When politics lend an uncertain hand
Journalists in the Philippines have been having a field day this past couple of weeks, scrambling to cover new developments concerning a massive bribery scandal that implicates government officials.
To cut a long story short, a US$330 million-deal between the Philippine government and Chinese state-owned network equipment maker ZTE turned sour after allegations of bribery involving high-ranking officials emerged.
ZTE, which had elected to remain quiet since the scandal erupted, finally broke its silence and issued a statement refuting any involvement--and the Chinese company didn't mince its words.
"ZTE has neither done anything wrong, nor has it bribed anyone to get this project... This episode certainly brings unforeseeable negative influence on bilateral economic co-operations between China and the Philippines."
Dubbing the whole controversy a "political circus", ZTE added that this episode will "not only play down the confidence of companies from China, but also from other countries to invest in the Philippines".
Oh, what a tangled web politicians weave when they get themselves embroiled in industry dealings.
Governments play an important role in helping to boost and drive key initiatives in their country's ICT market. However, they run the risk of achieving the opposite when they allow politics and internal inadequacies to get muddled into the equation--as the Philippines government has clearly done in the ZTE project.
Whether the allegations about bribery and corruption are true, or not, are no longer important because the damage has been done. The scandal has created doubts in the global market about the Philippines' viability as a business partner and thrown the country's ICT market into disarray.
It further underscores the need for complete transparency, particularly when the project in question involves parties from another country. Airing dirty laundry in the comfort of your own home isn't quite the same as airing it on a global stage.
In the Philippines's case, the ZTE scandal is an unfortunate distraction and steers focus away from where it is truly needed. For example, the attention and resources could have been better spent championing the country's ambition to be a regional outsourcing hub.
No government is infallible, and there are bound to be misjudgments and pockets of incompetence that cannot be prevented, especially where humans are involved. But, governments can certainly mitigate the risk of such instances by enabling greater transparency and implementing more stringent governance.
With stronger policies and checks in place, governments will also have an easier time managing the consequences when things do go wrong and pointing to these lapses as isolated events.
Most importantly, governments need to understand that there are larger stakes at risk when they decide to get involved in multi-national agreements.