Subsidy for poorer states under federal govt urged

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A federal government will only work for the Philippines if both the federal government and wealthy states are willing to subsidize the poor states, a political analyst said recently.

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During ANC’s Federalism in Focus forum, Country Representative Benedikt Seeman of Konrad Adenauer Foundation noted that federalism is not only about the federal government pouring subsidy into the rest of the independent states because not all independent states will be on equal footing with subsidy from the central government alone.

“Federalism is not just about drawing random lines between national government and the respective independent regions [states]…pouring money from top to bottom. It is about fostering inter-dependence, so the equalization fund for the poorer states should be sourced from both the federal government which is the vertical approach and the wealthier states which is the horizontal approach,” Seeman said.

“Of course, the first time you tell someone that you have to share your wealth with other states, one will say, yes, but not my state. But this two-pronged equalization is the only way to make it work. Otherwise, the disparities in growth will also affect the rich states,” Seeman, who hails from Germany, which is under a federal government, pointed out.

Senate President Aquilino Pimentel 3rd earlier proposed a P100-billion equalization fund sourced from both the federal government and the wealthy states.

“With the imbalance, people from the poorer states will migrate to the richer states, and that will create high rates of unemployment and dissatisfaction. So if you can balance it with a equalization payments from the federal government and the wealthy states for the poorer states, one can actually development sustainable development for all regions,” Seeman said.

He cited the case of Germany’s federal state of Bavaria, which used to be a recipient of a similar equalization fund but has since turned itself into one of the richest states.

“Bavaria used to receive money from the equalization fund. But in terms of business, economy and employment, it is one of the most successful states in Germany. Most important, they are the most successful German state in the field of education. They know how to sustain their success story,” Seeman said.

He added that Germany still maintains an equalization fund, and that has turned the tides for the better for the rest of Germany’s federal states over the years.

“With the equalization fund, the states should be able to develop a good system of governance with integrity, checks and balance, create jobs so that there will come a time that the equalization fund will be hardly needed,” Seeman said.

“But make no mistake. There will always be richer and poorer states, so there should be willingness for solidarity. Otherwise, federalism cannot work,” he added.

The House of Representatives already named 12 deputy speakers from Luzon, Visayas and Mindanao in an attempt to acclimatize themselves with a federal form of government.

Speaker Pantaleon Alvarez of Davao del Norte has also named his recommendations for the 30-strong Constitutional Commission that would assist Congress in drafting the Constitution.

These are Pimentel, former Chief Justice Reynato Puno, former Sen. Bobby Tañada, Father Ranhilio Aquino of San Beda College of Law and Fr. Joaquin Bernas, among others.

LLANESCA T. PANTI

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