At What Price?

Malacañang has been trumpeting the success of the US trip of President Benigno Aquino III and in the process, downplaying the P25 million expense. Being cited as the fruits of the trip are the signing of the $434 million grant from the Millennium Challenge Corporation and the potential fresh investments from Coca Cola reportedly amounting to $1 billion to upgrade its facilities in the country, the $1 billion commitment of AES Corporation to double the capacity of its controversial Masinloc coal-fired power plant, and the $400 million in other investments for expansion projects by the world's biggest multinational drug company Pfizer - which only recently gobbled up Wyeth - Hewlett-Packard and JP Morgan Chase. These supposedly would generate 43,000 jobs in the next three years.

There is a saying that nothing in this world is free. This applies to the commitments President Aquino received and gave during his US trip as well. According to Ibon Foundation, the Millennium Challenge Corporation (MCC) compact grant agreement did come with certain conditions namely, open trade, economic freedom, good governance, adherence to human rights, public investments in education and health care. Thus, part of the grant would go to the building of roads in Eastern Samar and the construction of clinics and schools in the poorest provinces. Well and good.

But for the donors, the most important conditions are free trade and economic freedom. It could be remembered that the conditional cash grant program began with the Arroyo administration and was supported by the International Monetary Fund, World Bank and Asian Development Bank even when it was widely believed to be involved in a lot of corruption scandals and was committing human rights violations.

By signing the compact grant agreement, the Aquino administration is committing to the same policies of deregulation, liberalization, and privatization that were vigorously pursued by the previous Arroyo administration. This entails continuing the process of removing tariffs, import quotas, and all restrictions to trade in goods and services; dismantling regulatory frameworks such as price control; removing restrictions to foreign investments, including controls over capital flight - which caused the Southeast asian financial crisis of 1997 - limitations to foreign equity, and the ban on foreign ownership of land; opening up all sectors of the economy to foreign investments including the finance and service sectors, such as education, communications and transportation; and privatizating essential government services and limiting government intervention in the economy in the name of fiscal austerity.

Essentially, with the signing of the MCC, the Aquino government commits to pursue the same neoliberal policies, which resulted in the current world economic crisis and the worsening of the domestic crisis.