Asia Africa Intelligence Wire, Jan 16, 2004 pNAWEEKENDER.Full...

Asia Africa Intelligence Wire, Jan 16, 2004 pNA
WEEKENDER.
Full Text: COPYRIGHT 2004 Financial Times Ltd.

(From BusinessWorld (Philippines))

Byline: Beverly T. Natividad

The Swiss government had exited from the board of trustees of the
Foundation for a Sustainable Society, Inc. (FSSI).

The departure, however, was done on good terms. In press briefing in
Makati last month, Swiss Ambassador Lise Favre said, "The Swiss
government's decision to withdraw from FSSI is a vote of confidence
in the foundation and its managers, who are working together with
the government to bring FSSI closer to its vision and mission."

Ma. Teresita Diokno-Pascual, chairperson of the FSSI, said it was
a "positive exit" and an "exciting milestone" for the foundation.

The foundation was formed through a debt relief scheme. In March
1991, the Swiss, in a referendum, cancelled officials debts to
several developing nations.

For the Philippines, half of debts amounting to 42.4 million francs
(or P454 million) was converted to form a foundation composed of
civil society organizations to manage the endowment fund. Thus, the
FSSI's creation.

Ms. Favre said the debt condonation scheme was part of the her
country's program to celebrate the 700th foundation of the Swiss
confederation.

The referendum was held on lobbies of advocacy groups throughout
Asia, like the Freedom from Debt Coalition, for the reduction of
Swiss debts.

Instead of simply writing off the debt, the Swiss government asked
the debtor-country to transform the debt into local currency and
create innovative projects out of the fund.

"In effect, what happened was the Philippine government pays half of
the debt immediately to the foundation. One half is cancelled, and
the other half is pre-terminated," Ms. Diokno-Pascual said. The
program also placed the endowment in the hands of civil society for
the facilitation of the projects.

FSSI's assistance to communities has taken shape in various ways.
Most recently, FSSI has been investing in the implementation of the
clean air law.

It has undertaken a project with Colorado State University in the
United States and nongovernmental organization Swiss Contact to
retrofit the two-stroke engine common among tricycles, to a direct
fuel injection system.

This would make it technologically and financially possible for
tricycle drivers and operators to conform to emission standards and
make their vehicles more fuel-efficient.

FSSI has also promoted the use of coco coir products - products from
the strong fiber from the outer husk of the coconut - by supporting
the development of bio-engineering technology.

FSSI's cooperation with rural banks and community finance
institutions such as the New Rural Bank of San Leonardo has
strengthened the credit programs for the enterprising poor. Thee
success was shown in the rural bank's good repayment record and high
savings.

FSSI, with the assistance of the Asian Center for Entrepreneurship
of the Asian Institute of Manangement (AIM), is planning for the
next seven years the identification of areas and sectors where it
can assist communities and cooperatives toward development.

In its eight-year existence, this is the first time it will undergo
a long-term planning exercise. "The Swiss government has supported
us with this exercise. It is also their way of saying that, yes, as
we leave you, we are also enabling you to plan your future and to
move ahead as a foundation," Ms. Diokno-Pascual said.

FSSI has 26 member-organizations and has supported over 600 projects
nationwide. The members range from cooperative federations, NGOs,
institutions engaged in microfinance, NGOs involved in agrarian
reform and rural development, and other advocacy NGOs.

Since the establishment of the foundation in 1995, the nominal value
of FSSI's assets has grown from the initial level of Php 454 million
to Php 641 million as of 2002. Its present development deposits and
equity investments amount to Php 101.1 million as of October 2003.

The foundation is operating on the basis of the endowment from the
Swiss government. Some member-organizations are working with the
business sector. One example is the FSSI's memorandum of
understanding with Smart Communications, Inc. in line with Smart's
plans to expand its reach to remote areas of the country through
foundations like the FSSI.