Debt, power and Imee Marcos

Jojo Robles
Manila Standard Today
August 26, 2005

There are precious few things that you can’t blame the Marcos family for during the time when it was in power. The national debt isn’t one of them. Another is our continued and near-absolute dependence on imported oil.

News reports say Ilocos Sur Rep. Imee Marcos has taken offense at the not-so-veiled reference made by Arroyo government officials to the debts incurred by his late dictator-father in explaining why nearly a third of the proposed P1-trillion budget for 2006 will go to debt servicing.

Taking what moral high ground she can, the eldest spawn of the late strongman says that by the end of 1986, total foreign debt stood at around P390 billion (at a P15-to-$1 exchange rate) compared to the P5.3 trillion by the end of last year. No way could the accumulated debt be the fault of her dead father, Imee sniffs, a hurt expression probably crossing her preternaturally wrinkle-free face.

People have apparently gotten used to the oldest Marcos child going into paroxysms of historical revisionism, like when she takes the lead in street protests in defense of human rights abuses and other causes so out of character for a former dictator’s daughter. But let’s go, as they say in sports, to the tape – or at least a very relevant part of it that deals with the Marcos regime and its connection to the national debt and our oil importation woes.

Let’s look at the mothballed Bataan Nuclear Power Plant, that hulking white elephant that the Philippine government – make that Philippine taxpayers – will continue to pay for until the year 2018. Unless, of course, the National Treasury runs out of money before that time and we have to pay for the power plant a lot longer.

Dissecting the BNPP is also extremely relevant these days, when the country reels from unrelenting increases in the cost of imported fossil fuels. Government estimates that the national oil bill will reach upwards of $5.5 billion this year, compared to $4.57 billion last year – and that won’t be the fault of the Marcos family.

But the BNPP, which took a decade to build beginning in 1975 at the cost of $2.3 billion, without producing a single watt of electricity, is another kettle of fish altogether. And if Imee says that her father had nothing to do with that, then she’s lying through her pearly whites.

* * *

For the benefit of Imee Marcos and for all those who may have inadvertently forgotten, the Bataan power plant is the Philippines’ single biggest debt and still accounts for 5 percent of the total indebtedness of the entire country.

Imee’s father was accused of making $80 million in kickbacks on the plant, which cost three times the price of a comparable plant built by the same US company in South Korea at the time, according to the [UK newspaper], The Guardian.

According to the respected British publication, the Bataan plant is often cited as one of the most blatant examples of a debt that should not be repaid. “First, it was a grand scheme of the late dictator that never benefited the people, and is thus an ‘odious debt’ under international law. Second, the children of the Philippines are being asked to pay for bribes to Marcos and excess profits of the contractor. Third, the company should take the responsibility for building a nuclear power station just 60 miles from the sprawling capital Manila, near several earthquake fault lines and at the foot of a dormant volcano,” it said.

Construction on the plant began in 1975 and it was completed in the mid-80s, but after Marcos’ downfall in 1986, a team of international inspectors visited the site and declared it unsafe and inoperable. Since that time the government has spent $100,000 a day servicing the plant’s debts, according to The Guardian.

Susan George, in her book A Fate Worse Than Debt (Penguin 1991) wrote: “According to the New York Times, Marcos received $80 million in commissions from (plant contractor) Westinghouse through one of his cronies, who mysteriously snatched the nuclear-plant contract from the jaws of General Electric and got it awarded to arch-rival Westinghouse. General Electric’s much lower bid had already been approved by a panel appointed by Marcos himself and by the then head of the National Power Corp.

“Marcos overruled the panel’s choice in favor of Westinghouse before the latter had even submitted a detailed bid. The Secretary of Industry at the time wrote angrily to Mr. Marcos that he was buying ‘one reactor for the price of two.’ The crony who arranged the deal, Herminio Disini, ‘now lives in a castle near Vienna,’ according to the New York Times report. Westinghouse acknowledges paying a commission to a Marcos associate, but says ‘allegations of illicitly inflated costs at its nuclear power plant in the Philippines are completely without merit,'” George wrote.

Soon after Marcos’ downfall in 1986, a team of international inspectors did a top-to-bottom audit of the plant, including a physical inventory of the facility, before declaring it unsafe – in all likelihood because Westinghouse had to pay off Marcos, Disini and the other cronies involved in the deal.

In this time of ever-escalating debt and oil prices, someone should tell Imee Marcos to get a grip on reality before absolving her father and his men. Because we’re still paying the costs of Marcos the Elder’s kleptocracy, whether in the form of higher power costs because of an unused power plant or unending debt payments incurred by a thieving regime.

Categories: Asia, Odious Debts, Philippines

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