Early this week, the United States House of Representatives rejected a US$700-billion bailout plan endorsed by the Bush Administration to salvage Wall Street by buying up the banks’ bad debts with taxpayers’ money to preempt further escalation of the economic turmoil that may ravage global markets.

The Wall Street meltdown has shown us how unfettered free markets can run amuck and ravage whole economies. The reckless abandon by which Wall Street hedged funds and derivatives illustrate how, without strong government regulation and public accountability, an elite few can destroy the rest of the world.

Thomas Friedman observed the important role of government in this crisis. He said in his New York Times column, “In this age of globalization, government matters more than ever. Smart, fiscally strong governments are the ones best able to empower their people to compete and win.”

The Wall Street meltdown buttresses the necessity of more credible government regulation on the one hand, and public accountability through transparency on the other. This call follows the previous demand for better governance following the aftermath of Enron, wherein the top energy corporation ran amuck without much government intervention that resulted in its bankruptcy, and the difficulties faced by its employees and investors in recouping their money.

Interconnected capital markets should drive governments to be more vigilant in ensuring that bankers and investors are accountable to the public, since people are often investing their retirement funds or their savings in these markets.

The harrowing experience of corporate recklessness calls for not merely a US government intervention, but a global action. There is the necessity of establishing a global financial regulator independent of any of the existing bodies like the World Bank or the International Monetary Fund to oversee the activities of capital markets.

There is the saying that when the US economy sneezes, the rest of the world gets flu. Now then, a global doctor is needed to cure this financial sickness.

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These illegitimate and immoral loans are breaking the burdened backs of many third world countries and yet are being paid with the blood and sweat especially of the poor people… And nearer home, the finger points to the Bataan Nuclear Power Plant which was built in 1976 and which cost us $2B in loans… The tragedy, according to former national treasurer, Leonor Briones, is that “Filipinos have not benefited from a single watt of electricity” from this plant that was even built along a known earthquake fault.

Two years after Chief Justice Puno delivered that speech, the Philippine Government decided to put that monumental folly under the rug when it paid BNPP creditors the last tranche of Php15 million. This ends 32 years of negotiations and compromises over the white elephant that symbolized the excesses of a dictator.

One of the pet projects of the late President Ferdinand Marcos, BNPP was originally pegged at US$1.109 billion in 1976. By December 1988, it ballooned to US$2.67 billion.

The illegitimacy of the debts used to pay for the BNPP has been discussed ad nauseam, so we will no longer cover it here. What is utterly revolting in this issue is not only the amount of money spent to pay that monumental folly; it is the government’s failure to defend the Filipino dignity against injustice for so blatant a crime that took toll to our country’s floundering economy and our people’s capacity to live a decent life.

For 32 years, the BNPP stood there idle and worthless, consuming billions of pesos in debt payments, not to mention the high costs of maintenance and security for something that does not generate any material benefit to the people. The money used to pay for debt servicing and maintenance costs could have been better used to invest in better roads, stronger bridges, more efficient public transportation system, wider communication backbone, quality education, better health care, low-cost housing, and other investments that will generate a respectable rate of return in the long run.

But with an economist as President, and a plethora of self-proclaimed brilliant advisers in her official and kitchen Cabinets, why did the administration throw money in the air and pay for something that will not generate any revenue for the country? If it is a question of goodwill and respectability in the international community, the government could’ve cited the Odious Debt Doctrine, a theory in international law that holds that debt incurred by a regime for purposes that do not serve the interest of the state should not be enforceable.

But that begs the question of the Arroyo administration’s respectability in the first place.

Why should we shoulder the burden of paying for the BNPP, conceived in sin, without enjoying a single watt of electricity? It is similar to the Iraqi people’s question to its creditors: why should they pay for Saddam Hussein’s loans when these loans are used to buy knives to slaughter them?

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