration to float P10 billion in zero-coupon bonds in order to raise funds for poverty alleviation, for implementation by civil-society groups, including foundations of some of the richest families. The net resource made available, ultimately, for such propoor programs amounted to several hundreds of millions, but the tab for Juan de la Cruz, to be paid early next year, is a whopping P35 billion when the bonds mature. That’s one of our hardest lessons in how borrowed funds can create heavier problems than the original ones sought to be addressed. But that’s another story, which we leave to a future editorial.
