Tapping foreign aid
October 6, 2011 at 15:22
This is a re-posted op-ed piece.
The Japan International Cooperation Agency has reportedly expressed willingness to participate in a “hybrid” public-private partnership scheme with the Philippine government. Under the hybrid PPP, foreign donors will provide official development assistance or ODA to finance big-ticket public infrastructure projects in partnership with private investors. JICA officials reportedly expressed openness to participating in the hybrid PPP during President Aquino’s recent visit to Japan.
The government came up with the hybrid PPP scheme amid the tepid response to the original PPP, which the Aquino administration had hoped would attract job-generating foreign investments. That tepid response has been fueled in part by controversies that have hounded several major infrastructure projects finalized during previous administrations, several of which involved ODA.
Those controversies would not have derailed the projects and given the country a black eye before foreign investors if there was more transparency in ODA utilization. Instead the opaqueness surrounding foreign aid utilization has provided opportunities for crooks to collect fat commissions and pad costs for government projects.
The Aquino administration is still trying to undo the damage from tainted government contracts with foreign funding component. The effort, though in line with laudable initiatives to promote transparency and good governance, has also scared away investors. Among the toughest challenges facing the Aquino administration is to win back investor confidence and reassure the world that investments in the Philippines can withstand changes in government or judicial and congressional scrutiny.
Those controversial deals provide enough lessons for the administration to make sure that the mistakes of the past are not repeated. Foreign donors, most of which must account to taxpayers for aid disbursements, also do not relish seeing their ODA linked to corruption in a recipient country. Donors will appreciate clear-cut rules that will shield their aid from controversy or litigation. Those rules must be in place if the government wants the hybrid PPP to get off the ground.
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Source: The Philippine Star, Editorial, Oct. 4, 2011
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