China’s silence is deafening

Through the tempests surrounding the ZTE-NBN scandal and the attempted kidnapping of a whistleblower by government elements, we didn’t hear a pip from the country that made the ZTE-NBN deal possible. It would have been nice even if all China did was to reiterate the assurance of a lower level official during the APEC meeting in Sydney that China will look into these allegations of wrongdoing from their end.

Then again, China is just being true to its current “business model” which includes turning a blind eye to corruption that accompanies its foreign aid program. An article in Asia Times Online entitled “China mixes rice and neo-colonialism” points out the ironic twist in how this still communist-led nation has become the kind of neo-colonial power that Chairman Mao’s generation despised.

The article, datelined Hong Kong, opens with this lead sentence: “When China, one of the world’s most corrupt countries, starts dishing out tens of billions of US dollars in aid and business contracts in Africa, the world’s most corrupt continent, alarm bells go off…” Looks like Sen. Miriam was right after all and need not have apologized.

Well… neo colonial or not, China is merely acting in its self interest. “To fuel its phenomenal economic growth, which has averaged more than nine percent annually for the past 20 years,” Asia Times Online explains China needs oil as well as raw materials. Not rich in oil reserves, China is becoming increasingly dependent on imported oil. According to the Ministry of Commerce, oil imports accounted for 47 percent of the country’s total consumption in the first half of this year.

“In exchange for securing energy, mineral resources and other raw materials, China has been doling out aid and providing technical assistance and interest-free loans to business-friendly African governments. At the same time, Chinese companies are winning contracts to build highways, pipelines, hydroelectric dams, hospitals and sports stadiums and to upgrade railways, ports and airports.”

That sounds like a classic neo colonial type of relationship where the colonial power sucks the natural resources of colonies and returns with manufactured goods and sophisticated services. For China, the benefits have been substantial, Asia Times Online observes. “The offer is clear: in return for securing the raw materials necessary to feed its voracious economy, China will not meddle in the internal affairs of African governments, even if those governments are known for rampant corruption and human-rights abuses…

“From Beijing’s perspective, the partnership is working brilliantly. Africa’s ruling elite are also happy as the Chinese pump money and cheap manufactured goods into their economies without the ritual hectoring about democracy and human rights that they have grown accustomed to hearing from Western partners.”

What seems obvious with our experience in the ZTE-NBN and NorthRail scandals is that China is applying a variation of their African strategy to us. In our case, seemingly low cost or easy to pay ODA projects are dangled with our officials given more than enough leeway to tack on their share of an overprice. Of course the ODA is tied to a sale by a Chinese vendor who most likely also has important ties in the Chinese bureaucracy. It wouldn’t be surprising that there is corruption on both the China and Philippine ends of the deal.

This is so unbecoming of an emerging world power. China should be upholding transparency and good governance, as is now expected of it. Given that two of their flagship ODA projects here have become embarrassments for China, one would expect China to at least say something official about how they do not tolerate corruption and will do a thorough parallel investigation from their end. At the very least, we need reassurance that their leaders are not in cahoots with ours in looting our treasury.

I guess China will learn more and more that being a world power carries responsibilities. Its successful transition to what looks like a market economy notwithstanding, it would help if China’s leaders reviewed the thoughts of Chairman Mao now and then with special emphasis on why neo colonialism is an evil now as it was then. And if China is a real friend, it wouldn’t impose its own brand of neo-colonialism on us.

Big projects

I am still trying to figure out why Ate Glue pulled out 11 projects worth about P104 billion, including the also questionable Cyber-Education Project, from ODA funding. These projects will be funded using government money instead. I wonder if that is to make overpricing easier to accomplish. I do not buy the explanation of Toting Bunye that it is because “we now have sufficient funds as a result of the fiscal reforms; the government prefers that these [projects] be funded with locally generated funds.”

If the president’s action is designed to reform our system of availing ODAs, that’s a good reason. For one thing, we should stay away from ODAs with strings attached in terms of who the project can be awarded to. We should have learned our lesson from the ZTE-NBN deal. Sometimes, a seemingly cheap loan can turn out to be more expensive with all the strings attached, than if we funded the project ourselves and provided our own specifications.

For one thing, even ODAs, specially those we have to pay back, should be subject to our procurement law with all the attendant transparency features. We shouldn’t have to listen to another Asec Formoso saying that we don’t have a choice because China made it a condition in granting the loan to deal with ZTE. Formoso makes the Filipino people seem like paupers who must be happy with what is being given and not ask questions. Projects should also be needs driven, not supplier driven.

The Commission on Audit’s review of ODA projects in 2006 revealed that these were marred by problems like suspension or non-completion, overpricing, unliquidated cash advances, erroneous transactions and others that involve funds amounting to billions of pesos. For instance, COA found “unnecessary and overpriced” land acquisitions that cost P36.089 billion under the Third Airports Development Project of the DOTC, the same department that brought us the ZTE-NBN scam and caused our aviation facilities to suffer a downgrade by the US Federal Aviation Authority.

The COA also took note of unliquidated cash advances and fund transfers amounting to P1.563 billion in projects like the North Luzon Railway Project, the ARMM social fund and the Metro Manila Air Quality Improvement Sector Development Program. The audit agency also said that the non-operational or unutilized equipment, textbooks and software guidelines and manuals caused losses amounting to P1.596 billion. And there are still more such waste of taxpayer money cited by COA but space limitations prevents me from enumerating them.

Ate Glue still has a chance to redeem herself if she administratively undertakes the remedial measures to assure transparency of our procurement process and make sure ODA projects benefit the people and not just some people. Otherwise, I know that the Senate is ready with remedial legislation. We simply cannot go on like this any more. The ZTE-NBN deal should be the last such sordid deal.

Loaded question

This one’s from Romana Borromeo.

INA: Anak, tawagan mo nga tatay mo sa celfon. Pauwiin mo dito.

[pagkatapos tawagan.]

ANAK: Nay, babae po ang sumagot.

INA: Lintik, sinasabi ko na nga ba, may tinatago yang tatay mo eh! Anong sabi?

ANAK: ‘you only have zero pesos in your account...’ hindi ko na tinapos nay mukhang matapobre.

Boo Chanco’s e-mail address is [email protected]