Flawed legal system bad for investors

If you are wondering why despite our generous and competitive investment incentives we are unable to match the value of investments going into our neighboring countries, the Ombudsman’s resolution of the ZTE case offers a gruesome explanation. Justice in this country is less about the law and more about money and people in power.

Our colleague, Jarius Bondoc, cited the personal relationships of the Deputy Ombudsman who worked on this case to some of the major characters who so obviously bear more culpability than poor Romy Neri. With that information, everything now makes sense.

Unless one is aware of what Jarius revealed, the resolution of the case defies logic. How can actors who are mere supporting cast be singled out when the principal actors are allowed to go free? Assuming Ben is guilty as Romy testified, Ben must surely have principals because rich as he may be now, he is not about to give Romy the kind of money Romy told the Senate Ben offered to give him unless it isn’t his.

And if the sin of Romy is that he did not refuse the money strongly enough (through a notarized affidavit perhaps published three times in a newspaper of general circulation?), Romy’s boss, our beloved Ate Glue, should also be liable because she even went out of her way to go to China to sign the contract after Romy already told her of the bribery attempt. She may not be sued while in office but the Ombudsman should have at least made a note of it.

The decision of the Ombudsman to file charges against Romy Neri and Ben Abalos smacks of a moro moro. I am sure the decision was cleared with the proper people in power and it is likely that even Romy and Ben were told to play along for the meantime because in their mind, they need to show the stupid and gullible public they are doing something at this time. Rest assured that when no one is looking, the cases will be dropped or dismissed by the Court because that was how it was designed to begin with. It will take the route of the Nani Perez cases.

AbCerge Remonde, the Palace loudmouth, already gave us a hint when asked for a reaction to the Ombudscam resolution. “The law,” he said is on Neri’s side. Remonde added: “A fine reading (of the resolution) will show that the decision on both Neri and Abalos was more on the impropriety of playing golf and dinner.” AbCerge is obsessed with dinner.

Any investor who sees how justice can be tailored to fit the needs of people in power can be excused for feeling a little insecure. The law cannot be depended upon to protect an investment if powerful people get on the other side of the equation.

No wonder American corporations would trust a communist government in Vietnam and their system of justice to one in our country that is patterned after their very own. Investors want very clear rules, written or unwritten. They could trust the commies of Vietnam but not our greedy bunch who can and do use our flawed legal system to interpret rules any way they want to.

Unwritten rules

Speaking of unwritten rules, investors everywhere are quite conscious of their existence. When they are told that bribes must be paid, investors just pull out their calculators and see if they can still make a profit after paying it.

But there are two things investors want to be sure of if they have to pay a bribe: one, whoever they bribe must deliver on the promise and stay bought and two, the bribe demanded must be reasonable. On both counts, our officials have miserably failed through the years because they have proven themselves too greedy to stay bought on the original price.

On the ZTE affair, it is possible that ZTE may have been given the impression that they were following our norm of doing business in this country through influential intermediaries like Ben. But not only did the local intermediaries fail to deliver, the company was publicly humiliated for following our “rules of the game.”

That’s also the same situation the Germans found themselves in with regard to the NAIA 3 terminal. They too followed our “rules” and made deals with three administrations only to find out that our officials are unable or unwilling to deliver or probably are trying to get more.

The problem is, after “dealing” with three administrations, the cost has escalated to scandalous proportions and can no longer be credibly defended. If Ate Glue leaves office next year as she has reluctantly been hinting, a fourth administration will inherit the NAIA 3 mess and there may be people there who will also want their piece of the cake.

ZTE and Fraport, even if both are not innocent victims will nevertheless be seen by foreign business as good examples of the uncertainties of doing business in this country. Even an alliance with people in power, as in the ZTE case, is no guarantee our system will allow delivery of the business.

Our laws are meaningless given the way we whimsically interpret and enforce them. Our “unwritten rules” are no guarantee either. That’s scary for foreign investors bringing in large sums of money. They see our record and compare. In South Korea, they sent a former president to jail. In Indonesia, they sent the son of a powerful former president to jail. In this country, we convicted a former president but pardoned him even before the ink is dry on the court’s decision and now he wants to be president again.

Who wants deal with a country like that?

Corruption

Speaking of corruption, the question is often asked: how do we compare to our neighbors? Indonesia’s Suharto and our very own Marcos are both in the same class of kleptocracy during their time, one that enriched their families and friends. Yet, Indonesia under Suharto has progressed dramatically while our economy remained stunted. The difference, it is often told, is that Suharto kept the money circulating in Indonesia while Mr. Marcos brought the money out of the country and into the vaults of Swiss and other banks.

Suharto was also able to moderate the greed of his relatives. His wife was known as Madame Tien per cent while ours was, as the martial law era joke puts it, in the “mine-ing” business. Indonesia’s former first lady didn’t spend fabulous sums of the people’s money with the jet set party crowd of the beautiful people in New York and elsewhere like ours did. And Suharto managed to build critical infrastructure that laid the basis for Indonesia’s economic expansion that outlived his time in office.

The same is true in Malaysia. When I first visited Malaysia in 1969, Kuala Lumpur was below the development of Cebu or even Davao. But look at it now! The Malaysians have so progressed that they are now hiring OFWs to do their dirty work. They are credibly on their way to First World status by 2020.

I don’t think the Malaysians are free of corruption. On the contrary, their politicians are as versed on how to make money on the side as ours are. In fact, they have institutionalized the avenues for unfair financial gain through the Bumiputra policy where Malays got shares in business ventures for nothing. But, I am told, they are able to moderate their greed.

The Indonesians and the Malaysians proved corruption can co-exist with development so long as greed is moderated and the leader had a good vision for where the country is headed. In our case, the national interest was sacrificed for the greed of those in power. The Malaysians were happy to stay within 30 percent but in our case, it is not unusual for our politicians to demand more than 50 percent. Just check how they divide the spoils of pork barrel.

We have tried dictatorship. We have tried and are still trying to make democracy work. Neither has delivered the way dictatorship and democracy and variations of both have worked in Indonesia and Malaysia. I suspect that even if we turned over the government to JoeMa’s Holland-based communists, the new ruling elite will merely take over the spoils.

Are we hopeless then? Not if we work together and throw out the scoundrels while we can. That’s the tough part. There seems to be a bit of the scoundrel’s gene in each of us. We should just be embarrassed at what we have become.

Halal

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Kasi hindi siya halal.

Boo Chanco’s e-mail address is [email protected]