In a recent conference sponsored by Finance Asia, the Philippine government showcased to international investors a proposed $280 million government funded Infrastructure Development Fund.
Unfortunately it seems that the investor response had been tepid.
This from Asian Investor, (bold emphasis mine)
As reported by AsianInvestor recently, the President of the Philippines has promised that these new public-private partnership deals would not be tainted by corruption on the part of the national government. Since he is new to the job, people may give him the benefit of the doubt until it’s proved that nothing has changed.
However, there are worries that international investment funds are going to be embezzled and siphoned off by people seeking backhanders and kickbacks, irrespective of the good intentions expressed by the head of state.
International infrastructure investors would therefore like to see a modest track record of success and a proven ability to administer this programme before they make significant commitments, even if that is based on the evidence of just a couple of honestly and effectively managed projects that can be held up as good examples.
This seems to be a natural reaction from international investors considering the poor track record and that public-private partnership deals signify no less than political concessions subject to the caprice of politicians.
As we previously said,
PPP’s signifies as politically privileged economic rent/concessions to favoured private entities that will undertake the operations in lieu of the government. They will come in the form of monopolies, cartels or subsidies that will benefit only the politically connected.
Since the private partner partnerships aren’t bound by the profit and loss discipline from the consumers, the interest of the private partners will most likely be prioritized or aligned to please the whims of the new political masters.
And because of it, much of the resources that go into these projects will not only be costly or priced above the market to defray on the ‘political’ costs, but likewise, they will be inefficiently allocated.
The more things supposedly would change, the more things seemingly would stay the same.
The Philippine growth model still depends on crony capitalism arising from its ardent adherence to the elitist based social democracy.
