|
Malacañang needs good news these days and one that is welcome is
the March 11 announcement of a US government corporation to make the
Philippines eligible for more US funds to fight poverty under the
Millennium Challenge Corp. (MCC) on the basis of “good
governance.”
The good governance indicators include curbing
corruption, rule of law, economic freedom and investments in health
and education. Because corruption undermines every aspect of
sustainable development, “MCC has made fighting it one of its
highest priorities,” the US statement said.
The MCC is a US public corporation that helps
developing countries on the principle that “aid is most effective
when it reinforces sound political, economic and social policies
that promote poverty reduction through economic growth.” It was
established in 2004.
A Washington Post story has described the MCC as
“an audacious attempt by the Bush administration to rewrite the
rules of foreign development assistance, focusing less on foreign
policy considerations and more on whether countries create the
conditions to use the money wisely.” An eligible country could
receive as much as $300 million in additional aid each year beyond
its current foreign assistance.
“This is a great day for the Philippines and
the action by the Millennium Challenge Corporation offers a
remarkable validation of the efforts of our government and nation to
invest in our people, fight corruption and encourage economic
freedom,” President Gloria Macapagal-Arroyo, reacting to the news,
said.
The Hong Kong-based research group Political and
Economic Risk Consultancy recently rated the Philippines one of the
most corrupt countries in Asia based on a poll of overseas
businessmen. The presidential palace has downplayed the conclusion
as being based on perceptions and not on objective indicators.
The MCC action does not automatically qualify
the Philippines for financial aid from the US government, but it is
recognition from Washington, DC, of the administration’s efforts
to improve the economy and the life of Filipinos.
Eligibility is an essential first step towards a
poverty reduction grant but selection does not guarantee funding,
CEO Ambassador John Danilovich said. Manila could now apply for a
MCC Compact, a multi-year funding facility for poverty reduction and
economic growth projects.
So, what needs to be done? The government must
begin a consultation process that includes citizens, nongovernmental
organizations and representatives of the private sector and
government to identify the barriers to poverty reduction and
economic growth.
The decision on whether the Philippines could
qualify for more MCC funds was delayed December when the board
requested additional time for review and deeper analysis of the
Philippines’ passing performance on the eligibility criteria.
In June 2006, the board approved $21 million for
a “Philippines Threshold Program” to address improved revenue
administration and anti-corruption efforts. The program involved
strengthening the Office of the Ombudsman and strengthening
enforcement in three areas of the Department of Finance: the Revenue
Integrity Protection Service, the Bureau of Internal Revenue and the
Bureau of Customs.
What is the downside to the MCC action? Only 15
poor countries, mostly in Africa and South America, have qualified
for MCC aid. Competing for the award when the country is enjoying a
28-quarter growth and the economy poised for a takeoff does not seem
to make sense.
Still, the government could use every foreign
dollar even if we are unable to use overseas development assistance
fully and wisely. The MCC money, as shown in its experience with the
Office of the Ombudsman and the Department of Finance, is useful for
targeting specific agencies to introduce reforms and improve
performance.
|
