Suspension of ODA funding for 11 projects is not enough
20 February 2008
Debt & Public Finance
The Freedom from Debt Coalition (FDC) sees as positive development the recent suspension of the Official Development Assistance (ODA) funding for the Cyber Education Project, the Southrail Phase 1, and nine other ODA-funded projects suspected to be marred with anomalies.
We believe that such an executive action is the next logical step after the legislature decided that “no amount shall be used for the payment of interest payments on debts which are challenged as fraudulent, wasteful and/or useless, like but not limited” to what FDC labeled as illegitimate debts. These loans include the Austria Medical Waste Project, Small Coconut Farms Development Project (SCFDP), Telepono sa Barangay Project, among others.
However, FDC deplores the motive behind this decision. The excuse used by Press Secretary Ignacio Bunye in justifying the suspension – that we have enough local financing already to cover such projects, is evasive to say the least. His statement conveniently ignores the fact that the suspension precedes the controversies which surrounded the ZTE-NBN deal, also another loan-financed project.
Furthermore, suspending such projects without the benefit of a corresponding investigation is suspect. For one, the administration may have all along been prepared to suspend a handful of projects as token palliative to dilute the call for a more comprehensive systemic change following the Senate investigation on the ZTE-NBN deal. Also, FDC wonders if the recent suspension is in anyway related to Malacañang’s silence on the results of Administrative Order 210, which was primarily meant to investigate $232-million World Bank ODA for road projects.
What we need is an independent Comprehensive Debt Audit which will scrutinize and investigate all loan- and ODA-financed projects. If the Arroyo administration has nothing to hide, and for it to be able to give flesh to its rhetoric on transparency and accountability, then it should readily support such an audit, even if it leads to suspending more projects and holding accountable persons within the administration.
We challenge the Senate and the House of Representatives to immediately pass House Joint Resolution 04 calling for a Congressional Audit of all public sector debt and all contingent liabilities. Such an audit would serve not only to fiscalize the executive’s own investigations; it would serve to assert the Congressional power of the purse, especially since it is the Congress that, in spirit, appropriates payments for debts.
An effort to free the nation from corruption and illegitimate debt should not put people in sidelines, that is why FDC together with the People Against Illegitimate Debt (PAID!) and Assembly of Faith-based Organizations against Immoral Debt is pushing for a parallel undertaking, through the Independent Citizen’s Debt Audit Commission. Personalities from the civil society, the academe, sectoral groups, and other organizations shall be invited as Audit Commissioners tasked to investigate anomalous deals such as the ZTE-NBN project and the North and South rail projects.
FDC recognizes that the immediate cause of this quagmire is government’s policy of relying heavily on foreign lenders to finance social development projects highly susceptible to corrupt practices – a policy which, ironically, would have been unnecessary had the government chosen to allocate more to social development than debt payments. As had been recently revealed to the public, there is no shortage of cases of loan-financed projects going to waste due to inefficiency or corruption.
We call on the government to finally end its dependence on lender-driven, anomaly-ridden projects. It is high time that the government rid itself of illegitimate debt and corruption that continuously plague its institutions and agencies. -30-