• About that ‘political instability’ thing


    Ben D. Kritz

    THE two-word phrase has appeared in just about every economic assessment of the Philippines by outside analysts since President Rodrigo Duterte took office, usually as the catch to an otherwise upbeat outlook: The country is likely to prosper as a result of the government’s economic program, so long as “political instability” doesn’t hinder progress.

    Various sources of the potential trouble are described. In a report last month, for example, BMI Research worried about the possibility that “political instability” would derail the government’s tax reform plan:

    “Given recent episodes surrounding the arrest of Senator Leila de Lima of the Liberal Party (LP) and the dismissal of four other LP and affiliated senators from their committee chairmanships, legislators from the Senate minority could hold the [tax reform]bill hostage in order to force the government into a consensus,” it warned.

    Other problems cited at different times by different analysts include the potential for trade issues with the EU, China, or the US, depending on the results of Duterte’s maverick foreign policy and, at least in the case of the EU, perceptions of his human rights record; the progress, or lack thereof, toward settling matters between the government of the Philippines and the Communist rebellion is sometimes also mentioned, as is the prospect of deepening unrest in the south due to the stubborn presence of Islamist terrorists.

    Although they haven’t yet been mentioned, at least to my knowledge, other political eyebrow-raisers such as Duterte’s suggestion that he simply appoint barangay officials rather than allow them to be elected; the embarrassing departure of Duterte’s first choice for Foreign Secretary, Perfecto Yasay; his dismissal earlier this week of Interior Secretary Ismael Sueno after corruption allegations were leveled against the former; and the growing calls for the removal of Vice President Leni Robredo, which manifested themselves rather spectacularly in a rally last weekend might all be considered potential sources of “political instability.”

    For people in this country who are either supporters of Duterte or essentially neutral, the concerns about “political instability” are overstated. Ordinary life and business has not been adversely affected, and most are optimistic that economic and social circumstances will continue to be good, and perhaps even improve. For those who oppose Duterte, the sky is falling. In terms of the news that filters out of the Philippines to the rest of the world, the impression is that this minority view seems to attract a bit more attention.

    If there is anything at all remarkable about Duterte or his government, it is how he has encouraged a large part of the country to convince themselves that he is somehow different, when in fact, apart from his appearance and demeanor, he is a stereotypical Filipino politician. Nothing that has happened under his administration—the contriving of a national crisis (drugs), the witch hunt against political opponents, the favoring of personal connections over strict vetting to choose department heads that results in a couple of bad decisions, and the suggestions that the entire political system might be overhauled—is not at all novel; only the names have changed.

    From an economic perspective, that’s actually somewhat comforting, because it indicates there is a certain stability. Economic growth started to pick up through former President Gloria Arroyo’s efforts to steer the country through the aftermath of the global financial crisis, and has continued on a steady path despite six years of foolishness by former President Aquino, and three-quarters of a year under an Angry Old Man. The economy itself—the businesses, workers, and consumers who constitute it—is largely responsible for that.

    Short of a sudden, violent revolution, which is virtually impossible here, there is not much that can really derail the economy in the foreseeable future. Concerns about “political instability” in that context are about as realistic as “the capital will be flattened by a giant meteor.” Sure, it could happen, but it is unlikely enough that it can be largely discounted. “Political instability” to an outsider or someone on the wrong side of the political fence here is just “normal” to everyone else.

    By the same token, that realization is a bit discouraging. Even though the Philippine economy is considered healthy—it is, after all, the second-fastest growing economy in Asia—there is an undercurrent of perception that it is still in a bit of a rut, and needs a significant push to correct some of its nagging shortcomings, such as persistently high underemployment, low exports, and a weak manufacturing sector. The realization that Duterte is, at least so far, not obviously different than anyone else who could be president in terms of creating substantial change means that the country may continue to fruitlessly wrestle with these same problems into the term of his successor.

    In that sense, perhaps what should worry analysts is the Philippines’ remarkable stability. A little bit of instability would probably do us good.



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