MAKING PHILIPPINES A 'BREAKOUT NATION' CAN BE NOY's HISTORIC LEGACY
[PHOTO - CATHOLIC nuns and supporters of the people’s revolt greet a soldier aboard a V-150 armored tank on Edsa in 1986. INQUIRER ARCHIVE FILE PHOTO]
MANILA, JULY 3, 2012 (INQUIRER) By: Winston A. Marbella - As President Benigno Aquino closes his first 700 days in office and begins his last 1,400 days, it has been the best of times and the worst of times.
Going by Ruchir Sharma’s economic metrics, the Philippines is on the verge of joining the ranks of the elite group of “breakout nations,” newly emerging economies that might make it in a turbulent world.
This must have been topmost in the mind of President Aquino after a whirlwind weeklong trip to the United States and the United Kingdom that included 42 hours on the wing.
President Aquino brought home the bacon worth $2.5 billion, or P100 billion, in British and American investments in the country that would mean more jobs and more food on the table.
The President came home to a country upbeat over a resurgent 6.4 percent first quarter growth rate that outpaced our Asean neighbors and was second only to China’s.
The good news reinforces the country’s potential membership in “breakout nations,” a select group of high potential countries touted to become the new economic miracles.
After slowing down to a 3.7 percent laggardly growth rate in 2011, the economy surged to a 6.4 percent GDP growth in Q1 that put us ahead of our Asean neighbors, which had consistently set the pace for us.
The normally conservative Wall Street Journal gushed that the Q1 surge “defied most forecasts as well as the mood in the global economy.”
Enthused the WSJ: “Filipinos have reasons to smile. Asia’s perennial underachiever is outperforming.”
Postcards from the edge
Like most Filipinos, I have friends who toil in distant lands for various reasons. Some of them followed closely President Aquino’s talks before Filipino communities in the US and UK. They sent me back “snapshots” of their impressions, not in pictures but in words.
In London, the President talked mostly about the government’s moral crusade and the removal of Renato Corona as Chief Justice. The UK-based Filipinos watch the Filipino channels almost daily, and they know all about the impeachment. What they expected to hear was how the government was addressing their specific concerns as OFWs, and, beyond that, the big picture of the Philippine situation.
In Los Angeles, his last stop before boarding the homeward-bound plane, Mr. Aquino was full of details: The first quarter economic surge, the massive infrastructure spending, housing, rice, all the sundry details, and, of course, Mr. Corona.
As with the London crowd, the LA audience a reference to the specific problems of overseas Filipino Americans, and the big picture about their country’s future.
In these are picture postcards from the edge, the people expect the President to provide the big-picture context. In short, the meaning of the details.
Mr. Aquino has an excellent opportunity to do this in his forthcoming State of the Nation Address (Sona). But only if his speechwriters don’t clutter him with the obvious details that can sufffocate his message.
And then there is the obvious temptation of gloating over the removal of Chief Justice Renato Corona.
This Sona will be his third. But it is historic in more ways than one—not only because the President will be summing up his first 700 days and crafting his next 1400 days. It will be historic because never before in our recent history is the nation on the cusp of a political and—if we are lucky—an economic breakthrough.
At the time Benigno Simeon Cojuangco Aquino III was growing in his mother’s womb, the Philippine economy was second only to Japan in the whole of Asia. Ruchir Sharma’s notable book, Breakout Nations: In Pursuit of the New Economic Miracles, marks this historical episode.
Sharma recalls the good old days “back in the 1960s when the Philippines had the second highest per capita income in Asia, behind only Japan …” He believes we have the sound economic fundamentals to get back on track if our politicians get it right this time.
BRIC a brac
In a 2001 paper published in 2005, Jim O’Neill popularized the acronym BRIC (for Brazil, Russia, India, China) to represent the rising new economies at the time. Sharma, head of the emerging markets division at Morgan Stanley, names the Philippines as among the emerging economies he calls the Breakout Nations, the sequel to the BRIC.
With Turkey and Indonesia, we make up TIP, poised to upstage BRIC. BRICs are losing steam, and the breakout nations (including Nigeria and Thailand) will speed ahead.
To Sharma, President Aquino is a good leader who is “delegating power to competent technocrats and seems to understand what needs to be done to get the lights back on.”
But becoming a breakout nation does not come automatically. Breaking out into sustainable growth must be “inclusive,” economic jargon for growth that reaches the poorest of the poor. Sharma notes that the country’s stagnant economy had resulted from a few family-owned conglomerate dominating the markets.
Powered by revolution
“To understand which nations will thrive and which will falter in a world reshaped by slower growth,” Sharma stresses that we must abandon our current obsession with global macro trends and all-embracing theories. He offers instead a more discerning, nuanced view, identifying specific factors— economic, political, social—which will make for slow or fast growth.
Sharma believes the Philippines is ready to exceed expectations in a world where the leading emerging nations (the BRIC) are starting to flounder with Europe and the United States.
Sharma’s thesis banks heavily on President Aquino’s success: “Filipinos saw him as an honest figure who could deliver on the Aquino mandate for change, and they were desperate after nine years of drift and decay.”
Becoming a breakout nation “could be made to happen if the third Aquino can get the people power revolution right,” Sharma says.
How nations succeed
Another big-picture context book making the rounds is Why Nations Fail: The Origins of Power, Prosperity and Poverty. It is an intriguing read—for it seeks to answer a question that has fascinated scholars for centuries: Why are some nations rich and others poor?
Co-authors Daron Acemoglu and James Robinson (Massachusetts Institute of Technology and Harvard) demonstrate by historical sweep and anecdotal evidence that man-made political and economic institutions underlie economic success.
The book is an ambitious attempt to explain why 1.29 billion people in the developing world subsist on less than $1.25 a day. That includes the Philippines.
How to explain such gaping disparities?
The bottomline, asserts the authors is: To get our economics right, we must get our politics right. To illustrate this central point, the authors take us through the events that led to the “Arab Spring” of discontent that is sweeping the Middle East.
Those of us who lived through our People Power Revolution in 1986 will be overwhelmed by a great sense of pride and a poignant déjà vu feeling.
But to reap the fruits of our own revolution we must contextualize what happened at Edsa and apply it to breakout tasks that remain in Mr. Aquino’s agenda in the remaining four years of his presidency.
FROM MANILA STANDARD TODAY
AQUINO TO USE 'VISUALS' IN 3RD SONA, NOT THEATRICS By Joyce Pangco Pañares
President Benigno Aquino III (photo), who marked his second year in office on Saturday, will employ visuals and not theatrics for his third State-of-the-Nation Address on July 23, deputy presidential spokeswoman Abigail Valte said on Sunday.
“The President has no inclination for theatrics. Normally, the President sticks to visuals and not theatrics,” Valte said.
“Visuals become the default [form of presentation]. But as to what kind of visuals, we do not know yet… The need for visuals comes more or less after the speech has been concretized, and at this stage we are just on the fi rst draft.” Former President Joseph Estrada gave Mr. Aquino a passing grade of “seven to eight” at the weekend.
Valte said Mr. Aquino would also be comfortable having his predecessor, Pampanga Rep. Gloria Macapagal-Arroyo, in Congress to listen to his speech in the event she was allowed to post bail. Arroyo under hospital arrest as a result of the electoral sabotage case fi led against her. “She is under detention,” Valte said.
“We do not know if she will ask permission from the court to personally attend the SONA. But she is a representative of the Lower House, so her right to be there is a given.”
The Cabinet submitted the fi rst draft of Mr. Aquino’s speech two weeks ago. Presidential Communications Secretary Ramon Carandang said it would be a report to the Filipino people on what the Aquino administration had accomplished so far.
He was coy when asked if the ouster of Chief Justice Renato Corona would be included in the speech. He said there would be a “long back and forth” process until the speech was fi nalized, noting that last year’s speech had 14 drafts.
“Normally, when you report on what happened in the past year, you report on the signifi – cant accomplishment, so it is up to you to decide whether you feel that will be included.
“Let us just wait for the draft… This is the report of the President to the Filipino people, to our bosses. We are going to give a bit of an accomplishment report, where we want to go looking forward.
FROM THE PHILSTAR
Little fanfare as P-Noy marks 2nd year in office By Aurea Calica (The Philippine Star) Updated June 30, 2012 12:00 AMComments (5)
[PHOTO OF AQUINO AT 2011 SONA: Message last year-- Noynoy's message was loud and clear. Please stop this noynoying. It does not make sense. Peace.]
MANILA, Philippines - There will hardly be any fanfare as President Aquino marks his second year in office today but Malacañang released excerpts of a book saying the Chief Executive was leading the Philippines to become the next “tiger economy.”
In his book “Breakout Nations: In Pursuit of Next Economic Miracles,” Ruchir Sharma wrote that “at long last the Philippines is on the road to becoming part of the elite group of tiger economies” primarily due to the leadership of its new president.
Deputy presidential spokesperson Abigail Valte said there were no scheduled activities for today unlike last year when the President had a town hall-like meeting to discuss what he had done so far.
Valte and presidential spokesman Edwin Lacierda earlier said the President would discuss his achievements and his plans for the country during his State of the Nation Address on July 23.
But the Palace and even the President himself had been citing various good news as the administration marked its second year, including improved social services, more infrastructure projects and better economy.
Yesterday, Malacañang released Sharma’s observations in his book, starting with the title: “The Philippines is no longer a joke.”
“Now at long last, the Philippines looks poised to resume a period of strong growth. The president, Benigno ‘Noynoy’ Aquino III, probably has enough support, and looks likely to generate just enough reform momentum, to get the job done. The Aquino name is still virtually synonymous with the promise of change,” Sharma said.
Sharma said Aquino was originally dismissed in foreign circles as an unimpressive 51-year-old bachelor who had lived most of his life with his mother and had not made much of a mark in a low-profile career as a Philippine senator.
“However, Filipinos saw him as an honest figure who could deliver on the Aquino mandate for change and they were desperate after nine years of drift and decay under outgoing president Gloria Macapagal-Arroyo,” Sharma said, adding that following his mother Corazon’s death in 2009, Aquino won the presidency on a wave of public sympathy.
“His victory margin was unprecedented and his task daunting at a time when it seemed like the whole country was in disrepair,” Sharma said.
Officials have been citing foreign reports noting that the Philippines can be resilient amid the global financial crisis due to the situation in Europe and the United States.
The Palace cited a Wall Street Journal report saying only four economies were projected to weather the European economic and financial crisis – Australia, China, Indonesia and the Philippines.
“The Philippines is better prepared than in the past to withstand a downturn with a stronger government balance sheet and a robust domestic economy. Foreign reserves are high enough to fight capital flight,” the WSJ said.
The WSJ said other countries like Singapore, Malaysia, Thailand and Vietnam would feel the brunt of the euro meltdown due to their exposure to European banks and trade as well as investments.
Meanwhile, labor center Kilusang Mayo Uno yesterday condemned President Aquino for allegedly making the condition of workers and the poor even worse on his second year of presidency.
KMU marched with other organizations under the umbrella group Bagong Alyansang Makabayan to Mendiola, citing the acronym “P-NOY” as “ Pahirap, Nanlilinlang, Oo nang oo sa Kano, and Yumuyurak sa karapatan.”
“Workers’ wages are more depressed than before, contractual employment is more rampant, and joblessness is more widespread. Workers do not have anything to celebrate after Aquino’s two years in power,” said Elmer Labog, KMU chairman.
“Aquino has even implemented major policies that will further press down the value of the country’s labor. He has been a pest to workers and a blessing to big capitalists,” he added.
KMU cited the two-tiered wage system which means a wage cut and wage freeze for workers, the Labor Department’s Order No. 18-A Series of 2011 which legitimizes contractual employment, and the K+12 program in education which will confine the youth to contractual employment.
“He has repeatedly deceived the people in claiming that he is going after Gloria Macapagal-Arroyo for her grave crimes. Two years into his (Aquino’s) term, Arroyo may post bail to leave her comfortable hospital arrest,” Labog said.
Labog said the Aquino government has failed to seek the conviction and jailing of the former president.
“It was quick in ousting chief justice Renato Corona but excruciatingly slow in going after Arroyo,” he said.
The labor center also slammed the President for fast-tracking the return of US bases into the country and for violating human rights.
Labog said Aquino has used China’s assertive statements and actions to try to justify intensified US military intervention in the country.
He has also magnified the US’ promise of support to sidetrack the danger to the lives and livelihood of Filipinos and the insult to national sovereignty brought about by greater US military presence, Labog said.
“We vow to hold even bigger protests on the President’s third State of the Nation Address in which we expect him to weave more lies about the country.” - With Sandy Araneta [PHNO: READ REVIEW OF THE BOOK 'BREAKOUT NATIONS' AT THE OPINION SECTION]
Chief News Editor: Sol Jose Vanzi
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