This is a re-posted opinion piece.
How should one rate Gloria Macapagal-Arroyo’s economic performance during her nine-and-a-half year reign? My short answer: a dismal failure. Her nearly 10 years in office turned out to be a decade of lost opportunities to rebuild political and economic institutions and to catch up economically with our ASEAN neighbors. Arroyo left behind an economy that is less competitive, a public finance that is weaker, more heavily indebted and with poorer capacity to generate revenues, and, finally, economic and political institutions that are weaker, corrupt and dysfunctional.
I gave this review before a group of faculty and students, government workers, and media practitioners last Thursday at the National College of Public Administration and Governance of the University of the Philippines in Diliman.
I started with the Athenian Oath of the City State. It states: “We will never bring disgrace on this our City by an act of dishonesty or cowardice. We will fight for the ideals and Sacred Things of the City both alone and with many. We will revere and obey the City’s laws, and will do our best to incite a like reverence and respect in those above us who are prone to annul them or set them at naught. We will strive increasingly to quicken the public’s sense of civic duty. Thus in all these ways we will transmit this City, not only not less, but greater and more beautiful than it was transmitted to us.”
Indeed, the responsibility of any leader — whether the president of the parent-teacher association, or head of a civic organization, or town mayor, or congressman, or senator, or President of the Republic — is to transmit the organization or country that he leads “not only not less, but greater and more beautiful than it was transmitted to him.” This, I propose should be the basis for evaluating any leader — GMA or President Aquino III or whoever will succeed him.
Some caveats
First, no government can claim full credit for how the economy worked during his its because a great deal of the economy’s performance depends on factors that are beyond the control of government. Economists call these “exogenous factors” or “external shocks.” These include global growth or global recession, good or bad weather, geopolitical crises that could bring about high oil prices.
The 9/11 twin tower bombing incident maybe considered external shock as it brought about a low-interest rate regime. This brought about the boom in the early and mid-2000s and ended with the Great Recession in 2008 and 2009.
Second, comparing growth rates in one President’s term with others is inappropriate at best and misleading at worst. Each President is supposed to build on what his predecessor has done. Consequently, more is expected of those who came later than those who they preceded.
Mrs. Aquino restored democracy, reformed the bureaucracy, empowered local governments, limited the role of the public sector, and so on. But she failed to address the growing power needs.
The energy crisis at the start of Ramos’s administration gave him an opportunity to shine. He hit two birds with one stone. He fixed the power shortage and raised public spending to perk up the wobbly economy. He deregulated the telecom industry which provided the basis for the development of the BPO industry. He exited at the height of the Asian financial crisis.
Coming in the middle of the Asian economic crisis, Estrada perked up the economy by investing in public infrastructure. He focused on agricultural development and peace and order. He also prioritized the budget for social services and public infrastructure. He declared a moratorium on the creation of SUCs and it held.
Third, there is the matter of uneven tenure of office. Mrs. Aquino served for almost seven years, Ramos six, Estrada two and a half, and Arroyo nine and a half. More is expected of Arroyo.
Ten years is a long time to transform the Philippine economy into a modern one. Ten years is enough time to strengthen its weak political institutions and processes.
The promise and the reality
The performance of any administration should be compared with what the President promised to achieve. This is a fair comparison. At the time of the promise, he knew fully well the initial conditions, the resources available, the existing technology, and the capacity of his own men.
During her last six years, Arroyo surpassed 1 of 6 target years (2004, an election year) and barely exceeded the target for another one (2010, another election year). For the rest, she missed her GDP targets — miserably in 2008 and 2009.
It is the responsibility of the any administration to reduce poverty. The expectation is that the poverty situation should improve every year. The commitment of the government to the international community under the Millennium Development Goals is to halve poverty between 1990 and 2015.
With the latest poverty estimates, poverty has remained practically unchanged during the entire Arroyo reign. The probability of halving poverty, between 1990 and 2015 was practically nil.
Among ASEAN-5 countries, the Philippines has the worst record in poverty reduction. For Thailand and Malaysia, poverty incidence was down to single-digit levels as early as 2008 and 2007, respectively. Poverty incidence among the population was 26.5 for the Philippines in 2009, 14.5 for Vietnam in 2008, 14.2 for Indonesia in 2009, 8.5 for Thailand in 2008, and 3.6 for Malaysia in 2007.
The Philippines made progress in achieving some MDG targets such reducing by two-thirds infant mortality rate, increasing the land area covered by forest, increasing access to safe, drinking water. There is near certainty that the Philippines will miss the goal to reduce by three-fourths, between 1990 to 2015, maternal mortality rate.
The goal to wipe out TB prevalence per 100,000 population has worsened, from 246 in 1990 to 280 in 2009.
During the last decade, the Philippines has the lowest investment rate among ASEAN-5 countries. Not surprisingly, when Arroyo left Malacañang, the Philippines was ranked 56 among 57 nations in terms of quality of infrastructure.
(To be continued)
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By: Benjamin E. Diokno – Core
Source: Business World, Nov. 22, 2011
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