- The Washington Times - Saturday, May 15, 2004

It is hoped that the Philippine national elections held on Monday will add some stability to America’s troubled distant cousin. As it stands, the peso is at all-time lows and foreign investment has all but dried up. Islamic separatists in the south continue a decades-old civil war that national troops cannot control. Vote-counting is behind schedule due to myriad problems at ballot boxes across the country. If she is elected to a new term — and early returns suggest that she will be — President Gloria Macapagal Arroyo needs to make good on the promises she has not fulfilled over the past four years.

One of her most pressing challenges is to make the business climate more hospitable to outside investors. According to Manila businessman Michael Alan Hamlin, “Mrs. Arroyo has promised to rewrite the present protectionist constitution. Liberalization and competition would provide significant benefits that don’t exist now, such as value-added investment, better jobs and lower prices.” More dependence on the private sector is essential to break away from the habit of basing anti-poverty projects on public works, which are notoriously inefficient as funds are siphoned away to graft. A majority of Filipinos live on less than $2 a day. The money needed to dramatically improve the quality of life will only realistically come from foreign investors.

During the past two years, foreign investment in the Philippines plummeted from $1.8 billion in 2002 to $319 million last year. To turn that around Mrs. Arroyo will have to get serious about cleaning up systemic corruption. When she was installed as president by the military after her predecessor Joseph Estrada was ousted on corruption allegations, Mrs. Arroyo said that cleaning up government graft was her top priority. However, one of her first cabinet appointments of a notoriously ethically challenged man sent a message to the nation’s corrupt business elite that the new president was not going to rock the boat.

To her credit, the president did institute lifestyle checks for public employees. The problem is that investigations have concentrated more on lower-level officials than department heads. The military is one of the most corrupt institutions in the country, yet the armed forces brass was left conspicuously exempt from the lifestyle-check policy. Military corruption seriously impedes the war against Islamic radicals, which further scares off foreign investment.

If she does come out on top, one significant advantage of winning election is that Mrs. Arroyo won’t be as beholden to the military because she will finally have a mandate from the people, giving her presidency a democratic legitimacy and authority she didn’t enjoy before. This will make clamping down on official excess easier, if she decides to do it. The security and prosperity of the Philippines depend on the president using her mandate for real reform.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide