Global Competitiveness

Taking Short-cuts on the Righteous Path

Has jailing the former president Gloria Arroyo led to better governance?

As the 2013 congressional and local election approaches, the opposing camps led by incumbent president Benigno “Noynoy”Aquino and his vice president Jejomar “Jojo” Binay will be vying to gain control of as many seats as they can. Both opposed the policies and legitimacy of Mrs Gloria Arroyo when she was president. Both have sought to have her arrested and prosecuted for her “misdeeds” in the highest office.

Both claim to be fighting for better transparency and accountability in government. Now that the ailing Mrs Arroyo has been placed under hospital arrest for the second time, her party scattered to the winds, and her defenders in the Supreme Court neutralised, both can claim victory in the ground war against the vestiges of her regime.

However, it is worth posing the question, exactly what has changed, particularly over the past three years, apart from winning the anti-Arroyo battle?

I am not asking what has been achieved in terms of the usual things governments do, like building roads and bridges, hiring teachers and nurses, and maintaining the peace. When it comes to these measures, any government regardless of its occupants can claim some achievement. In fact Mrs Arroyo often touted her flagship infrastructure projects as signposts of her government’s diligence in serving the people.

In fact Mr Aquino’s priorities have often been similar to that of his predecessor, including the expansion of the conditional cash transfers program, running after tax cheats, strengthening the industries of business process outsourcing, tourism and agribusiness by expanding the country’s infrastructure. Where he has differed has been in promoting greater transparency and accountability in the way government did these things.

Atmospherics vs reality

Most analysts put the different “atmospherics” created by having Mr Aquino at the helm behind the growing optimism in outlook of the Philippine’s economic prospects. This is a good thing. But the problem with simply relying on a “mood change” is that if it is not backed by substance, such moods can often swing the other way. That’s why as the country faces an election in May next year, it is worth considering the best way forward.

Take for instance business confidence in the Philippines. As Roel Landingin wrote for the Financial Times blog Beyond BRICs, although the country leaped 10 places in the World Economic Forum’s Global Competitiveness rankings, it dropped two notches in the World Bank’s Doing Business Report.

While the WEF reflects the sentiment of big business regarding the clean-up drive of President Aquino, the WB focuses its study on the nuts and bolts, the procedures and red tape that affect mostly small and medium sized enterprises throughout their life cycle. Landingin notes

The Philippines’ dismal record on the business climate for local, mostly small enterprises underscores the limitations of Aquino’s anti-corruption drive in promoting government efficiency. While going after suspected wrongdoers of the past administration has begun to change investors’ perceptions, it does little to cut red tape or inertia in regulatory offices and courts across the country.

As the UN Council on Trade and Development report for the first half of the year showed, in a region that attracted $52 billion worth of foreign direct investments, the Philippines attracted only $900 million or about two per cent. Singapore drew $27.4 billion, Indonesia $8.2 billion, Thailand $5.6 billion, and Malaysia $4.4 billion. Despite bucking the regional trend by growing 12.5 per cent from a year earlier, the Philippines remains miles behind its ASEAN rivals.

It seems that incremental not transformative change is happening. If President Aquino leaves these structural rigidities behind after leaving office, you can imagine that confidence of investors who are buoyant at the moment because of his honest leadership could just as easily take a dim view if things go back to the way they were under a different president.

Legislative report card

If we take stock of legislative accomplishments, what significant policies have changed under Mr Aquino’s first three years? Let us examine the status of a few high profile pieces of legislation below:

Reproductive health – not passed, needs to be put to a vote

Freedom of information – not passed, still being debated

K-12 – not passed

Fiscal incentives rationalisation – not passed, still being debated

Fiscal responsibility – not passed, still being debated

Sin taxes – not passed, nearing a vote but greatly diluted

Mining investment and tax policy – still being drafted

Cyber-crime – passed and signed but under Judicial Review

Witness and Whistle-blower protection – under consideration

The list goes on. In fact, judging the administration solely on its legislative record, it would hardly deserve a pass.

Managing international obligations and treaties? The Senate President and an ally of the president so readily aired our dirty linen in front of the gallery right in the aftermath of an international territorial dispute that could have escalated into a military or economic conflict.

The country narrowly escaped being blacklisted by the Financial Action Task Force, but only just, and the measure that was hurriedly passed to avoid this still wasn’t deemed adequate to get us off the hook completely.

Lasting peace in Mindanao? Perhaps, but the blanks still need to be filled in.
Good economic management? The reason for this year’s better than expected performance is that last year’s was worse than expected.

So the question remains, what major piece of reform can the two wings of the anti-Gloria coalition claim to have put in place while she and her forces are immobilised? What lasting institutional, transformational change have they enacted? Why do they think they deserve to be re-elected or endorsed at the coming May elections?

If not completely wrecking and discrediting our system of government is the watered down criteria, then yes, the Senate and the House narrowly escaped sending the country to hell in a hand basket by their clumsy actions during the impeachment trial, but they seem to have been wanting everywhere else.

The long hard slog

One reason we could say progress on reform measures is dragging in congress is due to the fact that our legislators represent a class of people who benefit from the way things are.

Some incumbents want to hand over to their relatives their posts in the senate or be joined by them. Sharing the same surname, having been groomed since childhood to succeed them, the choice seems so natural. We ought to elect them because they are honest, or well-meaning or qualified or worse: winnable.

Sure, but the question remains, how has the nation been served by their lot so far? We keep hearing the same old excuses like, It’s just too hard to pass these reform bills. There’s always tomorrow. Mañana, manana. Que sera sera. Bahala na si batman and all that jazz.

This week, in his trip to New Zealand, the president took a dig at his predecessor’s honour, insinuating that she feigned illness to escape the full force of the law. Three years nearly into his presidency and it is still all about her. There is apparently no second act.

While it is easy convincing overseas Filipinos that things are improving back home, it is not that easy convincing those that live in the country that things have in fact changed, unless of course real, tangible, and meaningful changes do get hammered out and carried out. This is the long hard road to real recovery and deliverance that we must trod, not the soft, easy route that we are currently being offered.