First of two parts
Perhaps feeling the spirit of the season, Reader Hector, who should be familiar to readers by now, has sent me an incisive analysis of the Philippines today, that in my view screams to be published.
He gave his email an intriguing and beguiling title, “The Philippines is an Onion.”
He thought of the title because he says, “Understanding the Philippines is like peeling away the layers of an onion – it can make you want to cry in the process!”
Hector’s ideas pour out in a torrent. They remind me of Thomas Paine writing on the eve of the American revolution – Tom Paine who became the voice of another people’s struggle for freedom, and gave the world such immortal lines as: “These are the times that try men’s souls,” and “We have it in our power to begin the world all over again.”
Hector, as I disclosed earlier, is a management executive by training and has spent some time in top-level consultancy work I think he is an expatriate working and living in our midst. But he also shows such an intimacy with and keen interest in Philippine business and economic affairs, that it is easy to imagine him a Filipino (with no need to prove that he is natural-born).
Strategic review of the Philippines
Hector’s long note outlines a prospective strategic review of the Philippines in the light of Asean integration and globalization, suggesting that a book by him may be in the works.
He opens his brief with a quote from Justice Louis Brandeis of the US Supreme Court:
“A country can have democracy, or it can have wealth concentrated in the hands of the few, but it cannot have both.”
“Corruption at the top means poverty at the bottom, and the only thing which trickles down is deceit, and hypocrisy.
“When the head is sick, then the rest of the body becomes impotent and helpless.
“The Philippines is now losing up to 2 Trillion pesos a year (equal to nearly 100% of annual budget, and circa 20% of GDP) to corruption by politicians and tax avoidance/evasion by the oligarchs & multinationals.
“Furthermore, the illegal smuggling/gambling/mining of the growing shadow economy, which according to Bloomberg, is now the 25th biggest in the world, and which equates to $150 Billion a year – 50% of official GDP – results in an additional 2 Trillion pesos per annum in lost government revenue!….
“The Philippines has now truly become a full-blown kleptocracy, with all the attendant symptoms, and the metrics show that it has become fully entrenched under PNoy Aquino.
“What has become of the country? Is there no politician of integrity?
“The country needs a new breed of conviction politicians, and the current crop of politicians should be convicted. But the chances of either happening are remote.
“Such unbridled theft from the national coffers is the primary reason why, over the past 5 years, there has been no reduction in poverty levels, an increase in income inequality, a lack of strategic investment, and long-term structural unemployment.
“It really is as simple as that.
“And it is certainly not average Juan who is stealing billions, it is those with access to funds, with the opportunity, and with the impunity. It does not take a Sherlock Holmes to ‘follow the money’ and see where it ends up.”
Five measures to steer PH in right direction
“The solution to the malaise is also not very complex – in theory. The twin barriers of lack of political will, and the intertwined vested interests of the oligarchs and dynasties provide a more imposing challenge, and needs an Alexander to unravel the Gordian knot, and liberate the Philippines.
“Transformational change is driven by an initial small number of fundamental high level policies/decisions which act as the natural catalyst to related downstream actions and further positive activity.
“Five key measures are needed to steer The Philippines in the right direction, bring it into the 21st century, and, belatedly, begin to develop its potential:
“1. Change the 60/40 economic provision within the constitution
“2. Implement a meaningful Anti-Dynasty law.
“3. Enact a strong Freedom of Information bill (FOI).
“4. Education, education, education! (open the market, increase % of GDP spent on education, use modern teaching methods & quality textbooks, train the best teachers and pay them accordingly).
“5. Adopt an integrated approach to entrepreneurship, and a balanced portfolio of added value in agriculture, investment in manufacturing, innovation in services, and R&D.
“It is imperative to focus upon these priorities which represent maximum return long-term…
“Without the right foundation any effort in building is wasted, prone to high maintenance, damage, and ultimately destruction.
“Illusion and delusion are the hallmarks of a politician, and clearly the approach of PNoy Aquino.
“Some people cannot see the big picture and prefer to hide when decisions are needed, or courage is called for….
“Politicians have crossed the line with their greed, incompetence, and sense of entitlement. The pendulum has swung too far and needs resetting. The natives are getting restless.
“To date, very few have matched political talk with concrete action, particularly PNoy Aquino who has reneged on all his campaign promises.
“A leader who abuses his country is like a father who abuses his children.
“Enough is enough.
“Enough corruption, enough incompetence, enough human trafficking, enough human misery, enough discrimination, enough elitism, enough feudalism, enough cronyism, and enough propaganda/outright lies.”
PH lags behind Vietnam and Asean
Hector concludes his strategic outline with a downer that bluntly contradicts BS Aquino’s claim that he has spread optimism in the country and among the people:
“The Philippines has clearly lost its way and become a very divided nation.
“In competitive terms the country is already at a distinct disadvantage. The GDP per capita of Vietnam is now double that of The Philippines. At a time when it should be planning and getting ready for the big game — Asean integration and globalization — it is squabbling in the locker room.
“Everyone knows about income inequality, but few realize its full extent, the direct link to poverty, understand the underlying reasons, or consider the long-term implications.
“The Philippines has an illusory headline GDP growth of 6%, but a real growth of possibly only 2%, and, most critical, no inclusive growth at all.
“Economists agree that even a 2% growth rate in a developing country with a trickle down strategy, and a high GINI co-efficient (inequality index – The Philippines has the worst in Asean, and more alarming, it has worsened in the last 5 years), will have zero impact on poverty levels.
“The Philippines is reluctant to embrace modern economic thinking, best practice, or even proven solutions. Instead it clings to protecting the status quo, at a very real cost to the majority of the people.”
(As I read hector’s analysis, I noticed that the onion had caused my eyes to well up. Where is Aquino’s vaunted Asia’s new darling? Where is Cesar Purisima’s “Good governance is good economics?” Part II will supply an answer? )