The main reason for this are the uncertainties associated with next Mayís general elections. Those uncertainties dissuade investors from coming into our economy. The intense political combat associated with the forthcoming elections engrosses everyone and draws attention from the reforms that need to be done urgently.
The next year will be a crucial time for the region. Its economies are now collectively recovering from the effects of the Asian financial crisis. In the forthcoming period, that recovery will be driven by the anticipated expansion of the economies of Japan and the US.
We are again in clear and present danger of missing out on a vital cycle of regional growth.
If we do, this will not be the first time misfortune strikes the nation. In the late eighties, when the Plaza Accord forced Japan to revalue it currency, investments streamed out to the region. The investment outflow spurred rapid growth in China and Southeast Asia.
At precisely this time, however, coup attempts and the kidnapping of a senior Japanese executive by local communist guerrillas took the Philippines out of the investment map. Skipping the Philippines, investments headed for China (which was just opening up to the global market), Thailand, Malaysia and Indonesia.
With business confidence in the Philippines shot by the coup attempts and, subsequently, by crippling power shortages, we missed out on the opportunities for high growth. It was during this vital period that Thailand, Malaysia and, yes, even Indonesia overtook the Philippines in poverty reduction, domestic product growth, trade expansion and increases in the per capita income.
Today, Thailand – comparable to the Philippines in population, resources and relative development – has triple our per capita income. Indonesia, at least before the Asian crisis struck, brought down its poverty rate to about half ours. Malaysia is head and shoulders above everyone else in the region, excepting Singapore. China, as we know, has maintained double-digit growth rates for many years running.
Our politics has been our handicap. It has caused us to be left behind by neighboring economies that began from comparable levels of development.
Our politics has compromised the next generationís chances for a better life. It is the culprit behind that shocking survey finding that one-fourth of all Filipinos want to migrate elsewhere. The proportion of people who want to migrate increases dramatically as we go down the age groups: young Filipinos expect life here to be harsher and life abroad comparatively more enticing as we go along our chaotic way.
This survey finding, to hammer the point, is despite the fact that a tenth of our population already works abroad.
The problem with our politics goes beyond the present tumult. It goes beyond the present crop of troublemakers and scandalmongers. There is something structurally wrong with our politics.
Our politics is anarchic because our institutions are weak.
Our bureaucracy is one of the most permeable in the world. Every new president is entitled to appoint people to about 4,000 posts. And every president does.
It is also – and this is a relevant point – one of the most graft-ridden bureaucracies in the world. The depth of political appointments to the bureaucracy not only undermines the professional character of the public service. It is a factor that abets corruption.
We have not institutionalized our political party system. This lessens the predictability of the alternation in power of the political elite. It encourages bands of political adventurers to gun for political power and scorch the political earth when they succeed in doing so.
Without a stable political party system, everything about our electoral politics becomes ad hoc. Electoral contests become volatile popularity contests, reducing the role played by well-formed constituencies for well-defined policy paths.
The Malaysians, the Indonesians and the Thais have been running 20- and 30-year development plans long before while we remain trapped in the habit of drawing up 6-year "medium-term" plans that coincide with the term of office of the chief executive. That has kept our policies hampered by a short-horizon and undermines confidence in the stability and sustainability of our development policies.
If political modernization were a race, then we are precipitously lagging behind our neighbors.
We are the only country in the region where an active communist insurgency manages to persist despite the obsolescence of their ideology. We are the only country in the region where coup rumors continue to persist. And we are the only country in the region still grappling with the fundamentals of its constitutional order and locked in an irresolvable debate over whether the charter ought to be changed or not.
The IMF has warned that the Philippine economy will remain pegged at a very modest 4 percent growth rate while our neighbors move quickly ahead, taking advantage of the recovery cycle of the global economy. The only way to break out of the trap of low growth is to push ahead with the urgent reform measures – such as the modernization of our internal revenue system – even as we prepare for elections.
That is easier said than done.
In all election year, the last thing our politicians want to do is to improve the efficiency of our revenue collections. The existing inefficiency is precisely the reason why campaign funds become available to the contenders.
If there is a sense of drift and confusion in this nation, it is because of a large constellation of factors. We have not done the reforms when they needed to be done. We managed to weave a constitutional order that is backward- rather than forward looking. We have not addressed the deficiencies in our political culture with a systemic response.
Somehow, the complexity of the challenge escapes the mass of voters who will decide the outcome of the next contest. It is, to be sure, easier to cultivate expectation that a messiah will come and deliver us from the systemic malaise that grips our people.
So close to the elections, it is far more tempting for the contestants to cultivate the myth that all we need is a messiah. Any attempt to advance a complex national discussion will, given the very deficiencies of our political culture, be counterproductive to the aspirants. That is the final tragedy of it all.