A Case study of the derailed China funded development project during the Arroyo administration — the NBN-ZTE deal

Abstract

China is a growing super power infamous for giving out instant loans with relatively high interest rates to countries who can barely afford to pay them back, hereby making them a victim of China's strategic debt-trap diplomacy. However and unfortunately, the Philippines is one of the countries who depend on China for loans for the accomplishment of the current Duterte administration's ambitious "Build, Build, Build" Infrastructure Program. Even though our officials reassure us that we are far from the quicksand of China's debt trap diplomacy, we could not help but to be cautious and critical of the conditionalities of these loans since there are concrete examples from around the world of what could happen to a country's sovereignty if China keeps on providing us massive amount of money for projects we don't even need and we can't afford. And given the corruption patterns of the politicians running our government and the influx of aid entering the country for these projects, there is a very high probability that these large-scale projects will only be susceptible to graft and be stalled, making us deeply indebted to a foreign country for projects which in the first place are not needed by the country and are not beneficial to the citizenry. This study focuses on one of the most famous case of graft and corruption during the Arroyo Administration which is sponsored by China — the NBN-ZTE Project.