Is foreign aid bad for PH?

In recent pronouncements of President Duterte, he challenged the European Union and the United States to withdraw aid from the Philippines, and declared that it would survive without assistance from donor countries and organizations.

His projection of himself as a “strong” man and of the Philippine government as capable of delivering basic social services to its people by itself is messianic on many levels. He sees himself as the absolute key to solving poverty and developmental issues, and puts himself at the frontline as one man against nations: me versus the West.

Political ideologies and the rationalism of a head of state are instrumental in shaping foreign relations, but how does the President plan to implement his idea of an “independent foreign policy”? To brag that he is willing to suffer the loss of aid is heroic, but selfish. He must learn to compartmentalize his emotions, to leave his personal feelings two steps behind him, and to speak with vision and bias for sound economic policies.

The debate on whether foreign aid is good or bad is not new. Foreign aid gets thumped by academics, public servants, and even by the people, and most of the time, the argument used to discredit it is the issue of effectiveness. For example, Sub-Saharan Africa receives $134 billion each year in loans, foreign investments and development aid, and yet in 2014, research suggested that $192 billion leaves the region. And most African nations are still impoverished.

The use of foreign aid should be contextualized. The country’s forgotten war on poverty is mainly centralized on Mr. Duterte’s attempt to stop the use of and trade in illegal drugs. He forgets the necessity of a comprehensive social policy that could put domestic policies and programs in sync with foreign aid deposits.

Worse is the conclusion that foreign aid is the cause of a nation’s socioeconomic stagnation. It is shameful to argue that foreign aid in its absolute form is ineffective without considering how domestic socioeconomic policies and good governance work. Aid is not bad per se, and to disregard its benefits without looking into the domestic priority agenda not only puts the country’s socioeconomic progress in bad shape but also prevents the people from collectively working for a participatory and stakeholder-centered track of development.

In 2014, according to the National Economic and Development Authority, the United States contributed $1.15 billion, the highest amount of official development assistance (ODA). The United Nations came second with $608 million, followed by Australia with $587 million. The 27-state European Union was fourth with $175 million.

Rounding up the top 10 ODA grant donors were Japan with $167 million; Germany, $125 million; Asian Development Bank, $118 million; South Korea, $94 million; and World Bank, $84 million.

In November 2013, an online site, an initiative to promote transparency, was launched by the Foreign Aid Transparency Hub (FAiTH), which mentioned that the European Union contributed $20 million in the aftermath of Typhoon “Yolanda” (Haiyan).

According to Devex, in 2011 the World Bank scaled up its support for the Department of Social Welfare and Development’s Pantawid Pamilyang Pilipino Program, from $50 million to $405 million. Additional financing was also earmarked for the Kapit Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, intended to develop communities’ capacity to craft, implement and handle poverty-reduction activities.

The issue is how the Duterte administration can devise holistic solutions across sectors and reconceptualize partnerships. The participation of both the government and donor organizations is crucial to ensure that efforts previously launched for development are sustained over time, and that what has been done through the collective action of various stakeholders are not left behind.

Reuben James T. Barrete is sectoral development officer at the International Center for Innovation, Transformation and Excellence in Governance.