It’s not purchasing power parity, a theory used to explain exchange rates. But PPP was once called the BOT scheme. So says the Philippine News Agency:
MANILA, Sept. 13 (PNA) — President Benigno Aquino III has issued an executive order reorganizing the Build-Operate-Transfer Center in fresh efforts to accelerate the financing, construction and operation of key government infrastructure projects through public-private partnership.
In issuing Executive Order No. 8, the President renamed the Build-Operate-Transfer (BOT) Center to Public-Private Partnership (PPP) Center of the Philippines, whose functions will now be supervised by the National Economic and Development Authority. The BOT Center was previously under the wings of the Department of Trade and Industry.
“There is a need to fast-track the implementation of the Public-Private Partnership programs and projects as a cornerstone strategy of the national development to accelerate the infrastructure development of the country and sustain economic growth,” President Aquino said in his State of the Nation Address last July.
But this looks very much like “industrial policy,” code for government taking a role in choosing potential “winners.” The Austrian School would say, as did some sober thinking economists, that we cannot really know beforehand which industries or sectors will be winners. Who will pay the price for mistakes?
Of course, if you don’t like who’s in power, you would call it “cronyism.” So, which is it?
Perhaps it’s neither industrial policy nor cronyism. Perhaps it’s just another form of trickle-down economics except that big business wants to “play it safe.” This is an insight from cartoon characters, Frank and Ernest.
Here’s an explanation of PPPs by Cielito Habito. His solution to the potential rent-seeking problems: “Let’s make sure all PPP projects are transparent and properly evaluated…” How do you do that? For starters, we should have a working Freedom of Information process, as I suggest in the comments thread. All PPPs should be required to have websites where they promise to give the public information to which they are entitled, even if the Freedom of Information bill has not yet been enacted into law.
After all, partners under the law are entitled to equal access to information relevant to the business. And if government is a partner, it acts as an agent of the people, who should likewise have access to information.