Predictability: The key to stability

Go around Metro Manila on a regular day and for sure you will stumble upon a prediction that is more likely to happen than not. About a year before the campaign season starts, you will hear some people say that bank robberies and holdups will again increase. And no doubt, it’s already happening now. Political grandstanding and mudslinging also occur about the same time. Together with these come the exposes on corruption, rumors of coups, Senate investigations, resignations from government office, etc. Nostradamus looks like a grade school graduate compared to Filipino "soothsayers." We all know that taxes and the prices of gasoline and goods will inevitably increase just as well as tuition fees do every year. Some things have become so commonplace, people don’t even think of predicting that they will happen, like the budget deficit. To predict the exact level to which the peso will fall against the dollar has become a favorite national past time for exporters and importers.

However, this is the kind of "predictability" we don’t need. What the country needs is the kind that spurs growth, encourages confidence among the people, and gives strong assurance to businesses that come hell or high water, things would at least be the same, or will get better. It may not be an exact illustration because it is a city-state, but Singapore is a good benchmark to study on what predictability could do for a country. The Philippines obviously has more in terms of natural resources compared to Singapore. But Singapore’s economy has grown so large that most success stories like Thailand and Malaysia can’t even catch up to it.

Why? Because people can bank on its institutional processes and laws to make government and businesses continue. Apparently, since its independence, Singapore has embraced a "predictability framework," close to what multinationals and corporations possess: good governance, efficient government institutions, low-level of corruption, highly-effective laws and policies, which all led to a favorable political climate. In business parlance, we call these qualities good management ability, sound policies and by-laws, competent workforce, consistent multi-level tasking capabilities, etc. Some say Singapore has become so predictable, it’s boring.

On the other hand, the Philippines has just too much excitement, everything is going bananas. Nonetheless, the success of Singapore lies mainly on the fact that the government functions with the same high efficiency and effectiveness rating of a large corporation or conglomerate. For example, Singaporeans who want to work in government can expect to receive competitive salaries, which are pegged and automatically adjusted to those in the private sector. That’s why corruption is very low. Singapore’s level of corruption is even lower than the least corrupt countries in the West and Europe like Germany, the United States and England as shown by Transparency International and studies from the University of Göttingen. When a serious problem arises, they swiftly address the problem by enacting very effective laws and policies to curb it. That’s why Singapore Airlines, despite the threat of terrorism, has not suffered as much as other airlines after 9-11. Rather than intervene in business, the Singaporean government gives investors and businessmen the red carpet treatment. Their lawmakers make it a point to always protect foreign and local entrepreneurs with better policies, thus leveling the playing field. The government allows tax concessions for multinational corporations and also built very strong infrastructure to support businesses that want to come in. It even provides subsidies to encourage businesses to use IT and the Internet. Today, even small- and medium-scale enterprises in Singapore have e-commerce capabilities. Many who have visited Singapore can attest to the fact that the country has a very efficient basic services program for the public. More than a city-state, Singapore has become a huge corporation with a leadership that thinks more like a Chief Executive Officer than a Prime Minister.

Just think, if the Philippines can only reach 50-percent of Singapore’s efficiency level, with the backing of our natural and human resources, the country would be way ahead of its Asian neighbors. But as it is, it seems we have our roles all mixed up and mismatched. The Supreme Court is perceived to be acting like a legislative body or an arbiter of contracts, while our senators have turned into investigators. Worse, politicians think they’re in government for business, while some businessmen are beginning to think they’re politicians. The police are being branded as criminals while insurgents have put up more checkpoints and are acting as tax collectors. The military wants to exercise executive powers while the executive branch is acting like a judge. Something is very wrong here. We better get our roles straightened out. Let’s take two steps backwards. All this talk about holding snap elections is pure hogwash. What is important now is to make sure there will be clean, credible and orderly elections in 2004. This is the kind of predictability that’s needed to keep the economy afloat for now. Businessmen and investors are simply waiting for the results of the 2004 elections. A critical year for this country’s survival. Hopefully, it would bring another predictable expectation of a bright future for the country. This time, for real.

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Our friends in Washington were surprised to hear of the sudden resignation of Defense Secretary Angie Reyes. They called me early yesterday morning to express their concern. They were surprised because Sec. Reyes and his Assistant Secretary Alejandro "Bud" Melchor III worked hard to get a substantial increase in military aid for the Armed Forces. It is sad for them because the fruits of their labor will only be felt by the next defense chief in the coming months.

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