Make aid transparent

There is a website soliciting signatures for the cause of making foreign aid programs transparent. The website, www. makeaidtransparent.com points out that citizens, of donor as well as receiving countries, have a right to know how aid money is being spent. Citizens of donor countries are paying hard earned money as taxes to finance foreign aid programs. Receiving countries like ours, on the other hand, often have to pay counterpart funds from scarce resources in the National Treasury as well as pay back even soft term loans.

There is no argument that if well spent, foreign assistance programs do make a difference. It can, as the website points out, save lives, put kids into school, and reduce poverty and suffering. In the case of assistance in putting up needed infrastructure such as roads, ports and water treatment facilities, the positive impact on the economy and the health of the population is well documented.

But at the moment there is insufficient transparency in the implementation of such aid programs. Sometimes, not even governments receiving aid have a full picture of where all the money goes. This undermines aid’s potential and its effectiveness, the website asserts. “With more information, citizens in both donor and recipient countries could know whether aid money was having the best possible impact.” This is important today because major OECD donor countries have fiscal deficit problems to deal with themselves and some have imposed strict austerity measures on their citizens.

The website declares that “2011 is a critical moment. Governments have promised to be more transparent and at a big international meeting at the end of this year we have the chance to hold them to account. A public push for greater transparency now will make a huge difference. Governments are reviewing their commitments and if they feel public pressure they will redouble efforts to keep their promises.”

Indeed, “at a time when public budgets are under pressure and the effectiveness of international aid is being scrutinized, increased transparency is an easy win that could deliver a huge boost to poverty reduction, without needing more money.” Based on our own recent experiences, greater if not full transparency in the conduct of aid programs will stop the corruption that seems to be imbedded in the system.

For instance, it was distressing that during the watch of Ate Glue, our government invoked executive privilege when a Senate committee looking into the ZTE broadband and NorthRail projects, both secured under an assistance program from China, sought details of the deals. Normal audit and other control procedures were also apparently waived on the basis of a so-called Executive Agreement entered into with China.

As we all know by now, the deals proved riddled with unexplainable lapses that could only mean corruption even at the highest level of our government. That China apparently cooperated with the Arroyo regime was in itself not that surprising given the reputation of its foreign assistance program particularly with many impoverished nations in Africa. Invoking the principle of non interference, it is China’s policy to look away from obvious corruption on the part of the receiving government. As a result, we are today still trying to clean up the mess that the NorthRail project has become.

I wrote a column last week about the Ro-Ro ports, another grand project of the Arroyo administration but this time utilizing assistance from the French government. Alas, it seems the project too, is as rotten as our corrupt bureaucrats can muster. It turns out the ports in question are not needed, not designed to serve our needs and pretty expensive compared to what can be locally done. Since it takes two to tango, there is apparently a problem on the French side as well. They were just too eager to make a sale to be paid for by a loan from the French government that we will have to eventually pay for.

Then there is the infamous Bridges to Nowhere scandal, a British foreign aid program that was investigated by no less than a committee of the House of Commons and found to be highly anomalous. Not only was the British taxpayer cheated in the deal, the bridges were built in areas where they are not needed, hence the Bridges to Nowhere tag. I recall that there was a bridge built in the middle of a field where there is no river and no road leading to or after the bridge.

It is sad that we, as a receiving nation, have wasted so much of the money we have received as foreign aid. Starting with the Japanese reparations in post-WW2 Philippines to current aid grants from Japan and other OECD countries, corruption has diminished the positive impact contemplated by the authors of these aid programs. We have become so addicted to foreign aid such that the level of such assistance is already normally programed in our budget.

The bureaucracy has become so enamored of foreign aid programs likely because through the years they have profited from auxiliary industries, such as project study making, that have grown from it. One DOTC bureaucrat has been widely quoted as having said that even if an ODA or Official Development Assistance project is up to 70 percent corrupt, it is still worthwhile because of the concessional interest rate on the loan. It is this kind of attitude that has given ODA a bad reputation through the years.

Major foreign aid donors, with the exception of China, have strict Foreign Corrupt Practices Law that covers private sector business transactions. It is time that the same strict provisions be made to apply to the manner by which ODA is implemented. The World Bank has a wide experience and body of literature on how the benefits of ODA are dissipated through corruption. It is time that OECD countries, working with the World Bank, devise and follow strict anti corruption rules in the implementation of their aid programs.

There was a foreigner who commented on my Facebook post on the Ro-Ro ports that a contract had been signed and we are obligated to carry it out regardless. This is not a simple case of having second thoughts on a contract due to a change in government. This is official development assistance meant to help this developing country and not burden it with a nearly P12 billion loan, no matter how soft the terms, for a project that is overpriced, not designed for our sea conditions and worse of all, we don’t need. We can only surmise the project got going only because there were other considerations that are definitely not in accordance with the public interest.

While foreign governments are well within their rights to support their own contractors in the conduct of their ODA programs, it is hoped that they also make sure the project will be of definite use to the country receiving it. The reason we are availing of ODA is precisely because we need help. Being saddled with expensive white elephants is definitely not part of the deal.

We have, as a nation, bent over backwards to honor our debts no matter how onerous. We paid for the US Ex-Im bank loans that funded the nuclear plant we never used. It is time that foreign governments work with the P-Noy administration in cleaning up their ODA. This is the only way our foreign donor governments and ours can do justice to the hard earned tax money of their people.

Expose ODA to the light of day! Expose the shenanigans within donor governments and our own, once and for all. –Boo Chanco (The Philippine Star)