Thursday, October 23, 2014

Paying the price: failures in human development

Do we even care? Do we believe we’ve shot ourselves in the foot, not once, not twice but many times over? Do we expect the world to think like we do or value our beliefs and way of life? We in the elite class may be enjoying the best of all worlds but that is not the yardstick of PHL development – i.e., when do we do “community sense” and the “common good”?

“The other major deterrent to foreign investment is the much more difficult one: policy consistency. The Philippine political system is so structured as to give the president wide-ranging power to change policy at whim, with almost no counterbalancing control. It’s not just this President; to attack him is not my intention. It’s all administrations. It’s the Philippine system.” [Policy consistency and labor laws, Peter Wallace, Philippine Daily Inquirer, 16th Oct 2014]

Didn’t we say that the reason we aren’t as prosperous as Singapore or why we lag Malaysia is that these nations are autocracies? When do we pull out our “dibdib” or heart and step up to the plate? Do we still want to rationalize our reality – that we aren’t suited to Western-style democracy? It has nothing to do with Eastern versus Western – it’s all about embracing an egalitarian society instead of valuing hierarchy despite ‘rank has its privileges’ including patrons of the poor? As a Singaporean scholar argued, the Asian tigers and the Asian century could be described as Asians espousing how the West pioneered and learned human development.

It is thus about human development, not the myopic pro-poor bias we equate with our faith and expressed in our dole-out culture that smacks of condescension and contempt – because it perpetuates our cacique system and structure, reflective of our misunderstanding of our faith. It is not that Filipinos are born to be poor per se but a select few cornered PHL’s resources that the rest of the nation has no fighting chance to pursue and sustain development – making Juan de la Cruz all but cursed.

It was the pursuit of human development that made Europe prosperous which they then brought to the new world via higher education. And it was what Rizal encountered – in the expressions of the Age of Enlightenment – while in Spain. After over a hundred years of failures – in human development – don’t we owe it to ourselves to ask: (a) who is fooling who and (b) “who am I to judge,” to quote Pope Francis – or more to the point, who are we to expect the rest of the world think like we do and value our beliefs and way of life?

“Gloria Arroyo had 10 years to mess things up. She imposed market-distorting controls. She halved drug prices; issued an executive order that capped oil prices in Luzon after Tropical Storm “Ketsana” (“Ondoy”) and Typhoon “Parma” (“Pepeng”); froze a tuition increase in state universities and colleges and urged their private counterparts to do the same; and cancelled the Ninoy Aquino International Airport-3 contract without proper compensation.” [ibid.]

But which our neighbors have overcome by their ability to attract FDI – that comes with technology and innovation and people, product and market development . . . and thus competitiveness – predicated on a country’s infrastructure development and the overarching metric of good governance. In other words, an ecosystem. It takes an ecosystem to attain sustainable profitable growth in the private sector – and economic development for that matter. Which is simply the fundamental given in freedom and democracy and free enterprise that we have yet to espouse.

“She also cancelled the waste-to-energy project with Australian firm Jancom Environment Corp. five years after its approval. Early in her term, she ordered the renegotiation of contracts with independent power producers due to an insistent public clamor to bring down electricity rates. It was a popular measure, but a surefire way of discouraging businessmen from investing in the country.”

“Under the current administration, the most glaring and disastrous was the President’s ill-advised decision to review the tax on mining—without a thorough study and intense discussion with all involved. It sent the industry into chaos; it put one of the potentially most beneficial sectors on hold. Billions of dollars in investment and exports, thousands of jobs, have been lost. On a whim. Then there’s the cancellation of the Laguna Lake dredging project with a Belgian firm. The company is suing the government. Maybe the company’s proposal wasn’t the best solution, but it was a signed contract. If there were valid reasons to cancel—and they’d have to be very strong—then full and immediate recompense had to be made. It wasn’t done.”

How do we make heads or tails of all these? “We must accept the fact that, for the last 100 years of our independence, we have not succeeded in making our country strong enough to be among the best in Southeast Asia in terms of sustained economic progress and social stability. We are dwarfed by the achievements of our neighbors, like Thailand, Singapore and Malaysia . . . Now, even Vietnam, Myanmar and Indonesia seem to outpace us.” [Limits of politics: What the private sector must do, Ariel Nepomuceno, Decision Time, Business Mirror, 15th Oct 2014]

“We must accept the reality that, in the coming decades, poverty and corruption will keep haunting us, since our political system is not capable of quickly paving the way for the solutions that we urgently need. Meanwhile, our neighbors are resolutely focused on strengthening their capabilities and competitiveness.”

“Mining has become a divisive issue, yet it need not be. Efforts to clarify and sharpen the Philippines’ mining policy have generated intense debate among stakeholders, spanning the business community, civil society and the central and local governments. The debate largely centers on increasing the government’s share of the total mining revenues.” [Mining for inclusive growth, Ronald U. MendozaPhilippine Daily Inquirer, 16th Oct 2014]

“Yet the narrow focus on revenues runs the risk of keeping other important aspects of mining policy unaddressed, resulting in failure to generate cohesive support from all sectors . . . This translates to a projected decrease in mining investments in the Philippines (both domestic and foreign) of anywhere from 13 percent to 67 percent. If investments drop, so, too, will revenues.”

“Focus also on investments, not just revenues. International best practice also emphasizes that mining policies should explicitly state how mining wealth will be managed and invested. Successful countries invest their mining revenues in areas that will continue to generate returns for future generations, such as investments in children and youth. The trick is to convert natural-resource wealth into drivers of inclusive national economic development, including strong human capital investments and industrial diversification.”

Can we say that PHL has a positive prognosis despite the absence of a track record – and in today’s highly competitive world? ‘The glass is half full’ has proved an expression of our fatalism? Is there a role for media in light of all these?

“The Philippine media have been accused of an inordinate focus on politics, which is true enough. But because the politics that is their main concern has been limited to the reporting of scandals without looking into their causes, they succeed only in encouraging citizen indifference to political issues, and in preventing understanding of the political system in terms of such fundamentals as who wields political power, how and for whom, as keys to citizen empowerment in understanding corruption and doing something about it.”[Understanding (and not just exposing) corruption, Luis V. Teodoro, Vantage Point, Business World, 16th Oct 2014]

“Corruption may not be the sole reason for the poverty that has haunted this country for centuries, but it is an important factor in the continuing impoverishment of the many. Corruption is rooted in the exclusionary character of the political system, which over the decades has become the preserve of a handful of political dynasties . . . The Philippine media can provide citizens the knowledge they need that’s vital to informed political action.”

How much longer are we going to pay the price – for our failures in human development?

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