entrepreneurship

Trapo Alert! Detecting political pandering, part 2

Featuring Chiz Escudero, Risa Hontiveros and Loren Legarda.

This is the second part in a series on the candidates for the senate in 2013. Just a recap: I am attempting through this series to have a serious discussion of the aspirants and their political platforms (or lack thereof). I have identified nineteen so far that have articulated some kind of policy agenda in running for a seat in the upper house. These are put through what I call the pander-o-meter to determine whether the policy detail they have released so far places them in either the reformist or populist columns. The following table details the range of possible scores a candidate can get and the equivalent meaning of each reading:

Introducing: the ‘Pander-o-meter’ or Trapo Scale

A reading of… …is equivalent to…

1-2

Low levels of pandering detected, generally reformist in nature

3

A mixed bag of proposals aimed at both pandering and reforming

4

Trapo alert! Approaching dangerous levels of pandering

5

Could be likened to a vote buying trapo

In part 1, I analysed the platforms of Juan Edgardo Angara, Jr, Benigno Aquino IV and Alan Peter Cayetano.

In this instalment, I will be covering Francis Escudero, Risa Hontiveros and Loren Legarda.

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Francis “Chiz” Escudero (Ind.-Team PNoy) has spent his time in the senate over the last Congress submitting bills that delve mostly on justice and human rights having been the chair of the said committee. As such he has been responsible for shepherding a number of notable bills like the Human Rights Victims Reparation and Recognition Law of 2012 through the Senate. This should be counted as one of his greatest achievements to date.

The Senator has also filed a number of bills that aim to strengthen social justice and democratic accountability such as the bill seeking to strengthen the investigative and prosecutorial powers of the human rights commission and the freedom of information bill.

His platform for this senate race attempts to cover a broader agenda such as shelter, the environment, health, food security, education, entrepreneurship and employment, peace and order, protection of women and children. While the platform consists of very broad principles-some would call them motherhood statements-the following two senate bills he has filed are examples of concrete proposals he has put forth when it comes to social and economic policy.

1. Educational Trust Fund (ETF)

  • Description: a voluntary scheme in which GSIS and SSS members could contribute regular payments into a plan that would cover educational costs for their grantees. This would make the GSIS and SSS similar to the Central or Employees Provident Fund of Singapore and Malaysia, respectively, which are pension funds, but allow employees to withdraw part of their accumulated contributions for educational purposes.
  • Cost: to be determined
  • Source of funding: member’s voluntary payments

My critique:

If done correctly, this could solve the problems of insolvency that have been observed in a number of privately managed educational plans. The coverage of the ETF plans has to be defined by the actuaries of the two government institutions to avoid the problems related to tuition inflation. The fact that the scheme is voluntary means that individuals can still exercise their right to opt out of it. The creation of a public provider to compete with existing private pension plans will be an interesting new dynamic in the industry.

2. Magna Carta for Informal Sector Workers

  • Description: this bill seeks to create a number of entitlements for informal sector workers such as those working in the construction, farming, fisheries, retail and transport sectors. It seeks to grant formal rights to micro-enterprises through a business registration system administered at the local level in which business permits would be issued to street hawkers, sidewalk vendors, transport operators and the like. The annual dues start at Php100 and scale up to Php1.500 depending on the net worth of the individual. This net worth is to be verified using financial statements as proof. The money collected goes into an Informal Sector Development Fund, which uses the money to provide all the sorts of benefits: everything from housing, education, health (including reproductive health), and support for their industry.
  • Cost: to be determined
  • Source of funds: Ninety per cent of all revenues from business registration of informal sector workers and entrepreneurs and ninety per cent of fees and dues collected from PAGCOR and PCSO.

My critique:

This, in my view, demonstrates the limits to taking a “rights-based approach” to social and economic issues. By creating a whole set of rights for informal workers and business operators, there is no question that the intentions of the bill are noble. How realistic it is though is another matter. One can legislate these rights into being, but enforcing them is a bit hard for a government that is chronically underfunded. For one, not many informal sector workers would have financial statements of their net worth as the bill assumes they do. Second, many unintended consequences could occur such as continued harassment of those who do not come up with the fees to register themselves (and continued corruption from street level “enforcers”). The whole purpose of the bill could be subverted at the local level.

Overall Comments:

Senator Escudero has authored a number of sensible pieces of legislation that deal with justice and political rights. It is when he tries to legislate social and economic rights that things become a bit of a mixed bag. Perhaps in preparation for another stab at higher office in 2016, he seems to be pitching himself as a candidate with a broader agenda, more appropriate for a chief executive. The problem is, it is a bit of a hit and miss situation when it comes to that, so far.

Pander-o-meter: 2.5 out of 5

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Risa Hontiveros (Akbayan-Team PNoy) who was a proponent of the cheaper medicines law and reproductive health bill at the lower house when she was a party-list representative is staking her second run for a senate seat on health issues. To wit, she has issued a policy statement covering the health sector, which has five key planks towards “making health care more universal”. The five planks of her program include:

  1. Increased spending on healthcare through the budget
  2. Tighter regulation of private health facilities to address affordability of health-care
  3. Upholding patient’s rights and standards of healthcare treatment
  4. Disease prevention and promotion of healthier lifestyles
  5. Improving the quality of training and education of healthcare workers

My critique:

There are no costings to her proposals. She hasn’t really specified what this five-pronged strategy would mean to ordinary people on the ground in terms of what they should expect. She hasn’t really talked about how much the health spending ought to increase as a share of GDP. She hasn’t really said if there ought to be a patient’s bill of rights and the method for enforcing those rights.

One thing she has spoken about with regard to healthier lifestyles is that she supports banning the sale of sugary drinks in school cafeterias. As to how to improve the quality of healthcare professionals, again there is not enough detail regarding this. Should non-performing schools be closed, for instance, or should better disclosure and consumer information be relied upon to improve student choice as I have suggested here.

Since we do not know how much health spending needs to be, we don’t have a clue as to how much to raise to fund it. What about a “fat tax”, as I have advocated in this space? I have estimated it would raise a significant amount that could in fact fund health reform programs and interventions.

Overall comments:

There are so many blanks to be filled in Risa Hontiveros’s policy platform. I hope she gets around to filling some of them before the election season ends. Overall, I feel that if these policy prescriptions (sorry for the pun) were to be fleshed out, they would provide greater clarity to citizens about what she is fighting for and her distinctive appeal. She can literally dominate and “own” this policy space if she really wanted to. It’s a pity that she has been forced to deal with “Team Patay” distractions and hasn’t been able to scope out her place as a senate contender, yet.

Despite this lack of detail, however, the intent of her health policy statement is clearly headed in the right direction, for the most part. I still am not clear about how tighter regulation will lead to lower cost of delivering health service, since the jury is still out on whether the cheap medicines act has in fact done the same in the pharmacy industry. It is important for her to state what the intended outcome of these policy directions will be and the principles she would adhere to in designing either an expansion of existing health services and entitlements or the creation of new ones.

Pander-o-meter: 2 out of 5

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Loren Legarda (NP-Team PNoy) launched LOREN, an acronym that stands for Livelihood Opportunities to Raise Employment Nationwide, as her campaign platform for 2013. According to the senator, “LOREN sa Bawat Barangay will be a consultation with various sectors of society and concerned local government agencies on how to raise employment and entrepreneurship opportunities. This is a program I did during my first term in the Senate and we will have it in every region in the country.” The policy intent of LOREN is to implement four employment and business laws that she has been responsible for (see below), conduct job fairs and disaster risk and reduction programs. The four laws referred to are listed below:

Public Employment Service Office (PESO) Act RA 8759 of 1999. The law that set up PESO, which according to the Bureau of Local Employment website is “a non-fee charging multi-employment service facility or entity established or accredited”. These are meant to provide job fairs, livelihood and self-employment bazaars, workers hiring for infrastructure projects, credit and the like. The law requires these to be provided in “all capital towns of provinces, key cities, and other strategic areas”.

Magna Carta for Micro, Small and Medium Enterprises (MSME) RA 9501 of 2008. This act amended earlier laws RA 6977 of 1991 covering MSMEs which now range from firms with capitalisation of under Php3 million for micro enterprises up  to Php100 million for medium-sized enterprises (the earlier law defined the range from less than Php50,000 to Php20 million. In its current form, this law seeks to intensify and expand existing programs that encourage entrepreneurship and skills acquisition, facilitate access to funds and government procurement contracts, reduce red-tape and stringent requirements, and to foster linkages with large companies and industry associations.

Barangay Kabuhayan Act RA 9509 of 2008 which establishes livelihood and skills training centres 4th, 5th and 6th class municipalities with satellite and mobile training centres. The purpose of this law is to extend the services of government with respect to livelihood and skills down to the grassroots level.

Agri-Agra Reform Credit Act RA 10000 of 2010. This law seeks to provide an agriculture and agrarian reform system of credit and financing through banking institutions. The law mandates banks to allocate a minimum of 25% of their loan portfolio to agricultural loans and a minimum of 10% for agrarian reform beneficiary loans.  They can do this by either lending directly to loan applicants or to other banks and institutions that specialise in offering credit to the primary sector.

My critique:

It is a bit strange that the senator is seeking re-election so that she can implement these laws which have been in place for up to fourteen years. Surely, what she ought to be doing is seek an evaluation of the policies and programs through an externally commissioned study. That is the very essence of evidence based policy analysis and advice. She should push for the inclusion of that in the assigned line agencies’ budgets.

Furthermore, it seems a bit strange that the senator is campaigning by offering job fairs and disaster risk and reduction programs. Regardless of how noble the purpose of these projects may be, they should really be done outside the election campaign period.  If a rich billionaire were to distribute relief goods to flood victims during the campaign season, wouldn’t that be regarded as a form of vote buying? Furthermore, this “consultation” as she terms it might be skewed due to the context in which it is being performed—during an election.

Overall comments:

The senator is clearly pivoting to hip pocket issues. Her means of doing this is by demonstrating her track record through the laws she has co-authored in the area. She has toned down her environmental and women’s rights advocacies for the moment. She probably recognises that for her to aspire for a higher office in the future, she needs to solidify her economic credentials with the masses.

That can only be established through the effectiveness of the programs she has sponsored as a legislator. That as I said should already have been done. It is rather disappointing that so many years since the enactment of these laws, no serious effort has been made to try and measure their impact, which is perhaps why she has nothing new to offer the electorate this time around in terms of new or updated legislation.

Pander-o-meter: 4 out of 5

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Next, I will cover Aquilono “Koko” Pimentel, III, Joseph Victor “JV” Ejercito and Juan “Jack” Ponce Enrile, Jr.

Occupied

Restoring a meritocratic society is the goal of the 99 movement in America. Establishing it for once in the Philippines should be our national ambition.

The Nobel winning economist, Gary Becker, whose work on human capital I deeply admire wrote a piece called Deserving and Undeserving Inequality in the blog which he shares with Richard Posner. In it he distinguishes between good inequality (deserved) and bad inequality (undeserved) saying

The great majority of people in different cultures do not object to someone who has made lots of money when they have superior abilities and talents, and they work hard at producing what are considered useful goods or services.

The meritocratic society with upward and downward social mobility would be in Becker’s view the most acceptable form. In this just society, the cream always rises to the top. He cites actors like Tom Hanks and Jennifer Anniston, entrepreneurs like Bill Gates and Steve Jobs, and skilled professionals like transplant surgeons who have grown rich by applying their exemplary talents and skills.

In contrast, Becker poses the problem society seems to have with hedge fund managers who make use of arbitrage (momentary bargains unnoticed by the market) to make huge sums of money. He lumps them together with speculators, Russian oligarchs and monopolists who enrich themselves through unfair, uncompetitive means (the latter two through government fiat).

Becker of course uses human capital theory as his framework for addressing this issue. Under its framework, individuals who acquire knowledge and skill through education and training (one cannot gain it any other way as it cannot be inherited or passed on) deservedly earn private returns in the form of higher incomes over the remainder of their working lives.

A meritocratic society should in Becker’s view reward the investments made by individuals in themselves and not rely on some other criteria. Elitism, the polar opposite of meritocracy rewards individuals for investing in other things (political patronage, social standing or being raised on the right side of the tracks, marrying into the right family, etc). It all sounds rational and justified, which is why Becker says “the great majority of people in different cultures” accept the legitimacy of a certain form of inequality (I have some reservations which I expressed here).

The Occupy Wall Street protests that have spread all around the world is comprised of a disparate set of individuals, but at its core, it is a protest against what is seen as an illegitimate form of social structure perpetuated by a weak central government unable to constrain the greed of corporate elites.

The breakdown of social cohesion has occurred because of what is perceived to be the breakdown of a meritocratic society where one rule seems to apply to the rich who are becoming a new aristocracy while another set of rules applies to the rest.

The teapartiers detest the privilege accorded to the global capitalists/Wall Street at the expense of local merchants and tradesmen/main street, while OWS expresses their distaste mathematically by stating they represent the 99% who play by the rules but have to bailout the 1% who don’t.

It is curious to see how the OWS protest that began in NY mutates as it travels to each city throughout the world deriving a local “strain” in each place. In the Philippines, which has witnessed a high level of social inequality, there has not been a similar groundswell of support outside the usual suspects of BAYAN MUNA and other groups who coalesce under anti-American imperialist banners.

The reason being I think that the broad sections of our society by and large aspire towards a meritocracy and see their lack of social mobility as either the result of divine providence or misfortune. The masses have not coalesced around a universal sense of rights and entitlements that has taken hold in the West perhaps because they still depend on ties of patronage from local elites.

The state has had a long history of either colluding with or acceeding to our elites. They have given concessions to the “peasantry” whenever popular movements have challenged their ascendancy but withdrawn them when the threats have passed. Charismatic populist leaders like Ramon Magsaysay and Joseph Estrada sought to appease them, not undertake reforms aimed at genuine social restructuring.

The only time when the state sought to weaken the landed elite by expropriating their assets was under Martial Law. Even then there were limits to what it could do as it sought to make its authority legally and constitutionally binding in the eyes of the world. The problem was that once it had weakened any challenge to its authority, nothing prevented the regime from plundering as well.

The lack of accountability under Martial Law made the state susceptible to a new form of super-sized impunity. This was not inevitable though as in the case of East Asia with their benevolent dictators. Had Mr Marcos fostered a new meritocracy in both the bureaucracy and the wider economy, things might have been different.

His wife Imelda widely reviled for her pompous display of wealth had actually promoted a meritocracy in the arts. Through her sponsorship of young scholars and aspiring artists through competitions and venues for the demonstration of their capabilities, she enabled a flowering of talent that was not based on birth or privilege. This is the one legacy for which she can be rightly credited.

If only the same thing had happened in the technology sector where innovation and risk-taking could have been encouraged, instead of the crony capitalism that created a new elite not based on productive but predatory activity, the Marcos years might have come out smelling a bit better.

Contemporaneous with the Marcos era, during the 1970s and 1980s, Brazil and India embarked on a policy of giving birth to technology firms. The state agencies that were engaged in this “midwifery” role were not perfect, but as discussed by Peter Evans in his book Embedded Autonomy, despite their imperfections, at the end of the 1980s they still had something to show for it.

After seeing efforts at producing local operating systems and PC clones flounder, Brazil’s IT sector survived by specializing in financial automation for their banking sector (emblematic of this were companies like Itautec of the Itau Banking group). In India, state investments in skills produced manpower to work in systems integration services combining hardware and software engineering which became their strength. Today some of these Indian firms have successfully expanded their operations overseas (Mahindra Satyam and Tata Consulting Services are prime examples).

Korea which was most successful in fostering growth of this sector focused on the assembly of computers, consumer electronics and semiconductors through concessionary loans and state sponsored and financed research and development. In 1989 Samsung and IBM signed a co-licensing deal allowing them to tap into each other’s portfolio of patents. Today IBM no longer makes PCs, but Samsung is challenging Apple for the handheld tablet market.

Brazil of course was under a military dictatorship during this period. India was except for a brief period in the 70s a rambunctuous democracy like the Philippines is now. Korea was still being ruled by an autocratic president. In other words, the type of political system did not prevent the sorts of policies needed for promoting a meritocracy from emerging in productive sectors.

This was Pres Marcos’s greatest moral failing: neglecting the national development project and engaging in pure predatory behavior. The “Freedom Constitution” that followed his fall sought to put a system of checks and balances in place to restrain the executive has unfortunately not produced a meritocracy either. It simply revived the old aristocracy to power which has picked up where it left off prior to Martial Law by engaging in booty capitalism.

The weakness of the judicial system has served to deny a system of justice to the dispossessed and the poor. So unlike the Occupy Wall Street protesters who camp outside the headquarters of the global elite, our own version of the downtrodden live in slums outside the gated communities of local elites. They are forced to work in the informal sector without legal entitlements such as social security, healthcare or retirement funds, for the most part having acquired very little in the form of human capital.

The present dispensation is beset with many challenges all around which include fostering good governance and promoting economic growth. These projects will take time to bear fruit. While it is seeking to free the poor from local patron-client relationships through social insurance programs, it eventually needs to buckle down to the difficult task of generating employment through industrial promotion strategies and policies.

Having fostered the emergence of the electronics and business process outsourcing industries in the interim, the government faces the more difficult task of expanding the scope of these industries in the international division of labor (what Evans terms the role of “husbandry”) into more value added activities.

It would be good if aside from producing the domestic equivalents of Tom Hanks and Jennifer Anniston (a legacy of our showbiz, pop mentality from the Imeldific years) we could also foster the development of our own Bill Gates or Steve Jobs (the burgeoning industries out of Silicon Valley of course received tremendous government support through the defense industry).

Globalization was meant to usher in a kind of meritocracy among nations in the division of labor. What the experience of emerging countries has shown is that to rise to the top, state involvement in the development of industries is necessary. The ultimate goal should not be to one day attract a greater share of foreign companies to our shores; the national ambition should be to one day join our brothers in emerging markets in buying out foreign companies within their own shores.

Perhaps it is this vision that should occupy our hearts and minds as we look to the future.

Arroyo spreads news in New York about her admin's feats

Arroyo spreads news in New York about her admin’s feats
AMITA LEGASPI
GMANews.TV

“Start spreading the news…” that’s how Liza Minelli’s 1977 song “New York, New York” goes.

That’s what former President and incumbent Pampanga Rep. Gloria Macapagal Arroyo did. At two recent events in New York in the United States, Arroyo highlighted the achievements of her administration.

Taunted in the Philippines for corruption issues, Arroyo found two international venues — the Clinton Global Initiative (CGI) conference and the Important Dinner for Women — to cite her administration’s achievements, especially for women.

Arroyo attended the two international gatherings from September 20 to 22. Arroyo’s classmate, former US President Bill Clinton, and Queen Rania Al-Abdullah of Jordan invited her to these events.

Both events focused on addressing women issues related to the Millenium Development Goals (MDGs).

The MDGs are eight international development goals that all 192 United Nations member states, and at least 23 international organizations, have agreed to achieve by the year 2015.

These goals include:
(1) Eradicating extreme poverty and hunger;
(2) Achieving universal primary education;
(3) Promoting gender equality and empowering women;
(4) Reducing child mortality rate;
(5) Improving maternal health;
(6) Combating HIV/AIDS, malaria, and other diseases;
(7) Ensuring environmental sustainability, and
(8) Developing a global partnership for development.

Presenter of commitments

In the 5th CGI conference, Arroyo was the “presenter of commitments” on enhanced education for about one million girls.

In a press release, Elena Bautista-Horn, Arroyo’s spokesperson, said the “commitment” was shared by Barclays (a financial services institution), Goldman Sachs (a global investment banking and securities firm) and Room to Read (a non-profit organization based in the US).

Women empowerment

During the 5th Important Dinner for Women, Arroyo was a discussant on the lagging targets on women empowerment and maternal deaths.

The discussion was participated in by Netherlands Prime minister Emily de Jongh-elnage, and Ida Odinga, wife of Kenya’s Prime Minister, among others.

During the event, the former president shared her administration’s accomplishments.

Arroyo said the country was among the world’s top in providing economic opportunities for women. She said the 2006-2007 global entrepreneurship monitor noted that the Philippines was the only in the country in the world where the women are more active in starting business than men.

She added there was a significant increase of women in the labor force, with 49% of all women now working, topping gender equality among managers, professional and technical workers.

Arroyo admin’s achievements

Arroyo also cited that the Philippines has been at the top of the ranking of developing countries in the World Economic Forum’s “global gender gap index” for four consecutive years. She added that the Philippines also has the highest ranking in Asia.

Arroyo further said the government tops in gender equality among legislators and senior officials, adding that women dominate civil service at the technical level.

“The Philippines continues to be the top performer in gender equality in literacy rate and enrollment in primary, secondary and tertiary education. The country also tops gender equality on life expentancy with women outliving men,” the former President said.

She also said that her administration also made landmark legislations for women, such as the enactment of the Magna Carta for Women, a comprehensive women’s human rights law that seeks to eliminate discrimination against women.

The magna carta seeks to recognize, protect, fulfill and promote the rights of Filipino women, particularly those in the marginalized sector.

She also cited the Anti-Violence against Women and the Trafficking Persons Act of 2003, recognizing that women are the number one victims of human trafficking.

Empowerment of women

She said the Philippines is the only country that automatically appropriates 5% of its annual budget for the empowerment of Filipino women.

Yet, like many other countries, the Philippines faces the difficult challenge of reducing maternal mortality from 160/100,000 in 2009 to 55/100,000 in 2015, she said.

Arroyo said maternal deaths affect not only women empowerment but also the promotion of an intact family unit, the breeding ground of an individual’s values and direction for the future.

She said most of maternal deaths are caused by the absence of birth experts and proper birth facilities.

Arroyo said her administration has thus made health care services more available for women. They also made pregnancy quality for public health insurance.

Arroyo also put priority to facility-based, rather than home-based delivery of babies, by upgrading the gynecological, obstetrics, and surgical services of government hospitals.

Aside from attending the two events, Arroyo also held meetings with philanthropists and non government organizations to discuss possible projects addressing the concerns of women and overseas Filipino workers. Arroyo also discussed possible infrastructure, relief, and reconstruction projects. –VVP, GMANews.TV