Wednesday , May 23, 2018

Villanueva: Federalism and the economy

THE other day while I was walking along Session Road, I saw a car with a special plate which read, “FEDERALISM” and to the left of the word is a photograph of the President and his popular tagline, “Change is coming.”

One of the platforms of Mr. Duterte during the campaign period was to establish the federal form of government for the Philippines. And when he became president, he promised that before the end of his term, the Philippines will already follow the federal form of government. He further promised that if the Philippines become federal, he will step down from the presidency.

Federalism is a type of government wherein sovereignty is constitutionally divided between the central national government and subdivisional governments which are autonomous political units called states or regions.

It is basically dividing the whole country into autonomous regions, which are divided into local government units that will have primary responsibility over developing industries, public safety, education, healthcare, transportation, recreation and culture.

At present, we have a unitary form of government. This means that the central government is the highest governing power. It receives a large part of the national income and redistributes it to the regions, provinces, municipalities and barangays as Internal Revenue Allotment (IRA) which would sometimes be perceived as disproportionate redistribution.

The regions, provinces, municipalities and barangays can only exercise powers and enact policies that the national government chooses to delegate them.

Federalism is expected to accommodate regional preference and diversity. The small political units may be able to keep more of their income to themselves because 80% of the income they earned will stay and only 20% goes back to the central government. Of the 80%, 30% of it will go to the state or regional government and the rest will be allocated to the provinces, cities, municipalities and barangays under them.

Therefore, the states will have more power over funds and resources. The local and state governments can funnel their funds toward their own development instead of the bulk of the income going to the national government. They can spend the money on programs and policies they deem to be necessary and apt and not waiting for the national government’s approval.

Regions can specialize and compete, while the central government can focus more on foreign affairs, health care, taxation and national defense. The states will have more autonomy to focus on economic development using their specialized competencies and industries, say for example, the Northern Luzon Region focusing on agriculture while the Mimaropa Region can focus on Eco-Tourism.

Aside from these economic advantages, federalism is also deemed to be a possible solution to the conflict in Mindanao by addressing the concerns of the rebels by creating the Bangsamoro Federal State which will crave more authority over the administration of Muslim Mindanao.

Furthermore, federalism is perceived to bring the government closer to the people. Arguably, it can create or proliferate political dynasties, but it can make local leaders more accountable to their constituents. State governments have no more reasons or excuses for delays in the projects and services, and the bureaucracy is avoided.

On the other hand, there will be challenges that will be encountered when federalism is established here in the Philippines.

It can bring about uneven development among states because some states or regions may not be as rich in land, labor and capital as the other states. Those with lesser resources would not be as developed as those with more. Leadership is also crucial because those states with better leaders will develop faster than those with ineffective leaders. The national leadership cannot balance them up.

Federalism may exacerbate the divisiveness of the country. Healthy competition among states could be a cause for more disunity and possibly create more rivalry and worsen regionalism enflaming conflicts among ethnic groups.

Federalism may result to overlaps of jurisdiction. The question of where does the responsibility of the central government ends and where does the regional government’s responsibility begin. This can happen in times of disaster.

There are much more advantages and disadvantages of a federal system of government, which is beyond the economic and political aspect. However, as Jonathan Malaya, the executive director of the PDP-Laban Federalism Institute in a recent interview admitted, the federal system of government will not solve the Philippines’ problems but should be perceived as a means to finding solutions to these problems.

I would like to emphasize what Malaya said that Federalism is a means to greater development, but it is not the solution to all the problems of the country. However, what is more disconcerting is the fact that people agree to this shift of government system without really being educated on what they are agreeing to. They are simply agreeing because this is what Mr. Duterte is saying.

I am not for nor against federalism because I believe that whatever system of government is, if the government keeps their citizenry ignorant, the country will not achieve economic prosperity and development.

This country, more than anything else, needs to be more educated and informed of the facts and opportunities. People need to know the truth. People need to have access to economic opportunities. People need to learn who truly has their welfare in mind. Because the main reason why countries do not grow and develop, and why many citizens stay in poverty is ignorance.