he way we are
hearing it from purported professionals in government who are still justifying
the corruption-laden national broadband deal, government borrowing from another
government is the biggest innovation in financing big-ticket items since the
Dutch started issuing bonds to finance their wars in the 17th century.
Borrowings from other governments carry an interest of 3
percent. Commercial loans, in contrast, charge at least 8 percent. From this
fact alone, the $329 million supply contract with ZTE, financed through a loan
from Beijing, must therefore be far superior than any proposal a private group
can offer, which,. according to these officials, is indeed the case.
They also say that in the case of the national broadband, it
ought to be owned and run by the government because that way accountability
could be pinpointed in the event of a fault or a breakdown in the system such as
theft of confidential data.
So why the hell are we privatizing the National Power Corp.
and the National Transmission Corp. in the case of power, the Philippine
National Construction Corp. in the case of road-building, and contracting out
the putting up and operation of sea and air transport facilities, to name a few?
It seems those PhD holders at the Commission on Information
and Communication Technology are idiot savants who have not heard of the term
"moral hazard" which refers to the behavior of actors or institutions who do not
bear the full consequences of their actions. They take risks which they would
not do otherwise take if they would personally bear the cost of failure.
This is the reason enterprises run by government are almost
universally less efficient than those that are privately run. A bureaucrat – or
worse, a political factotum – does not have as much incentive to perform well as
the owner of private enterprise or a management hired for the purpose.
The risk of moral hazard is not limited to government alone,
of course, but it certainly is higher where the non-elected or the non-appointed
or the unauthorized could direct the expenditure of huge sums of money coming
from an anonymous mass like taxpayers.
And that is exactly where we stand on the national broadband
deal. Benjamin Abalos wanted his $130 million commission. And only a fool would
believe that all of it would go to him. Somebody else more influential than
Abalos had to be taken care of.
So they overpriced the project. That’s the long and short of
it. It has nothing with cheaper cost over time. The principals would have been
laughing all the way to the bank had this grand thievery pushed through.
What do they care? In 2010 they would be out, leaving us to shoulder the cost
of the overprice that they would have had already banked.
