Inquirer Headlines: Nation

A World with Extreme Poverty is a World of Insecurity.

Saturday, September 29, 2007

Donor-driven, donor-dependent

Opinion / Financing and Population Management

Health News and Views / Dr.A.G. Romualdez / Malaya, 25 September

Donor-driven is the term used by a number of senators to describe the ZTE-NBN project. The fact is that the deal was also supplier-promoted and externally facilitated. All these features rendered the ZTE deal extraordinarily susceptible to unsavory practices such as bribery and other forms of corruption.

However, apart from the immensity of the amounts involved and the exposure of unprecedented direct participation by very high-ranking officials, donor-driven, supplier-linked, and externally facilitated projects are the rule rather than the exception in most foreign assisted projects in the Philippines, whether they be bilateral (one country donor) or multilateral (international finance institution).

In the health sector, Japan, Netherlands, Austria, Spain, and in fact almost all OECD countries have in the past implemented projects with features similar to the controversial broadband network deal. The modus operandi for project development is essentially the same in most cases.

The story usually begins with a supplier who is well-connected in the donor country. The supplier identifies and approaches a local group that has vested or professional (or both) interests in an activity and offers to secure funding for a project. In exchange, the local group is expected to facilitate the government processes for project development and approval including counterpart funding or government guarantees when necessary. Depending on the donor countries’ procedures for overseas assistance, the deals can be finalized anywhere from one year to a few years of initial contact.

At this point, it should be emphasized that not all projects that follow this process are disadvantageous to the Philippines. In fact most of them are of distinct benefit and have contributed to peoples’ welfare significantly. The Research Institute for Tropical Medicine (RITM) in Alabang (funded by Japan) and the Eye Institute as well as the Emergency Medical Complex at the Philippine General Hospital (funded by Spain) are only two examples out of many.

Unfortunately, quite apart from the potential for scandal and graft, there are other adverse effects of foreign assistance that need to be anticipated and to the extent possible mitigated. The worse of these are most likely when the supplier-linkage is eliminated or minimized such as is the case with most multilateral agencies such as the World Bank and the Asian Development Bank.

Among the most undesirable of these adverse effects is the strong tendency to develop donor dependency in Philippine institutions. Donor dependency is in the long term more harmful to Philippine interests than some of the financial consequences of individual projects. Unfortunately, in the health sector there are a number of examples.

Arguably one of the most successful of foreign funded programs in this country is USAID’s family planning assistance. Over the last three decades, population growth rate dropped significantly, and the population management program is so well institutionalized that repeated attempts (including the present administration’s) to dismantle it have so far failed. However, the country’s complete dependence on foreign support for contraceptive supplies, aided and abetted by government’s reluctance to allocate money early in the program, has resulted in today’s dangerous situation of lack of supplies especially for those who need them most – the country’s poor women.

Similarly, a number of apparently successful programs currently on-going are in danger of suffering the same fate if and when donor interest wanes. For instance, drug procurement for the Philippines’ most important disease control programs is largely dependent on funds from the Global Fund on AIDS, TB, and Malaria (GFATM).

The Department of Health’s Formula One strategy to institute health reforms in the Philippines is another example of donor dependence preventing the major portion of the Philippines from benefiting from serious changes in the way health services are delivered. All efforts are concentrated on 16 provinces identified by a combination of past experience (old pilot projects) and donor-interest that are beneficiaries of World Bank, European Union, Asia Development Bank or other donor agencies projects. It appears that without foreign-funding, even the highest of priorities are unlikely to receive attention because no Philippine funds are appropriated for them.

One characteristic that is shared by all donor-driven activities is over-pricing. This is because it is in the donors’ interest to spend as much money as possible. In the late 70s, when it was established that 95 percent of the World Bank’s First Philippine Population Project objectives had been met at a loan availment rate of 55 percent, a na├»ve health official suggested that the excess money be returned. The government finance establishment was aghast and instructed the health ministry to forthwith reprogram the funds for other activities.

For the record, these instructions were issued without finger pointing and the use of the phrase "back off".

Tuesday, September 4, 2007

The big reveal: Model cities’ secrets of governance

By Beverly T. Natividad, Tonette Orejas
Last updated 01:10am (Mla time) 09/02/2007

MANILA, Philippines -- Poor residents of Tagbilaran City in Bohol get free hospitalization benefits and free medicines.

Marikina in Metro Manila offers free dental services to its residents, while San Fernando City in Pampanga has placed some 6,000 of its residents in jobs here and abroad through its job fairs and recruitment projects.

“Tagbilaran is telling us that we are our best hope. San Fernando has rebuilt from the ashes [of Mt. Pinatubo] and has provided an empowering atmosphere. Marikina is moving the concept of leadership into [one] that ennobles the people,” said Mario Antonio Lopez, associate dean of the Asian Institute of Management’s Center for Development Management.

If these three cities are edging out their counterparts in the rest of the country, it’s not that their mayors—Marikina’s Ma. Lourdes Fernando, San Fernando’s Oscar Rodriguez, and Tagbilaran’s Dan Neri Lim—are lords of all they survey.

Far from being a one-person act or a top-to-bottom management approach, their style of governance involves a way of doing things that demands the participation of both the governing and the governed.

They share the power and responsibilities of governance with those who have stakes in their communities and institutions, involving them every step of the way to reach commonly agreed aims and targets.

Tagbilaran, Marikina and San Fernando were recognized as public governance system (PGS)-proficient cities at the two-day 2007 Public Governance Forum in Pasay City last week, dubbed the ‘Mahal Ko Ang Pilipinas’ (I Love the Philippines) forum.

They were three of 24 cities that adopted the PGS system, which is an adaptation of a corporate governance tool called the “balance scorecard system,” a strategic approach that directly connects the objectives of a company or local government to its operations.

Introduced by the International Solidarity in Asia (ISA) in 2004, the PGS is also being practiced in 14 sectors and six national public institutions. The ISA is an independent, non-partisan and non-profit institution which seeks to improve public governance.

“A PGS-proficient city means that these cities have mayors that are committed towards good governance, that they have highly involved constituents and sectoral groups, and that their governments have discipline and are transparent,” said ISA chair and president Jesus P. Estanislao.

The Philippine Military Academy under its superintendent, Maj. Gen. Leopoldo Maligalig, was also recognized as a PGS-proficient institution.

Estanislao said that while Filipinos are used to blaming their leaders for the inadequacies and failures of government, the PGS system teaches both leaders and citizens to think past government personalities and focus instead on active citizen participation. This is what makes good public governance sustainable, he said.

The ISA has partnered with the League of Cities of the Philippines (LCP) and the National Competitiveness Council to “aid cities in crafting programs that will push the competitiveness rating of the country.”

It has also teamed up with the AIM to develop “tools to gauge and track a city’s progress” and with the Netherlands government to “sustain the institutionalization of the PGS in select Philippine cities.”

The PGS will be one of five case studies to be featured in the Global Public Sector Summit in Washington, D.C. in October.

Being PGS-proficient means Marikina, Tagbilaran and San Fernando are about six months to one year away from institutionalizing the PGS in their own public governance systems.

The participating cities started off three years ago by drafting their objectives and plans for their cities.

The ISA conducts a twice-a-year audit of the participating cities and groups to see if they are on the way toward achieving their goals.

Marikina’s vision for itself is to become a model city in competitiveness, not just in the Philippines, but in Southeast Asia by 2015. In her presentation, Fernando said that Marikina was working towards this goal, using such indicators as honest, transparent and business-friendly government, a clean and green environment, efficient delivery of basic services, good infrastructure and financial stability.

The free medical and dental services at the health centers is one of the concrete results of the PGS system in Marikina. The privilege card is an example of how the people’s taxes are working for them, she said.

The city has also relocated 30,000 families and is on its way towards being squatter-free by 2010, she said.

Fernando said business permits have been streamlined to encourage businesses to locate and invest in the city to create more jobs. The city is also aiming to eradicate unemployment in three years.

Tagbilaran aims to become a prime ecotourism hub by 2015. In line with this, Lim said the city is focusing on environmental protection to preserve the marine-protected areas of Bohol.

He said the city has already rehabilitated about 80 percent of its coral reef cover. It has reduced solid waste disposal by 20 percent, with 65 percent of the city’s residents practicing segregation of solid waste at source.

Tagbilaran was also one of the first cities to phase out the two-stroke engine in tricycles through a credit system that allows tricycle drivers to buy on installment the more environmentally compliant four-stroke engine.

The Tagbilaran city government has also provided indigent families with the Blue Card that entitles them to free hospitalization in the city’s two major hospitals. Lim said the program brings to 99 percent the number of city residents with health insurance coverage.

Tagbilaran also topped the Asian Institute of Management’s recent quality of life survey among cities with a population of 200,000 and below.

San Fernando’s stated goal is to become the regional growth center of the Central Luzon region. It has streamlined local government policy and practices to make it conducive for foreign and local businesses to locate there. It succeeded in attracting about P481 million in new investments in 2006.

The city’s renowned parol (Christmas lantern) has been chosen by the national government as the model for the “one-town-one-product” project in 2006, aimed at marketing the product to the world market.

Rodriguez also said that some 6,000 urban families affected by the construction of the Northrail project are being resettled by the city government.

The city government is also funding the education of some 8,000 scholars who are receiving information and communication technology (ICT) training so they can compete for jobs locally and abroad.

The city has also built 35 school buildings to accommodate 150,000 students in the next 10 years through the city’s special education fund, Rodriguez said.

In the PMA’s case, Maligalig said the shift to long-term institutional development has, among others, improved the success rate of graduates from 36.8 percent to 64 percent.

The mayors of the three cities agreed that the secret of making public governance work is the people’s commitment towards achieving a vision for their city.

“Our people have an open mind and an open heart. This comes from the collective effort of the people,” said Lim.

It is having capable constituents who know enough to put the right person in a position of leadership, said Fernando.

Good governance is just the commitment of both the people and their leader towards achieving a vision for their city, according to Rodriguez.

For Lim, it is simply “loving your own city.”

“Governance is essentially participatory. It is not only of those at the top, it is also a responsibility of those in the middle and at the bottom. It is the concern of everyone. It is a matter for both the governors and the governed,” said Estanislao.

At the end of the day, the PGS system shows that doing good pays, he said.

The principles of governance are not hard-to-reach concepts, they are, in fact, basic ethical principles, said another speaker at the forum.

The governance principles of transparency and disclosure are just echoes of the commandments “Thou shall not lie” and “Thou shall not steal,” he said.