Survival mode

In her State of the Nation Address today, President Arroyo will reject calls to scrap the value-added tax on oil imports. This is the SONA part where she will stand against populist moves, as Palace officials put it yesterday.

The President will then announce the many subsidies, mainly for the poorest of the poor, that will be funded from VAT collections. This is the “caring administration” part – reportedly the theme of the SONA.

She is expected to promise that the nation will survive the food and fuel crunch, which she thinks is worse than the Asian financial crisis that struck in 1997.

There is no doubt that the country will survive. Filipinos are a resilient  people, and it takes so little to make us happy. We have perfected the art of grinning and bearing suffering.

The question is where the country will be situated in the Asian economic hierarchy by the time noon of June 30, 2010 rolls around.

We have been on a protracted survival mode. Under the watch of Gloria Macapagal-Arroyo, our national competitiveness has steadily dropped in all international surveys. Under her watch the country has dropped far behind Thailand and now even Indonesia and Vietnam in attracting foreign direct investments (FDI).

This situation continued in the first six months of the year, with FDI dropping by nearly 50 percent, according to official records. Cambodia, whose tourism industry is booming and which is competing with China in offering low-cost manufacturing, may one day overtake us in luring FDI and in economic growth.

Under the President’s watch, the number of Filipinos working overseas has also reached a record high, with more continuing to pursue the Filipino dream of leaving their own country.

The billions of dollars remitted annually by those workers make the peso strong and account for a hefty chunk of economic growth figures. But the continuing exodus is also one of the biggest indicators of economic hardships; the benefits of economic growth are not trickling down.

All is not rosy in this exodus. The country is now suffering from a continuing brain drain. We’re running out of doctors, nurses, teachers, engineers, pilots, workers with specialized skills for many industries – the human resources needed for economic development.

The Philippine diaspora also has its social costs: children growing up without parents, OFWs traumatized by abuse at the hands of employers, broken families.

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It surely isn’t just coincidence that in recent years, the Philippines has consistently ranked low in all international surveys on transparency.

The administration likes to point out that all the corruption allegations under President Arroyo’s watch have yet to be conclusively established in court. But this does not prove innocence, and is largely due to the weakness of the country’s judicial system. Also, those behind the Corruption Index take the Philippine government to task not for engaging in specific cases of corruption, which could take decades to prove with finality in this country, but for not doing enough to promote transparency.

When she does what she does best – namely implementing fiscal discipline and tackling economic problems – Gloria Macapagal-Arroyo can show conviction and leadership. This is the no-nonsense workaholic on whom the nation pinned such high hopes for change when she replaced Joseph Estrada in 2001.

Too bad even the nation’s best and brightest eventually get swallowed up by a system that rewards fealty rather than merit. This is a system where the best players learn quickly that if you’re going to steal, you better steal big, because then you have a bigger chance of getting away with it.

This is another thing that has been institutionalized over the past seven years: the failure to hold public officials accountable for official acts. Sure, an anomalous project gets scrapped here, a public official resigns there. But overall the failure to instill accountability in government has developed a culture of impunity that will take years to eradicate.

Patronage politics, the absence of a merit-based social system and the rule of law, crony capitalism and the corruption of weak democratic institutions are likely to put the country near the bottom of the Asian totem pole, ahead of only Laos and Myanmar.

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The task of cleaning up after nine years of this administration will be enormous. The Chief Executive, who had hoped to be remembered simply as a “good” president, will instead be remembered for “Hello, Garci,” the fertilizer scam, ZTE and Northrail, unexplained killings and disappearances.

There are the smaller matters: an unknown company with paid-up capital of about P65,000 bagging a coal supply deal worth almost P1 billion, thriving businesses in used vehicle importations as well as smuggling of oil and motorcycles.

The investment climate is so bad one of the country’s top industrialists is downscaling operations in all his companies and setting his sights on further expansion instead in China.

Another top industrialist as well as a banker and real estate developer have moved many of their assets to Australia.

The buzz is that certain individuals implicated in large-scale corruption are also preparing to relocate to hospitable countries in 2010, taking their money with them.

They will be carrying on a tradition of pillage, started by the Spanish bureaucrats who were sent here during the colonial period, enriching themselves and then returning to their country to enjoy their wealth amassed from Filipino suffering.

The tradition was continued by the Marcos regime, which stashed its billions in overseas accounts.

Instead of transparency, we have a perverted application of executive privilege, upheld by no less than the Supreme Court. Even our culture of mendicancy has become tainted with corruption: foreign aid, where auditing and accountability requirements are relaxed, has become a favored source of fat commissions.

We are giving democracy a bad name. As surveys have shown, many Filipinos would leave the country if they see a good opportunity.

This is the state of the nation today. Can President Arroyo still make a difference?