When foreign aid and assistance dry up because of our “psychotic” president, Filipinos will go hungry, according to the development and psychiatric expert known to many Filipinos as Agot Isidro. And going to Isidro, who is also an actress, for advice on foreign aid programs and psychiatric care is like seeking out that tour guide in Intramuros for investment advice—as they say, you get what you pay for.
I am not here to join Isidro’s critics for signing up with the crew of washed-up showbiz denizens who seem to find nothing good done by President Rodrigo Duterte. I just want to point out that “foreign aid,” while it does come from overseas, is definitely not as benign or altruistic as it sounds—and that our continued dependence on it may in fact be stunting our economic growth and yes, causing hunger and widespread poverty.
In 2009, the acclaimed Zambian-born economist Dambisa Moyo wrote Dead Aid, which blew away the concept of foreign aid as a catalyst of growth for impoverished countries. Moyo, whose groundbreaking book became a worldwide bestseller, argued that while rich countries poured more than $1 trillion in development aid to Africa in the past 50 years, the lives of most people on that continent did not improve.
Moyo reported that poverty levels have continued to rise while growth rates consistently declined in countries that have become overly dependent on billions of dollars in foreign assistance spent on them yearly by aid agencies and Western countries. But the countries that refused infusions of foreign aid, Moyo said by way of comparison, prospered.
How did this happen? According to a review of Moyo’s book in Forbes magazine, “over-reliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion and further poverty, leaving them with nothing but the ‘need’ for more aid.”
Foreign aid, in this respect, is a highly addictive substance like “shabu.” And when we, the citizens of a poor country, start believing that we can no longer survive without foreign aid, then we’re in deeper trouble than we can ever imagine.
Foreign aid, also called Official Development Assistance, was the brainchild of the Organization of Economic Cooperation and Development, which is composed of the 28 richest donor-countries in the world. In 2013, these countries “gave” more than $150 billion in ODA to some of the world’s most impoverished countries, including the Philippines.
I put “gave” in quotation marks because ODA is never really free, nor can it be truly classified as no-strings-attached aid. In fact, foreign aid is almost always tied up with conditions that, as Moyo pointed out, actually impoverish the recipient while benefitting the countries that give the assistance.
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It’s like this, in the local setting: If a donor country like Japan, through its official aid outfit Jica (or Japan International Cooperation Agency), offers to build a highway here, that doesn’t really mean that we get a free road.
From the very beginning, the proposal will include a provision for local counterpart funds, which the Philippines will have to ante up if it wants to get the highway that Jica proposed built. This is regardless of whether the Philippines has money to spend for the highway or if it has other spending priorities; no counterpart money, no highway, honey.
Then, Jica starts conducting the studies and hires the consultants from Japan, who will be paid from the aid package, which will be partly paid for by taxpayers in the Philippines—who will pay for the loans that their government will make from Japanese banks, naturally. Jica will then hire a Japanese contractor to build the highway, again paying the builder out of the funds that both Japan and the Philippines put up.
In certain cases, the Japanese will even maintain the project, as part of the package of giving the concessional loan that will fund it. Bear in mind, Japanese banks, consultants and contractors have already made money out of what was billed as an “aid” project.
For the kicker, the new highway will increase sales of Japanese cars, the dominant motor vehicles in the local market. So it makes perfect sense for the Japanese to build us a highway —even if we never thought we needed one in the first place.
So how does a brand-new highway impoverish us or make us hungrier? Well, first of all, it ties down government funds that could have been spent for other, more urgent purposes that will directly alleviate poverty.
Because loan packages like those involving our imaginary highway will take many years to pay off and are protected in automatic repayment provisions in the national budget, we never get to see those funds. We just keep paying until the entire loan is paid—and we enjoy the trip on the highway we probably never needed, in our Japanese cars, while poverty continues to stalk the land.
So pardon me if I cannot really cheer for the likes of Agot Isidro whenever they warn us of going hungry because Duterte asks us to shun foreign aid and rely on ourselves for financial independence. As the president says, he just wants us to let go of our mendicant mentality, which is a direct result of our continued existence in the “mental colony” of our foreign-aid dependence.
Who’s psychotic now? Those who want us to remain poor while addicted to foreign aid, or those who want to be free from the trap of economic dependence created by the rich countries who keep getting richer at the expense of the poor?
