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Rather than give handouts or lift the expanded value-added tax
(E-VAT) on oil, Sen. Richard Gordon said, the government should
launch a “new deal” similar to the package of programs US
President Franklin D. Roosevelt adopted in the 1930s that cushioned
the effects and eventually reversed the Great Depression.
If the Philippines is to overcome the
crisis triggered by skyrocketing oil prices, Gordon said at the
Kapihan sa Sulo media forum, “the government should pump-prime our
economy.” The wherewithal for this effort, he added, could come
from the windfall collections of the EVAT on oil, which has thus far
generated some P60 billion in additional revenues.
Some senators are agitating for either a
suspension or a total lifting of the taxes levied on imported
petroleum and its byproducts. Gordon, however, chooses not to jump
into that populist bandwagon. Instead, he pointed out: “The
removal of the E-VAT on oil will not solve the oil price crisis. It
is merely a Band-Aid solution and does not solve the root of the
problem.”
Rather than remove the oil tax, Gordon said,
“the government should prioritize where E-VAT money will be spent.
It should show the people where the money was spent and be
transparent.”
Like many quarters, the senator feels that the
handouts, which the Arroyo administration has been distributing to
the poor, are a waste of precious state resources and have no
lasting economic value. Moreover, he added, government dole merely
reinforces “the attitude of mendicancy among our people, which we
have had more than enough over the last four centuries or so.”
It is this keen sense of history that evidently
inspired Gordon to point out key lessons from the Roosevelt formula
on how to respond to economic crisis.
On October 29, 1929—which later came to be
known as Black Tuesday—the US stock market took an unprecedented
plunge, triggering a global economic depression. Over the next five
years, unemployment in the United States ballooned from four to 25
percent. Manufacturing output dropped by about 30 percent.
Blue-collar workers turned into panhandlers overnight, while some
businessmen literally took a dive from their skyscraper offices.
A “New Deal” was what Roosevelt called a
flurry of undertakings—including a massive civil works
program—he launched soon after his election in1933 and on through
1938. FDR’s goal: give relief to the poor, reform the financial
system and revive the economy. By time World War II broke out,
America had recovered its strength as a major industrial power,
allowing it to lead the Allies to victory over the Axis powers.
At the Kapihan last Saturday, Gordon said the
government could adopt an economic recovery strategy similar to
FDR’s New Deal. “This could be done by using proceeds from the
E-VAT on oil to fund major infrastructure projects,” said the
former mayor who shepherded Olongapo out of the ravages of the
Pinatubo eruption in 1991.
Aside from erecting much-needed civil works, he
explained, an accelerated infrastructure program would create jobs.
“It would reduce our unemployment rate and ensure that people will
have the money to buy, at the very least, basic necessities.”
Moreover, Gordon said, “these projects will
empower Filipinos and give them a sense of dignity.”
Where should the government—faced with myriad
problems all crying out for attention—start?
As chairman of the Philippine National Red
Cross, Gordon has developed a perspective of the national situation
far more comprehensive than most other officials’. Leading the
PNRC’s disaster-response efforts in the wake of Typhoon Frank, the
senator found himself in Panay, Negros Occidental, Romblon and
Central Mindanao. He rattled off statistics and information about
the calamity, a lot of which has escaped the attention of the media
and, more important, the central government in Manila.
For instance, while much attention was focused
on the ill-fated MV Princess of the Stars, Gordon said that an
estimated P600-million worth of fishing vessels have sunk in the
waters off Negros, Samar, Surigao and other provinces. “Those
fishing fleets need to be rebuilt if we don’t want the price of
fish to go sky high, too, like oil and rice,” Gordon said.
In what he called “the forgotten disaster”
in Central Mindanao, huge swathes of Cotabato have remained under
water weeks after Frank exited the country. Thick clumps of water
hyacinth from the Liguasan Marsh continue to clog the area’s
waterways, threatening to destroy bridges and other civil
works—bringing the local economy to a virtual standstill. “This
is one area that desperately needs flood-mitigation projects,”
Gordon said.
In Iloilo and other parts of Panay, flashfloods
and mudflows generated by the typhoon destroyed irrigation systems
that covered 400,000 hectares of farmland. “If we want to restore
the island’s agricultural productivity, the government needs to
repair and even expand the irrigation network damaged by Frank,”
Gordon said.
The way the senator sees it, if the E-VAT on oil
is removed the government would not only lose the resources it needs
to pick itself up from calamities like Typhoon Frank, but also the
funds that could prime the economic pump with infrastructure and
other job-creating programs.
Gordon is a rare politician. He is not afraid to
defy popular causes, but instead presses for long-term solutions to
national problems. That, in my book, is leadership.
dansoy26@yahoo.com
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