Tuesday, December 13, 2005

Wanted: Statesmen and masochists (Or why should we consider monarchy)

In the last few months, experts and pundits have been debating whether or not the Philippine should shift from the presidential to parliamentary form of government. It is clear however both parties are missing the real issue as to why Philippine politics has been prone to gridlock.

Advocates of parliamentary form of government say the Philippines has been stuck with the presidential system for so long and Filipinos have nothing to show for it economically. The country has been debt-ridden, thus preventing it from paying for vital economic and social services. It has been suffering from fiscal crisis, from graft and corruption, ineffective governance, corrupt bureaucrats. All these problems emerged under a presidential system.

Those who love the presidential form say there’s nothing wrong with the system per se. The problem is with the crooks capturing state power. If we could get the right people into office, we could make the presidential system work. It is more democratic because the president is directly elected by the people.

My view is that both perspectives miss the real issue. Yes, the country’s politics is prone to gridlock. But that has something more to do with how pervasive the impact of politics is in the country’s economic life. It’s prone to paralysis because of one single fact—that wealth creation in this country is not done through economic means or entrepreneurial skill but through extra-economic means: bribery, connections, government subsidy, high tariff walls for favored industries, tax holidays for favored companies, pork barrel, and plain graft and corruption.

Do you ever wonder why it takes three dozens of signatures for an entrepreneur to set up a simple photocopying business? That’s because bureaucrats and politicians in power from top to bottom layers of government want to maximize return for their “investments” (i.e. campaign expenses). Call it rent-seeking, ersatz capitalism, bureaucrat capitalism, predatory state, or semifeudal or plain graft and corruption, whatever—they are all one and the same and it has been a profitable enterprise for many crooks in government since the dawn of Philippine history.

Fertilizer scam? Hello Garci? Jueteng? They are just tips of icebergs. That’s why politicians of all shades of virtues—or lack of it—are perpetually fighting tooth and nail to capture, recapture, and maintain political power.
Let’s accept it: politics is necessarily Darwinian, survival of the fittest. Checks and balances. That is good for society; just look at those perpetual struggles in the animal kingdom for the status of an alpha male. But when you put in economic and financial element—nay unadulterated greed—in the political equation, that’s where trouble comes in because the political system starts attracting all sorts of sleazy elements. The crooks in power will cheat, cajole, threaten, and bribe to maintain power. Crooks outside the corridors of power will also cajole, lambaste, block, and revolt to capture power. Former Singapore Prime Minister Lee Kuan Yew called it “exuberance of democracy” but it’s really nothing but plain and simple shoot-in-the-foot.

All those who want to reform the Philippine politics and economy should therefore strive to remove the nexus between politics and the economy. This policy reform objective could be achieved through measures including low and neutral tariff rates (to discourage smuggling as well as the incentive to make deals with Customs officials), the removal of the pork barrel system, opening up entry and exit of all businesses including utilities and telecommunications without having to acquire franchise from Congress, and lowering of corporate taxes coupled with the removal of fiscal incentives, among many others. The central idea is to prevent political motivations to encroach in people’s economic decisions, subject to certain limited criteria such as environmental regulations and national security.

We should adopt the concept that doing business or engaging in entrepreneurship is an inalienable right on par with our freedom of assembly and speech as well as of pursuit of happiness. That way mayors, governors, and bureaucrats will not have any power to put barriers against people’s entrepreneurial energies. You remove political intervention in economic decisions and you can see that “public service” will only attract two types of persons, either statesmen or masochists, and that will be for the good of the country.

Do we hear these reform issues from advocates of either presidential or parliamentary form of government? No. Failure to address these issues would render the debates on the form of government meaningless.

As a last resort, maybe we should just think seriously about the proposal of Fr. Joaquin Bernas, the country’s leading constitutional expert from the Ateneo de Manila University, and probably the wisest Jesuit in the land. When asked about the best form of government for the Philippines, Father Bernas answered with great confidence: “I believe the best form of government is monarchy—for as long as I am the king.”

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