Sta. Ana coordinates Action for Economic Reforms.  This article was published in the Opinion Section, Yellow Pad Column of BusinessWorld, September 24, 2007 edition, page S1/4.

Methinks both Senator Miriam Defensor Santiago and Transportation and Communications Secretary Leandro Mendoza have been recently reading Shakespeare.  It might be that their recent behavior has been influenced by Shakespeare’s plays.  Why is this so?  Allow me to answer this in a roundabout way.

When Senator Santiago speaks, she is like a Shakespearean character, but with an Ilonggo accent, about to recite:  “Friends, Romans, countrymen, lend me your ears.” In the Senate inquiry into the National Broadband Network (NBN) project on 20 September 2007, Senator Santiago asked Secretary Mendoza if he had read the paper written by the University of the Philippines (UP) economic professors Raul Fabella and Emmanuel de Dios.  The academic paper, “Lacking a backbone,” is an economic analysis of the NBN and Cyber-education projects.  The media, academe, non-governmental organizations and the rest of civil society have widely quoted this paper, for it offers the most solid, scholarly critique on the two controversial projects.  (Information disclosure:  the authors acknowledged me and various experts and stakeholders in this paper.  It can be downloaded from here .)

However, Senator Santiago’s line of questioning was loaded.  With her bizarre brand of bravado, she asserted that based on “raw information,” the paper of  Professors Fabella and de Dios was written “under the persuasion and auspices” of a group called Agile (Accelerating Growth, Investment and Liberalization with Equity).  The United States Agency for International Development (USAID) provided full funding to Agile.

In response to Senator Santiago’s questioning, Secretary Mendoza said that, and I quote the report from, “Agile is one of the groups that have been ‘practically demonizing’ the NBN deal.”

This script—Senator Santiago’s question and Secretary Mendoza’s answer—is a form of character assassination.  They wanted to impugn the integrity and academic credentials of Messrs. Fabella and de Dios:  That Fabella and de Dios are paid hacks and that they have been used to protect US interests.

Recall that one failed bidder for the NBN is Arescom, a US manufacturer of broadband equipment. Recall, too, that the polite and pleasant US Ambassador Kristie Kenney had appealed to the Philippine government “to avoid undue haste and take the time to carefully review and consider the multiple expressions of interest that have been submitted, including those submitted by American companies.”

Further, Senator Santiago and Secretary Mendoza ingeniously linked the two professors to the controversial Agile.  Recall that several years ago, circa 2001, legislators and public opinion crucified Agile for what was seen as its brazen intervention in Philippine policy-making, especially in relation to the crafting of the law on anti-money laundering.   In other words, by connecting Messrs. Fabella and de Dios to a tainted Agile, Senator Santiago and Secretary Mendoza wish to destroy their credibility.

Perhaps Ms. Santiago and Mr. Mendoza were so engrossed with reading Shakespeare that they failed to study the Fabella and de Dios paper.

Especially for Senator Santiago and Secretary Mendoza, I attempt to summarize the Fabella and de Dios paper.

Ms. Santiago and Mr. Mendoza should in fact be relieved that the paper does not contain any allegation about bribery, bullying and “sexcapades.”  It has a plain, straightforward message:  the NBN and Cyber-education projects reflect bad policies.

“Lacking a backbone” argues that no sound economic rationale underpins the NBN and Cyber-education projects.  It states the conditions that justify state provision or ownership of infrastructure to address market failure—attaining scale economies and preventing congestion, for example.  In both the NBN and Cyber-education projects, the conditions that allow state ownership or provision are absent.  The private sector has invested heavily in two backbones and in technological advances.  These two backbones also compete with each other, thus dismissing any argument that government needs another backbone to check predatory behavior.

In addition, practice has shown that running a sophisticated communications system is not part of the Philippine government’s core competency. Recall the failed Telepono sa Barangay project. Further proof is that the government has two existing but idle backbones!

Rapid technological changes in telecommunications also make it highly risky and very costly for government, faced with institutional and resource constraints, to operate its own backbone.  In the end, government will end up holding the detritus of obsolescent equipment.

Yet the paper provides a constructive approach by identifying the appropriate government intervention in information and communications technology (ICT). Specifically, government should provide the “last-mile connectivity” so its agencies can be linked to the remotest barrios, but this can be done by using the existing backbones and thus without reinventing the wheel.  Further, government can substantially reduce the cost of ICT services by using its strong purchase leverage.

Clearly, from the arguments of their paper, Professors Fabella and de Dios are criticizing not only the deal with ZTE but the whole NBN and Cyber-education projects.  It also means, based on their economic arguments, that they do not endorse either the bids of the US-based Arescom and Joey de Venecia’s Amsterdam Holdings.  This should debunk any allegation that the two economists are promoting the self-interest of a failed bidder.

Perhaps it is apt to describe Raul (Fabella) and Noel (de Dios).  Raul is the lean, tall, and swarthy professor, with a serious mien.  Noel is the chubby, jolly fellow who is everybody’s friend.  Raul is passionate in his advocacy for a better Philippines, attending activities left and right in pursuit of his crusade.  Even though Noel wishes to devote more time to hearth and home, he continues to support great causes. For one, he is a concurrent trustee and treasurer of the Ramon Magsaysay Awards Foundation.

Both Raul and Noel are full professors at the UP School of Economics. Raul, who obtained his doctorate from Yale, is an Academician of the elite National Academy of Science and Technology.  Raul served as the School of Economics dean for three consecutive terms and recently passed the deanship baton to Noel.  Noel, who got his doctorate from UP, is hands-down the best economics writer not only in UP but in the country.  He is among the chosen few who have been honored as UP’s Centennial Fellows on the occasion of the University’s 100th anniversary in 2008.

Raul and Noel share another interest—their fondness for great literature, including Shakespeare’s works.   Raul was a seminarian, and Noel was educated by the Jesuits—which meant that they absorbed a lot of Shakespeare from their schools’ required readings.

And this brings us back to why it seems Senator Santiago and Secretary Santiago have been reading Shakespeare.

Ghosts abound in Shakerspeare’s plays.  In Macbeth, we find Banquo, the ghost, who is seen only by Macbeth.  In Hamlet, the ghost appears to Hamlet in the image of his dead father.  In Richard III, ghosts of those that Richard had killed spook him just before his final battle with Richmond. And in Julius Caesar, Caesar’s ghost visits Brutus on the eve of a war to warn him of certain defeat.

And what have ghosts to do with Senator Santiago and Secretary Mendoza?  The Senate inquiry—it can take the form of a play—has barely begun, and they already see a ghost.  This is the ghost of Agile.

Agile has long been buried.  Agile gave up the ghost after getting a terrible beating from the lawmakers and the public.

Yet Senator Santiago says that Messrs. Fabella and de Dios released “Lacking a backbone” in July 2007 “under the persuasion and auspices” of Agile.  Yet Secretary Mendoza says that Agile is demonizing the deal with ZTE.  There you have it, a ghost funding two professors and the same ghost demonizing the deal with ZTE.

As in Shakespeare’s plays, a ghost appearing to Mrs. Gloria Arroyo’s most loyal allies foreshadows tragedy.

Postscript:  This piece was written before Malacañang announced the indefinite suspension of the NBN deal and the Cyber-education project.  If this were a play, the audience would demand to see the last Act.  Lifting from Shakespeare’s Richard III, I imagine that the lines before the play’s suspension would read: The specters of the NBN and Cyber-education projects “Have strook more terror to the soul of [Gloria]/Than can the substance of ten thousand soldiers.”

In Richard III’s ending, Richard is unhorsed.