Reducing absolute poverty: Enhancing executive special powers

Published June 2, 2018, 10:00 PM

by Mario Casayuran and Vanne Elaine Terrazola

Fidel V. Ramos
Fidel V. Ramos

By Fidel V. Ramos

Former Philippine President

 

(First of Two Parts)

 

If the majority of Filipinos are hopeful for a better future, it is also clear they want out of the “kulelat” (tailender) position to which the Philippines had been relegated during the past few years. In its Human Development Index, the UN has ranked the Philippines in this laggard position which is not acceptable to FVR – that “pakialamero” (interventionist) senior citizen.

In the interest of our national pride and better performance, therefore, we owe it to ourselves, our children and successor generations to support the Du30 administration with any helpful contribution – whether a little bit or substantial – that we can muster towards steady, upward nation-building.

International institutions rate Philippine corruption among the worst in East Asia. In 2015, we failed to attain key benchmarks of the U.N.’s Millennium Development Goals. – of halving poverty, reducing maternal mortality, and providing quality basic education for all.

Even more painful, hunger has persisted in our archipelago which our people have regarded as unfailingly bountiful. And, the income gap is becoming more pronounced that the rich and the poor appear divided into two separate national societies.

With inadequate decent jobs available at home, a growing foreign debt, and population growing at East Asia’s highest rate, more than 10 million Filipinos have dispersed throughout the globe as migrants, contract workers, or even illegal entrants.

HOWEVER, IT IS THE MONEY THEY REMIT HOME THAT KEEPS OUR ECONOMY AFLOAT AT AN ESTIMATED 12% OF GDP – FEEDING CONSUMER DEMAND, PROVIDING EDUCATION OPPORTUNITIES FOR YOUNGER ONES, AND DAMPING DOWN INADEQUATE FOREIGN DIRECT INVESTMENT.

 

ESSENTIAL PERFORMANCE TARGETS

THE MAIN RISK, ACCORDING TO THE IMF, IS THE EXTERNAL ECONOMIC ENVIRONMENT IN WHICH BANKING VULNERABILITIES AND JOBLESSNESS STILL LINGER IN THE ADVANCED ECONOMIES.

 

To grow our economy steadily, the Philippines needs to raise its investment rate-to GDP ratio. According to the ADB, this should quickly reach more than 20% if development is to raise poor people’s incomes and create more jobs or livelihood opportunities.

Public finances reflect the weaknesses of the state. Our puny tax effort – the lowest among comparative East Asian economies – constrains government from making essential infrastructure and social investments. Thailand, for instance, spends about 6 times more than we do on every public-school child; Singapore invests 13 times more.

In taxes and tariffs, government collects barely 12% as a ratio of GDP, compared to a peak of over 17% we achieved in 1997. As a result, state revenues are projected to be short every year, which must be covered by more borrowings. We badly need to significantly increase tax/customs collections to reduce deficits. Hence, the necessity for TRAIN being promoted by DoF.

Then, there is the need to properly manage population growth. Government can no longer be wishy-washy on population/reproductive health policy – about which GMA and Noynoy were unusually subservient to the Catholic bishops. Projections indicate our population will reach 107 million by the end of 2018.

 

THE DU30 GOVERNMENT MUST NOW FORGE A NATIONAL CONSENSUS, PARTICULARLY WITH CATHOLIC COUPLES (NOT NECESSARILY WITH THE INTRUSIVE BISHOPS), ON POPULATION/RH POLICY – GIVEN THE IRREVERSIBLE INTERTWINING OF PEOPLE, THE ENVIRONMENT, AND SUSTAINABLE DEVELOPMENT, AS IRREFUTABLY PROVEN IN THE 1994 INTERNATIONAL CONFERENCE ON POPULATION DEVELOPMENT IN CAIRO.

 

BUILDING A STRONGER, MORE EFFICIENT STATE

HISTORICALLY, UNBRIDLED COMPETITION FOR POLITICAL POWER HAS LED TO A CULTURE OF SELF-AGGRANDIZEMENT AMONG MOST PHILIPPINE ELITES. THE BUREAUCRACY HAS BECOME A “MILKING COW,” GIVEN THE MULTITUDE OF SCANDALOUS PERKS AND ENTITLEMENTS IN SOME GOVERNMENT AGENCIES THAT CRY OUT FOR CONTINUING INVESTIGATION, PUNISHMENT, AND FINAL CLOSURE.

By itself, our aggravated bureaucracy cannot stem corrupt practices. In controlling official malfeasance, the Chief Executive has no effective instrument save his own political will and leadership example. Institutions for detecting corruption must now be developed such as LEDAC; “Cabinet Officer for Regional Development” – or CORD system over LGUs; and the “National Council on the Administration of Justice” or NCAJ created through an MOA between the Chief Justice and the President during the Ramos period.

To “moderate” the greed of special interests, our democratic institutions – the electoral system, political parties, and the Civil Service – must be strengthened.

We are also saddled with multifarious political “parties.” None of these pseudo-parties is large and cohesive enough to govern on its own.

Even electoral term limits the 1987 Charter imposed – supposedly to prevent the rise of “political dynasties” – have had the opposite effect. Oligarchs who “own” personalist factions simply get members of their extended families to “warm” their seats every time they themselves must leave office.

TO PREVENT SPECIAL INTERESTS FROM DOMINATING DEMOCRATIC POLITICS, WE SHOULD ALSO CONSIDER PUBLIC FINANCING FOR MAINSTREAM PARTIES, DETER PROMISCUOUS PARTY-SWITCHING, AND ENCOURAGE ISSUE-BASED POLITICAL COMPETITION.

 

OPENING UP THE ECONOMY

CORRUPT AND INCOMPETENT GOVERNANCE HAS DIMMED THE ECONOMY’S ATTRACTION FOR DIRECT INVESTMENT. DUE TO PATRONAGE POLITICS, THE PHILIPPINES IS NOT A PRIME AREA FOR “EASE OF DOING BUSINESS”

Our weak infrastructure connectivities, and the heavy hands of corrupt politicians and influence peddlers have damaged our economy which has fallen way short of its potentials.

We need to learn from the exemplary model of South Korea, a country devastated by war three generations ago that has lifted its battered economy of the mid-1950s to the level of a G20 nation today by dint of people’s self-sacrifice, opening up to industrialization, and a “shame” culture that compels erring officials/CEOs to jump from high buildings/cliffs because of remorse or feelings of guilt.

Through deregulation, liberalization, privatization and a Freedom of Information law, we can reduce corruption and the high costs of doing business. These measures will also stimulate domestic competition and our global competitiveness. We must also dismantle monopolies/cartels that have sprouted around our public service industries due to the pervasive cronyist culture of our political system.

TO EXPAND TOURISM – A LABOR-INTENSIVE INDUSTRY IN WHICH OUR VERDANT ARCHIPELAGO AND FRIENDLY PEOPLE OFFER NATURAL COMPARATIVE ADVANTAGES – WE SHOULD EMBRACE “OPEN SKIES” AND “OPEN WATERS” POLICIES. REGULATORY PRACTICES THAT HOBBLE THE AVIATION AND MARITIME INDUSTRIES, FOR SURE, DISCOURAGE TOURISM EXPANSION AS WELL AS RAISE OPERATING COSTS.

 

FORGING OUR NICHE

OVER THE LONGER TERM, WE MUST DEVELOP INTEGRATED AGRIBUSINESS INDUSTRIES WITH RAW-MATERIAL BASES IN OUR HINTERLANDS FOR HIGH-VALUE FOOD EXPORTS TO RICH MARKETS EMERGING IN EUROPE, CHINA, JAPAN, SOUTH KOREA, AND INDIA.

Mindanao’s unique advantage in the growing of cash crops – coconuts, rice, corn, rubber, cacao, bananas, tropical fruits, coffee, etc. – we must nurture to the fullest extent. Mindanao’s extremely fertile central plateau, together with productive areas of the Visayas and Luzon’s central plains can become part of industrializing East Asia’s food baskets.

We must also expand the scope/reach of our service industries. The revolution in ICT has made even services tradable globally. To widen our comparative advantage in services, Government should encourage the expansion of high-value industries such as medical and retirement tourism.

BECAUSE OF OUR PEOPLE’S RELATIVE PROFICIENCY IN ENGLISH AND ICT, THE PHILIPPINES HAS BECOME A REGIONAL CENTER FOR BUSINESS PROCESSING OPERATIONS AND OTHER BACK-OFFICE SERVICES FOR MULTINATIONAL CORPORATIONS. (PLEASE REVISIT OUR MANILA BULLETIN COLUMN OF 03 OCTOBER 2010).

 

THE INCOME GAP

INCOME INEQUALITY AMONG OUR PEOPLE IS SO SEVERE MAINLY BECAUSE ECONOMIC GROWTH IS NARROWLY BASED. METRO MANILA, CENTRAL LUZON AND CALABARZON ALONE PRODUCE SOME 65% OF OUR DOMESTIC OUTPUT/INCOME.

The economy’s fastest-growing components – overseas contract work and BPO operations – are seen as “temporary opportunities” because they have few organic linkages with the home economy.

TO CLOSE THE INCOME GAP, PUBLIC POLICY OF THE RECENT PAST HAS DEPENDED ON “TRICKLE-DOWN” PROGRAMS. BUT, IRONICALLY, GROWTH TRICKLES DOWN ONLY WHERE THERE ALREADY IS A MEASURE OF INCLUSIVENESS AND SELF-HELP – (WHERE, AS NOBEL LAUREATE JOSEPH STIGLITZ ASSERTS, “EVERY INDIVIDUAL/FAMILY, HAS THE BASIC EDUCATION AND GOOD HEALTH ENOUGH TO TAKE ADVANTAGE OF OPPORTUNITIES”).

THE INCOME GAP WE MUST NARROW THRU THE “BIBINGKA” RICECAKE – OR BALANCED BOTTOM-UP/TOP-DOWN – APPROACH. RAISING THE “ABSOLUTELY POOR” FROM POVERTY THRU BASIC EDUCATION AND PRIMARY HEALTHCARE COUPLED WITH ESSENTIAL CONNECTIVITIES SERVES TO INCORPORATE THEM INTO THE MODERN ECONOMY. (SEE OUR MANILA BULLETIN COLUMN OF 26 SEPTEMBER 2010).

THRU SUCH A “BIBINGKA” PROCESS, CHINA, SOUTH KOREA AND TAIWAN HAVE BECOME SUCCESSFUL POVERTY REDUCTION MODELS FOR THEIR ASIA-PACIFIC NEIGHBORS.

IN OTHER WORDS, LET’S EQUIP OUR CHIEF EXECUTIVE/COMMANDER-IN-CHIEF WITH “INTERVENTIONIST” POWERS SHORT OF MARTIAL LAW WHERE THE ECONOMY IS CONCERNED, BY WAY OF ISSUING EXECUTIVE ORDERS AND PRESIDENTIAL DECREES.

 

KAYA NATIN ITO!!!

 

Please send any comments to [email protected] Copies of articles are available at www.rpdev.org.

 
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