Davos

IT IS good that PNoy is able to give an upbeat presentation about the State of the Nation to a prestigious international conference. Last weekend’s annual gathering of the World Economic Forum at Davos, Switzerland must have been impressed by the President’s optimistic tone.

The Philippines has some sound economic fundamentals. It is likely that when all the information is announced, the 2012 public spending deficit will be somewhat under 2% of GDP [2012 deficit around P200 billion, GDP in excess of P10 trillion]. The Nation’s indebtedness, just over P5 trillion, is less than 50% of the GDP]. This compares favorably with the United States where the country’s debts have ballooned to US$16.4 trillion, in excess of its annual GDP. A debt/GDP ratio of over 100% is dangerously high and is also to be found in much of the European Union, for example Ireland, Spain, Portugal, Greece, Italy. Extremely low growth is expected for the US and EU. The Philippines, on the other hand, has experienced a growth rate of around 6% which will continue in 2013.

But PNoy is on shaky ground when he addresses the corruption issue. Recent Transparency International results indicate that there has been an incremental improvement in 2012 compared with 2011 and earlier.

Incremental. Not radical. There have been no systemic changes introduced by the government which will bring about truly substantial improvements. That we are deemed to have slightly lower levels of corruption than during GMA’s time is due to the appointment of fundamentally more decent people in senior positions. The late Jesse Robredo is a fine example. If we are to have significantly less corruption, then we need to revamp government systems to ensure greater transparency. Above all, we need people, such as Robredo, who genuinely see their role as one in which they must accept their enormous responsibilities. There are still far too many people in government and the private sector who see life in terms of their authority and how they can take advantage of this. The authority/responsibility disconnect is still far too prevalent in the Philippines.

It is approaching three years since GMA was in power. We do not consider that it is still appropriate for PNoy to talk about ‘rampant corruption’ in GMA’s administration as though there is no corruption in his. There may be slightly less corruption in PNoy’s government, but the improvements, if any, are marginal.

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PNoy’s speech at Davos was addressed mainly to high-level business officials. In effect, his speech is a sales pitch designed to encourage foreign investment. This, chronically, has been a disappointing arena for the Philippines but there are promising signs.

Attracting foreign investment is a competitive activity. We need to show that investments made in the Philippines are more likely to produce good returns that in, for example, Vietnam and Indonesia. Over the past few years, both these countries have been more successful in obtaining investment than ourselves. For example, in 2007, Vietnam was the fortunate recipient of foreign investments totaling 3.8% of its GDP. In contrast, we hover around the 1% mark. But corruption in Vietnam has prejudiced subsequent investment.

The recent Transparency International League table placed, for the first time in several years, the Philippines as being less corrupt than Indonesia. This should help us with investments during 2013. There has been talk of PNoy speaking to Volkswagen’s senior executives while he is in Davos. We hope he is successful. Recent economic improvements have rapidly increased our domestic market for motor vehicles and any car manufacturer who is prepared to assume the risks will also, I believe, have a substantial ‘home ground’ advantage. We hope the talks with Volkswagen are productive.

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Contrary to what PNoy stated in Davos, the Filipino is not yet convinced that there have been radical changes in the government’s ethos. ‘We are changing the attitude of Filipinos toward the system’ intoned PNoy. Who wrote this nonsense? Abigail Valte? The Filipino is as jaundiced about government probity as he has always been, and with good reason. Our family members have been trying, unavailingly, to pay land taxes in our name. We bought a property in 2010. But the Land Tax office of Bacolod City has been chronically and time-wastingly unhelpful. The ‘attitude of the Filipino toward the system’ will not change until the system and, more relevantly, those who operate the system, changes. This is not happening. Until government officials recognize that our time is not valueless, at least to ourselves, then the changes that PNoy is prematurely trumpeting will not occur.

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So the intriguing question remains: Will PNoy’s place in history be of a well-meaning, but only partially effective, President who made a marginal improvement to the life of the Filipino? Or will he be seen as someone who transformed one of the most corrupt countries in the world to one which can hold its head high in terms of economic, political and social progress during his term? A National Hero accolade awaits. But he needs to raise his game. I suspect a more challenging, combative, Thatcheresque mien when hearing bland ‘good news’ at Cabinet meetings would be helpful. He would find this enervating but National Hero status is not easily gained.

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‘A cabinet is a combining committee-a hyphen which joins, a buckle which fastens, the legislative part of the state to the executive part of the state.’ —The English Constitution (1867). The Cabinet. Walter Bagehot (1826-1877)