ACCRA ACTION AGENDA ON AID: LITTLE PROGRESS IN CHANGING DEEPLY FLAWED GLOBAL AID SYSTEM

ACCRA ACTION AGENDA ON AID: LITTLE PROGRESS IN CHANGING DEEPLY FLAWED GLOBAL AID SYSTEM

The Accra Action Agenda (AAA) endorsed by ministers at the 3rd High Level Forum on Aid Effectiveness inAccra , Ghana makes little real progress towards making aid more developmental.

The AAA fails to address the most essential concerns with the greatest impact on development in the Third World : democratic ownership of aid, policy conditionalities, tied aid and the foreign debt burden. The AAA instead gives undue attention to technical procedures in aid delivery and management to divert from its glaring inattention to the development issues that matter the most.

The Paris Declaration of 2005 raised the promise of improving the global aid regime. However the AAA supposedly aimed at deepening implementation of the declaration underscores the deep-seated resistance of donors to genuine reforms in the aid system. Donors have effectively still reserved the right to set conditionalities. They have not committed to eliminating tied aid. They have avoided making concrete, measurable and time-bound commitments to building democratic ownership of aid and development policies. Donors have completely avoided the vital issue of crushing debt burdens.

Yet “free market” policy conditionalities have gravely harmed Third World agriculture, stifled industrial progress, and worsened poverty and unemployment. Tied aid has assured donor country benefits at the expense of local needs. Ownership has been claimed more by donors and recipient country elites than grassroots communities. And debt service by the Third World is many times the amount they receive in official development assistance (ODA)

It is an opportunity that the AAA has been compelled to at least acknowledge these issues and it is welcome that civil society organizations (CSOs) have an increased presence compared to previous years. However this opportunity will be meaningless and the CSO presence will be mere tokenism if there are no clearly defined and effective reforms in the aid system.

AidWatch Philippines and IBON Foundation are among the CSOs participating in the 3rd High Level Forum that demand clearly defined and time-bound commitments to accomplish various targets by 2010. At the minimum this includes: 1) a broad but clear definition of ownership such that citizens, CSOs and elected officials are central to the aid process at all levels; 2) measurable commitments on the predictability of aid flows by 2010; 3) elimination of tied aid by 2010, with food aid and technical assistance no longer donor-defined; 4) development and implementation of new standards for transparency by 2009 including making information available to the public; and 5) an end to policy conditionality.

ODA clearly remains donor-driven with the main objective of serving donor foreign and economic policy interests. Developmental outcomes, if any, are oftentimes just incidental and only to the extent that donor commercial, political and diplomatic interests are not threatened. In Accra for instance, the United States used its clout to dilute language on ownership and conditionalities while Japan opposed proposals to untie aid. Recipient governments in turn comply rather than jeopardize aid flows and possibly important resources for development.

The challenge remains for the people and governments of underdeveloped countries to reject false aid that does not genuinely reduce poverty, advance gender equality, uphold human rights and promote environmental sustainability. Aid must also not be a matter of charity from rich to poor countries but of people achieving their right to development with all the resources at the world’s disposal.

AidWatch Philippines is a national network of grassroots-based non-government groups working on ODA issues in the country. It has over 150 members in more than 50 provinces nationwide, including 10 national networks, and regional formations.

AidWatch Philippines aims to deepen relationships and develop various levels of collaboration between NGOs on aid-related issues and concerns. It also looks forward to constructive engagement with official government and donor agencies on the basis of fundamental development principles.

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AS GOV’T HOLDS FOOD SUMMIT : REVERSE RP’S DEPENDENCE ON FOOD IMPORTS, THINK-TANK URGES

The Philippines has become too dependent on food importation to make up for its shortfalls in domestic production and should reverse this trend, says independent think-tank IBON Foundation as the Department of Agriculture opens its Food Summit today.

“Importation should only be a short-term solution to supply shortages, “ said IBON executive editor Rosario Bella Guzman.

“In the long-term the government must make the country self-sufficient in the production of its staple foods such as rice, not just to guarantee that Filipinos have enough to eat without relying on foreign markets, but also to ensure sustainable development.”

According to data from the Bureau of Agricultural Statistics, the country imported 808,000 metric tons (MT) of rice in 2001, or 10% of total rice disposable of 8.1 million MT. By 2006, imports had grown to 1.7 million MT or 17% of total rice disposable of 10.3 million MT.

As the Department of Agriculture made a positive step of raising the buying price of palay to P17 per kilogram from P12, it should ensure that traders do not translate this to unreasonably higher prices of commercial rice.

Government should also allocate more funds for buying from local farmers, said Guzman. If the P5 billion announced by Pres. Arroyo were used, it would only buy some 300,000 MT– less than one percent of the expected production this year of 7.2 million MT of palay.

If the estimated P62 billion that would be used this year for imports were allocated for local procurement, the NFA could purchase from farmers 3.6 million MT of palay. Aside from benefiting local farmers, this would also help NFA address the issue of hoarding by unscrupulous rice traders.

“The Food Summit should focus on such urgent measures that will help improve our local producers,” said Guzman. “The country’s experience since the 1990s clearly shows that importation has only terribly worsened the country’s self-sufficiency in food.”

GOVT URGED TO DISCONTINUE BANKRUPT LAWS LIKE AFMA:Policies only worsened RP’s dependence on rice imports

Independent think-tank IBON Foundation today urged the Arroyo administration to discontinue policies like the Agriculture and Fisheries Modernization Act (AFMA), which has only contributed to the country’s current rice crisis.

Rice imports have consistently increased since the AFMA was signed into law in 1997. From 722,000 metric tons in 1997, rice imports as of 2006 have already reached 1.7 million metric tons. For 2008 the country is estimated to import some 2 million metric tons of rice.

AFMA, which was signed in 1997, promised to develop and modernize the agriculture sector through investments and importation of machinery. It allows the private sector to participate in rice importaion, and targets to separate and partly privatize the regulatory and trading functions of the NFA.

The AFMA complements the government’s medium-term plan in agriculture, which aims to reduce the production of rice and corn from 5 million MT to 3.1 million MT and invite foreign businesses to invest in the country’s key production areas.

Neither the medium-term plan nor the AFMA can address the basi c p roblems of the country’s farmers, such as lack of support services and subsidies. Instead, it encourages more foreign investment in export-oriented agricultural production through the Strategic Agriculture and Fisheries Development Zones (SAFDZ).

The country can never achieve food security and self-sufficiency under liberalization policies like AFMA because it promotes entry of foreign investments in the local agriculture instead of supporting the sector and subsidizing Filipino farmers. What is needed is for the government to address age-old problems through government support for agriculture and reversing trade liberalization, while implementing genuine agrarian reform.

SMALL FARMERS UNLIKELY TO BENEFIT FROM ‘AGRI EXPORT BOOST’ UNDER JPEPA

The Department of Agriculture (DA) is trying to gain public support for the ratification of the Japan-Philippines Economic Partnership Agreement (JPEPA) by flaunting that the free-trade pact will secure some US$353 million (P15.6 billion) worth of existing agricultural and fishery exports to Japan . But the benefits, if indeed there will be any, will be cornered by corporate agri-businesses and local rural elites, according to independent think-tank IBON Foundation.

IBON research head Sonny Africa pointed out that food exports are actually only a small and diminishing share of total Philippine exports to Japan , accounting for just 7.4% of total exports from 2001 to 2006. But even if agricultural exports would be boosted by the JPEPA, grassroots farmers and farm workers are in practice unlikely to benefit.

Because of backward production methods, most local farms are not in a position to access the Japanese market, since their produce may be unable to meet strict Japanese phystosanitary and other quality standards. Freshness is also an issue given the lack of transport, storage and marketing infrastructure to bring the fruits to Japanese consumers.

Africa said that small farmers and farm workers may even be worse off as the agri-business intensify their use of contract growing and farm lease arrangements to improve their profits. The oppressiveness of such arrangements is well known, he said, as the contract growers bear all the risk of cultivation.

Moreover, small fisherfolk are also likely to be the worst hit of JPEPA as the free-trade pact allows Japan ‘s factory ships and fishing vessels access to the Philippines ‘ exclusive economic zone. A single Japanese factory ship could harvest as much as 50,000 metric tons of tuna a year.

This would worsen the state of municipal fishermen who are already suffering from a declining share in total fisheries production. Over the period 1992 to 2005, the share of municipal fisheries to total fisheries production fell from 41% to just 27%, even as they accounted for 85% of operators in the sector.

In the end, Africa said, the greatest benefit from increased agricultural exports will go to big agri-business transnational corporations (TNCs) and their big local corporate growers. These corporations have vertically integrated operations spanning the growing of the products in plantations, specialized packaging and storage, transportation, shipping and distribution which would allow them to take advantage of export markets. They also have control of the associated capital and industries.

Africa said that if the Senate would ratify the JPEPA despite the groundswell of protest against the trade pact, it would be responsible for further opening the country’s agricultural and marine resources to exploitation by Japanese and other transnational corporations, and sacrificing the welfare of the country’s small farmers and fisherfolk

FEAST OR FAMINE? RP-CHINA FARM DEALS AND LOCAL AGRICULTURE

China is looking at the Philippines to meet its domestic food and energy requirements even as the Chinese economy is being restructured into an enormous assembly hub of manufactured goods for the American, Japanese and European markets.

By Arnold Padilla

IBON Features– During Chinese Premier Wen Jiabao’s state visit here last January 2007, the country signed some 18 agreements on the agriculture sector with the Philippines . These efforts form part of Pres. Arroyo’s 2004-2010 Medium-Term Philippine Development Plan agriculture target of additional two million agribusiness lands, which is expected to generate at least 2.8 million additional rural jobs. But while some non-government organizations and civil society groups criticize the concerned government agencies for not consulting the farmers first and for lack of transparency, the more fundamental issue is that the deals would further worsen landlessness, undermine genuine agrarian reform, national food security, and rural development – and these threats are imminent.

At least four of the farm deals involve government’s commitment to provide at least 1.24 million hectares for hybrid corn, hybrid rice, and hybrid sorghum farming, leasing for sugarcane and cassava plantation; demonstration farm for sweet corn, and rice and corn production, agro-tourism, and organic farming. In addition, local bioethanol producers signed four joint venture deals with Chinese partners for domestic bioethanol production that also involve hundreds of thousands of hectares of agricultural lands; and three joint venture deals on aquaculture production.

Remiss in land reform implementation

For the China deals, the Department of Agriculture (DA) has already identified and certified as “available for investment” at least 127,000 hectares covering 32 municipalities in five provinces for the production of sweet sorghum, rice, sugarcane, corn and cassava. Government justifies these arrangements by arguing that Chinese intervention would help improve agricultural productivity and incomes as it targets lands distributed under the Comprehensive Agrarian Reform Program (CARP) but are “unproductive”, as well as alienable and disposable lands and forest lands that remain idle. So-called idle A&D lands are around 4.8 million hectares while idle forest lands that can be used for agricultural purposes are around four million hectares.

But such CARP lands should have been made productive by government as part of a comprehensive and genuine program for development of local agriculture, even without the Chinese deals. Further, if there are 8.8 million hectares of idle A&D and forest lands for production, why does landlessness remain rampant in the country despite numerous attempts at land redistribution dating back to the American colonial period? It should be noted that poverty in the country is most prevalent in the countryside, and a major cause of such poverty is the landlessness of the farmers and peasants.

These points go straight to the heart of the issue of the Chinese deals: that past and present administrations have been remiss in implementing a true agrarian reform program, that CARP is flawed and the deals will only aggravate the problem of widespread landlessness of farmers. Land reconcentration is also highly possible if these deals will be fully implemented because by experience, arrangements wherein farmers are asked to enter into production and marketing tie-ups with agri-business corporations lead not only to farmers losing control of their lands, but losing ownership altogether.

Worsening Food Security

Another major concern about the deals is the possible aggravation of the country’s food security. Since the mid-1990s, the Philippines has completely turned around from being a net food exporter to a net food importer with a yearly food trade deficit of $754.7 million from 1995 to 2005. This shift is because of crop conversion and land use conversion to meet the global demand for high-value crops have compromised domestic food production. The shift to biofuels production is a continuation of this trend and, given the growing demand for bio-fuels, may increase the risk of inadequate and inaccessible food supplies.

China ‘s rapid economic expansion makes it one of the most voracious consumers of fuel in the world and its demand for biofuels is expected to rise in the coming years. But its domesti c p roduction of biofuels is not likely to meet growing demand as it prioritizes its food supply over its need for biofuels.

This means that for its supply, China must increasingly turn to East Asian producers such as Malaysia , Thailand and the Philippines , which recently enacted the Biofuels Act of 2006 to establish the needed policy environment. Thus, China is actively pursuing joint bioethanol production arrangements with Filipino firms and has taken a keen interest in developing lands that could be used to cultivate “energy crops” or crops that can be used as feedstock for biofuels.

This restructuring of domestic agriculture has already taken away all state guarantees and mechanisms to guarantee food security. In the case of the Biofuels Act, for example, there is no provision to prevent corporate growers from converting lands dedicated to food crops to large-scale bioethanol and biodiesel production for export if they find it more profitable than producing crops for domestic food consumption.

Aside from compromising domestic food supplies, the farm deals also further weaken food accessibility in the country. The massive dislocation from the means of production of farmers and fishers means increased poverty for them and their families and will seriously weaken their ability to buy their food needs.

Behind the Deals

The Philippines sees the emergence of China as a key economic force in the East Asian region as an opportunity to boost its domestic economic development. The country wants to tap investments from the Chinese government for much needed capital to finance projects in agriculture, infrastructure and industry. Such projects are seen to create jobs, increase income and enhance economic activity.

China , on the other hand, is pursuing an aggressive campaign to open more export markets to sustain its economic growth, particularly in the wake of its becoming a member of the World Trade Organization (WTO). It is also seeking new sources of food, mineral and fuel resources to feed its booming economy. This is the context of the dramatic increase in bilateral economic agreements between the two countries in recent years.

From only five agreements on trade, investment and finance from 1975 to 2000, the figure jumped to 14 from 2001 to 2007. Agreements on agriculture signed by both countries similarly increased from six to 21 during the same period. All in all, the two countries have forged 89 bilateral agreements on various areas from 1975 to 2007, of which 32 were signed during the January state visit of Chinese Premier Wen.

A closer look at the Chinese economy shows that since it abandoned the socialist construction in the 1970s, transnational corporations from the First World have steadily and increasingly intensified their control and domination not only of its local market but its export-import sector as well. This means that burgeoning manufacturing “giant” China , which in actuality still lacks a First World-type industrial base, is at the mercy of a global market dominated by the industrialized nations.

China ‘s aggressiveness in forging economic agreements with the Philippines and other Southeast Asian countries is thus not driven simply by its agenda of increasing its influence in East Asia . In the context of the farm deals, for example, China is looking at the Philippines to meet its domestic food and energy requirements even as the Chinese economy is being restructured into an enormous assembly hub of manufactured goods for the American, Japanese and European markets. In other words, China itself, like the Philippines and other underdeveloped countries, is a victim of the distorted concept of development and industrialization imposed by First World countries.

Towards a True Partnership

The country should pursue stronger “South-South” partnerships such as its bilateral relations with China because the potential for a more meaningful cooperation and mutual benefit is greater than its “North-South” relations (i.e. with the US or Japan ). But such partnerships only become meaningful and mutually beneficial if they recognize common issues that beset the countries involved and from such recognition establish a cooperation program that aims to find a shared solution.

In the case of the Philippines and China , their common issue is that global monopoly capitalism has distorted their respective economic growth (although at varying levels given their respective historical development) and the logical solution is to find an alternative model of economic partnership that will truly promote their industrialization. Unfortunately, closer Philippine-China relations is being built not on this premise but to allow the further exploitation of their natural and human resources by First World-based corporations in collaboration with Filipino and Chinese capitalists and landlords.

Ultimately, only the people themselves, through direct action and mobilization, can ensure that any economic agreements that the Arroyo regime enters into in their behalf would genuinely benefit them. Even if the Chinese deals were already clinched, an informed and militant public can still avert the implementation of these agreements. In the case of the farm deals, for example, the Department of Agriculture is still in the process of negotiating with farmers who may be potential “partners” of the Chinese investors in their agribusiness ventures. IBON Features

FREE TRADE PACTS WITH CHINA, JAPAN TO FURTHER WEAKEN RP ECONOMY

Philippine trade deals with Japan and China , which President Gloria Arroyo recently urged Association of Southeast Asian Nations (ASEAN) members to act on, will further weaken the country’s already damaged domestic economy.

According to IBON research head Sonny Africa, any benefits the Philippines may gain from a pact with these economies are doubtful while more liberalization will further weaken the local agriculture and industry sectors.

Taking alone the ASEAN Free Trade Agreement’s Common Effective Preferential Treatment (CEPT) scheme as an example, the Philippines’ average applied preferential tariff rate as of 2001 is only 3.87%, lower than the 6.7% average applied tariff rate under the World Trade Organization. Roughly 99% of the country’s tariff lines are already included in the CEPT scheme.

Tariff reduction under the CEPT scheme allowed cheap imported vegetables from the US , Australia , New Zealand , the Netherlands , Singapore and China to flood the Philippine market, growing from 42,000 metric tons in 1995 to 115,000 MT in 2000. More liberal import policies also resulted in thousands of metric tons more smuggled into the country.

The petrochemical, cement, steel, garments/textile, footwear and ceramics/tiles industries have also felt the adverse effects of liberalization. For example, many footwear manufacturers, overwhelmed by cheap imports from China , have now become mere assemblers of imported shoe parts or shifted to trading. Shoe industry workers have thus been laid off or forced to go on rotation status.

Meanwhile, Africa pointed out, the country’s attempts to penetrate the markets of these major economies are uncertain. The government is banking on electronics, which is considered as one of the economy’s “strengths” due to export revenues from this sector. Electronics products are also the country’s top exports to China and Japan , which on the other hand are among the Philippines ’ top ten trading partners.

But electronics components are also among the country’s top imports from these countries, reflecting the inherent lack of technology to support production and the assembly-type nature of the industry.

According to Africa , the motivation of China and Japan in pushing for regional free-trade initiatives is their rivalry for economic leadership in the region. As an underdeveloped country, the Philippines should not seek to fruitlessly “compete” in the free trade arena but rather to undertake initiatives that would protect and develop its agricultural and industry sectors for the benefit of its people, Africa said.