MAX V. SOLIVEN: WAR AND BUSINESS ARE VERY MUCH ALIKE

[PHOTO: Philippine STAR publisher Max V. Soliven (center) discussed the local political outlook while Prof. Emmanuel S. de Dios (right) of the University of the Philippines School of Economics talked on the domestic economy during the economic and political briefing for senior managers and executives of the Lopez Group of Companies at the Meralco Mini Theater last Wednesday. At left is Oscar M. Lopez, chairman and CEO of Lopez Group of Companies. - Mike Amoroso ]

MANILA, September 12, 2003  (STAR) BY THE WAY By Max V. Soliven (Remarks given by Max V. Soliven for the Lopez Group Political and Economic Briefing, Meralco Mini Theater, Sept. 10, 2003)

Frankly, I don’t know why I’m writing this speech. For that matter, what I’m doing here before you very serious folks who run the embattled Lopez enterprises. My being invited to address your annual gathering of the clan seems out of step with your previous practice of getting persons of gravity to impart words of wisdom to your group.

I chose the word "embattled" because that’s what you are, indeed, what all of us Filipinos seem to be in these confused and trying times. Your own chairman, Osky Lopez, asserted in a rather brusque speech at the Foreign Correspondents Association of the Philippines (FOCAP) that your group finds itself squeezed by the so-called "populist policies" of this administration and the tendency of the judiciary and regulatory agencies to suddenly impose new rules with far-reaching consequences to business, catching business by surprise so to speak right in the middle of the game. I watched Chairman Lopez on TV delivering that speech, and, by golly, I said to myself, he’s declaring "war." Afterwards, (under government "persuasion"?) Osky explained that he didn’t declare war, only voiced the concerns of business. Oh well. The Chinese are more sanguine about it. In Taiwan, I remember, they called one important god "Kwang Kong." Whatever he’s called on the Chinese mainland, the god of War is also the god of Business.

It was Germany’s famous Iron Chancellor, Otto von Bismark, who had unified and strengthened that country by political maneuvering, diplomacy and war while he ruled it between 1871 and 1890, who put your present problem into one pithy sentence. Bismark declared that "war is politics with bloodshed, while politics is war without bloodshed." That’s where somebody like this journalist comes in, I presume. You know business; Having covered six Presidents, in all their glory, but mostly their foibles and folly, I perhaps know a bit more about politics.

I imagine that because your businesses are primarily in the politically sensitive areas of media and public utilities, you have to learn to be more adept in the games politicians and power brokers (no pun on the Meralco intended) play.

I use the familiar nickname for your Chairman, "Osky," because we were once classmates, in the dear, dead days beyond recall, in the same great institution which produced "Jose Velarde" and "Jose Pidal," in Ateneo de Manila. Incidentally, the same Ateneo also produced Jose Rizal, Gen. Gregorio del Pilar, Gen. Antonio Luna, and Juan Luna.

We are living, everyone realizes, in pretty muddled times. For many weeks we have been inundated by rumors, now speeded around more efficiently through text messages on cellphones. The cellphone is a revolutionary instrument, indeed, with 130 million text messages per day being flashed all over our country, the Texting Capital of the World. You can dispatch sentimental or religious messages, or arrange a coup, or summon up a mob for a mass demonstration or a new People Power march, by cellphone. Each text message costs you only one devalued peso.

All these rumors about "No-El," an impending new coup attempt or military mutiny, the television spectaculars about the First Gentleman Mike Arroyo’s alleged capers (as claimed by Senator Panfilo "Ping" Lacson in two privilege speeches), the Grand Inquisition by the Senate of "Jose Pidal," alias, as he claims, Ignatius "Iggy" Arroyo, the flip-flopping of "Udong" Mahusay, the Ano ba I-Toh saga which launched a hundred quips, are upsetting to the economy and the peso.

Then there’s the speculation that the "imprisoned" former President Joseph Erap Estrada, with no recourse to the courts and no hope of regaining freedom through legal channels (which many allege to be under the thumb of GMA) may be throwing his wealth into funding military mutiny – with a view to toppling the government and, theoretically, regaining at least his liberty, not necessarily his disrupted presidency. Erap may be completely innocent of any plotting. But apply Ockham’s Razor to it. Doesn’t logic whisper to you that by promoting discontent, he has nothing to lose and everything to gain?

The question of the day, which recently President Macapagal-Arroyo doesn’t even "allow" the media to ask (I kid thee not) is whether the President will go back on her pledge given on Rizal Day, last December 30, and decide to run for her own six-year term as President in May next year.

Last December, GMA maintained that she only wanted to devote this, her last year in office, to making a difference in the economy, heal the divisions among our people, and ensure clean and honest elections. Yet what do we see? Non-stop campaigning, or what looks like it.

Will she run then? She hasn’t been saying "no" recently. This is no indication she will make a surprise turn-around and reenter the contest, but many suspect that had it not been for the embarrassing "escape" of the Jemaah Islamiyah terrorist, Fathur Rohman al-Ghozi and two Abu Sayaff detainees from Camp Crame last July 17, and the Oakwood Magdalo Mutiny on July 27, she might even have announced her U-turn and her candidacy in the SONA (State of the Nation Address). Abangan ang kasunod na kabanata.

If she runs, can GMA win? Even with the "help" of the Commission on Elections? There are, in this politics-obsessed nation, any number of possibilities and combinations. Will the Lopez Empire field Noli de Castro? Will there be an ABS-CBN ticket challenging the Lakas, with Noli, Loren Legarda, et cetera. Will there be an alliance with Raul Roco? Is Roco still hoping for endorsement by GMA or will he team up with others in the opposition? What about Vice-President Tito Guingona? What about the candidacy of Ping Lacson? Will Danding Cojuangco, after much hesitation, throw his brewers‚ and farmers‚ cap into the ring? Other quarters sinisterly sneer that GMA might not even be able to finish her term.

Since my crystal ball is both cracked and clouded, I won’t hazard any guess. The late Manila Times columnist, Teodoro "Doroy" Valencia once offered me a word of sage advice, which he subsequently violated himself: "Max, never predict anything until you know it already happened."

Never to be discounted in our politics is the military factor. It was the late Dictator Ferdinand Marcos who brought the armed forces out of the barracks and into politics. As Ninoy Aquino said to me when we were cellmates in Fort Bonifacio’s maximum security prison: "How will we get the toothpaste back into the tube?"

The answer seems: Never. The military, from generals to corporals, tasted power during the martial law regime. The "messianic complex", coupled with this sweet taste of power, makes it difficult to keep our soldiers confined to the barracks and the battlefield. Perhaps because most of our more promising military officers – including the Oakwood mutineers like Navy Lt. S.g. Antonio "Sonny" Trillanes IV – have been given time and resources to study and earn degrees in civilian graduate schools and work in civilian branches of government, they have acquired the notion that they are as capable as, if not more capable than, our politicians in running the country. Add to that the complex: if we’re to fight and even die for the country, why shouldn’t we be running the country, and you have a potential putschist in uniform on your hands.

The military, for that matter, feels itself woefully neglected and scorned by the politicians – possibly most of all by the Senators who browbeat them, while each Senator gets a "pork barrel" of P200 million per year! As you know, we have the most decrepit and badly-equipped armed forces in our region. We have been reduced to receiving hand-me-down OV-10 warplanes from our recent snap visitor, the dynamic Prime Minister Thaksin Shinawatra of Thailand. Thaksin bounced over here on a 20-hour visit last Sunday to give us a pep talk on what our President happily dubbed "Thanksinomics", then gifted us with four OV-10s. Those are obsolescent aircraft, but, hey, they’re still effective for the Mindanao fighting – and you don’t, in this mendicant nation, look a gift horse in the mouth.

No matter how well trained and motivated our military officers and men may be, the frustration level must be very high because the few resources they are parceled out are further diminished by corruption. This was the theme of the Oakwood "rebels," whatever you may think of them. As one of the negotiators in the Oakwood apartments, I was among the panel which listened to their complaints, and fathomed their angst for more than four stressful hours before they agreed to surrender in exchange for a pledge that they would be tried by court martial and treated under the Articles of War.

It is easy to understand why our soldiers regard corruption as deadly. Underspecs or out-of-specs Kevlar helmets can cost the lives of men in the battlefront, lack of bullets can spell death by being overrun by the enemy, trudging to combat in boots with holes in them, or being drenched in tropical downpours and storms with their ponchos similarly worn out and with holes in them, are demoralizing factors. That’s more dramatic and immediate a shortcoming than the impact of overpriced textbooks, or lack of textbooks, and even of classrooms, on the quality of education of the present and future generations.

Back to politics: the coming "political summit" won’t accomplish anything. They will just talk, talk, and talk. In this garrulous country, talk is too often mistaken for action.

The peso and banking stability have been definitely battered by the strange decision of the Court of Appeals‚ Fifth Division, promulgated last August 13, in which three CA Justices ruled Governor Rafael Buenaventura of the Bangko Sentral ng Pilipinas and his Deputy Governor Alberto V. Reyes, and three other BSP officials "guilty of gross neglect of duty" in the case of the closure in the year 2000 of Urban Bank, Inc. and Urbancorp Development Bank and the revocation of the trust license of Urbancorp Investments, Inc..

The CA decision was penned by Justice Eugenio S. Labitoria, chairman of the Fifth Division, and concurred with by Justices Elvi John S. Asuncion and Lucas P. Bersamin.

In sum, reading the 19-page decision, one is prompted to observe that the appellate court seems to have arrogated to itself the self-imposed task of scrutinizing how Bangko Sentral officials should discharge and exercise their mandate as "an independent central monetary authority."

As former Secretary and Senator Raul Roco exclaimed: "Can you imagine Alan Greenspan suspended for one year by a New York Circuit Court?"

That’s how the CA ruling impacted not merely on our own peso, and our banking system, but on institutions and nations which deal with us all over the world. How can the BSP regulate and discipline banks from now on, with that "sword of Damocles" hanging over its head? That’s an example of the judicial over-reach which complicates our economy and our society.

The prevailing atmosphere of uncertainty and ferment has been harsh on our economy. Investors, local and foreign, are hanging on to their money, instead of putting them into endeavors which would create jobs and improve productivity. The peso’s value has been plummeting at a pace which shocked even the Secretary of Finance. The economy has failed to grow to keep pace with our runaway population growth, forcing families to break up because one or both parents are compelled to work abroad to earn enough to feed, clothe and educate our children. We brag about our close to 8 million OFWs, who’re keeping us afloat – but the terms in social costs are often unnerving. What we may have is a cauldron of social discontent that could boil over, or be exploited by leftwing, radical elements, while our politicians bicker endlessly on everything that they calculate could capture media attention and advance their selfish political fortunes.

Unemployment has reached a mind-boggling 11.4 per cent, and this is growing as I speak. The continuing conflict in Mindanao has contributed mightily to the loss of business confidence, amounting to billions of dollars in potential investments and tourist revenue foregone.

Exports have fallen drastically, by 7.9 per cent – the largest dip in the past 18 months.

The country is tormented by a bloated budget deficit – P133 billion as of July, over the full-year target of only P130 billion.

The people have grown cynical. This is the worst development of all.

As for the "peace and order" problem, our inadequate financial resources will force our armed forces to be ever more dependent on the Americans for training and supply of some basic equipment. We will probably need the "war of attrition" in Mindanao to go on indefinitely to be able to sell to the Americans the need to support us because we are a part of their worldwide war against Muslim fundamentalist-inspired terrorism. Dependence on the former colonial power will increase and it wouldn’t be long before some legal accommodation may even have to be arrived at to pave the way for American bases here again.

How do all these impact on business in general on the Lopez businesses in particular?

As a general statement, it would be safe to say that the political environment would remain so fragmented and poisonous in the next year or so to the point that it would be silly to expect any administration, old or new, to gather enough political will to do what must be done to enhance the investment climate. A good example is the EPIRA, a reform law which your group is so interested in. It requires a lot of political chutzpah to implement that law in the spirit that would make it effective. You are not going to have that kind of political will anytime soon. If power blackouts return in the next two years as some of you predict because of a shortage of supply or transmission facilities, maybe the state of emergency will force political leaders to act. Unfortunately, I am told that solutions in the power sector are not as easy to put in place as flicking a switch. A power crisis should make a smoldering crisis even more explosive. I don’t see how a parliamentary government could mitigate this problem any better than the one we have now. But a crisis like this could give ideas again to undemocratic forces, if you know what I mean.

Populist policies, as your own chairman recently pointed out, will sour the interest of investors. That would shut off a good source of financial resources needed to improve local infrastructure from roads, airports, water systems and yes, power plants. Politicians will continue to expect the private sector to subsidize social services because government will never be able to raise enough through taxes and other levies and we have just about maxed out our borrowing ability. The lack of adequate infrastructure will further reduce our national competitiveness, making us fall even further behind our neighbors in the region.

The judicial system will continue to be as corrupt and unpredictable as ever. It is alarming that in the short time that this administration had been in power, one law firm has amassed so much influence in this sector of government, from the Supreme Court, the Court of Appeals, the lower courts and the public prosecutors from the Department of Justice. Investors who plan to make long term bets in this country must make their peace with this group unless they want to get their noses bloodied. There are enough examples from Ital Thai and even your own Meralco to show what damage the judiciary can bring to the conduct of business. Any review of the Constitution must look into the failure of the Judicial and Bar Council in its mission to keep standards of judicial appointments high and shielded from political interference. Something also ought to be done about the propensity of the courts, including the Supreme Court and Court of Appeals to legislate and go beyond the traditional boundaries of the judicial branch in ruling on issues and cases.

In other words, what you and I face in the next few months and years isn’t pretty. As planners for the Lopez group, you have to sharpen your pencils on possible worse case scenarios. While it is philosophically better to be optimistic, in the case of planning for something as important as what to do with your money, utmost conservatism must be the guiding principle.

Even if your favorite senator, Noli de Castro runs for President and wins, it would be silly on your part to think that he would be free to act in a manner that would be good for business, specially your own. In fact, any new president, whoever it may be may be more constrained in acting to favor your businesses for fear that he would be crucified by a hyperactive civil society, restive military and rumor mongering media.

Our very interesting political situation would have made the adrenaline of your founder, Iñing Lopez flow. I should know because I worked for him at the old Manila Chronicle. But I have noticed that his successors are more timid in dealing with political adversaries. This is why recent FOCAP speech of Osky was so out of character that it came as a big surprise to many. Perhaps Iñing had it right. The fact that you are involved in the very politically sensitive public utility businesses from power to water to telephones and expressway and mass media demands proactive handling of the political environment and the principal actors in the political stage to include media. You will have to take a lot of political heat in your line of business. And if you are not inclined to take this kind of heat, my advise to you is to go into other businesses that are less stressful.

I am tempted to conclude this piece with a pessimistic observation. Bad as situation today may seem, perhaps you ain’t seen nothing yet.

Yet, I am reminded of one of the most devastating days in which England’s great Winston Churchill saw defeat. He had just led an embattled and besieged Britain and Commonwealth to its Finest Hour, defeating – with the help of America and other Allies – the Nazi threat which had overwhelmed Europe and attacked Russia, and once blitzed London, threatening to cross the Channel and conquer the sceptred isle.

Did the British people reward Churchill for his magnificent and doughty leadership. Instead, in the 1945 elections, the first postwar polls, they rejected him and his Conservative Party. His Conservatives were reduced to only 210 seats, while the Leftist Labour Party, singing "The Red Flag," won close to 400 seats in the House of Commons – toppling Churchill from the Prime Ministership.

Churchill’s response to this, his Darkest Hour, was delivered at Oxford University, if I remember right, one or two years later. He was invited to give the Commencement Address. He stood up at the graduation ceremony, looked the graduating classes and the Dons in the eye, and uttered only one sentence: "Never, never give up!"

In October 1951, Churchill and his Conservatives were returned to power by the British electorate. The signal was sent from ship to ship in the British fleet: "Winnie’s back!"

Churchill had turned eighty by the time he finally left Number 10 Downing Street on April 5, 1955. He had set the stage for the United Kingdom’s march towards the 21st century. Winston was a man with many faults, often querulous, sometimes a curmudgeon. But he had one guiding goal: for England to be strong, prosperous, defiant of all odds – and proud. "I feel like an aeroplane at the end of its flight, in the dusk, with the petrol running out, looking for a safe landing," Churchill told R.A. Butler in March 1954. Churchill found a safe landing, indeed, in the hearts of his people.

That’s all it takes. The magic of leadership. This kind of leadership was provided by the late President Ramon Magsaysay – with whom, by the way, the Lopezes clashed, in the manner in which Titans clash. What made Magsaysay effective, and annoying to the Power Elite, notably the Sugar Bloc, was his inexplicable sincerity.

Can we find a leader with these qualities today? My suggestion is that we all strive to become leaders in what we do: and we’ll win through. Monching Magsaysay tried to do his best, and counted on the Filipino people to do the rest. The Filipinos, even the rebel Huks in the end, responded to this challenge.

I conclude with optimism. Ninoy Aquino’s faith in the Filipino as "worth dying for" seems unvindicated in this, our Darkest Hour. But Ninoy was right, and I was wrong. When I warned him angrily not to come home, "because they will kill you," he had replied: "If I should die, then so be it. But I hope my death will awaken our people to stand up and fight for themselves."

This is what happened. Can it happen again? Is the Filipino worth living for? I leave the answer to that challenge in your hands – and in your hearts.


Reported by: Sol Jose Vanzi

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