Key Issues That Holds the Philippines Back From Being Progressive - Case Study Example

 This memorandum is in compliance with your request to outline the specific problems that need to be addressed in order for the Philippines to develop into a politically, economically and socially stable state today. I have identified five of the most pressing of these: political approaches; legal system; corruption; terrorism and conflict; and, religion. I will make myself available to answer your questions any time. I can be reached at this number: ___________. INTRODUCTION It is important to include a short historical development of our present situation in order to establish my points and recommendations. I would classify this evolution into three: political, economic and social. Political: After the fall of the late strongman Ferdinand E. Marcos, we have trudged on and endured a slow, painful but certain transition to democracy. The successive regimes and institutions such as the media have made it a certainty that freedom is guaranteed at all cost. The 20-year rule of Marcos have actually turned majority of the Filipino population from authoritarianism or any vestige of it in our political system that is why such feat became possible. Our Constitution is the culmination of such desire and collective efforts to achieve a vibrant democracy. Economic: On the economic front, the Philippine experience is a bit tragic. From one of the richest countries in Asia, we have emerged as one of the poorest. After the Second World War we have experienced a steady growth, but starting in the 1980s we have suffered steady decline and more recently, mixed economic trends. By 1985, our economy shrank by more than 10%; it would be further weakened by the political instability of the Corazon Aquino administration. (USA IBP 2007, p. 22) Sweeping economic reforms have been instituted by Fidel Ramos and have resulted into a renewed economic vitality only to be halted by the Asian financial crisis back in 1997 and the political turmoil that hounded the short-lived Joseph Estrada administration. The Gloria Arroyo presidency saw the brightening of our economy but the potential has been tempered by political turmoil due to legitimacy crisis. Social: Social stability or instability is perpetuated via political and economic causations. The political legitimacy of a regime is crucial in the way unrest or stability permeates in our society. There is the case, for instance, of the widespread rigging of the 1985 elections that led to massive demonstrations and have eventually winded down to the EDSA People Power Revolution. Then, the alleged electoral fraud committed by the Arroyo administration has also shaken and polarized society, leading to various political, military and social backlashes. Although they were successfully suppressed and/or contained, the social environment was so poisoned that the government has been consistently reviled by the media and several civil society groups. The three variables cited above did not function independent of each other. Instead, the way they interact has resulted into a collective force that brought about both positive and negative developments for the Philippines. Five of the latter would be addressed in the succeeding sections: POLITICAL APPROACH. As has been cited previously, we are averse to any vestige of authoritarianism in our leadership. This has been guaranteed by the 1987 Freedom Constitution. However, a downside of this was the deliberate attempt to weaken some institutions of the government including the Presidency by a system of checks and balances, which eventually lead to a domination of factions. As a result, the following negative effects emerged: 1. Our political system has become susceptible to the domination of groups such as the elite – those powerful enough to manipulate the high degree of freedom that has been mandated by our political and legal systems. As a consequence, our country is peppered by sharp conflicts from factions – the elites, politicians, the left, civil society, religious and other interest groups – that pushing for reform becomes harder for the leadership to undertake. In some instances, the polarity that results from our processes has lead for some factions and groups to push for drastic solutions that are beyond the bounds of the Constitution. We can cite the cases of the several coup d’état that rocked your mother’s administration as well as the recent Oakwood mutiny, wherein a band of disgruntled officers seized Makati City, our financial center. 2. There is a perversion in the way our electoral processes are conducted. Although, we have instituted electoral reforms recently, such as the Arroyo-sponsored poll automation we have used, which eventually led to your election, our system – though hailed as free and democratic in every sense of the word – is twisted in such a way that the activity defeats the ideal and objective in the process. The reason for this is simple: the fundamental flaw remains unaddressed: that the alienation of the vast majority of Filipinos from political life is still very chronic and this results into an utter powerlessness or susceptibility to patronage politics. An outside observer summarized the problem best and I quote: “Their [the electorate] massive and eager participation in periodic direct elections notwithstanding, many Filipinos continue to see politics as an abstract and distant affair, as a numinous experience, a form of entertainment or a cynical commercial exchange in the guise of civic function.” (Hill 2007, p. 198) Massive vote-buying is already becoming a norm for us, wherein politicians can no longer be elected based on his merits if they do not have the means to bribe the people from voting him into power. We have expressed optimism that automating the elections would reduce fraud, but it appears that this only meant transferring electoral corruption to another area. According to the Henrietta De Villa, the chair of Parish Pastoral Council (PPCRV), the citizen partner of the Philippine Commission on Elections (COMELEC), “While I’m happy that the precinct count optical scan machines are okay, now there are so many reports of vote-buying here and there. It shows that supporters of candidates really go out of their way to change the will of the people. Now they’re getting frantic that they cannot exercise their old ways of cheating, so they’re resorting to vote buying.” (Quismundo, Napallacan and Arguelles 2010) The immediate consequence of this is of course corruption. Philippine Today in its editorial shortly after the recently concluded local elections observed: “Politicians are not stupid, of course. Remuneration for the position they coveted are miniscule. The only way they can recoup their investment is through corruption, by way of their assumed power, privileges, perks, and influence. Discreet or brazen their corruption is, it doesn’t matter: because, for politicians, everyone has a price. And as they accumulate wealth to buy more people out, they build their fiefdom.” (Today 2010) Indeed, our political system plays a big part in the corruption that depletes our resources that could have been perused for poverty alleviation and for social and welfare services. Our system is creating a political culture that could embed bribery, cheating, vote-buying and other hooliganism to electorate’s consciousness. That is why it must be addressed. We should initiate reforms in this area that include several elements into a coherent and forceful strategy. These elements include: amendments to the constitution enactment of statutes strict policy enforcement educational initiatives. CORRUPTION This year, we are ranked 134th most corrupt country by Transparency International in its annual Corruption Perceptions Index. We have barely moved out of our previous 139th finish last year. (TI 2010) Of course, we do not need outside observers to tell us about this problem. We have acknowledged this time and time again and, in fact, this administration has used this as a battle cry during this year’s election. The overwhelming mandate given to us by the Filipino people with our victory underscore the gravity of the problem as perceived by our countrymen. But I would like to reiterate the role it plays in the Philippines’ dismal performance in realizing its political, economic and social objectives. Many analysts have assessed the effects of corruption in a country. One of such was Heidenheimmer (1989) who listed two specific consequences: 1. Reduction of Governmental Capacity as it alienates modern-oriented civil servants prompting them to leave the country or withdraw/reduce efforts. (p. 290) In addition it taxes our country significantly as it eats considerable opportunity costs because it restricts the development and implementation of programs. 2. Loss of Legitimacy as corruption squanders the most important asset of the Philippines, which is the legitimacy of its government. (p. 290) This loss of legitimacy figures prominently in the assessment of power of this administration or our – and our efforts - importance in the eyes of the citizenry. This variable is crucial in pushing for our reform agenda. We certainly have to face further problems besides the previously outlined two. The Council of Europe in its study of various countries, for example, reported that corruption: Undermines democracy; Destroys the respect for constitutional authority; Slows and erodes economic development; Leads to social and moral disintegration; and, Opens the door to organized crime. (p. 29) If we have to go back in time, in 1995, the Ombudsman reported that the cost to the Philippines from corruption in the span of 20 years is estimated to be $48 billion. This has been more than a decade’s past and to calculate the present figure and to project future costs would certainly reveal staggering numbers and cost to our treasury. It is, hence, comforting to know that we are addressing this problem head on. Our effort to implement full transparency policy in governmental processes and activities is widely recognized as one of the appropriate measures in solving corruptions. Transparency, wrote Elkington and Hartigan (2008), “does not guarantee system change, but it is often a critical first step.” (p. 160) These analysts also push forward a strategy that we may want to adopt and implement for our own: that because corruption is deeply enmeshed into our society, there is a need to change the system by developing convening power by creating and nurturing a broad coalition of actors from civil society, business, and government. (p. 160) This collaborative effort is aimed at comprehensively addressing corruption. LEGAL SYSTEM. Our policies are anchored on a Constitution that can be considered reactionary to repressive Marcos regime. While it has it merits, particularly in regards to the guarantee on individual rights, it has its own flaws especially now that time has significantly changed and the world is forcing us to open up more. This is particularly important because we are under a rigid legal system, characterized by the following elements: Laws hold primacy over judicial decisions in that courts have to apply them and are not permitted to challenge their wisdom. While the courts can declare a law unconstitutional, it cannot replace the legislation that has been invalidated. (USA IBP, p. 247) The above characteristics underscore how the legal system is powerless to effect reform, much less respond immediately to the rapidly changing international economic landscape. This is even more highlighted by the fact that many of our existing laws run counter to economic trends such as globalization, liberalization, among other variables that require countries to continually have competitive advantage in the highly integrated international market. A case in point is foreign ownership. Section 2 of the Republic Act No. 7042 states that: Foreign investments shall be encouraged in enterprises that significantly expand livelihood and employment opportunities for Filipinos; enhance economic value of farm products; promote the welfare of Filipino consumers; expand the scope, quality and volume of exports and their access to foreign markets; and/or transfer relevant technologies in agriculture, industry and support services. Foreign investments shall be welcome as a supplement to Filipino capital and technology in those enterprises serving mainly the domestic market. (RA 7042) With the above law in place, it is still difficult to entice foreign investments because our constitution explicitly states that in all areas of economic activity, the entry of foreign investments is regulated whenever foreign equity participation exceeds 30 percent of the capital stock. (Lardizabal 1988, p. 128) The limitation of foreign equity is listed as follows: List A – areas for Filipinos under the Philippine constitution and other laws such as mass media, retail trade, and small-scale mining where foreign ownership is prohibited, and advertising, land ownership and public utilities where minority foreign ownership is allowed; and List B – areas that defence-related, those with adverse effects on public health, and domestic market enterprises with paid-in capital of less than $200,000, unless they involved advanced technology or directly employ at least 50 people, in which case the paid-in capital can be as little as $100,000. (Kirk 1998, p. 40-41) There are other specific areas in which the legal system stands in the way. A specific example is the way our country’s regulatory and supervisory framework is laid out. While generally comprehensive in coverage, they are quite complex and that weaknesses in their enforcement are often reported. Such complexity is due to the fact that the financial industry and services had over time became what Enoch et al. (2007), called as increasingly conglomerated and universalized. (p. 174) Enacting laws to change the current systems in place would require amendments to the constitution as well. This is very important if we are to attract much needed capital inflows. As we pander to the world that we are open for business, and then investors come in only to find that there are actually limits to what they can do, the result becomes confusing. Foreigners are restricted in their ability to invest freely and this is one of the crucial factors that inhibit and would inhibit our growth. In addition, the legal system also paved the way for the establishment of numerous regulatory agencies that are mandated to oversee the various aspects of investments to the point that they overlap and result into further confusions and restrictions driving away investors and squandered opportunities for us. The only recommendation in this area is to amend the constitution – bring in a host of economic policymakers, analysts and outside resource people in order to come up with a framework and policy suggestions that would be integrated in the move to change the charter. This is expected to address the problem in both the short-term and the long-term. The process of amending our constitution is a tedious and highly political one. We must make sure that an initiative to change would be successful. Otherwise successive attempts to do so would probably end up in failure as demonstrated by the experiences of the previous administrations. TERRORISM AND CONFLICT Currently, there are three major sources of serious domestic threats in the Philippines – Islamic extremism/terrorism, the separatist war being waged by Muslim secessionists in the southern Philippines and the Communist New People’s Army. The country, in effect, has to deal with these three threats simultaneously. Although, there has been no large-scale conflict recently with each or with all of these forces collectively, there are bouts of violent skirmishes that need to be handled carefully and decisively because, after all, the peace and security of this country is fundamental in achieving political, economic and social stability. This problem taxes the Philippines in a number of ways. Some of the most important are outlined for your perusal: Defense-spending: In our experience and in addition to the empirical results gathered out of studies undertaken elsewhere around the world, armed conflict and terrorism require a higher share of the yearly budget allocation of our country. The magazine, Jane Defense Weekly, for instance, through its Bangkok correspondent, had prominently published our recent move to raise our defense expenditures to 81% in our proposed budget for the fiscal year 2011. (Grevatt 2010) This proposed budget would make our defense expenditure surge to $2.3 billion – a significant figure deducted on the national government’s fiscal appropriations for its more priority programs and social welfare services. In a specific study undertaken by Bruck (2007) to measure the negative effect of conflicts and the defense reactionary initiatives of a country, it was found that the circumstance has a negative effect on growth because it diverts resources away from spending on socially and economically productive sectors that promote economic growth. (p. 198) The study is adamant in its findings that contrary to what some claim, such effect is not indirect but direct, as demonstrated by the composition of our budget allocation. This confirmed Bruck’s finding that “the share of government revenue in percent of GDP tends to fall during the conflict period, and to pick up somewhat in the immediate postconflict period.” (p. 198) And so, resolving conflict in order to attain some semblance of peace and security, our government has to compromise our economic stability. Effect on People and Communities: Conflicts, in our experience, has also taught us that the damage and loss are not merely confined to the government or the opposing forces – Islamic terrorists, secessionists or the communist rebels. The fact is that hundreds of thousands of people could be displaced once violence erupts. We have experienced this repeatedly in our battle against the Moro National Liberation Front (MNLF) and the Moro Islamic Liberation Front. The impact on such displacement on the psyche as well as the economic and social well-being of the hapless victims are difficult to quantify but staggering, nevertheless. The Philippine historical narrative with regards to its conflict with insurgents and terrorist has actually stretched for decades already. It is safe to say that there is no full-proof solution as yet since the problem is still to be resolved. Several initiatives have been pursued. Out of these, however, emerged the fact that three important strategies seem to work: multi-lateral peace talks, interfaith dialogue and the economic development in afflicted areas as with the case of Basilan and Tawi-tawi. These solutions need to be examined further, modified if need be, and, integrated when the situations calls for it, so that a comprehensive solution is drafted. It is helpful to bear in mind that the various conflicts that our country has to face are multi-faceted and complex problems that count no exclusive causation. RELIGION Religion or the Catholic Church, as an issue contained in this memo should not be taken in the context of how the previous four issues were outlined. Religion, per se, is not entirely bad for the country, especially in the socio-cultural front and even in the political area, they are a sobering voice. However, its influence can prove to be disadvantageous when its highly conservative point of view clashes with some reforms that need to be instituted by this government. The issues are actually quite few, but that they can be so important and the Church can be bull-headed in their opposition. The tragedy is that our country is predominantly Catholic and most of the Filipinos listen to the words of the priests and the prelates. A case in point is family planning and birth control. The Catholic Church has been against the use of contraceptives. But to date our population will already be on the brink of reaching the 100 million mark. Addressing the population explosion is important because it dilutes the economic achievements of the government. During the administration of Gloria Arroyo, for instance, significant economic growth has been achieved, averaging 4.5% annually and at some point reaching 7% despite the series of economic disturbances that hit the world in the span of her nine-year regime. It is, therefore, important for your administration to have the political will to resist pressure from this sector. There are observers, analysts and scholars who argue that the Philippine political, economic and social problems are entirely attributed to the chronic poverty that besets us. To some merciless commentary, we have become a basket case that is quite difficult to solve. However, the problem is not exactly as simple as what this school of thought depicted it to be. The fact is that there is an interplay of variables that led our country to the situation that we are in, five of which has been cited by this memo - political approaches; legal system; corruption; terrorism and conflict; and, religion. The economic problem, which appear to be the primary reason for our plight is brought about by the collective effects of these factors. Therefore, it is not enough solve each of these issues exclusively. They must be addressed by a reform agenda that is collective, comprehensive and coherent in nature in order for such strategy to be effective. Put in another way, addressing one or two issues and leaving the rest behind would also lead to failure – perhaps the reason why many poverty alleviation policies of past administrations failed. Sources Cited Bruck, T. (2007). The economic analysis of terrorism. Oxon: Routledge. Council of Europe. (1998). Corruption in public procurement: proceedings : programme of action against corruption : reports of the 2nd European Conference of Specialised Services in the Fight against Corruption, Tallinn (Estonia). Talinn, Estonia: Council of Europe. Elkington, J. and Hartigan, P. (2008). The power of unreasonable people: how social entrepreneurs create markets that change the world. Cambridge: Harvard Business Press. Enoch, C., Habermeier, K. and Branco, M. (2007). Building Monetary and Financial Systems: Case Studies in Technical Assistance. Wasington, DC: International Monetary Fund. Grevatt, J. (2010). "Philippines raises spending in reaction to insurgency and Chinese build-up, ASIA PACIFIC." Jane's Defence Weekly. Sep. 2, 2010. Heidenheimer, A. (1989). Political corruption: a handbook. New Jersey: Transaction Publishers. Hill, H. (2007). The dynamics of regional development: the Philippines in East Asia. Cheltenham: Edward Elgar Publishing. US International Business Publications (IBP USA). (2007). Philippines Industrial and Business Directory. Washington, DC: International Business Publications. Kirk, D. (1998). The Business guide to the Philippines. Singapore: Butterworth-Heinemann Asia. Lardizabal, A. (1988). Foundations of education (psychological, sociological and anthropological). Manila: Rex Printing Company. Philippine Today. (2010). The Vicious Cycle of Vote-buying and Vote-selling. Philippines Today. Retrived 13 Dec. 2010, from The Vicious Cycle of Vote-buying and Vote-selling. Quismundo, T., Napallacan, J., and Arguelles, M. (2010). “PPCRV bares vote-buying in Metro, provinces.” Philippine Daily Inquirer. Retrieved, 12 Dec. 2010 from http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100510-269105/PPCRV-bares-vote-buying-in-Metro-provinces. "RA 7042 - Foreign Investments Act" Philippine Board of Investments. Retrieved 15 Dec. 2010, from www.boi.gov.ph/.../ra%207042%20-%20foreign%20investments%20act.pdf. Transparency International (TI). (2010). “Corruption Perceptions Index 2010 Results.” Transparency International Online. Retrieved 13 Dec. 2010, from http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results. Read More