Tuesday, January 10, 2006

Unleashing the Revolutions from Within and Beyond

We are happy that Cristina "Tinay" Bugayong (12 years old) got all those scholarship offers and washing machines after she found money (P300,000 worth of cash and checks) and returned it to its rightful owner. Her family is apparently hard-up. Yet she returned the money knowing that the same amount could have provided her family several days’ supply of basic needs like food. Definitely a good girl she is. She deserves all the media accolades and the spectacle that personalities and politicians created in order to ride on her new-found fame.

But wait a minute! Why should we go gaga over her when—poor or unpoor—she really has to return the money for the simple reason that it’s not hers?

Maybe it was a big deal because many of us have grown so cynical that we always assume that a person will always keep what he or she finds of value in some unlikely places all the time. So when the girl behaved otherwise, we were so surprised, even shocked. Some of us might have even derided her and her family for being “stupid” enough to return the money. Kuwarta na, naging bato pa! [It’s money turned to stone!] In a less insane society, the act of returning an item not one’s own would have been no big deal because people are naturally expected to behave honestly and in good faith without the expectations of receiving material rewards or extensive television coverage.

If there’s one thing that this Tinay episode has proven, it is that virtue—including honesty and good faith—seems to have become a rare commodity in this country. Yes, indeed, we should thank her for returning the money. But we should thank her more for exposing who we really are as a society and for telling us what changes we should take so we could catch up with the rest of the fast-growing world in the ever accelerating race to progress.

Don’t you ever wonder why we can’t seem to grow like our Tiger neighbors in the Asia-Pacific Region? It’s for this lack of honesty that we can’t seem to build good roads and bridges. Each one from top to bottom of the bureaucracy would always have his or her own cut in the infrastructure budget. It’s for this lack of honesty and good faith that investors are avoiding our shores. They know that they can’t trust our legal contracts as politicians and bureaucrats tend change their minds even before the ink used to sign the contract has dried.

Or maybe there are still a lot of honest people in our midst. Who knows? But if each day, one scam piles on top of the last one (e.g., Hello Garci, fertilizer scam, Piatco, overpriced highways, among many others) without some crooks going to jail for it, one could not simply help but be cynical. And this attitude easily rubs on to outsiders. These days, a lot of would-be investors perceive, rightly or wrongly, that many of our institutions, again for lack of honesty and good faith, are not doing their jobs. Many cops are not chasing the bad guys; they are with them. Soldiers are supposed to be chasing rebels and terrorists but some of the military officials are actually selling bullets to rebels and terrorists. Politicians are supposed to serve the public but are milking the bureaucracy for cash by favoring some vested interests. Many businesspersons are not creating wealth by entrepreneurial skills but by political deals. And priests and bishops are doing partisan politics when they are supposed to evangelize and refine our souls.

Of course, other factors that prevent investments from flowing abundantly in our direction are the limits and constraints we put on certain industries. We use all sorts of barriers: high tariff walls, negative list, nationality requirements, non-tariff barriers, customs regulations, phytosanitary regulations, among many others. And we use all sorts of excuses for these barriers—protecting “local” industry, infant industry protection, ensuring national security, environmental regulation, market failure, protecting local jobs, “nationalist industrialization,” among many others. We have been using all these barriers against entrepreneurship with the same excuses in more than half a century yet we have nothing to show for it. This is because those regulatory barriers are intended for nothing else but extorting bribes and facilitating smuggling.

Certainly the challenge is for us to make Tinay irrelevant. We shall have achieved this when corruption no longer pays and there are few opportunities for it. In the old days, people would storm the Bastille, send the bastards to the guillotine, or line them up against the walls and shot. This is no longer fashionable. But we can have the same “revolution from within” through gentler ways. We can start with schools by improving curricula, in churches by encouraging priests to preach conversion rather than hate and politics, in governance by ensuring transparency and by not allowing pretenders and usurpers to capture and hold political power, by strengthening the judiciary and other social institutions like media. Certainly, civic society could help through their old and tested “conscientization” or “arouse-organize-mobilize” techniques and alliances with reform-minded legislators and politicians (if ever there is such a creature!).

We should encourage progrowth policies, e.g., low and neutral tariff policy, replacement of fiscal incentives with low corporate tax, removing unnecessary barriers to foreign investments, introducing more competition in banks and services, and removing all barriers to entrepreneurship. We should also go for greater connectivity with the rest of the world through greater trade, engagements in multilateral institutions, and accelerated adoption of information and communications technologies. That way, we could also achieve what Thomas Friedman, author of the bestseller The Lexus and the Olive Tree, calls a “revolution from beyond” by imbibing the best practices, the international standards, and the rules-based systems that made rich countries practically graft-free and rich. How? Because foreign investors will always tend to demand transparency, internationally-accepted standard, and predictable rules before they would put their investments here. Even international institutions these days demand improved governance standards before granting loans for development projects.

When there is sustained growth generated by policy reforms and greater connectivity with the world, the ranks of the middle class expand and, according to political scientist Thomas Barnett, there would be more people to forcefully demand transparency and better governance. They have all the incentive to be vigilant for fear of losing their new-found affluence to corruption and rent-seeking. And isn’t it that in history, societies experiencing long-term growth—according to Benjamin Friedman’s recent bestseller The Moral Consequences of Economic Growth—tend to be virtuous?


Anonymous said...

I was equally elated on hearing that news, Dave. Shows that not all is lost in this country perceived to be the no. 2 in the most-corrupt list. Or is it number 1? :)

But I was more elated on that senior inspector (I forgot his name) who had been continually exercising his rightful duty as a good and honest cop through the years.

He is the best one to be exemplified in my opinion.

Btw, I think it was in an old issue of the Reader's Digest that we are not that totally dishonest among the countries they tested and surveyed. I believe so as I really practice returning things that are not mine.

Dave Llorito said...

I was just being bitchy about that actually and was highlighting the bigger issues. yes, we are not number 2 or 1. Africa or Indonesia is worse or worst. but i guess that's not the point. the point is we need to get rid of those baggages if we want to progress.