EDITORIAL - A threat greater than terrorism

For several months after the terror attacks in the United States on Sept. 11 last year, the global economy teetered perilously close to disaster. Even before the attacks economies were already suffering from the tech meltdown. The attacks in New York and Washington made unem-ployment lines longer and forced businesses, many of them in the travel industry, to shut down.

A year after the attacks the world remains focused on terrorism, but other issues now compete for attention. In the United States, cor-porate practices fueled by greed and deception have dampened investor confidence. In this country, terrorism remains a concern, but only in some parts of Mindanao where Islamic extremists are known to operate. If investors stay out of the country, it’s not so much because of any terrorist threat but because of other problems that have festered for decades.

The Economist Intelligence Unit, rating 60 countries including the Philippines, said bad government – not terrorism or security problems – posed the biggest risk to business. In Asia, security risk was rated high only in the Philippines, Indonesia and Pakistan. Corruption and bureaucratic red tape remained the biggest problems of the corporate world, the EIU reported in its risk assessment a year after the terror attacks in the United States.

"Government effectiveness risk is rampant and generally affects most foreign companies’ overseas ope-rations, sometimes with very severe consequences for profitability," the EIU reported. "Where roads fail to get built, or utilities underperform, corruption is often the problem."

You only have to consider the fiasco over the contract to operate Terminal 3 of the Ninoy Aquino International Airport to agree with the EIU’s assessment. Sure, terrorism and kidnapping could turn away even the most daring investors. But addressing these problems effectively will require good government. As glo-balization forces economies to become more competitive, corruption and red tape are among the factors that continue to dampen investments in the Philippines. The government knows what it must do, and it must act decisively.