Government News Analysis

Backlash for Euro-cash

Philippine President Rodrigo Duterte and Trade Secretary Ramon Lopez at an ASEAN Opening Ceremony

Critics of Philippine President Rodrigo Duterte (photo, left) are having another hissy fit. This time it’s over his decision to reject European Union (EU) aid grants to his country; a decision confirmed by Foreign Affairs Secretary, Peter Alan Cayetano, yesterday. Duterte’s detractors on social media seemed to be wondering if this was ‘further evidence’ that the president’s lost his marbles. After all, they ask, how could he turn down free money? The fact is though, he didn’t; it’s not free. In fact it comes at quite a cost.

We’ll come to that in a moment, but more significant than the head-scratching that’s going on among Duterte-bashers, is the reaction to this news by European businessmen based in the Philippines. No hissy-fit from them; in fact quite the reverse. As far as the European Chamber of Commerce of the Philippines (ECCP) is concerned, this latest spat between Brussels and Manila is of no consequence.

Guenter Taus, president of the ECCP – this organisation has maintained a Philippine presence for more than 40 years and represents some 600 companies from right across the quilt of Europe – said this: “We are business as usual. Nothing has changed and we intend to keep it that way. We in business do not mingle in politics; that is for politicians to do. We see to it that business gets addressed and addressed adequately”.

A voice of sanity, then, explaining the reality of yet another storm in a political teacup which the anti-Duterte crowd would like to escalate to a tempest. Taus also confirmed that the current rift between the EU and Manila has had no detrimental effect on investments from Europe and is unlikely to. “No reason for us to leave the country or think investments are not happening,” he said.

Thus, any economic fallout from Duterte’s decision which those in the political opposition might have hoped for – to add economic mismanagement to the list of charges they’ve brought against him – hasn’t materialised. So what does this rejection of EU aid actually mean? Let’s put a more helpful perspective on that in both economic and sovereignty terms.

This year, under the EU’s Multiannual Indicative Programme (MIP), the Philippines received PHP247.75 million. In terms of the country’s 2017 national budget – PHP3.35 trillion – that doesn’t amount to a mole hill of beans. In other words, the Philippine Treasury can live without it with very little belt-tightening.

That same sum was due to be delivered for each of the next three years; meaning that the Philippines will forfeit a total of PHP7.73 billion from next year until 2020. That’s the end of the maths.

Of course, if you look at that last figure without understanding the terms of the MIP, it might appear as if Duterte’s been reckless – PHP7.73 billion could pay for quite a lump of much-needed infrastructure. But that’s not how it works. The EU more or less designates, or at least has a large say, as to where and how the cash is spent.

Furthermore – and this is the real crux of the issue – the money isn’t some no-strings-attached gift from Europe. There are many attached conditions. It’s described variously as both “aid” and “funding”, but in fact it’s being used – and more visibly so since Duterte took office – to further EU global policy. This was always the case, but previously it was never challenged.

What’s brought things to a head, and actually made it an issue, however, is the orchestrated opposition to Duterte’s rule which has been building for more than a year. That opposition seized on the president’s anti-drugs campaign – his policy to rid his country of illegal narcotics – and was developed a narrative to show widespread human-rights abuses in the execution of that campaign. The opposition’s mantra for this is “Extrajudicial Killings” – the notion that all unexplained deaths in the Philippines can be attributed to rogue police actions inspired by Duterte.

But what finally spiked the boil was the appearance in Manila two weeks ago of a Member of the European Parliament (MEP) – along with other Euro-politicos in the Left-elitist Progressive Alliance. They were there to denounce Duterte’s anti-drugs policy once more and issue veiled threats that the Philippines could lose a deal that provides tariff-free entry for its products entering the EU area. Euro-septics in Manila.

This is what that MEP, Arne Leitz, said: “If the human rights standards are not upheld, then there may be consequences in the Philippines’ inclusion in the special trading instrument of the EU – [the General System of Preference, or, GSP+ which is currently under review]”.

The fact is, had there been no War on Drugs, that opposition – coalesced around the Liberal Party which believes it should still be running the country – would have found something else to undermine the presidency.

Certainly, the EU grant, if it was applied in the spirit of its two proclaimed strategic objectives – (a) Inclusive growth through access to sustainable energy and job creation. (b) Strengthening the rule of law through judicial and legal reform – would be gratefully received by Duterte.

Despite what the mainstream media likes to put out, his government is fully committed to those issues. Its socio-economic agenda is heavily geared to poverty alleviation and inclusive growth – indeed it was the lack of inclusive growth under the previous Liberal Party administration of Benigno “Noynoy” Aquino that played a big part in ensuring Duterte’s election victory in May last year.

As far as strengthening the rule of law through judicial and legal reform is concerned, that’s also a government priority. There’s no bigger critic of the country’s antiquated and hopeless courts system than Duterte – apart from possibly The Volatilian™. He’s also committed to stamping out official corruption at all levels and providing greater transparency of government affairs.

Let’s not forget it was Duterte who, just 24 days into his presidency, signed the executive order for freedom of information (FOI) – an order that covers all departments, bureaux, agencies, state-run firms, universities and colleges that come under the executive branch. If he could write a similar order for Congress, he would. But the separation of powers – affirming the independence of the legislature – prohibits that; though he continually urges lawmakers to pass an FOI Act.

Certainly, then, there’s full agreement on the MIP’s objectives – but there are conditions attached to them which can, and have, been used to show that the programme is a carrot-and-stick approach by Brussels to impose its political will on Manila. And, to put it crudely, the carrot’s too small and the stick’s too big.

This paragraph from the EU Commission Directorate General for Development and Cooperation (or, Europeaid) gives a taste of what’s involved. In explaining the objectives of the MIP package it states: “… cross-cutting issues such as – the improvement of governance, human rights issues, gender, children (in particular children associated with armed groups), indigenous peoples’ rights, social dimension of globalisation, cultural issues, disaster risk reduction and resilience building for the most vulnerable populations , environmental protection and conflict prevention – will be systematically mainstreamed in all development programmes covered by this MIP”.

As they say, the devil is in the detail; and the devilish detail in that paragraph are two phrases; the first being “human rights issues”. Of course it should be there and the present and past administrations, respectively, has and have had no problem with that. Its how it’s used and interpreted that’s important. If the EU decides there’s been a violation of human rights in a country to which it provides aid, it can cancel that aid unilaterally.

And so it’s that other phrase, “systematically mainstreamed”, where the real licence lies for the anti-Duterte movement in Europe – ably aided abetted and encouraged by the Philippine Liberal Party and its tame packs of human-rights jackals and media sycophants – to fashion the issue into a weapon. They’ve been able to put pressure on the president by keeping human rights first and forefront of all dialogue surrounding the Philippines.

The ‘Systematic mainstreaming’ of human rights in the context of Duterte has been conducted ruthlessly and relentlessly by the Liberals. And not least by the party’s chairman and the country’s vice president, Leni Robredo; senator-in-custody, former justice secretary and alleged drugs queen, Leila De Lima, along with the Philippine Commission on Human Rights – now engaged in probing the country’s military for possible human-rights violations committed by government troops during the battle to retake Marawi City in the south of the country from Islamist militants, bishops of the Philippine Roman Catholic Church, and shed loads of Left-loving academics, media hacks, student groups and all their international associates.

Between them, they’ve systematically lobbied the EU, the United Nations, the US Congress, the International Criminal Court and anyone else they could find to listen. And it’s against that backdrop that this issue was brought to a head.

Calls from Duterte’s political opponents for the EU to place sanctions on his government – for example, the removal of those trade-tariff preferences for Philippine goods – to bring him to submission and end his drugs war, is seen by Duterte not simply as an attack on him but an attack on his country and his people. An attack, in fact on Philippine sovereignty.

And that’s something he’ll never stand for. Furthermore, the EU Commission which along with the European Action Service administers the MIP, should know that. This is precisely the sort of interference in the internal affairs of the Philippines that caused Duterte to switch Philippine foreign policy away from the US and towards China – thus effectively ending a 70-year-old relationship.

It was even over the same issue. Former US president Barack Obama had sought to lecture Duterte on human rights and criticised his drugs war. So, why would any Brussels bureaucrat believe that some misplaced EU authority could bring him to heel? Don’t they study people; analyse events? Or are they so preoccupied with notions of their own grandeur that they believe one word from them and a little country like the Philippines will suddenly jump into line?

Here, for their benefit, is what Trade Secretary Ramon Lopez (photo, right) said on the issue: “The President has made it clear, no interference … that is the position of the government … What we’re just emphasising is the importance of mutual respect for sovereignty”.

And if that’s not explicit enough, he added this: “If there is a clear interference from any group … [the president] has mentioned that even trade, he is willing to sacrifice”. Those who meddle in the Philippines, he said, can expect a “strong reaction”.

Trade losses, of course, would have an effect on the Philippine economy – Lopez reckons that Philippine exports to the EU could reach US$10 billion this year – but it should also leave the EU in no doubt how passionately Duterte prizes his country’s sovereignty. It comes above all other considerations and he will have it respected.

Part of the problem, of course, is that the EU doesn’t give a hoot about the sovereignty of any of its own member states – one reason, in fact for Britain exiting that autocratic abomination – so it’s unlikely to have considered Philippines’ sovereignty to be of much consequence.

That though amounts to cultural ignorance – Asia isn’t Europe. The EU may be able to trample over the sovereignties of Greece or Hungary, but in this region the Philippines has provided just a foretaste of what it can expect. The EU would get a similar reaction from any of the 10 countries which make up the Association of Southeast Asian Nations. See what happens if Brussels starts telling Singapore how to run its internal affairs – or Thailand, or Indonesia or anywhere else. It’ll soon find they, too, can do without its grants.

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