It is an honor to join the Foreign Correspondents Association of the Philippines in its first meeting in the New Year. And I welcome the opportunity to take part in this discussion of current developments and challenges in our country.
We meet at a pivotal and hopeful time for the Philippines. We Filipinos have come through a year of challenge and difficulty. The economy is experiencing a period of resurgence and what seems to be a good run. Politically, the government has weathered challenges to its authority and stability. International credit-rating agencies have given the country a vote of confidence. And there is a prevalent sense of optimism in the air something we have not known since the eve of the 1997 financial crisis.
Considering how long weve hoped for a change in national fortunes, it might be easy for some to join the chorus of optimism. But we would be doing ourselves and our country a disservice if we dont look at the national situation thoughtfully and objectively. Precisely because we seem to be on a roll, this is the time to ask how we can sustain this period of economic resurgence in our country, including providing specific recommendations on how to do so.
Continued success is not a given. Hopeful times like this have come and gone before in our country. Again and again at critical turns in our history we have known surges of vitality in our national life, only to see them followed by decline and even crisis.
The last thing we want is to ride this cycle of boom-and-bust again.
The Political Dimension
Curiously, there are those who believe that our best course now is for politics to just get out of the way, and let private enterprise do its thing. Some even say that holding elections this May could spook the economy and send it into a tailspin.
Because of our perpetually quibbling politicians and sometimes murderous politics, the idea of a political respite may sound appealing. But it is a mirage. As already seen, the very idea of canceling the elections this year proposed by Cha-Cha advocates became a lightning rod for citizen protest, causing the administration to relent. Its kindred idea of ousting the Senate and going unicameral has gained no traction in public opinion.
The hard reality is that politics and governance are crucial to sustaining our economic momentum. There is no way forward outside of democratic politics and sound public policy and administration.
When administration allies of President Arroyo fended off impeachment moves against her and then faced down a coup attempt last year, fears of political instability in the country receded. When this was followed by purposive legislative and executive action to wrestle down the fiscal deficit particularly in passing the expanded VAT and improving government revenues international confidence was renewed in our capability for sound economic management. These developments combined with soaring OFW remittances, high tourist arrivals and export receipts bring us where we are now.
The same convergence of economic and political concerns will sustain our economic momentum. I see three key political challenges that are critical at this time.
The first challenge is holding free, credible, and speedy elections in May and commencing the process of automating the conduct of elections and other electoral reforms.
The second is affirming the rule of law in the country, and all that it connotes of public order, national security, effective judiciary and transparent laws and regulations.
Third and finally, we need effective executive-legislative collaboration in taking down long-standing roadblocks to economic modernization like the poor state of infrastructure and social services in the country.
Each of these is a test of Philippine political credibility. As with Don Quixotes windmill, we will soar or sink depending on how successfully we meet them.
Importance of May Elections
The May elections have taken on exceptional importance, not only because electoral results will have grave repercussions in policymaking, but because they are now seen at home and abroad as a test of our capability to hold credible elections.
It is a sad thing to say about the oldest democracy in Asia, but we are back to kindergarten school in elections management. By a combination of both tradition and opportunism, we have failed to adopt modern technologies in our electoral system and processes. Each political exercise has become more farcical than the last.
To foreign correspondents, who have covered elections in other countries, it is totally mystifying why we have kilometric ballots, why voters must painstakingly write down every name they vote for, and why it takes weeks, even months, to proclaim election winners. It is what Winston Churchill called a riddle wrapped in a mystery [within or] inside an enigma.
This dubious tradition is compounded by recent developments that raise some uncertainty about the coming balloting. The rash of suspensions of local officials by order of the Ombudsman, are unsettling and raise questions about their timing. Why is this happening now when the election season is at hand? The inclusion of one or two pro-administration officials does not dispel worries about an orchestrated effort to curry advantage for administration bets. We condemn the excessive and unjustifiable use of force by the police in Iloilo against Gov. Neil Tupaz.
Similarly, the closure this week of Newsbreak, a newsmagazine highly critical of the administration, raise worries about the narrowing circle of press freedom in the country. Many have cause to be skeptical
The great controversy over the 2004 presidential election has served as a national wake-up call to fully reform our electoral system. Reform will not come easy, however. After two years of preparing for this political exercise, we still have no comprehensive program for reform and modernization of the system. People will still have to stand vigil over the process. Speedy canvassing is still years away.
But this coming May, there is hope at least that we will take the first and vital step toward real electoral reform the automation of our election system.
By overwhelming vote, both houses of Congress have passed election law amendments that authorize the Commission on Elections to use an automated election system in order to ensure transparency, credibility, fairness, speedy, and accuracy in our elections.
The amended Act is now with the President for her signature. We are confident that she will give it her approval because not only did she certify this bill to Congress, but also added automated election as part of her 10-point agenda.
The significant provisions of the amended law are:
1. For the 2007 elections, full automation of the election system in two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao. An appropriation of P2.6 billion for this is authorized under the law.
2. Full automation nationwide in the 2010 national and local elections. By initiating the system in the 2007 elections, we can make needed adjustments and changes in technology and organization for a nationwide automation of the vote.
3. Other features of this bill include speedy electronic transmission of results in real time or within the hour and the voter verifiable paper audit trail.
One act of Congress, of course, will not transform our electoral system and our Commission on Elections into a haven of suffrage. The important thing, however, is that the reform process will start once the President signs this into law. And we will not stop until we truly have in place an election system that works. This is my commitment as Chairman of the Senate Committee on Constitutional Amendments, Revision of Codes and Laws and principal author and sponsor of the automated election bill.
The Commission on Elections has no business saying that it can no longer implement the law in time for the May elections. This is plain and simple shirking of responsibility. We have brought to Manila one of the election machines necessary for the pilot effort. Five hundred to a thousand machines can be brought in within weeks if we act with dispatch.
The point to remember is that we are starting here a paradigm shift in elections management in our country. Postpone this reform yet again, and we will have yet again a messy balloting in the 2010 national and local elections.
Those who have championed this law at the Senate, in the House and in civic forums across the country submit that what matters in the May elections is not so much who wins in the balloting the Administration or the Opposition. What matters is that we are able to hold free, credible, and speedy elections.
If we meet the test, we all win. Fail it, and we all lose. And that includes the countrys economic momentum.
Rule of Law
The second challenge we must meet is maintaining and ensuring the rule of law in our country. Specifically, this simply means that the government is subject to law; the Constitution is the criterion of validity; the Judiciary is independent; individual rights are guaranteed; and citizens welfare is promoted.
Rule of law is a hot-button issue now because the country is facing questions about:
The recent wave of killings of journalists, judges, activists, and politicians that overall disfigure public order and civility in the country;
The continuing communist insurgency and Muslim rebellion in the country that result in the governments presence in certain areas of the country being marginalized;
The effectiveness of our courts and the justice system in meting out justice and resolving conflict; and
The framework of laws and regulations that circumscribe business in the country, resulting in the lowering of the Philippines standing in international competitiveness surveys conducted by, among others, the World Bank.
We do not have the time here to discuss all these problems in detail. I will just raise two points.
First, I believe our historic inability to bring closure to many outstanding cases does not inspire much confidence in the rule of law in our land.
Twenty years after the downfall of Ferdinand Marcos and his family, our government is still litigating cases pertaining to his alleged ill-gotten wealth and spending precious money on the PCGG.
Five years after his fall from power and being hailed to court on plunder charges, former President Joseph Estrada is still under trial.
The list goes on. The more important the case, it seems the harder it is for us to end them.
This underscores a larger failing: the tendency of debates and contentions go on ad nauseum.
The problem is of surpassing importance to our future as a nation. We cannot meet the challenges of the future if we are still rerunning the arguments of the past; thus, the need for closure.
Secondly, our laws and regulations governing business in our country need review. When we are not over-regulated, we are inequitably regulated. And we have a habit of changing policies.
Law and policy governing the economy have to be enduring and sustaining. We cannot stimulate investments and encourage trade with policies that lurch and change frequently. Weak and unstable states lack this kind of continuity. Strong and stable states provide investors time horizons for planning their projects.
The danger of sudden lurches in policy is well illustrated in Thailands recent change of the rules on foreign investments that spooked the stock exchanges and FDI decisions there.
On the other hand, the assurance of policy continuity and stability is shown by the experience of China and Vietnam. They have attracted foreign investments because their policies are firm and hospitable to investments. This is the underlying reason why nations like them are doing better in attracting FDIs than capitalist countries like the Philippines.
Executive-Legislative Collaboration
Finally, I believe we can sustain our current economic momentum if there is more effective Executive-Legislative collaboration.
The danger of gridlock and incessant executive-legislative bickering is the kryptonite of the presidential system of government. Yet there is no good reason why the nation should be at the mercy of such infirmity.
With greater Executive-Legislative collaboration, I believe we can address more effectively the major obstacles to accelerated economic growth and modernization. These are:
The modernization of infrastructure in the country;
The improvement of education;
The improvement of public services; and
Eradicating graft in government.
When Congress and the Executive collaborate, we can see how beneficial it can be to the nation. The passage of the sin tax law, the EVAT law, and the biofuels act are just examples of this.
When they are bickering as in the distressing failure to pass a national budget for some years now the nation is held hostage. The economy starves.
In the last few weeks of session, we are all hopeful that there will be a breakthrough in passing the national budget for 2007. If the rumored agreement proves firm, we will now have the wherewithal to aim for higher growth this year, including pouring vital funds into infrastructure development and social services.
In infrastructure, we need a serious and comprehensive long-term program for infrastructure development commensurate to the demands of a modern economy. Without modern airports, seaports, communications, power and other vital infrastructures of a modern economy, the gains of the day are only fleeting.
This is more than just a problem of money. It is a problem of commitment. The long-delayed opening of the new Manila international airport vividly illustrates all that has been wrong in infrastructure development in our country.
Ironically, we have today many opportunities that could spell huge dividends if our infrastructure were only better. We can double our tourism arrivals if we had the rooms, the airports, flights and the facilities to host them. Tourism is a great industry that provides jobs to a lot of our people. That is why I have introduced the tourism bill in the Senate to declare a national policy for tourism so we can maximize the gains of this industry. We could also spur greater growth in agriculture, industry and services if our infrastructure were up to speed. The 3-2-1 Luzon Global Corridor bill which I have also introduced in the Senate seeks to integrate and optimize effectively and efficiently the 3 airports in Subic, Clark, and Manila, 2 seaports in Subic and Manila, and 1 connecting highway or railway to encourage trade and investments and create business and job opportunities in the area. We could do many more things that could rival our high-growth neighbors if only we had made the necessary investments in infrastructure, like in an adequate and efficient national railway system, in earlier years.
But its no use regretting the past. Our huge infrastructure gap a glaring hole in national competitiveness -- must be filled by the decisive and energetic action of government today.
In education, we face a similar problem. Our needs are always way ahead of our capabilities. Every year, we face a shortage of classrooms and teachers. And we have to worry about the quality of education in our private and public school system. Educational flaws stem from poor curriculum, inadequate teacher training and low investment in education.
Yet it is in this area where we can be most competitive in the world. As our work force has become more vital to the global economy, so the challenge of educating our young become more imperative and urgent.
Congress and the Executive should agree that education is the best economic policy of all. Our strategy should not be to compete as a low-wage, sweatshop economy. Rather, it is to harness our greatest asset -- our people, their great potential, their intrepidity and their industry so they can find their future not only in foreign shores, but also in their native Filipinas.
As we develop this asset, we succeed as a nation.
In the new global economy, the more you learn, the more you earn.
We talk a lot about eradicating poverty in our country, but the fact is there sis only way of ending it by our growing out of poverty.
We can do this by harnessing our greatest asset -- our people, their great potential, their intrepidity and industry. As we develop this asset, we succeed as a nation.
In the new global economy, the more you learn, the more you earn.
Political Credibility
All these actions require decisive action in the political sphere. Economists and political scientists warn that its not enough for governments to survive. To be effective, they must be politically credible. There is a direct correlation between political credibility and economic development.
Nation-building, says Francis Fukuyama, is no longer the primary challenge to developing countries. It is state-building creating effective institutions for governance and development. Good institutions enable government to break the cycle of poverty and make economic modernization happen.
What we have often lacked unfortunately is the capacity to focus on problems, and never to relent until they are solved. We get distracted from tasks by new trials and tribulations. And we often lack the moral stamina for sustained effort, though we never tire of moralizing.
We stand today before unparalleled opportunities to accelerate the modernization of our economy and our country. We will succeed to the extent that we have the political will, the economic know-how and the moral stamina to meet the challenge.
Thank you.
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