Much-needed transparency

There is no such a thing as a free lunch.

This popular adage basically means that even if something seems like it is free, there is always a cost, or quid pro quo, no matter how indirect or hidden.

In a paper by Hirschman and Bird for Princeton University’s Department of Economics, they mentioned that “foreign aid is as Janus-faced an institution as can be found. In a world of sovereign nations, rice and poor, it is an instrument of national policy which can be used by the rich to acquire influence and to increase their power. At the same time, foreign aid redistributes income from the rich to the poor…”

They said that aid is given in the form of a check drawn by the donor to the order of the recipient without conditions or strings of any kind. This unconditional aid can then turn into conditional aid along two principle routes. First, the donor can insist that the money be spent for certain specific purposes and second, the donor may require that the recipient country change some of its ways and policies as a condition for receiving the funds.

Remember how President Duterte said that the Philippines will stop receiving development assistance from the European Union as a display of the country’s independent foreign policy? This was after the EU criticized the President’s anti-illegal drug campaign.

The President noted that aid from the EU comes with conditions, including a review of the country’s adherence to the rule of law. And this includes the right to question the government on human rights, which critics claim have been violated by the Duterte government due to the proliferation of extra-judicial killings in connection with the war against drugs.

Now, Foreign Affairs Secretary Alan Peter Cateyano says it is the country’s policy to decline foreign aid that comes with conditions, or those with strings attached.

But it is not only the Philippines that has recognized the fact that foreign aid is being used to influence foreign policy.

Reuters has reported that the India government led by Prime Minister Nerenda Modi has since 2014 tightened surveillance of non-profit groups, saying they were acting against India’s national interests. The report revealed that thousands of foreign-funded charities’ licenses have been cancelled for misreporting donations.

The intelligence wing of the Indian Home Ministry has noted that foreign interests making foreign contributions for purposes of lobbying against an established economic activity raises multiple concerns, including adverse economic impact on 35 million people.

The Home Ministry referred to tobacco control grants handed out by one US-based foundation.  Also according to Reuters, in 2015, the Home Ministry put Ford Foundation on a watch list and suspended Greenpeace India’s license under the Foreign Contribution Regulation Act.

The Foreign Contribution (Regulation) Act of 2010 regulates the receipt and usage of foreign contribution by NGOs in India, to prevent use of foreign contribution or foreign hospitality from a foreign source for any activity detrimental to the national interest. Specifically, the law regulates the inflow to and usage of foreign contribution by NGOs by prescribing a mechanism to accept, use, and report usage of the same. Foreign hospitality refers to any offer from a foreign source to provide foreign travel, boarding, lodging, transportation, or medical treatment cost, while the term foreign source includes foreign citizens, companies, governments, international agencies, foreign trust and foundations, among others.

India is the world’s largest producer of tobacco with around 46 million people depending on the tobacco industry for their livelihood.

Succumbing to strong anti-tobacco lobbying, India has passed extreme and unreasonable tobacco regulation to the consternation of the industry.

According to India’s Home Ministry, the anti-tobacco lobby wants to kill revenue generating activities.

In the Philippines, this US-based foundation is said to have, for more than a decade, funneled close to half a billion pesos in grants to local Philippine NGOs without any clear accountabilities, lack of transparency and without the benefit of any public auditing rules and standards.

Among the known recipients of these funds based on the foundation’s own website are the anti-tobacco NGOs that have lobbied for the passage of the Sin Tax Law as well as government agencies like the Civil Service Commission (CSC), the Metropolitan Manila Development Authority (MMDA) and the Food and Drug Administration (FDA).

Indeed, the Sin Tax Law has accomplished its public health goal of reducing smoking incidence in the Philippines. The Global Adult Tobacco Survey reported a decrease in the number of smokers in the country from 17 million in 2009 to 15.9 million in 2015.

But like India, the Philippines has a robust tobacco farming community. Millions of people depend on the industry for livelihood. After the passage of the STL, local tobacco production however went on a steady decline. According to the National Tobacco Administration, domestic production dropped from 68 million kilos in 2013 to 52 million kilos in 2015. The number of farmers growing tobacco decreased from 55,000 in 2014 to 41,000 to 2016 while the areas planted with tobacco shrunk from 38,264 hectares in 2014 to 28,808 in 2016.

Government revenues also dipped as a consequence, from P109 billion in 2012 before the STL to around P80 billion in 2016. The dramatic drop in revenue is however not at pace with the reduction in the number of smokers, some of who are probably using cheaper smuggled cigarettes.

The Euromonitor International cited the Philippines as the leading country in the world in terms of illicit cigarette growth from 2010-2015, followed by Chile, Egypt, Israel and Greece. Only South Korea at number 10 joined the Philippines as the only country from Asia in the top 10 list.

A recent study conducted by the Federation of Philippine Industry on the impact of illicit trade in eight key industries valued the volume of illicit cigarettes found in the market from 2013-2015 at P9.8 billion.

Now comes Executive Order 26 signed by President Duterte that regulates smoking in enclosed public places.

While anti-tobacco NGOs and even the Department of Health call this an absolute smoking ban, even a cursory reading of EO 26, the earlier Tobacco Regulation Act which served as the EO’s basis, would show that smoking is generally not prohibited, only regulated. In open or outdoor areas, whether public or private, smoking is still allowed. However, in enclosed places, public and private establishments must provide for a smoking area.

I have received my share of criticisms for allegedly protecting smokers. Come on, I did not prepare Republic Act 9211 or EO 26. I am merely pointing out to over-eager beavers, or those who prohibit smoking even in open public places, what is in these issuances. And yes, I have stopped conventional smoking a long time ago, but trying out alternatives. So like other non-smokers, yes I hate tobacco smoke, especially second-hand smoke.

Whether we like it or not, foreign donors always have an agenda, even if this is to make the world a better place. But it is about time that our government, like that of India, pass a law that regulates and holds accountable NGOs for their foreign funding for transparency’s sake. I am not saying that foreign aid per se is evil or that NGOs that receive foreign funding are not to be trusted. Far from it. But when foreign money attempts to interfere with our domestic policy and industries, then it is our government’s role to make sure that we are not being made unwitting or unwilling pawns in a much bigger game.

Not So Hidden Agenda

BETTER RELATIONS: Nagasaki Japan officials led by Governor Houdo Nakamura (center) visited Manila recently to foster better relationship in the areas of tourism, culture, history, and religion between Nagasaki and Manila, Cebu and/or Clark. During their four-day official visit, the group paid a courtesy call on the Embassy of Japan, visited Cardinal Luis Tagle, and Philippine Airlines for possible direct flight between Nagasaki and the Philippines. Others show in photo are Robert Lim Joseph, president of Network of Independent Travel and Allied Services; and Ralph Lim Joseph, president of Wine Museum during the dinner reception.

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