Sunday, 14 August 2016

"An Economy truly for the masses or still for the Elite?"

"An Economy truly for the masses or still for the Elite?"

Notes on President Rodrigo Duterte's Economic Agenda

Formulating a new economic agenda is not new at all, what more of putting some patriotic or populist flavor in it especially in a still developing country like the Philippines.

Be it Garcia's "Filipino First Policy", Marcos's "Import Substitution", to those of Arroyo's willingness to pursue "Globalisation" and Aquino's "Public-Private Partnerships", most economic policies and agendas seemed to be debated especially from those who assert protecting local manufacturers and emphasising domestic-based production to those insisting complete opening to direct foreign investments and unbridled trade liberalisation, all thinking that these policies and agendas as means to resolve economic, and even social issues such as those of poverty and unemployment.

However, there are those whom seemed to trying to make a "third way" on both protectionism and liberalisation, of the need for protecting local enterprise and willingness to open for foreign investments and enterprises, as well as the need to put an end to debt servicing as the Philippines, ever since it tries to create a fa├žade of progress and development has been debt driven for decades, and worse, tainted by corruption and of instability.

It may sound past-like, especially with some of those ideas that  are meant to be in the era where industrialisation as necessary to the developing countries for self development, describing to some as "neo-Keynesian", "Neo-Rhine Captialism", or any other description about that agenda; but, to think that the country hath rather remain contented in commerce and trade, and attempts to industrialise and stimulate domestic based production be curtailed if not restrained, perhaps the desire for genuine national development, as asserted by economists like Lichauco et al. been necessary especially in a government that is, clean and in capacity to attain and sustain such economic plans and tasks.

And that patriotic, of not a "third way" attempt, hath been planned under the present Duterte administration, via its so-called "economic agenda" introduced to the people as president-elect four months ago.

In that agenda, mostly done by economists supporting the newly-elected administration, Duterte appears to be observing policies of his predecessors while at the same time trying to deviate by "radical" means such as those of agarian reform and attempts for industrialisation. His appointment of left-wing figures as well as the people's assertion for a 'peoples agenda' during last month's "State of the Nation Address" did somehow bolster hopes of having a desire for an alternative to an economic agenda whose points rather favours big businessmen and multi/transnational interests. After all, he often saidth about being against "oligarchs".

The points, which seemed catered to both businessmen and commoners alike, are as follows:
  • Continue and maintain current macroeconomic policies, including fiscal, monetary, and trade policies.
  • Institute progressive tax reform and more effective tax collection, indexing taxes to inflation.
  • Increase competitiveness and the ease of doing business.
  • Accelerate annual infrastructure spending to account for 5% of GDP, with Public-Private Partnerships playing a key role.
  • Promote rural and value chain development toward increasing agricultural and rural enterprise productivity and rural tourism.
  • Ensure security of land tenure to encourage investments, and address bottlenecks in land management and titling agencies.
  • Invest in human capital development, including health and education systems, and match skills and training.
  • Promote science, technology, and the creative arts to enhance innovation and creative capacity.
  • Improve social protection programs, including the government's Conditional Cash Transfer program.
  • Strengthen implementation of the Responsible Parenthood and Reproductive Health Law.
It may sound reasonable at first with all its populistic intentions, if not an attempt to merge those of his predecessors and those from his (including those from his "leftist" adherents); but as according to IBON Databank, it showed that most of the policies stated at Duterte’s economic agenda as rather tilted in favor of big business, especially through the easing of foreign ownership restrictions, lowering corporate income taxes, and endorsing public private partnerships similar to those of his predecessors.
And in fact, as acording to Duterte himself, he stated that in relaxing ownership rules through a constitutional amendment would entice foreigners to do business in the country and boost jobs. The relaxation itself may include 100% foreign ownership of utilities, that is contrary to attempts for economic Dirigisme, particularly those of domestic-based "self initiative" in form of empowering domestic-based sectors such as the manufacturing sector.

That perhaps somehow made Duterte's economic policy be deemed confusing knowing that whilst assuming to be as "Patriotic" and "pro-labourer", if not "pro-smallholder" or "promising industrialist", some of his statements tend to keep policies that rather lean towards neoliberal interests, that both Landlords and Compradores trying to keep as such. In fact, the "Peoples Agenda" offered during the "National Peoples Summit" a day before Duterte's inauguration as President stated (excerpts):

"We must reassert our economic sovereignty and conserve our national patrimony. We must repudiate and oppose the neocolonial and neoliberal policies that have been imposed on us to perpetuate economic underdevelopment, aggravate the unequal ex-change of foreign manufactures on one hand and raw materials and semi-manufactures on the other hand, bound us to import-dependent consumption and sink us in perennial trade deficits and foreign indebtedness...

We must engage vigorously in national industrialization. This is the only way we can generate employment in a big way, overcome the conditions of widespread poverty and underdevelopment and prevent a large part of our labor force from leaving the country and separating from their families. The government and private sector can cooperate in establishing major industries and encouraging tens of thou-sands of small and medium enterprises around every major industry as suppliers to the main industry, product distributors and service providers to the communities...

Implement land reform as a matter democratic right and social justice, as the foundation of economic development and as a method of liberating the landless tillers, releasing capital, promoting rural development and creating a domestic market..."

The agenda offered to Duterte by various groups and mass organisations smacks of Dirgisme and Self-initiative as a nation particularly those of industrialisation and agrarian reform done by its neighbours. It tries to emphasise a state that intervenes in economic affairs in behalf of the people, particularly in imposing policies such as those of protecting local enterprise to those of nationalising utilities such as telecommunications, power, and mass transportation. After all, economic Dirigisme had made France improved its standard of living and found means to resolve crisis on employment, welfare, to those of power and other basic needs the French people demanded prior to that self-reliant policy.

And perhaps some of Duterte's economic statements (that some included in his "agenda"), may also sound having serious intentions on being "Economic Dirigist" such as those trying to reintroduce a "market-oriented yet state-intervened mixed economy" of the past, particularly those of  "National Industrialisation" besides "Agrarian Reform".

For as according to Inquirer, President Duterte expressed interest in industrialisation via heavy industry as means to create domestic-based development as well as employment:

"He said the country has to build factories and industries to generate more jobs for the people and one way of doing that is to have a vibrant steel industry.

Industrialization is key to real economic growth, Duterte said in a video outlining his economic programs as President. “We should realize our dream of having our own steel industry,” he added.

Duterte said only by shifting to industrialization that the government would be able to provide windows of opportunity to as many job seekers as possible so people would not be longing anymore to work overseas for better income."

However, his plans for industrialisation also includes direct flow of foreign and local investment, most likely the former with some "regulations" that somehow reflects the view of big businessmen rather than the people in general:

"Duterte said one way of revitalizing the steel industry is to correct some  of the country’s laws or come up with a Code of Economics.

By having this code, the country will be ready to open its doors for  business and investments, he said.

The Department of Trade and Industry also listed several ways to revitalize the steel industry. Among  the recommendations was to encourage investment in the industry by making  it more attractive for local and foreign investors through ISO  accreditation.

Duterte also lamented the bureaucratic red tape that often drives investors  away even as he said Davao City had overcome it when he imposed a 72-hour  period for processing of permits and clearances for businesses.

“We will give investors more than what the other countries are giving them,  even better,” he said."

And in it, those statements shows that despite showing some "third way" intentions, that "Self-initiative" as Duterte probably thinking of, may have also trying to curry favour with outside investment; knowing that the president, trying to assume himself as an "old school" Filipino "patriot", is trying to prove himself and to others that his economic policy an alternative or different to those of his predecessors, whose market-oriented "developmentalism" meant reliance on foreign investments if not disdain for industrialisation and policies such as those of preference in foreign ownership over utilities particularly those classified as national patrimony.
However, that same "developmentalism" brought about by trade liberalisation and globalisation advocates also meant reliance on foreign loans, hence putting a country debt strapped if not keeping domestic-based development at a snail's pace as concerned by many. And perhaps, Duterte himself may probably end becoming same as his predecessors if he leaned towards big businesses despite his "anti-Oligarch" rhetoric due to his statements that includes "Continuing and maintaining current macroeconomic policies, including fiscal, monetary, and trade policies." and "Promoting Public-Private Partnerships" that is, a basis for "Commercialisation, and Privatisation" of state-owned assets.

And since people heard various contradictions over President Duterte's economic policies and agendas, it appears to be idealistic the way he assumed himself as a "patriot" if not a "populist" or even a "socialist" as what he self-proclaimed months ago; that his economic policy smacks of reintroducing some Singaporean or French-style Dirigisme the way he opposes "Domestic Oligarchs" or even those of "American-based interests", while others looked at him as "Opportunist" due to his statements that are
But such statements does not sound what more of appear clearly as people sees the other side as still accomodating to globalisation as any other third world country dependent on the developed ones. True that there are attempts to end Contractualisation, but does it include companies owned by compradore oligarchs such as Henry Sy and Lucio Tan? True that there may possibly having wage increases for the laborers but how about consumer protection amidst increasing prices of goods and commodities? Again, the agenda is as worth debatable given its pros and cons, or to which sector does the agenda favor: is it the commoner or the elite? Is it for the benefit of all or still for the benefit of the few? Dirigisme appears to be intervening, but will that dirigisme under Duterte prevail in an economic order that favors neoliberalism, globalisation, as well as feudal interests? Thank god that there are progressives in the cabinet dealing on Agrarian Reform, Social Welfare, as well as Labour!

But Ionically, Neoliberal interests also assumed themselves "patriotic" as they insist 100% foreign ownership of utilities meant a showcase of "national development" without a need for stimulating domestic production even agrarian reform! The policies brought about by international moneylending agencies used Sounds typical for having a system stubbornly trying to keep their interests also have to assume itself populistic the way it appeased the masses with bread and circuses.

source: Rappler
All in all, the policies brought about by the present Duterte administration is an attempt to cater the elite and those of the masses. True that it appears confusing if not criticisable with most policies reminiscent of past administrations. Maybe the president tries to emphasise preferential option to the masses with free healthcare, education, as well as immediate and adequate distribution of social services while at the same time dealing with Big Businesses and Foreign Investors with various forms of "economic reforms" catered to their interests as well as those of Smallholders and Local Industrialists. It also quite appeared ridiculous knowing that despite his statements and "agendas", he also had grudges with big business, American policymakers,  and even the Left despite having latter's personages within the cabinet. The military, being subservient to interests, may have been intervening in some, if not most policies as it asserts need for intense internal security to those of opposing the left and its actions "detrimental to the status quo."

And perhaps, come to think that the agenda, in its simplest terms, appears to be made to appear sneerable through the ears. But if one may ask, is the alternative worth fulfillable? Or just a hodgepodge of promises that is meant to be broken?