Marcos loyalists and the DDS have been at it on social media platforms since the inauguration of BBM. The opposition has also been weighing in because it in their DNA. They’re not going to change their strategy but instead still use the usual divide-and-conquer bit which served them well before when they ousted Marcos in 1986.
What politically conscious Pinoys don’t see is the bigger picture; why the onus is on BBM to deliver the country from the hell it finds itself in now and the question that critical thinkers have in their minds about whether he will be a reformer or just another enabler of his class.
In the previous blog post Sold Out, we laid out the big picture. The historical basis for where we find ourselves in the present now in terms of our political, economic and social structures. We can’t afford to waste time nor can we afford to not put the pressure on BBM to deliver because the people gave him the mandate. The final judgment was made in the Aquino versus Marcos saga.
Stephen CuUnjieng writes in his Manila Times column:
What have we seen in the last 40 years with the failures of both the last part of the first Marcos regime and many of the administrations since EDSA? Basically, with the economic legacy the 1980s left us in, guess what happened? We exited most of the few industries we had because of the loss of tariff protection and other reasons. Why did we lower tariff protection? Because we could not handle a premature equivalent of Brexit. So, we had to follow the pattern of lowering tariffs and barriers to remain a partner in mainstream trade and services. But we did little to adapt to that. The government had to lower or remove tariff protection that protected what scant industries and manufacturing base there was. We left it to the private sector to fend for themselves and we saw what happened. Not that it was just their fault. Some survived, but for too many companies, high utility costs, abysmal infrastructure, horrible bureaucracy and corruption, and a badly structured tax system were too much to overcome. Still, it would also be fair to say that many who could have adopted did not adjust fast and thoroughly enough to survive in a system that was free of either quotas (remember garments?) or tariff protection. Why were food manufacturers an exception? They always were competitive rather than coddled, and companies like Universal Robina, Monde Nissin, Century Pacific Food, San Miguel and RFM always had to compete not just with each other but with multinationals and imports.
What puny manufacturing we had was replaced with imports, which further ate into what was left not just of that base, but even into other areas like agriculture. This exacerbated our lack of food security and without low prices to compensate. As pointed out, globally, sugar sells for about P22 a kilogram. Yet our sugar-producing country sells it domestically for anywhere between P50 to P100. Let’s see how that affects our food manufacturers as well. Though many were wise enough to have their own sugar mills. With our 7,000 islands, we import 93 percent of our salt. We can list more products and staples.
Therefore, keep importing and import even more? How will we pay for that eventually if there is less and less employment in the Philippines as more companies exit while keeping our high population growth? Keep exporting people? Don’t you think the law of diminishing returns will also apply to seeking overseas jobs? If available, don’t you think the marginal jobs will get worse and harsher even if they exist? As we found out with food importation — it is like the provision in bank credit lines — subject to availability. Not to mention a big importer must often be a price taker rather than negotiator.
Our political and economic crisis of the 1980s did not help, but others like China and Vietnam had even bigger hurdles to overcome at the same time on their amazing march to industrialization, progress, and most of all, mass wealth creation for their people. What did they do that we did not? Let us start with what we did. We blindly followed the Washington Consensus that the best government was the least government, open our economy, and don’t support major companies in difficulty. All well, but notice how the advocates of that did not follow it themselves when faced with an analogous situation in 2008. Yet, no change with most of our decision-makers. Was there a desperate need to stop coddling inefficient industries and companies that often produced substandard and overpriced goods? Of course. Did our neighbors do the same? Of course not.
First, they were not so naïve as to blindly follow the Washington Consensus but found their own ways, often with mistakes but with simple goals in mind. They made sure their utility and infrastructure were not just sufficient or better but priced to benefit manufacturing and economic development. When I brought international investors from the rest of Asia to invest in some power-generating companies in the Philippines in the 1990s, they were shocked that residential power rates were cheaper than industrial and commercial. In those countries, they had the lowest rates for manufacturing and industry, then commercial, with the highest for residential, with subsidies or relief given to those in need. I don’t need to explain the logic.
They did open their economies, especially in areas where they were not expert or competitive. In areas where they had existing players who were under stress, they always made sure there was at least one local champion to keep from being completely beholden to foreign companies whose top priority was not them. In the aftermath of the 1997 crisis, most of Asia’s cement companies were in extreme difficulty given the collapse in construction and infrastructure spending. Except for Northern Cement, which was sequestered at the time, all our cement plants were sold to foreign companies. Same thing in Indonesia. What did Thailand pragmatically do? They sold all, except the leader, Siam Cement, which the government supported. Guess who has lower cement prices than Indonesia and the Philippines? Then see what happened after. When the new owners ran into difficulties of their own, they sold or tried to sell their Asian assets, including those in the Philippines, and some skimped on upgrades and so on while they attended to bigger problems and opportunities in their core markets and had to ration capital. Still want to have all our key industries in the hands of owners who do not look at us as even a second-tier priority?
What else? They did not just give up on government services and leave it to the private sector. They worked to make government services better and coordinate better in helping the private sector. In Vietnam, for example, a client of mine bought a fish meal company which exported all its output. All he had to do was go to one government office and they took care of all approvals, licenses and permits, whether local, provincial, or national. It did not stop there as they provided continuing service and when a local mayor was harassing them, he asked for help. The office said we will take care of it. After a quick investigation they removed and arrested the mayor. Things are far from perfect in Vietnam. It is a tough place with very competitive people who are not pushovers if you muscle into their space, but this is an example of making government effective and accountable. Another example was another client of mine who built a critical toll road in Malaysia. The government wanted the toll to be cheap to enhance usage and promote the manufacturing hub and other priority areas the road was going to connect. The government did not have the budget to build it themselves. It was built and operated privately, but for the first few years, toll rates were subsidized to enhance usage. What did we do under President Aquino? Ask for an upfront premium to cover annual government spending which was much more than the cost of the road and right of way. The toll operator would get his return by building it into the toll rate over the concession period. So, making sure our expensive infrastructure stays that way for decades to deal with short-term funding needs. I understand the reason why this was done. I just don’t agree with it.
CuUnjieng sums up what went wrong from 1986 – 2016 perfectly. But if you think about it, this also applies to the period from 1946 – 1965. Marcos Sr. did try to break away from the US in 1973 when he didn’t extend or renew the Bell Trade Act. He tried to extract compensation from the Americans with the shortened military bases agreement. It was then he also implemented a rapid industrialization plan, modeled after South Korea’s chaebols, with an individual in charge of a specific industry.
Marcos failed due to a combination of factors. There was his hubris, the fact that he gave Imelda a larger role to play in government and the challenging economic environment that he launched the eleven major industrial projects in.
But for the most part, it was his daring to challenge the Americans which did him in. The assassination of Ninoy Aquino didn’t bring him down but the internecine fighting within the factions in his camp contributed to his downfall, together with the major blunder of calling for a snap election, which was the trap set by the Americans with the opposition.
BBM should look to history in order to move forward. The environment has changed a lot since Marcos Sr. but what the people expect is the Marcos standard. It’s been two months since he assumed the Presidency but his administration still doesn’t have a clear direction, even if his economic managers have laid out the eight point socio-economic agenda.
The Marcos administration is still without a flagship program moving forward unlike the Duterte administration which had tax reform and BBB as the linchipin of its economic strategy.
Marcos Jr. should have seen the writing on the wall. The Presidency has been his goal since the death of his father. It would’ve been wise to keep a team of policy experts to keep track of what was done wrong and how to correct the same. He had six years of waiting to prepare for the final battle he needed to fight.
Marcos goes off to his first official trips to Indonesia and Singapore this coming week. After these, he is off to the US to attend the UN General Assembly in New York and possibly meet with President Joe Biden. It’s interesting that Marcos chose to visit the US first before China. Perhaps it is his way of showing up Uncle Sam by putting it in front of the American’s faces that the family they unceremoniously ousted in 1986 is back.
What the people are looking for in Marcos is leadership. Unfortunately, he follows in the footsteps of the most popular and trusted President ever. The onus is on Marcos to be better than Duterte. Unfortunately, it doesn’t look like it will be that way given how Marcos has started off in his two months in office.
There is much to be desired in the manner which the Office of the Executive Secretary, the Presidential Management Staff and the Office of the Press Secretary have all been operating. The cracks are wide and there is plenty falling into the cracks which doesn’t do well for Marcos’ image thus far.
There is still time for Marcos to correct these but the people are wondering why he doesn’t seem to see through it this early. Marcos should realize that winning the Presidency doesn’t mean he’s won the battle already. He still has a target on his back and not for anything but there is a greater number who wish he would fail than those who wish he would succeed.
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