Wake Up, Philippines!

Illegitimate debts and the economy (II)

Posted in Budget, Debt Policy, Economy, Sovereign Debts by Erineus on February 12, 2009

NUMEROUS projects have become possible because of financial assistance through debt. This is where we get acquainted with the roles being played by financial institutions like World Bank in the country’s economy.

While the Arroyo administration have claimed that our economy has reached unprecedented growth and displayed infrastructure projects being undertaken everywhere as evidence, the debt toll has also reached unimaginable levels. Various projects likewise serve as evidence that best describe why we as people do not feel the growth that this government has been bragging about.

This is happening because the Arroyo economy is debt-ridden. Not only that the debts of this administration have been accumulating because of numerous debt financed projects were reduced as milking cows.

Take for instance the case of the SEMP2 Textbook Anomaly. The loan meant to fund 17.5 million Social Studies textbooks and teachers’ manuals for public elementary and high schools – had been allegedly riddled by high-profile fraud and power-play issues.

The project amounts to $100-million from World Bank. In the bidding process, the World Bank allegedly pressured the Inter-Agency Bids and Awards Committee (IABAC) to reverse its earlier decision to disqualify Vibal Publishing Group despite being ineligible due to “conflict of interests”.

Not only was Vibal, who had been able to monopolize DepEd textbook publication in recent years, able to qualify, the publishing company later secured the contract for the project, fueling suspicions of corporate-government collusion and manipulation on the part of the World Bank.

The more ominous thing about the project, however, comes with its output. Opposition Senator Panfilo Lacson exposed that at least 60,000 textbooks funded by the projects were found to have inverted and erroneous pages. It is thus not hard to imagine that the defective textbooks were ultimately the product of defective processes of textbook procurement.

Another World Bank funded project is the Small Coconut Farms Development Project (SCFDP) amounting to $121.8-billion.

In 1990, the World Bank extended a loan to the Philippines supposedly to address rural poverty, especially among small coconut farmers, through distribution of free farm inputs like fertilizers. However, the project had been beset with wide-spread corruption among government officials and the private contractors involved in the project.

The irregularities range from complete non-delivery, to the sale of fertilizers to private companies engaged in trading or manufacturing fertilizers, and non-deliveries due to default by principal contractors in their obligation to pay the intermediary warehouses or contractors hired.

It is estimated that at least 40 percent of the funds intended for the project’s fertilizer deliveries had been malversed. Ultimately, the SCFDP failed to accomplish its objective of rehabilitating the country’s struggling coconut industry. Surprisingly, the World Bank hailed the project as successful, in the process condoning the anomalies that hounded its implementation.

What makes these projects illegitimate debts are the issues of transgression of sovereignty, monopolistic corruption and mal-education as the case of SEMP2 Textbook anomaly. As in the case of the SCFDP, there was obvious negligence on the side of the creditor, incompetence of implementing agencies and more glaring is the failure of the loan to reach its target beneficiaries – the farmers.

What is the impact of these loans to our economy and people is the fact that the national government are forced to pay for debts of these projects which turned-out to be useless.

Under the principle of the illegitimacy of debts, our national government could have stopped wasting people’s money for these projects. We could have utilized these funds in achieving genuine development goals and improving social services. (Comments to tao.kolumnista@gmail.com)

Author: Ted Aldwin Ong

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: