11 February 2008
Debt & Public Finance
Of the Freedom from Debt Coalition (FDC), the People Against Illegitimate Debt (PAID!)
and the Assembly of Faith-based Organizations against Immoral Debt
on the Lozada ZTE-NBN exposé
11 February 2008, Quezon City
Greed, Corruption and Illegitimate Debt
Greed is defined as an excessive or uncontrolled desire for or pursuit of money, wealth, food, or other possessions especially when this denies the same goods to others. It is reprehensible acquisitiveness, an insatiable longing for power, and supremacy in order to advance individual interests at the cost of other’s well being.
But greed is not just about Mrs. Gloria Macapagal-Arroyo, the First Gentleman and other greedy officials.
If the Filipino public ought to be learning something from the recent revelation of whistle-blower Rodolfo “Jun” Lozada Jr. over the aborted $329-million ZTE National Broadband Network (NBN) project, it is that our flawed political and economic system perpetuates this greed and makes wealth accumulation and concentration at the expense of the nation and the majority of our people not only possible but a persistent and dominant feature of the political landscape.
Indeed, Lozada’s testimony is an astounding tale of greed and corruption. But we should not just focus on the staggering amount of $130 million that was to be the “commission” of one man, not just the brazen power and influence of “FG,” nor just the complicity of many other officials.
In truth, the ZTE-NBN deal reveals the deeply imbedded flaws of the system that has led to the accumulation of illegitimate debt such as what we would have contracted had the ZTE-NBN Project pushed through.
• Government projects are not primarily determined by our people’s needs and national priorities, but are corrupted by profit-making agenda of government officials, foreign lenders and private multinational and even big local corporations. A government that places highest priority on debt service and fully dependent on heavy borrowings is even more vulnerable to wrong priorities, fixated with chasing after “foreign-assisted” projects, and driven by external funding.
• The Executive powers to approve, contract and implement projects and loans are non-transparent and unregulated. We all know that the ZTE-NBN deal is neither the first nor the last. These powers, beginning with the Office of the President, must be curtailed, redefined and subject to rigorous checks. Further, these powers must never again be entrusted to or allowed to be captured by politicians with no ethics, no scruples, no sense of service and duty, no regard for people’s welfare, whose idea of national interest is the interest of their own family and class.
• The bidding process is more dysfunctional than all the players care to admit. Many government officials and their close relatives get involved in vying for government contracts. This must be stopped.
• The practice of “commissions” is widespread, well entrenched, and involve several layers for every project. Apparently, the politicians and highly placed government employees involved only differ on the amounts. We say no level of commission is acceptable.
• Lenders are driven by their own agenda often at the expense of our national interest and the welfare of our people. Many loans come with conditionalities. In the ZTE-NBN case – it was tied to the purchase of services and technology from the same country, and even from specific companies. Lenders promote and perpetuate corruption by practicing bribery and including the cost of the so-called commissions into the project cost. In many cases, lenders pass on overpriced, unnecessary and/or flawed products.
The government system is highly vulnerable to plunderers who see the system as a lucrative source of business opportunities and huge kickbacks, precisely because it is a government dominated by rent-seeking elites, colluding with rapacious foreign big business and their governments.
The Freedom from Debt Coalition (FDC), the People Against Illegitimate Debt (PAID!), and the Assembly of Faith-based organizations against Immoral Debt call for an immediate independent audit of all loan-financed government contracts beginning with the suspended ZTE-NBN deal and other projects implicated in the Lozada testimony such as the $503-million North Luzon Railways Project and the $884- million South Luzon Railways Project. This should lead to a comprehensive audit of all public debt and all policies, regulations and laws that govern public borrowings, including the Build-Operate-Transfer (BOT) law, the practice of extending sovereign guarantees and the resulting contingent liabilities.
FDC and PAID! will be convening an independent Citizens Debt Audit Commission for this purpose. We urge both Houses of the Congress to form a Congressional Commission on Debt Audit for the same purpose. These can be parallel processes – the Citizens Audit and the Congressional Audit – that will serve to uncover the truth about these projects.
We call on other government officials and private citizens who have information concerning other questionable projects to come forward. The best way to honor and give meaning to the courage and selflessness of Rodolfo “Jun” Lozada Jr. is not by merely extolling his good deeds, but by replicating it with the same act of daring.
We demand all those who are found guilty and responsible be held accountable and punished under the full force of the law.
We also demand that the government immediately stop payments for illegitimate debts and the implementation of anomalous projects such as those mentioned by Lozada. -30-