On Sunday the Inquirer editorial pointed out that Americans are not only keenly interested in their upcoming presidential election, but have been for some time -far earlier than usual. The editorial says this is due to Americans eagerly looking forward to regime change.
The 2010 presidential race has also begun, for us, rather early, which also points to the public heartily looking forward to installing the next administration in office -and giving thought to the various candidates presenting themselves even at this early stage. This is born out by the (admittedly unscientific) observation made by some bloggers and media people I’ve talked to, who’ve noticed that anything to do with the potential candidates for 2010 gets a large, and highly critical, readership.
Amando Doronila does not make the above point, but makes a different one that’s difficult to contradict:
Truly, 2010 heralds the closure of the turbulent EDSA-driven eras, defined by extra-electoral political change, and the beginning and the normalization of electoral politics now under the specter of military coups or withdrawal of support for sitting civilian governments.
This epochal shift gives us the opportunity to make a leadership change that offers this time a wide range of choices.
It is the advent of a younger generation in 2010 that makes the next election a qualitative change from the previous leadership handovers.
We will be electing in 2010 a new set of leaders who will take power with electoral mandates unblemished by the irregularity of an extra-electoral method of change represented by EDSA I and EDSA II, both marked by military interventions.
Year 2010, therefore, will mark a return to normal election processes as a mechanism of political change. This is what makes it a hopeful transition, although the relatively large field of choices does not ensure the emergence of an honest, efficient and results-oriented administration.
I suspect, though, that what we will find is really a two or at most, three person race, as both the politicians and the public narrow their choices and, who knows, actively seek a truly majority president for once, after a string of post-Edsa minority presidents.
Mon Casiple, in his blog, dissects the options that confront both the President and the opposition this year. In terms of the administration, he boils down the options available to three:
For the people in the GMA administration, the logical first choice will have have to be an extension of her stay in power–by a constitutional change allowing the president a second term or a change to either a parliamentary system or a federal state (which would require a transition provision). This is not possible at this time without a prior effort to dislocate the opponents of a GMA constitutional change–a scenario requiring massive political and electoral manipulation as well as ensuring an undisputed control of the armed forces.
A second choice is the building of a viable presidential candidate without the negative association with GMA in time for the 2010 elections. As in the first choice, this will maintain the ruling coalition but necessitates an early distancing from GMA or–more difficult–the positive upturn of GMA’s popularity.
A variation of this that benefits Vice-President Noli de Castro is an early retirement for GMA that would put him in the presidential chair to push forward the ruling coalition’s eventual candidate. However, it is a given that whoever this candidate will be, he or she will be campaigning with a huge millstone around his or her neck because of the present administration’s unpopularity, especially if GMA is still around in 2010.
Failure to make the above choices will effectively dissolve the ruling coalition and create a free-for-all where the strong presidentiables raid the ranks of the coalition to augment their own electoral coalitions. This will be evident in the incoming year as serious contenders make their moves to create the critical mass for their candidacies.
In terms of the opposition, Casiple lays out the main challenges, chief of which is the one that Doronila (see his piece above) credits Estrada with setting out to do: consolidate its forces (see Fr. Joaquin Bernas, SJ, however, for his views on past presidents being permanently disqualified from running for the presidency again):
The momentary issue for the opposition (or for presidential hopefuls within the ruling coalition) is the possibility of a GMA endrun for a continued stay in power through a constitutional change. This possibility, though more remote than before, has to be laid to rest before the real battle for 2010 commences. 2008 therefore will lay the ground (or set the terms) for 2010.
In a situation where the president steps down or is passive in the 2010 presidential elections, the opposition–and the ruling coalition–will fragment and their component forces will go their own way to form new coalitions behind the presidentiables. The opposition as such will become irrelevant and the GMA factor will be a non-issue, except as another campaign issue against former administration candidates.
On the other hand, if the president continues on to 2010 or actively intervenes in the 2010 elections, then the main issue of the elections will be her administration’s legitimacy and record. The opposition, in this situation, needs to unite to ensure victory against the vast resources and machinery of the administration. Failure to do so will divide the protest vote and effectively jeopardize the chances of all opposition candidates.
The opposition (or the presidentiables from their ranks) will have its work cut out in 2008. A critical mass has to be formed behind one presidentiable capable of getting out the winning votes. The operative word here–crass though it may be to political reformers–is ADDITION.
A shrewd political observer I talked to over the weekend distilled both points into three broad questions which will determine things, politically, this year:
1. Will the President be more liberal, or restrictive?
2. Will the armed forces be adventurers, or remain firmly wedded to the constitutional order?
3. Will the public be active or passive?
My editor at the Philippines Free Press last week gave me my first assignment for the year. “I want you to explore whether the President can turn things around, and recover her popularity,” he said. The result of this challenge was the following:
MARILYN Monroe once said, “I’m selfish, impatient, and a little insecure. I make mistakes, I am out of control, and at times hard to handle… But if you can’t handle me at my worst, then you sure as hell don’t deserve me at my best.” The President of the Philippines is no blonde bombshell, but maintains much the same defiant, even petulant, attitude toward her critics. Divided as her critics may be on what they want to accomplish, the President has only two things to say to them: “I will survive,” and “I will continue to be relevant.”
Her perpetually having to be in survival mode is a problem unique to her administration; that of making every effort to remain relevant is an occupational hazard faced by all presidents approaching the end of their constitutional term.
Political analyst Mon Casiple says this year “will lay the ground (or set the terms) for 2010.” According to him, the President can do one of three things: try to extend her stay in office; intervene, actively, in the election of her successor; or step down gracefully and not bother with trying to influence the outcome of the 2010 presidential race. At stake is not just her personal and political safety, but also, the prospects for the continuing control of the levers of power by the coalition she’s built up and maintained, and the opportunities for her critics to gain control of those levers for themselves.
The President has been able to face down constitutional and extra-constitutional challenges to her rule; she has done so, not by mobilizing public support, but by capitalizing on public mistrust of the entire political class –and by mobilizing the resources available to her as the incumbent. Patronage, whether in cash or kind, by means of promotions or demotions, has kept her coalition much more united and purposeful than her opponents. She has also managed to step back from the brink whenever any administration initiative, such as the proposal to amend the constitution, threatens to galvanize opposition to her government.
Recently, the President said she was a better economist than she was a politician –a statement that inevitably sparked a debate on whether she was good at being either. What’s significant is not whether her self-analysis was objectively true, but rather, what it revealed about her. Her belief in herself as an economist first, and a politician second, may have been there all along, but has been unevenly expressed throughout her term. That she is more comfortable with herself helps explain, to my mind, why she has both endured and continues to maintain the allegiance of a significant portion of the population. Her self-satisfaction taps into a yearning from those sectors who consider it a virtue to sacrifice some of their freedoms in order to move the nation forward.
In contrast to the equally significant portion of the population convinced she has indeed presided over the erosion of freedom while not really moving the nation forward. To be sure, this analysis requires the stipulation that we accept that the surveys are correct: a quarter of the population solidly supports the president, another quarter tolerates her as the lesser evil and the least-inconvenient option, and the other half of the population can’t stand her but are utterly divided among themselves on what they want as an alternative.
In such a situation, essentially a battle of attrition, survival is highly probable so long as both sides continue to have access to resources. The President, by virtue of her controlling the national treasury, possessing the appointing power, and playing off the provinces versus the metropolis. Her critics, by means of their ability to marshal public opinion, have denied her total control of Congress and continue to flourish in pockets of opposition-controlled provinces and cities. Neither side, however, is capable of mounting an offensive to crush the enemy.
But the President’s attempt to make a virtue of her unpopularity, can’t obscure the fact that she holds a job whose powers are built on the cultivation of popularity. It is popularity that provides a president with room to maneuver, which allows a chief executive to pull the rug out from under the opposition, and which cushions the impact of programs or policies that may be unpleasant, but necessary for the common good.
The President and her team have tapped into simple, but effective, messages that resonate with enough of the public to keep the opposition divided and the rest wedded to the status quo. These messages are: the peso is strong, and the stock market high; we are attending to the serious business of governing while ignoring political noise; and we are pursuing infrastructure and economic reform while avoiding exotic and frightening economic options beloved by certain sectors in the opposition.
In the meantime, the administration has been fairly careful to avoid closing off the avenues that allow the public to do their own thing, never mind if the government takes credit for private sector achievements. Emigration abroad is encouraged; overseas contract work continues to be proclaimed a form of heroism. The real mass media, radio and television, has been kept manageable through a combination of co-opting individual media practitioners and the use of government media to sound a constant note, if not of reality, then of achievement and optimism. Print media has born the brunt of government pressure, applied more consistently and daringly than in the case of other media, which anyway has proven liable to being divided and easily intimidated.
Intervention in the business sphere has been less clumsy than in the case of past administrations: there is no Midnight Cabinet, deal-making is done overseas or in private homes and golf clubs, no particular business group or company has been targeted for destruction, and presidential corruption can at worst, be whispered about, but there are no obvious cases of high living or high-profile acquisitions to make businessmen and the middle class particularly nervous. Even in terms of the political class, the administration can be said to take things less personally than the opposition: once back in the administration fold, there’s far less lecturing and hectoring than takes place in opposition ranks.
Every bill, however, has a due date. Presidents use popularity to both charm and intimidate not only their critics, but their followers. Kissinger famously said power is an aphrodisiac and the art of seduction is an integral part of the political game. Bereft of charm, the President’s policy has been to buy the love of her supporters, but being transactional, there isn’t any real warmth: diamonds may be a girl’s best friend but cannot sustain political friendship. What real loyalty does the President command, or more precisely, can she continue to command, as the country prepares to select her successor?
This is her dilemma. It is a dilemma that presumes she is no different from her predecessors in wanting to accomplish three things in her last years in office: go down in history positively; remain influential (and safe); and possibly, convince the country it needs the incumbent more than it needs a replacement as chief executive. Ideally, every president (except for Corazon Aquino, the only exception in terms of never showing an interest in perpetuating herself in power) wants to accomplish all three. Though of the three, the last is, perhaps, the most expendable.
If we take the President at her word, meaning she looks forward to stepping down on June 30, 2010, her main problem becomes figuring out when to make her resolve unambiguous, without turning herself into a very lame duck. If her last State of the Nation address is any guide, she prefers ambiguity to the certainty of being a lame duck. In adopting this attitude, she makes recovering a semblance of popularity, virtually an impossibility. No President likes being unpopular, but any president would prefer actual power, to impotently enjoying the affections of a fickle people.
The President’s main task, then, becomes threefold: continuing to pay off political debts but not so recklessly and lavishly as to arouse the people; keeping everyone guessing as to what she truly intends to do in 2010, while pursuing every means to keep every option (including an extension of her term or a change to parliamentary government) on the table without, again, solidifying the opposition; and keeping the pressure valves –the OFW remittance cash cow, a healthy stock and property market, a content upper and middle class- operational.
She does not have to do these things particularly well; she never has. She only has to keep the impression going, that everything she does is not on an ad hoc basis, but instead, is based on a plan. That plan is simple: keep remittances coming in, which obscures the weaknesses of the domestic economy; keep the deficit under a semblance of control, by means of selling off government assets; juggling tax collections and spending so as to never put a crimp on her doling out patronage; and creating as many jobs as necessary for her supporters, whether civilian or military to maintain their tactical support.
Along the way, she can hope that she continues to enjoy better luck than her enemies. This includes hoping that nothing takes place in the outside world, that threatens to close off any of the safety valves in our society and economy. In the absence of anything extreme taking place, she can expect to coast along, and with her, the country. Lurching from event to event, but without risking any fundamental change, may not seem much in terms of governance, but what matters is that the President believes –and with her, her supporters- that along the way, small, incremental changes have been made.
At the start of her term, the President said she hoped not to be a great, but simply, a good president. Her legacy has been to take these diminished expectations, and convince enough of the country that it is better to do small things, and not bother with the big things –and who, in the end, can argue that this is not a genuine achievement? For a President who may not be loved, but who is tolerated, still gets to wield the same thing –power.
My column for today, Shod and unshod, takes its cue from the Sunday column of Joseph Gonzales. My column also makes reference to Randy David’s Civic duty and national renewal. In his column, David does his own distilling, this time in terms of what modernity demands of the citizenry:
The modern society that is upon us demands that we abide by its most basic rules. They are not difficult to understand. What are these? Three things, basically: (1) Fall in line and wait for your turn; (2) Know the rules and follow them; (3) Come on time. These simple rules will permit us to navigate the complex terrain of the modern world with ease. There is not a single modern society in the world today that does not strictly enforce these rules.
He then goes on to make a point about the evils of patronage, and with this particular point in mind, I’d like to refer you back to my entry, Charismatic expectations in noncharismatic times, where David’s point is echoed in the writing of Gary Wills, who makes reference to Max Weber and others whose thinking has influenced David’s, as a Sociologist.
At its simplest, the point is, a modern society relies on a bureaucracy to fulfill the social purposes that politicians dispensing patronage used to provide.
Via Touched by An Angel, found out about this article in the January 6 Manila Bulletin. Am grateful to WikiPilipinas.
Technorati Tags: elections, ideas, philippines, politics, president, society
“In early 2006, economists at HSBC were already saying that this changing OFW labor demographics will bring down the peso exchange rate.”
OFWs will stop buying condos. Expect condo prices to go down. Loan defaults might also increase.
Carl,
another bu**s**t – The left-leaning research firm Ibon considers all OFWs as part of the unemployed! As they reflect ‘government’s failure to provide jobs locally’!
(sigh) When will the Ibon people finally realize that government does not provide the jobs?!
qwert
I certainly agree that everybody in society should cooperate to make our country a better place to live in. But what I am saying is that we should just go ahead and do what we have to do without waiting for government to hand you help. If government will provide the help, well and good. If not, does that stop you for doing everything to make your life and your family’s life better? Yun ang punto.
anthony scalia,
“… government does not provide the jobs?”
But the government provides jobs. There are millions on the government payroll and millions more who have jobs in companies that do business with government.
In addition, a government that operates efficiently and pursues sound policies provides the opportunity for investors and enterpreneurs to make money. And that means jobs.
So government provides jobs directly and indirectly. And when there is high unemployment because not enough businesses are being set up or expanding then the blame lies with government.
Gloria set a target of a million jobs a year. She only managed to produce 400,000 jobs in 2007.
Consequently, if there were no overseas employment opportunities Gloria will have to figure out how to provide jobs for at least 8 million people.
Anthony Scalia
IN the communist world, government provides everything, including jobs, kahit na yung job ay tagabilang ng taong dumadaan sa kalye….hehe
Yan ang gusto ng ilan diyan, ang magkaroon tayo ng mendicant mentality. Lahat i-aasa sa gobyerno. Ayaw kumayod, ayaw magsipag, gusto good time and lakwatsa lang. Por Dios, por santo! Kung puede nga, may susubo pa sa bibig niya ng kanyang kinakain.
Government is NOT required to provide jobs. They’re supposed to create the environment for job creation. There’s a difference.
Unfortunately, Philippine government has been doing the former for the longest time. And that’s why we have a bloated bureaucracy who just sits around and waits for the 5 pm check out time…
anthony scalia,
In effect the 8 million or so OFWs can be considered unemployable in the Philippines because there are no jobs for them
Carl
A lot of things are fundamentally wrong in our country, hence the optimal solution for NOW is really the OFW phenomenon. In the end, who would want to go out of their homeland to make a living and leave their families behind unless the opportunities are not there in the first place. I do agree with CVJ that the economy is controlled by rent seekers and therefore, the economy si not performing as it can be. It is only the solution that CVJ and I differ on.
Silent Waters,
“Government is NOT required to provide jobs. They’re supposed to create the environment for job creation. There’s a difference.”
The difference lies in the time continuum. Government IS required to create the environment for job creation. At the end of the day, a government that creates that environment is, in effect, providing jobs. That’s what people mean when they say the government should provide jobs.
manuelbuencamino
I think it is a question really of how one defines unemployment. Is unemployment only limited to the Philippine area of responsibility, or given the nature of the world economy, shouldn;t we now include every Filipino citizen who’s employed in the Philippines and overseas? I suppose an argument could be made both ways. We may want to limit it to the Philippines and conclude that 8M Filipinos are unemployed. This may or may not give the true picture. I honestly don’t know the answer.
manuelbuencamino
Ok, if that’s how you define it, then I agree. Some people here may presume otherwise and I want to make sure it’s clear from the onset.
The fact is that our faster growing neighbors had governments that actively intervened to ensure that their industries develop. I suggest you read up on the works of Sanjaya Lall, Alice Amsden, Dani Rodrik and H.J. Chang.
What i don’t get with your line of reasoning is this:
– We both agree that the Philippines is in need of going up the manufacturing ladder.
– You praise the Chinese community in the Philippines for their achievements in setting up business enterprises.
– You criticize the ‘Malay-Pinoys’ (who are not Chinese) for their failure to ‘capitalise anything’.
The obvious question to me is that why aren’t the Chinese businessmen (who have the capital) able to move their capital into industry and manufacturing? Why are they largely still in real-estate, trade and transport?
Why are you not criticizing them for their failure to take our economy to the next level?
Instead, you bypass the Chinese and put the responsibility of industrialization directly on the ‘Malay-Pinoys’.
Aren’t you missing a step here?
Isa ka pa.
CVJ
The CHinese community in the Philippines WAS in manufacturing and industry as that was the economic activity allowed pre Marcos days. The problem of why it never went to the next level, particularly in the last decade, can be attributed mainly to the high cost of the factors of production vis a vis other countries. This is coupled with the labor situation during those times. A lot of them have decided to shut down in the late 90s and this phenomenon is actually ongoing. (look at the Valenzuela skeletal buildings for a preliminary look..). As businessmen, they would rather look at more rewarding endeavors for the same effort (YOU, as an probable economist based on what I have read so far from you, should know THAT) and these industries you mentioned are certainly more rewarding than manufacturing.
In addition, the local banks at present do not look too kindly on manufacturing as a lucrative economic activity. Therefore, any businessman interested in short terms credit facilities engaged in manufacturing will not be able to get them.
Do you guys have any idea how much grants or contributions the government put up for a start up capital for big auto companies to set up shop in our Province to provide long term jobs? millions of taxpayers money with expectation of millions of taxes and spin-offs from jobs that resulted…so governments one way or another help create jobs. Toyota and Honda are two big employers now in Ontario that offset the downgrading of American auto makers, without the incentives of government grants and cheaper health care cost for auto makers would have put up shop somewhere else.
Vic
I think in the Philippines, the government does give some tax incentives. The problem for me really is that this is not always the way to go. I know this sounds like a motherhood statement but for an investor to put money to create jobs, the government must at least provide the following: a stable source of power at a reasonable cost, the proper roads to market infrastructure including modern port facilities, labor that does not hamper production, and a government free of bureacratic red tape. That’s the the least teh government must provide for job creation. I am sure there are more
Silent Waters, thanks for the explanation. Import controls (along with export targets), subsidies, government financing (via development banks) were the kind of industrial policies which our East Asian neighbors used to nurture their own businessmen.
What baffles me is that given that even the business-savvy and capital rich Chinese-businessmen are reluctant to go into manufacturing, why does Benign0 expect the relatively capital poor Pinoys to bypass all the above hurdles that you mentioned (which even the Chinese business community cannot overcome)?
That something more may include Capital Controls to prevent capital flight. Just as we would want to prevent labor strikes, we would also like to prevent capital strikes.
I think Benigno was really looking at the whole chinese community, which includes the ones who are in the retail, property and services businesses, which certainly gives better returns than manufacturing. Lately though, even they are feeling the pinch …
CVJ
I am not certainly advocating a wholesale ban on labor strikes as workers do have the right to redress grievances. My issue is that most of these workers are not properly informed of what would constitute a “proper” strike. Most of them strike because the labor leaders generally have their own agenda. Capital controls are also an issue for me in the sense that this will certainly serve as a deterrent to any investor who may be willing to risk his money.
The difference is that China is more actively increasing local content and local manufacturing capability. This includes investments in Research and Development. As per Amsden:
That’s not ‘nada’.
Silent Waters, just as you accuse the labor leaders of ‘having their own agenda’, so can others accuse businessmen of the same. It just depends who’s shoes you’re wearing. Anyway, we both agree that labor strikes and capital strikes can result in (and from) economic sabotage.
CVJ
I think our discussion then really begs the question: How do we get Philippine manufacturing and industry going again ? This is a major problem for the Philippines as that is precisely one of the main reasons why jobs have been sorely lacking in our country.
I’m aware of that. The problem is that he bypasses the legitimate reasons (which boils down to lack of a sound industrial policy) that you have enumerated (at 12:56 am above) that discourage businessmen (whether Tsinoy or Pinoy) from entering manufacturing. Instead, he applies his culture-based explanation on one group and not the other.
I agree 100% that this is the major problem. What compounds the problem is the mentality that the people can do it without the help of government. That is contrary to the experience of our more successful neighbors.
@JEQ and Benig0
“Here I would agree with benign0 that they were hampered by lack of imagination, the jeep not having changed its design since WWII: poor aerodynamics…”
It is not a lack of imagination but a lack of venture capital, a lot of internal investments. Do you know how much it takes to improve aerodynamics in a vehicle. All the testing and redesign. All those little shops can do is copy badly the designs of foreign manufacturers.
You’re putting down your countrymen and saving the real culprit of our current “import-consumerist” economy. The wealth capitalists avoid risks and innovation takes risks. Importing good sand selling it to Filipinos with remmitance money is a risk-free business and that’s what they’ll keep on doing without government intervention.
There are two ways to look at this conservatively or liberally… demand-side economics or supply-side. Keynes or Adam Smith. But I’m no expert on the subject.
WE NEED THE PARTICIPATION OF THE LAZY-ASSED, PARASITICAL CONGLOMERATES!!!!!!!!!
beancurd, not that i take your joke seriously but i will be dishonest if i say i’m not flattered. i wish i have a daughter like gma. actually i’m mature, but not “that” old. gma was a teenager at st. scho when i was a 20-yr old law school freshman at ust.
no, i don’t think it’s right for anyone, including presidents, to lie in a manner that causes injury to somebody else. but if you were hiding in my house and an npa hit man, who wanted to kill you, came looking for you, i would not hesitate to say you were not there. in that case, i lied with intention to save your life. in gma’s case, she might have “took her promise” back to save the country from the morass that it had been put in.
mlq3, wow, that was a mouthful!
1. on your “she recognized she was the cause of a great division among the people”. do you really think fpj (under estrada’s sponsorship), lacson, legarda, roco, angara, drilon, enrile, defensor-santiago, villanueva and other power-seekers like pimentel, de venecia, villareal, maceda, tatad, etc., and all their fanatic supporters, would have instantly smoked the pipe of peace and unity as soon as they are assured gma would not run? forget what gma said, but what do you think?
2. “you want rule of law? its greatest adherent was fpj, not the president, actually”. yeah, right, manolo. in the movie roles he portrayed. but the philippine presidency is not make-believe as what we have learned from estrada. it seems these kinds of people operate on the belief that as long as you are “adored” by the people, problems of national economy, international relations, internal and external security, education and national health, among others, would take care of themselves; and that the coffers and resources of the state are there waiting to be grabbed.
3. (susan roces) could have attempted to unleash an open civil war”. whaaaat? i’m glad you inserted the word “attempted”. but didn’t she, by her linda blair (the exorcist) imitation of a speech and repeated participation in failed “people power” marches? coming from you, this is a bit disappointing.
4. (gma) “give (estrada) a new lease on political life by arresting him”. i thought estrada was arrested through the office of the ombudsman (not gma’s) because of strong evidence of plunder and other crimes. gma is not above the law. nothing she could or could not do would change the fact that estrada had to be prosecuted for his crimes. as to his pardon, gma only exercised the power vested in her by law, she did not transgressed it, as you seem to imply.
5. on your “(gma) had to expand the deficit to fund her election in 2004”. now, that was an unfair statement. the business of government doesn’t stop during the period of election. disbursements have to be made, debts have to be paid, and funding for local projects have to continue. why should it be considered for buying votes purposes every time a re-electionist president releases funds from the national treasury? after estrada’s presidency, the country could hardly even pay the interests due on its foreign debts, let alone its overhead and income-generating/enhancing development projects. the vat was a poison pill for any sitting president. despite the doomsayers, gma took it with courage and luckily she survived, and the country could not have been better for it. she does not deserved to be pilloried for that.
6. “exile in spain”? why exile? she can live wherever she wants in retirement, just like any other retiree. exile makes sense if the country went totalitarian in 2010 after she leaves office, a not too-remote possibility.
7. she could have put the country under martial law by adhering to the strict requirements of the constitution. if she thought the circumstances warranted it and she could substantiate them, who cares what negroponte and the defense secretary say? put up a fight a la dinky et al? know where they are now?
and, lastly, of course it’s not due to her that the likes of you can bitch all you want with relative impunity (unlike under marcos). rather it’s because she is not above the law, and she knows and respects it.
One of the basic insights of Keynes is that what is good (or bad) at the level of the individual [consumer] is not necessarily good (or bad) at the level of the entire [economic] system. For example, it is good for an individual to save as much of his salary as possible, for example 20%. It is bad for him/her to keep spending 100% of his salary. However, if tomorrow, everyone suddenly decides to start saving 20% of his/her salary, this will result overall reduction in consumer spending and in an economic slowdown which may result in more business closures and higher unemployment. So what is good for the individual may not necessarily be good for the entire system.
One of the roles of government would then be to ensure that the economy is shielded from the swings in collective spending (and saving) habits. Government does this by increasing spending when private consumers (as a group) refuse to do so (i.e. ‘pump-priming’) or cutting back when private consumers are on a spending spree. This is ‘demand-side’ management.
Now that the supply-demand equation has come into the picture, three or four questions come to mind:
1)How does that explain the OFW phenomenon?
2)How come RP (since Marcos time, down to Gloria’s) has made deployment of overseas labor a major policy for the country’s economic uplift?
3) Is the massive deployment of labor overseas generally good” (or bad) for the OFWs (as individuals) or for the country (as a system)?
And oh, since many bloggers here are now overseas pinoys, do you think of coming back home for good?
‘And oh, since many bloggers here are now overseas pinoys, do you think of coming back home for good?’
I made the decision not to come back during the 1997 Asian financial crisis. Seeing the peso-dollar exchange go down to P44 to 1 from P27 to 1 scared the hell out of me.
i just hate when people say this.
“i just hate when people say this.” well, maybe it’s not meant for you, but for others like supremo to respond to.
That question has been raised repeatedly by others, in MLQ3’s blog and elsewhere, to call out on the issue of “nationalism” (whatever that means), or civic duty, which they see is lacking on Filipinos.
hawaiinguy: for good..nah..spent most of my adult life here and I like it, actually I’m loving it..but for vacation nothing beats spending it back home and spend it with the family..Now the question is just because we prefer to live in a country which offer so much opportunities and freedoms in real sense, does that make us less patriotic or nationalistic than those living over there? Or at this moment in time it is a pointless exercise to debate or argue about this issue? Because it is very apparent that those living there has not shown any nationalism far above those living outside the country…or are they without us being aware?
vic, i agree with you. besides, we now have 90 million people in the home country? what happens if the other 6 million or so abroad came back for good? it’s a powder-keg!
hawaiianguy,
Some oldies I know are not keen on retiring in the Philippines. There main concern is health care especially during emergencies. In the US an ambulance gets priority on the road. ALL drivers will give way. In the Philippines you can die in an ambulance because no one will give way.
“The obvious question to me is that why aren’t the Chinese businessmen (who have the capital) able to move their capital into industry and manufacturing? Why are they largely still in real-estate, trade and transport?
Why are you not criticizing them for their failure to take our economy to the next level?”
Oh, so now it’s THEIR responsibility now? Whether they keep their investments in “real-estate, trade and transport” or “move their capital into industry and manufacturing” is nothing more than a business decision from their perspective.
As some previous commentor mentioned a while back, it depends on the business environment (which, I 100% agree is the responsibility of Government). Seeking employment is an INDIVIDUAL business decision as well. If the environment in the islands is good then the decision to invest one’s personal time to seek employment within the islands is viable. If the environment sucks (as it does today), then said “investor” votes with her feet.
Same thing with investment. If the bucks are in real-estate, trade, and transport, then that’s where the capital goes.
Obviously, capital owners don’t see the Philippines as a great environment for setting up sophisticated (and high-added-value) manufacturing and design/R&D operations — the kind that require facilities that are not as easy to pull out whenever the natives get restless. That all goes to Singapore, Malaysia, Taiwan, S.Korea, Hong Kong, and India. All we get are monkey-see-monkey-do operations — the kinds that suit our vacuous intellectual faculties best.
Supremo, “main concern is health care especially during emergencies.” I know. Life abroad, esp. in the US is so good that coming back home, even for a few days, is shocking to many pinoys. Am just thinking of the hot shower deprivation, among the many.
Still, I heard some pinoy retirees who are returning. Many already started buying up homes there. A close friend of mine who teaches in the university is going back home next month, leaving behind a well-paying job that he won’t get in Manila or elsewhere in SEA. And to think that he is an American citizen feeling more pinoy than those born, or living, in RP.
Vic: “Or at this moment in time it is a pointless exercise to debate or argue about this issue? (nationalism)” I myself don’t feel guilty about it when others challenge me to face down “under-(or lack of) development” in RP, in economic or political terms. As an individual, I try to give my share.
Am sure many pinoys would gladly come back, if they see RP moving out of the morass it has been embedded for long. Right you are, nationalism must show up higher among those at home than those outside. (“Because it is very apparent that those living there has not shown any nationalism far above those living outside the country…or are they without us being aware?”)
Truth is, Filipino diaspora is upon us, like the Indians (from India). But unlike Filipinos, the Indians are coming back, and investing in their homeland. I was told Silicon Valley is seeing a return-migration of those Indian software engineers, and stories get told of how this has helped the Indian economy back to track.
I don’t think OFW remittances are sustainable, or will give the push for a real take-off. Somewhere down the line, capital must be put into proper use. Returnees are potential entrepreneurs to make this possible.
Can this reverse diaspora happen to the Philippines?
Benigno:”As some previous commentor mentioned a while back, it depends on the business environment (which, I 100% agree is the responsibility of Government).” You said what others have missed. All markets, business or otherwise, are political. As an environment, it can be created (or dampened) by the kind of activities any govt worth its salt is engaged in.
Questions: Do you think the Arroyo govt is doing just that? What would it take to go into those value-added enterprises that bring home higher returns to investment? (even without the Chinese capital, as someone pointed out)
hawaiianguy
I mentioned this in my previous entries. Businessmen will come back if the business environment will make profits for them not only in the short term but for the long term. As of now, with the business environment not necessarily the best (infrastructure, labor issues, power costs, corruption, bureaucracy and unwieldy tax administration), you will find most businessmen going elsewhere. Businessmen tend to be sigurista in that respect. They want an environment that’s predictable (not 100% but as predictable as possible). The government has been trying very hard to get people to invests with their incentives but that is not enough. It doesn’t help us that since we love democracy too much, every man’s complaints becomes a major stumbling to getting a project even started. It would have been nice if majority rules but in this case, A PERSON can BLOCK a good project. Case in point, I talked to a guy in the Board of Investments before about an incineration project with green initiatives. Guess who blocked the project, a Senator of the Republic. Reason, he does not get a take of the project’s revenue. Now do you wonder why we don’t get anywhere ?
benign0, so if the Chinese businessmen don’t get invest in manufacturing, you say “it depends on the business environment“. If it’s the Pinoy who refuses to do so, you blame our “culture”.
Aside from that apparent double standard, i also notice that implicit in your analysis is that the Chinese businessmen are distinguished from the ‘natives’. Do you categorize them as foreign (or quasi-foreign) investors then? Would the Tsinoy commenters (Silent Waters, Anthony Scalia, Proud to be Tsinoy) agree to this distinction?
Hawaiinguy, i’m coming back home for good definitely upon retirement, preferably before that.
In the above example you cited, Why do you blame ‘democracy’ when it’s clear from the above that the problem is ‘rent seeking’ (or outright corruption) by that Senator?
and proud of it!
manuelbuencamino,
“But the government provides jobs. There are millions on the government payroll and millions more who have jobs in companies that do business with government”
kindly tell that to: (1) all OFWs so they would go back here and work for the government, and (2) to all prospecting OFWs so they dont have to leave the country
“In addition, a government that operates efficiently and pursues sound policies provides the opportunity for investors and enterpreneurs to make money. And that means jobs”
the stress is on the sound policies
“So government provides jobs directly and indirectly. And when there is high unemployment because not enough businesses are being set up or expanding then the blame lies with government”
tsk tsk tsk. a true entrepreneur does not wait for the right environment to come into place. its a good thing Henry Sy wasnt into the blaming mood when he expanded his business at the worse possible time ever, the years after Ninoy’s death and prior to EDSA 1.
and maybe you’re not aware of the problem of job mismatch. its getting severe. another reason for high unemployment is the lack of qualified manpower to staff unfilled jobs.
“Gloria set a target of a million jobs a year. She only managed to produce 400,000 jobs in 2007”
wow, i can’t believe you seriously expected her to produce those numbers. and even more surprising, you sincerely expected that she would produce any jobs at all! you should know, of all people, na pa-pogi points lang yung claims nya of job creation
“Consequently, if there were no overseas employment opportunities Gloria will have to figure out how to provide jobs for at least 8 million people”
thats the problem of Pinoys – iniaasa lahat sa pangulo!
cvj,
this may be a wrong yardstick, but let me use it, for discussion purposes: why Chinese businessmen are distinguished from the ‘natives’
Who owns the biggest local businesses? Tsinoys and Tisoys. We need more than two hands to count them all
Who are the biggest ‘indio’ business owners? Manny Villar, Gabby Lopez. Less than a handful
In terms of noticeable accomplishments, the Tsinoys are ‘distinguishable.’
The Chinese are singled out because they succeeded despite the presence of the things ‘indios’ are complaining of 24/7. Them (plus the Tisoys) not getting into manufacturing is another matter.
We consider Tsinoys as Pinoys. No distinction. We just sometimes use ‘chinese’ in lieu of ‘tsinoy.’
hawaiianguy,
Sure they will stay until they are disabled by a stroke that could have been prevented if they stayed in the US. Pork here is so lean they are tasteless. Pork in the Phillippines is full of fat. Very yummy!
cvj:”Why do you blame ‘democracy’ when it’s clear from the above that the problem is ‘rent seeking’” Sorry, it’s not me. Silent Waters said that.
“Hawaiinguy, i’m coming back home for good definitely upon retirement, preferably before that.” Good, I’ll join you. (not that I’m patriotic or nationalistic, far from it)
Benigno: “As I said, it’s the CULTURE of Pinoys that is fundamentally the cause of our utter inability to prosper.” That’s another Fallows-ian argument (sounds like fallupian tube, or phallus, hehehehe!)that takes culture to task.
I would argue otherwise. Pinoy culture is not THE HEAD to be bashed here, but SOME people who try to destroy it (see Silent Waters, Jan 9, 8:29am).
Or, if there is some larger entity responsible for it, it’s more likely the political institution that wrecks havoc. What we have basically, looking at the macro-indicators (on corruption, by Transparency International, on extrajudicial killings, by several independent media and other entities, perception of RP as the “sick man” of Asia, etc.), is a severely DAMAGED POLITICAL SYSTEM or DESPOTIC POLITICIANS.
On the positive side of it, culture can bring out the best among pinoys for good business. The values of “pakikisama, pakikipagkapwa, pagka maramdamin, utang na loob,” etc. can be marshalled to good advantage. I need not point out the Japanese traditional values (based on the samurai ethic), which they used as levers to economic success. Aren’t they more nepotistic and regionalistic than Filipinos?
manuelbuencamino,
sorry but that is a dead wrong conclusion. A great number of OFWs are not unemployed immediately prior to getting hired for abroad. This is especially true for high skilled and professional workers.
i think only seamen become OFWs after graduation, because the local job market for them is very small, the inevitable direction for them is overseas work.
cvj,
You again regress to pandering to victim mentalities and hollow-headed racial sentiments rather than see the matter for what it is — the REALITY that the Tsinoys are distinct in every aspect: ethnicity, economic, social, and cultural.
What’s wrong with highlighting what is so blaringly obvious? But this distinctness does not make them any less Filipino and my highlighting this distinctness does not make me a judge of who is or is not Filipino. Who is anyway?
And what “double standard” are you talking about? You are quick to put labels on fallacies you perceive yet in all ironies fail to see the fallacy in this statement you make:
“[so if the Chinese businessmen don’t get invest in manufacturing, you say “it depends on the business environment“. If it’s the Pinoy who refuses to do so, you blame our “cultureâ€Â.]”