• Rejection of EU grants with conditions a historic break from the past

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    RIGOBERTO D. TIGLAO

    RIGOBERTO D. TIGLAO

    TO understand quickly what the issue is about the Duterte government’s move to reject European Union (EU) grants that are laden with conditions, which would allow it to interfere with our sovereignty, here’s an analogy. (Note: the rejection currently involves grants only, not loans.)

    A tycoon’s philanthropic (of course tax-deductible) foundation offers you a grant of P50,000 (yes, that small, which is proportionate to the amount of EU grants to the size of our economy) which you are told you can use to renovate your house.

    However, the tycoon’s bureaucrat handling the grant tells you that if you accept the money, he can come into your house anytime and lecture you how to run your household which you must accept and implement.

    Would you accept the grant? I don’t think so. Unless you’re so poor P50,000 is a boon. But then you wouldn’t have a house to renovate.

    In the case of EU grants, these have had provisions, which past regimes ignored: ‘The [European] Commission may suspend this financing agreement if the beneficiary breaches an obligation relating to respect for human rights, democratic principles and the rule of law, and in serious cases of corruption.”

    While that may seem innocuous, Finance Secretary Carlos Dominguez to his credit interpreted this, correctly I think, to be interference in our Republic’s domestic affairs, an intrusion into our very sovereignty.

    What criteria, or what body would determine, that the country has no respect for human rights? The quantity of Western media and Human RightsWatch reports alleging human rights violations? Claims by the UN special rapporteur on extra-judicial killings such as Agnes Callamard?

    Would the EU one day decide that capital punishment is a violation of human rights? Would it pontificate that abortion at all stages of a fetus’ life is the human right of a woman? What criteria would it use to judge an instance as a “serious case of corruption”?

    In default
    “If the EU believes that the claims on human rights violations by this administration’s critics are true, then effectively, we will already be in default under the agreement,”a ranking finance department official explained. “A default on such a basis could further create unnecessary political noise and affect investor sentiment and overall confidence in our government,” he pointed out.

    He added: “This EU-specific provision is unusual in our grant documentations. Other donor countries and institutions do not have such provisions in their grants.”

    Duterte’s critics, and especially the Yellow Cult, would almost certainly claim this administration simply has become too defensive or sensitive over human rights criticisms in the wake of his war against illegal drugs.

    Still though, the inappropriateness of such EU grant conditions could be emphasized using a different analogy. If you applied to borrow money from a bank to buy a car, would you agree to a loan condition that it is suspended if ever you’re issued a traffic ticket?

    However, there is a far-reaching aspect to the Duterte administration’s junking of such EU grants, that make the 250 million euros in EU grants we will be giving up worth the cost.

    From the perspective of our country’s modern history, the Duterte administration’s move to reject EU grants that are laden with conditions that interfere with our sovereignty is a historic break from our sorry past, and a strengthening our sovereignty.

    Biggest ever grant
    Right at the emergence of an independent Philippines was the biggest ever grant by a foreign nation to our country, which however carried one of the the worst conditions ever imposed on a sovereign republic. This was through the infamous Bell Trade Act passed by the US Congress on July 2, 1946, two days after the Americans let us be an independent state.

    As a condition for the $800 million grant we needed to rehabilitate our war-ravaged economy, the US required us, using the euphemism “parity rights,” to amend our Constitution to allow US companies to own public utilities and to exploit our natural resources as well as to take in American products duty-free

    While most of our pro-American elite—the same crowd who are aghast over Duterte’s move on the EU grants—still find nothing wrong with the Bell Trade Act, it opened up our young economy to powerful US monopoly capitalists that dominated our consumer industries, stunting the development of local industries and pillaging our natural resources.

    A still-to-be-written economic history is the huge contribution of US mining companies to building up Fort Knox’s inventory of gold by mining and shipping out all of the gold in our country.

    The Philippine elite—except for a few nationalist industrialists—profited immensely from their collaboration with US companies and as traders for US imports. The elite has managed to disseminate their justification for such American economic dominance so much so that such ideology is taken for economic rationality.

    Such ideology in this day and age is called “globalization”. The long-term impact really of US “Parity Rights” is that most Filipinos have lost the sense of nationalism.

    Among many other things, they have become blind to or accepting of the fact that an Indonesian magnate, Anthoni Salim, has violated our Constitution by owning the biggest public utility firms like PLDT and Meralco as well as most expressways. An Indonesian tycoon, quite amazingly, has gotten parity rights for himself, which Americans got in 1946 only with the twin bribes: our nation’s independence and $800 million. Salim offered nothing.

    Underdeveloped and crisis-prone
    The kind of economic structure that was the result of parity rights—in which industrialization was blocked because of the massive imports of US goods and through which capital was drained out of the country by US mining companies— kept us underdeveloped and prone to crisis.

    As a result, we became addicted to loans with conditions purportedly intended to shore up our economy, mainly from the International Monetary Fund (IMF) which had conditions that intruded into our sovereignty as much as the Bell Trade Act did.

    We have had 23 such IMF loans, from 1962 to 1998, the so-called standby arrangement or extended facility loans, making us one of two countries in the world with the most number of such arrangements, the other one being Haiti. By comparison, how many such facilities have Indonesia and Thailand had, the only two other countries in Asia that got that type of IMF loans? Indonesia had 11, Thailand just two.

    These IMF loans had zero interest rates but had such huge conditions, such as the lowering of our tariff rates, privatization of public utilities, loosening restrictions on foreign investments, stopping subsidies for the poor. If those conditions sound good, it’s because of the elite’s brainwashing. Such unrestricted and swift opening up of the economy to advanced nations’ monopoly firms—which Japan, South Korea, or Singapore did only when they were already developed—explains much of our underdevelopment now.

    The proof of the pudding is in the eating. Asian countries which didn’t have such loans with conditions that required them to open up the economy swiftly retained their sovereignty in their economic policies, and managed their economies to develop their own industries. Even Indonesia and Thailand which had availed of loans with conditions—but fewer—are now more developed than we are.

    We may lose hundreds of millions of euros by rejecting EU grants. Such a move however puts us on the path of independent nationhood, which rich countries have proven to be the key to prosperity.

    Email: tiglao.manilatimes@gmail.com
    Facebook: Rigoberto Tiglao
    Twitter: @bobitiglao

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    14 Comments

    1. George Winter on

      I stopped reading after your first mistake. There are no conditions and nobody is coming into your house (only the Chinese). Oh wait maybe there is one condition: the aid is for the poor people – not the politicians and not to pay for bullets.
      If your president is an adult and does what he says then we don’t want to finance the filling of Manila bay with dead bodies. We help and want our money to be used for help, also poor drug users, not for hell. If he doesn’t accept it then it is clear he is not joking about killing and death. Still we want to help the people.

    2. I love to see people with different opinions over a single subject…freedom to think is it?. Unless and until a grant has that “do not think, otherwise” caveat, that grant is pure and was bestowed upon for you “to think as you wish”. Those takers of grant with caveat, only think how to circumvent the caveat… whilst the pure grant takers think only how to get the next grant….So who is the better thinker..your guess is as good as mine…both are money thinkers and as the old adage goes “Money is the root of all evil”. Let us try grants in terms of free servitude measured in thousand numbers of free labor hours…any taker?

    3. arnel amador on

      i had a conversation with someone who is “full” of human rights in his head. at the first glance, every word he said is emotionally impressive. i was listening to him silently while he lectures me about his belief. at the end, i ask him a simple question which goes this way – “if a bad person is at your doorsteep and threatens to hurt or kill you and your family, which human right you are going to choose, honestly, yours or his? i did not force him to answer….

      few days back i post the same question about unborn children, whether killing them to suppress population explosion can be considered as a crime against humanity or a human right violation. in EU it became a normal feature of their community to have chldren’s playgrounds san children playing in it. perhaps, the highly civilized EUs can tell us more about it…

      when prez marcos asserts the rights of pinoys against parity rights imposed on us by the US, and when he squeezed the US to give up the majority of the land they were using as military base in ph, and standing tall against our colonizers, he became a villain. and you know who became “saints and heroes” in the “alternative truth” of our history…

      • George Winter on

        Wow, now I am beginning to understand the position of so many Filipino’s. Let me explain: Human rights are exactly the opposite of what you are thinking.

        Human rights are to protect all against crime and violence!

        When someone threatens your family then you SHOULD act in self-defence. The intruder is violating your human rights, your safety. That is your right.
        Human rights are for you as they are for everybody. You can not exclude someone because a politician doesn’t like him/her.

        Human rights also protect you from false accusations. If someone says you use drugs then they better have evidence or leave you alone. It is part of the constitution of the Philippines. That are wise rules agreed upon by many wise people in order to protect all citizens. At the moment you are losing your rights. And you allow it because perhaps you think: I am not gonna be accused. Well, the chance is big that you are right. But that doesn’t mean you should allow others to be killed without even a trial. That is how corruption and plunder can happen. Always remain alerted.

      • george i suppose you are a westerner.

        its not like our govt is just shooting people randomly. and oh why are the 700k surrenderees still alive? why is this not being shown regularly by the media?

        you outsiders are being led to believe that we have some lunatic murderer pres purging the phil. of these drug addicts in barbaric fashion. Most of these killings you are hearing about are done by the drug syndicates themselves to silence their pawns, or to bring the govt in a bad light, to show this is EJK or whatever.

    4. Change will create havoc to those who are caught off guard, they will prefer no change at all – but expect them to create noise and cry foul. Let them to march in every street & be a guest to meda, after all thet are of same feathers. 2019 will be fast approaching???

    5. the philippines has no independence, just co-dependence.
      the reason for the rejection of the eu grants is personal interest, not national interest. dig deeper, like miners do.
      the eu tax-payer is happy that their money will not be stolen by corrupt politicians, or used to buy rifles to kill innocent people.
      other countries are more deserving.

      • Aphetsky Lasa on

        You are implying that the Philippines should not get out of its mendicant shell and survive from donors and grants, without realizing that, besides being poor, the Filipinos become slaves as a consequence. We refuse grants to strengthen our independence and show to the world that we are sovereign and demand to be treated with respect. If they will have to give us money apparently for humanitarian purposes, then that help should have no strings attached to it. Because, what good does it do to be humanitarian when what it takes to show it is to expect something in return? And because other countries are more deserving, like you wrote, maybe they could just give that money to them. Us? Thanks but no thanks.

      • EU should first look into human rights violations in EU member countries first before crossing the continental divide. How have they handled the refugee crisis? How is the latent and visible racial and sexual discrimination being addressed? Does the population under the poverty line have equal opportunities as those above it? How about the humane treatment of the sick and the old? There is a long list of human rights being violated there, as I write.

    6. Amnata Pundit on

      Don’t forget that in addition to the parity rights, the Americans imposed on us the dollar exchange rate of P2-$1 compared to what they allowed for Japan, Y1000-$1. In those days and even today, that exchange rate of P2-$1 was for a highly developed economy. It effectively ensured triumph of serfdom over sovereignty as it prevented us from industrializing whereas Japan had no other choice but to industrialize given the prohibitive cost of importing for them. Today Japan’s exchange rate hovers just slightly above Y100-$1 while ours deteriorated to P50-$1. If you ask me, it was the exchange rate that really screwed us and it still does today, but that is another topic altogether. As Chairman of the ASEAN, Duterte can ask the group to act together as one in case the EU undertakes any unfair punitive action like sanctions against a member for purely political reasons. That would be the real break from the past.

      • Right on point. That’s why our infant industries in the 50s and 60s remained an infant. We heavily relied on imported goods specially the ones coming from the US.