Aid with no strings attached?

Last Friday the newly appointed secretary of foreign affairs, Alan Peter Cayetano, made this statement with regard to foreign aid: “We will not accept aid from any country if there are strings attached, if there are conditions, because we are an independent nation, and we have an independent foreign policy.”

This statement echoes the Duterte administration’s recent announcement that it is rejecting all new foreign assistance from the European Union on the ground that the EU has been interfering in the Philippines’ domestic affairs.

The European Parliament has previously criticized the jailing of Sen. Leila de Lima, a staunch critic of President Duterte. It has also called out the Duterte administration’s conduct of the antidrug war for its seeming disregard of the rule of law, even as it warns against the administration’s plan to restore the death penalty and lower the age of criminal liability.

Indeed, the EU, the Philippines’ second largest trading partner and a major source of official development assistance particularly for projects in southern Mindanao, has been vocal in criticizing the administration’s resentful attitude toward human rights advocacy. Mr. Duterte has not bothered to hide his deep hatred for critics of his antidrug war. The other day, he publicly threatened to behead human rights activists who obstruct the administration’s war on drugs.

Even the President’s own Cabinet members are often unable to tell when their boss is making a statement of policy, or is just letting out steam. Socioeconomic Planning secretary Ernesto Pernia was incredulous when told that the President had made the decision to turn down all future EU grants that make any reference to compliance with norms on governance and human rights. Pernia, who worked with the Asian Development Bank for a long time, would surely have a more balanced understanding of the complexities of foreign aid than either Mr. Duterte or Secretary Cayetano.  It is astonishing that he had not been consulted on such a major decision affecting the country’s economic direction.

It is naive for any government to think that foreign development assistance — whether in the form of outright grants, or interest-free loans, or loans offered at concessional rates and terms — is freely given without any expectation. At the very least, a responsible donor would try to make sure the funds allotted are used for the purpose for which they are intended. In the development community, any donor or creditor that says this is none of its business immediately raises red flags.

It can only mean that important tacit understandings between donor and recipient are not fit to be written, and that certain obligations are being incurred according to unstated norms of reciprocity. The absence of transparency is the single most common source of corruption in all so-called development partnerships that involve large sums of foreign money. A few private pockets are lined but no development takes place, and, worse, the recipient country and future generations are left paying for accumulated debts.

There is no such thing as free aid. What there is is a country’s option to choose from a menu of available means with which to develop its economy and raise the quality of life of its people. All these available means carry some costs, and consequences — some economic, some political, and some environmental. When a country accepts tons of aid from another country, it most likely also accepts certain tacit expectations on the conduct of its foreign relations.

Does aid from China come with no strings attached? One only needs to take a look at the countries that supported China on the South China Sea dispute to see what aid can deliver. From the start, China had maintained that the Permanent Court of Arbitration did not have jurisdiction or was illegitimate. The Asian Maritime Transparency Initiative (Amti) tracked international opinion on this landmark case. On the eve of the verdict, China claimed that more than 60 countries backed its stand. The Amti checked this and found that of this number, only 31 publicly confirmed their support, while 4 denied backing China’s position. Twenty-six other countries in China’s list chose to remain silent or vague.

China’s staunchest supporters come from Africa, a continent into which it has poured billions of dollars in aid. They formed China’s “hakot” crowd. Seven African countries and one tiny Pacific nation, with no imaginable economic or geostrategic interest in the region but all recipients of Chinese aid, lent their names and joined the party — Gambia, Kenya, Lesotho, Liberia, Niger, South Sudan, Togo and Vanuatu.

In contrast, 40 countries backed the legitimacy of the arbitral tribunal, calling on China and the Philippines to respect its decision. It is worth noting that much of the strong support for the Philippines has come from its traditional friends — the United States, Canada, Japan, New Zealand, Australia, and Europe. Of the Asean countries, only Vietnam—in a display of sovereignty and geostrategic wisdom—stuck its neck out to support us all the way.

And now, for reasons not entirely clear to our allies and to the Filipino people, our government is poised to become China’s most loyal vassal in the region. The message we’ve been sending out to the world since Mr. Duterte took power almost a year ago is that we are prepared to junk the arbitral tribunal award we fought so hard to win in exchange for Chinese aid and investments.

But let’s be clear about this: These goodies come not with strings attached, but with a rope by which to hang ourselves.

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