Grants and strings | The Daily Guardian


THERE’S much talk about Martial Law in Mindanao, and rightly so. Vigilance is one preventive measure against human rights abuses, especially if the military is given power over civilians.

But while we debate on the merits and demerits of Martial Law, I would like to direct our attention to the recent decision of the Duterte administration to refuse grants from the European Union.

Professor Richard Javad Heydarian posted an analysis on GMA News Online (- See more at: in an effort to shed light on Duterte’s move:


Five facts about EU grants and Duterte admin’s posturing


By Richard Javad Heydarian


Over the past few days, something strange has been happening.

For the first time in our modern history, the Philippines has openly threatened to reject any external assistance that is expressly based on specific political conditions. Henceforth, we would turn down any assistance that comes with strings attached — or that seems to be the plan of the Duterte administration. After all, as a sovereign nation, the Philippines has the sovereign right to resist any “undue interference” in its domestic affairs.

This (supposed) dramatic shift, if not revolution, in our foreign policy followed, quite characteristically, a great measure of confusion. First came the news that the Department of Finance (DOF) rejects any aid from the European Union (EU), the world’s largest economic bloc and now the Philippines’ top export destination. Executive Secretary Salvador Medialdea tried to justify the move by stating, “We’re supposed to be an independent nation.”

Then later came explicit resistance by other government agencies, particularly the National Economic and Development Authority (NEDA), with Secretary Ernesto Pernia lamenting, “I will not take that as a policy. It is more of a reaction to criticism. I don’t think it’s going to remain as such…This is not going to be customary. It’s a one-time act.”

Though the DOF is in charge of dispensing with EU grants, NEDA is a key agency, since it is in charge of identifying, together with EU authorities, which projects should be prioritized and funded. Based on my knowledge, the “rejection” news coincided with an important meeting between EU and NEDA authorities on how to the two sides should move forward with their joint projects. This is most likely why Secretary Pernia reacted the way he did.

It later emerged that even the Department of Foreign Affairs (DFA) wasn’t fully informed about the situation. Then came the usual clarification from Duterte’s eloquent spokesman, Ernesto Abella, that what was in question wasn’t the entirety of EU grants, but instead only those with expressed political conditionalities.

Before judging the merits and validity of the latest headline-grabbing move by the Duterte administration, we have to keep five key facts in mind:

First, the European Union has provided close to €250 million (P13.8 billion) ‘grants’, which are donations rather than interest-based loans, which have undergirded our relationship with other major powers such as, say, China. In short, we are not expected to pay them back with interest rates.

Second, the EU grants are not bags of cash handed down to corrupt officials sans any accountability, transparency, and performance-based objectives. They instead are targeted towards capacity-building (strengthening our state institutions’ ability to provide basic services), provision of post-disaster rehabilitation and reconstruction, and peace process and post-conflict development, particularly in President Rodrigo Duterte’s home island of Mindanao.

Third, the EU grants are part of a broader package of assistance, which the regional body provides to its partners, particularly developing nations and emerging democracies. For instance, the Philippines currently enjoys special preferential trading arrangement, the so-called GSP+ (Generalized Scheme of Preferences-Plus) with the world’s biggest market, where bulk of our exports enter the EU with almost zero tariff. Among the biggest beneficiaries are thousands of fisher folks, furniture producers, and agricultural exporters.

Fourth, it seems all EU grants (as well as the GSP+) are actually based on some kind of conditionality, meaning there is an expectation, written into contract, that the recipient nation meets certain criteria in exchange for development assistance. This is where the Philippines can’t just pick and choose, but will have to either consider full-scale rejection of all aid or consider a compromise with the EU.

Fifth, the EU’s conditions are neither as intrusively implemented nor as potentially destabilizing as those imposed by the International Monetary Fund during periods of credit crunch in the 1980s and 1990s or, say, neo-imperial powers on weaker nations in recent years. In fact, the EU has mostly sought to encourage recipient countries to observe labor rights or universal values, enshrined in the United Nations’ charter, such as human rights. If anything, the EU is open to dialogue and partnership with its partners in an event of disagreement or misunderstanding.

Honestly, what we are likely witnessing is classic posturing. The Duterte administration wants the EU to stop its criticism of its war on illegal drugs lest currently productive development partnerships fall apart. It is a risky move, which could jeopardize the interest of many ordinary folks, who depend on the EU assistance.

The truth is, rejecting the EU’s grants won’t likely stop them from criticizing what they view as undemocratic/inappropriate elsewhere. If anything, it could get worse. In my view, there is still much room for dialogue and mutually-acceptable compromise.

(Prof. Richard Javad Heydarian is GMA News Resident Analyst)

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