How to attract $8-B development aid

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Mike Wootton

Mike Wootton

It looks like the height of irony for a nation that has “lost” at least P3 trillion or P4 trillion to corrupt activity, which has already received hundreds of millions of US dollars in foreign disaster aid, and in which the all powerful private sector contains at least one entity capable of paying dividends to its shareholders for a single year’s operation of close to $1 billion, to be holding out its begging bowl for over $8 billion of foreign aid to rehabilitate 4 million of its citizens dispossessed by Super Typhoon Yolanda.

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The extent of dispossession by the typhoon was in large part due to the poor quality accommodation in which those affected lived, as well as the poor quality of the infrastructure supporting their lives. Both of these factors are caused by corruption, lack of jobs and low incomes.

Even now, so long after the typhoon struck, dead bodies are still being recovered and temporary shelter and food supplies are inadequate. A few of the international providers of emergency aid are carrying out their own audits to find out if their contributions were indeed properly used, or just vanished, or were wasted through inefficiencies.

To ask the advanced economies to stump up $8 billion is to ask for a lot. What right is there for a nation of which its Constitution limits foreign ownership to a minority position, and encourages about 25 percent of its workforce and consequently over 50 percent of its population to depend on jobs provided not by the Philippines, but by other nations, to expect that others will pay to put things right for the dispossessed? And given the vast amounts of money which have been lost to corruption, and the obvious concern of the emergency aid providers as to where their money went, is it really fair to expect that yet more money will be provided into the same “black hole”?

There are useful lessons to be learned from the 2010 Haitian earthquake which affected 3 million people and caused a death toll of over 100,000 with 280,000 buildings destroyed. Haiti is a very poor country and its gross domestic product (GDP) is 5 percent that of the Philippines, and its GDP per capita is half that of the Philippines. It is, however, geographically close to the United States and well within its area of direct influence. Although over 20 countries responded to the disaster by sending rescue equipment and medical teams, there was much confusion over who was in charge; the earthquake and a consequent tsunami made access to devastated areas very difficult; the airport was put out of action and power; and water services were non-operational. The United States sent an aircraft carrier and took control of flight operations in the same way as they did for Yolanda. One year after the earthquake, only 5 percent of the rubble had been cleared, and 15 percent of the temporary housing had been built.

Although over $4.5 billion had been pledged for rehabilitation and reconstruction, only 43 percent had been delivered two years after the disaster. Four years after the earthquake, 20 percent of those dispossessed remain in temporary camps, and only 50 percent of the rubble has been cleared.

The main lessons from Haiti are that commitments to donate relief and rehabilitation funds are not always honored, and even when they are their release can take years, that such donations may not be in the form of cash or in kind assistance, but may take the form of national debts being canceled or rephased, and that there is a critical need for efforts and funding to be planned managed and used in a strongly controlled way—donors set their own priorities for their assistance and there are many donors, possibly hundreds each with their own agenda.

In Haiti as in the Philippines, there were strong suspicions that disaster relief and rehabilitation monies and goods went missing due to either corruption or simple incompetence.

But here in the Philippines absolutely everything is measured in terms of money, nothing else counts. “Give us lots of money [we deserve it]and we will sort it out . . . .” Alas the international development community must know by now and if it doesn’t it certainly should know, that money while being a useful facilitator is not an end in itself; what is needed and is of critical importance is sovereign credibility and competent planning and control of rehabilitation efforts—the more sources from which aid is gathered the more difficult it will be to efficiently and quickly rehabilitate the dispossessed. The ability to show major prospective donors coherent, transparent and effective rehabilitation plans, the more likely it will be to recruit their support. The plans need to show how things will be controlled locally by the Philippine government in a centralized single point manner, rather than the red-tape and corruption riddled way in which everything else happens around here, and that there will not be additional confusion introduced by mixing up local and national responsibilities, which as we have seen so far only leads to totally unconstructive finger-pointing and accusation—the blame culture is alive and well! The donors will not readily give up prioritization and control over their donations, and certainly they will not give up that control to the Philippine’s private sector, so they have to be convinced that Philippines Inc., can do it and do it well themselves, and incidentally that the Philippines really is a place that will find ways to return the help and support that it gets from other nations. The question is—“can it?”!

Mike can be contacted at mawootton@gmail.com

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1 Comment

  1. My assessment of the international aid is that 50% goes to the pocket of the nat’l gov officials, 49% goes to the LGU officials and 1% to the beneficiary?