In today’s address to the Makati Business Club, presidential hopeful Noynoy Aquino unveils his “economic vision and platform.” Let me unpack some of his key points.
First and Foremost, Democratic Principles
Aquino underlines the importance of the sanctity of the ballot in order to gain a true mandate from the people. He also makes a direct relationship between mandate and accountability.
“We must now become a government committed to accountability. A government that works with the people in achieving long-term change.”
Where mandate might be the currency that flows from the governed, accountability is that which flows from those who govern. Above all else, this two-way relationship is the bedrock of any democratic polity. So far, so good.
Roadmap from Serfdom to Capitalist Development
Aquino makes a painful, if obvious observation:
“We must make the shift from bare economic survival to robust economic growth.”
And asks difficult questions:
“Why can’t we progress? What is it in us that limits or prohibits our growth as a people and as a country?”
He then goes to acknowledge that the Filipino is poor:
“We have a growing underclass that statistics tell us have given up looking for work. A permanent underclass that includes the five million of our countrymen that are illiterate, which means their opportunities in life will always be limited to living hand-to-mouth.”
Aquino’s vision of society is one which corresponds with many ‘developed’ countries in the world, that is, those that have transitioned from an agrarian-based economy to that of a full capitalist society.
“In every developed, progressive, prosperous democracy, it is the middle class that is the biggest class.”
So how does one transform the Philippines from a country with a permanent underclass to one with a large middle class? He hints to some answers by mentioning the following: creating a level playing field for enterprise, putting to rights public finances and rationalizing the agricultural sector.
Indirectly he asserts the correct functions of government vis-à-vis business – an enforcer of transactions and a provider of public goods (i.e. infrastructure):
“We will encourage free and fair competition in a level playing field. One not need be a crony in order to succeed in the field of business. More importantly, government will not compete with business. Nor will government use its regulatory powers to extort, intimidate and harass.”
In short, Aquino promises a government that does not seek rents. Others have accused the Arroyo administration as “predatory.”
He then makes an important point, something which deserves careful unpacking:
“There is a widespread perception that success in the business milieu can almost be directly correlated to your closeness to the powers-that-be. Because of this, some players in the industry are forced to focus their activities on maintaining relationships in order to retain the favors that they receive in exchange for cultivating that relationship. This has fostered the wrong kind of competitiveness. While it may work, locally, for now, it has not enabled these players to become competitive in the world market, where the rules of the game do not take special relationships into consideration.”
This acknowledges that local business interests have prospered not because they are able to provide competitive (i.e. the “best”) goods and services but because they have the political connections and know how to pull the right strings. The incestuous relationship of government and certain business interests forms the core of patron-client relationships which shape the country’s economic system. This rent-seeking government is the opposite of Aquino’s envisioned model – government should play the blind contract enforcer and provider of public goods. Businesses which prosper, in Aquino’s ideal, are those that do because they are competitive.
And here Aquino makes another crucial point that should be of importance to any country that wishes to make the transition from an agrarian economy to that of a mature capitalist economy – the ability to create local enterprises that will be able to compete in world markets. The road to capitalist success, as demonstrated by the experience of many other countries in the last few centuries, is the ability to create a viable domestic market and to export goods (not people) to other countries.
Probably because he is addressing the business community, he uses a conflict-free metaphor to describe the societal relations of his future Philippines:
“I’ve always used the analogy of a small panaderya to demonstrate how our approach must change….In a small-scale operation it is easy for everyone involved to visualize that entity as the combination of their collective efforts. As opposed to, say, when you are a bigger firm, and there is the management side and there is the labor side. In Tagalog, it’s even more dramatic. Kayo at kami, sa halip na tayo.”
I do not know if I am reading too much from this, but I suppose it shows a realistic view as to what the transition from tradition to modernity entails – some people will have to make sacrifices but changes have to be made. The small-scale operation versus big firm analogy acknowledges we will be starting pretty much from scratch. As far as public resources go, there will not be a lot to go around in the beginning (hence the conscious choice not to underline the conflictual capital-labour problematic of any capitalist economy).
Here I had hoped to hear more about social services and social spending, but I suppose this was not the audience to tackle such. In Aquino’s model, does government provide targetted social spending to catch those who might fall through cracks?
Further, is he operating on the assumption that Markets allocate best? If so, this is a dangerous assumption to make.
Yes, Money is the Lifeblood of Governments: Public Finances
From what I gather, Noynoy is something of a fiscal conservative. He promises no new taxes, so how does he propose to finance government? He points to more efficient tax and duties collection and curbing tax evasion and smuggling.
He then says he favours “universal low tax rates” rather than a progressive system (i.e. big income = big taxes, low income = low taxes). My knee-jerk reaction is that this goes against the fiscal principles of many developed countries. Even the most cut-throat (i.e. ‘competitive’) model of capitalist economies, the United States, usually taxes the rich more (although less so in the last thirty years).
I do not know what to think about this. I will ruminate and get back to you.
His Job as a Member of Congress and the Role of legislature
In response to the question of what he has done, he responds that many proposed laws do not a good legislator make.
“Our problem is the lack of political will to faithfully implement the many world-class laws that our legislature has passed.”
His priorities as a legislator were in strengthening the capacity of Congress to reign in the Executive. My read on this part is that he was interested most in the watchdog function of the legislative.
“It is in addressing this problem that I focused on the fiscalizing aspect of a legislator’s job – on Congress’ oversight and investigative functions.”
He then mentions some Executive-driven projects – NBN-ZTE and SCTEX. If Congress had only performed its watchdog functions better, such large-scale corruption scandals would not have occurred in the first place.
I will agree we already have many good laws and they all look good on paper. Those who say he has not done anything tend to hammer him on his legislative output. I think he should do a better job of explaining to people that a lawmaker’s job isn’t limited to drafting bills.
His Job as President and the Role of Government
He hints at his views on leadership and what it means to be President, then makes a pointed dig at the incumbent powers-that-be:
“As I said when I accepted the people’s draft, the job of chief executive is about the efficient allocation of resources. If you have hogged those resources for yourself, if you have lied, cheated, and stolen to gain power, how can you be trusted to lead the transformation our country needs?”
Let me unpack some crucial points he made about the role of government. His are moderns views on the role of government and the role of chief executive. He sees himself as mere resource-allocator. “Resoure allocation” is, of course, a highly political process and I hope Aquino acknowledges such. As president he will come under tremendous pressure as various interests will constantly tug at his sleeves to curry favours.
Given his record so far (not a whistle of misdeed or corruption), yes, I think we might count on Aquino not using his office for personal gain. His ability to control his government to do the same will perhaps be his greatest achievement. It is a worthwhile endeavour. I hope he has a gameplan on how he will do it because there are many, many entrenched interests who will do all they can not to upset the status quo. Business interests who are profiting handsomely under the current set-up, will probably not take kindly to “leveling the playing field.”
And “leveling the playing field”, such a harmless-sounding term, will entail superhero-level political will. If Aquino delivers on this promise, it might arrest our descent into Fourth World status.
Public-Private Partnerships and the Size of Government
He hints the kind of public-private relations when he talks about developing public infrastructure:
“It is time that our infrastructure agencies and LGUs transform into cooperative ventures with the private sector by bringing forth an agreed public infrastructure program, based on a cohesive plan that optimizes the value of the entire network…Initially we want our infrastructure program to transform from being the means to enrich a few, to being labor-intensive and biased for employment as a means to pump-prime the economy.”
Here he shows an understanding that government spending (in providing infrastructure) has not necessarily brought efficient public works (roads, bridges, mass transport). The assumption is that partnerships with the private sector might curb inefficiency. Because government spends on building roads and bridges and manning mass transportation systems, then government employs people.
The ideal in modern economies is that government ought to leave the private sector to provide employment. I think it safe to assume that in Aquino’s philosophy, the bureaucracy ought to be a lean, mean fighting machine.
What about the couple of million civil servants rubber-stamping their way to retirement? Swim you wretches, swim!
Agriculture: An afterthought?
He only says that there is a need to review programs of the Department of Agriculture and to eliminate leaks and ensure the efficient use of resources. I am not happy with Aquino’s points on agriculture. Land reform is crucial on the road from Serfdom. Capitalist development hinges first on unlocking productivity of the land.
Is it a conscious effort to downplay agriculture because of Hacienda Luisita? To me, this would be a huge mistake. Agriculture still employs majority of the labour force. It is a hugely important policy issue and deserves to be discussed in further detail. Perhaps the Makati Business Club pow-wow isn’t the place to do it. When will he schedule a talk with farmers?
A Country that Works
Last, Aquino’s vision of the Philippines is deceptively simple. He does not promise “first world status by 2020.” Instead he promises to deliver a functional society, one in which institutions (both organisational and ideational) work as they should.
“We must find a unity that transcends the divisions of today, based on a shared commitment to transforming our country into one that works: One where traffic flows well, garbage is collected efficiently, crimes are solved, justice is served, and our kids are educated properly. It works in the sense that you do not have to flee the country to move up in the world, improve your lot in life, and rise to the highest level your personal merits can achieve.”
My verdict
Aquino has a specific vision of what he wants for the Philippines. His views on the role of government vis-a-vis the economy is very modern. I do not entirely agree with it, especially some statements hinting at what could be a naive view of the “contract-enforcing” state. There is little mention of welfare and the state’s role in disbursing non-infrastructure public goods.
In all, his vision’s success rests on entirely on the will to shoot some entrenched interests in the face. Maybe even his family’s. If he could do it, my hat’s off to him.
Popularity: 5% [?]
I don’t mean to be harsh but it appears to me Malacanang will be Noynoy’s on the job training in governance.
Whatever happened to his commitment to resolve the Hacienda Luisita issue.
Social just with blinders it seems.
NO ONE has experience in being president (well, except Erap) because we are a One-term Presidency.
So essentially, all the candidates (bar Erap) will be having OJT.
Look at their records. How they performed their jobs. That
will be what we are getting from anyone of them being elected
as President. If they messed up things. Sure they will surely
mesh up things again. If they are passive. Sure they will
surely let others do the work. If they stole or use public
funds to feather their financial nests. Sure, they will steal
more public funds wihtout us knowing!!!
I think the man is working hard at developing both perspectives and how to follow through. I hope he succeeds, and hope that he does not allow himself to get sucked into his own popularity and develop the kind of ego that starts making ears not work so well, or, worse, conniving. He is seeking a big job, and as Obama has discovered, even angels get caught in downdrafts now and then. It probably is wise to accept that there will be a learning curve, he will not get everything right, and he will certainly never satisfy all the people all the time.
To think he can somehow exhibit perfection is rather, ummm, bizarre. If he is working hard and generally right, it will be a refreshing change.
Joe
joe, do you really believe any of the candidate for the presidency has the intention to steer the country out of what we are having now?
joma,
Good question. I think most have good intentions – Gordon, Aquino, Perlas, and maybe Teodoro do – but they are rather trapped by the political system, the people who back them, and a culture that is so steeped in dishonorable behavior that it must seem weird to adhere to the notion of right over wrong, or public good over gain for the empowered elite. Perlas might be able to break the mold.
So the operative question is CAN they? And I would say, uphill for sure . . . Aquino’s problem is, indeed, the money that hangs about his neck like a giant albatross . . .
Joe
Joma: You asked a very broadbrush question, so just think this one. preventing the poor from getting richer — Does it benefit Manny Villar or Lucio Tan and the Ayalas if within 6 years, a million families who used to earn P200,000 to P300,000 a year elevate themselves to be earning P450,000 to P800,000 a year?
Does it benefit the Gokongweis if half of the slum dwellers within 5 kilometers of their malls who used to earn less than P60,000-a-year get to find steady jobs which give them over P120,000 a
year?
********** when more people have jobs, everybody benefits
Question: does it benefit the hacendero-class if more of the farmers get to complete their high school education?
Joe,
Yes, the political system, the kingmakers who back them and corrupted citizenry.
Every election time, we seem to be in the frenzy that a saviour is coming.
Cory was a reluctant president, pushed around. Ramos was a continuation of people who pushed Cory. Erap was a hope, a shining armour turned sour, Gloria, when she took over was seen as bright star, turned sour as well and Gloria again, probably for cheating and lack of formidable opponent.
None of the above showed performance that appear to steer us out of the situation we are having.
Noticeably, none of their opponents showed some twinkle as well except for (maybe) Mirriam Santiago (at that time), but we know better on hindsight.
There is something unidentifieably (in my view) wrong with the Philippines. Look at our neighbors (Singapore, Malaysia, Thailand, Vietnam, China and Korea); in the past they linger in backwardness in term of economy and politics, illiteracy, ravages of war, etc – there are still corruption but it seem that their boat is moving forward.
To share with you my thoughts – I allow the idea that in their private moment all these aspirants intend for the good – but as you say, they are trapped and they dont hold the real power.
There are so many wrongs and its frustrating, that participating in election is the mark of the fucked nation.
Thanks for your reply.
UP n grad,
I tried, but Im sorry, I failed to grasp what you are saying. Not your fault – its mine.
“I don’t mean to be harsh but it appears to me Malacanang will be Noynoy’s on the job training in governance.”
Well, let’s see. Last I heard the professionals botched it, didn’t they?
Who has experience without a whistle of misdeed or corruption?
Some can be better-trained than others. Like the city-of-Makati Mayor will be better able to crack the whip to get the bureaucracy in shape than, say, Perfessor Randy David or the running priest.
There is a big difference of the Power of Rethorics to the Power to translate it into REALITY. I heard the rethorics before. Sounds like “lumang tugtugin na!”.
Good Point.
It will be how it’s done. It is an EXECUTIVE position by the way.
The trouble is: I had heard similar rethorics before by
previous Presidential candidates. After the election. Nothing
changed. Same problems. The Squatters are still living and
subsisting around the Garbage Dumps. Mindanao problem still
not resolved. Graft and corruption still prevalent. A way of
life already.
Sorry, I became a skeptic already. I was taken for a ride
by similar politicians already in previous elections.
Erratum: “Social justice with blinders.”
@ Bert: By ‘professionals’ you mean the tradpols, I take it?
I wouldn’t rate Noynoy as an amateur but beyond his prepared speeches and prepped adlibs, I’d prolly be willing to see him run the ship of State.
I have reservation though ABOUT SEVERAL OF THE PERSONAGES HE’S SURROUNDED HIM SELF WITH AND ALLOWED TO RUN HIS CAMPAIGN FOR HIM. :/
but who cares about your hat?
No mention at all of the role of science and technology in Aquino’s economic vision. Sure we can have a bakeshop but a competitive bakeshop needs a bit of s & t to make it world class.
Science and technology is crucial to creating that class of competitive Pinoy entrepreneurs and in enlarging our domestic market and competing in the global market. South Korea and China are recent examples on why investing in S&T pays well.
This is also linked to the erroneous textbooks issue Aquino mentions. S&T expansion means we have more science and technology literate people who can write the right texts since the culture of research values accurateness and validity of information.
Pilipinas has been producing a large number of science and technology people. A number of them are well-regarded where they are — in Australia, Canada, Japan, others.
This – OFW policy – is of interest to the Makati Business community. The issue is that Pilipinas enterprises experience a dearth of top-quality managerial and technical talents because too many of the best have joined the migration (as OFW’s or as immigrants) to Singapore, Australia, Canada and other countries.
Who needs science when we have the Black Nazarene and daily Novenas to bring us out of misery.
Try practicing Voodoo. It could be better to bring you out of
your misery.
well, the ending is coming, the signs are here – who needs science and technology (which is work of the devil, in the first place)?
Then you can join the yellow crowd with its belief in the EDSA miracle!
thanks, i have the villanueva god with me
I think in the end, the speech to Makati Business club is Net-Zero. The will not push out those who already raised their hands to be among the NoyNoyistas. The speech also will not convince the pro-Gordon or pro-Villar to change sides.
The opening for Erap is over the next months, to repeatedly tell the masa what sparks has already noticed — Noynoy has not provided proposals to address the problems of population, unplanned pregnancies, illiteracy as well as shoddy public education infrastructure and lay the thought that “reduce income tax rates” not only does not benefit the very poor, tax reduction threatens the social welfare programs for the poor.
NoyNoy is an elitista.
Noynoy is a man who is born with a golden spoon in his mouth.
“…the job of chief executive is about the efficient allocation of resources. ”
Hhhmmm, the role of the President of a sovereign country is much bigger that that of company CEO. The President’s duty is two-fold:
1. Manage the Government – covers resource-allocation function mentioned, which could be easily delegated to trusted technocrats.
2. As head-of-State, more importantly is to Lead the People, specifically to set a vision e.g. ‘Sa ikaauunlad ng bayan,..’ or ‘Ask not what you can do…’ and inspire them to attain the mission of a modern polity.
Political and civil rights to do not exist in a vacuum. They are means to an end. The ultimate objective of governance is give members of society economic progress and social justice (Hacienda Luisita?)
Now, who among the candidates is best suited to be both the above. Tinimbang ka ngunit kulang?
Choose the least of the evels!
The least of EVILS, dammit!
besaya ka dong?
mariano,
evel is a famous name in the US,
like, of the dude who tried to jump his motorcycle across the Grand Canyon,
it does not signify brains,
but boldness
the least of two evels may be the smartest . . .
Joe
was it evel kanEvil?
I like your post. Very objective and devoid of fanaticism. This helped me understand a bit more of Noynoy’s agenda.
When indeed? I think he is already contented with ONLY taking the most votes and to hell with the others. Thus reinforcing my view of him as very far right. I suggest that he should meet with representatives of all the spectrum of the Filipino People whether he likes it or not.
I actually agree with this. I think we’re better off having the country be less dependent on the actions of the government which could be easily exploited by corruption. Corruption is just too prevalent in the government to be trusted with too much money. I would like the money be focused more on regulation and have more NGOs share the others. And with the rich gaining skill on tax evasion, the poor will always be on the brunt of this weakness in the system. We can increase taxes when handling of it gets better. If the president could dissolve a few non-functioning units, it should be done.
With Noynoy’s promises that start with “I’m not going to…”, It would be a more helpful and show his maturity in presenting new initiatives and in a specific manner to help the people envision how he will be as a president rather than making vague statements of what the roles of government should be.
For a published item on NoyNoy’s thoughts about farmers/CARP, go to this:
http://mlq3.tumblr.com/post/348063509/benigno-aquino-iii-on-hacienda-luisita-and-land-reform
MBC strongly opposed CHACHA. In my view, The old constitution needs revision to open up our country to become a competitive and free market. Our old Constitution has a lot of limitation especially in legal contract , property rights and taxation of foreign owned businesses.
A speech so funny to the business world-like a puppet. MBC has a lot of say in terms of who can get in or not. To me, it can be interpreted as a monopoly of idea in terms of investment in a supposed to be ” free market”…
Hi sparks, thanks for such a well-written piece. I think u make some valid points. I for one have never been a fiscal conservative (taxation means representation, right?), so I wasn’t entirely thrilled with the promise not to increase taxes or widen the tax base.
But Transparency International estimates that at least one-fifth of the country’s GDP is lost to corruption. Studies by Finex and PIDS show that the budget deficit could be plugged if tax evasion and corruption were curbed. Most Filipinos hate paying taxes because they don’t know where they’re going. But if you solve the corruption problem, less people would hesitate to pay taxes. Also, it’s also possible to lower tax rates if you have a citizenry who is willing to pay taxes. Ending the corruption would do wonders but it’s not the only solution. Minimizing wastage in government would also minimize the budget deficit.
It’s also important to note that the forum focused on the economy (and not agriculture or land reform), so we’ll probably hear the rest of the platform as we go along, especially once the campaign period has officially started.