Let’s dance the Chacha

I attended the first Senate committee hearing on Charter change a couple of weeks ago. It was interesting in that each of the speakers, who were experts on the Constitution, focused on a change in the political system—with a strong bias to going parliamentary. The economic sections were dismissed out of hand; changes there are thought unnecessary.

I have the opposite opinion. I don’t think that changing the political system will change anything. On the other hand, changing the economic sections could revolutionize the country. The single biggest problem in the Philippines is poverty. Give everyone an income in excess of US$5,000 (P220,000 annually), and marvel at the change that it will do for the people.

A change from presidential to parliamentary or unitary to federal, as was suggested, will give is the same politicians, the same families, the same political culture. The same people will dominate in the same old ways. A changed system won’t change anything. If we go parliamentary, we’ll probably just have a revolving-door prime minister as others jockey for power. So there would be even less stability than now with a fixed-term president.

I personally prefer a parliamentary system, even one that is predominantly but not wholly (as the excesses exhibited by the Cotabato governor shows) federal. But it needs political discipline—a two-party system where loyalty to a party is a constant—that just doesn’t exist. And this won’t change, too, by just changing the system. We would also need governors and mayors who can consider the national interest in guiding their local electorate. These people should also have management experience.

But if you change the economic conditions, then you’ll see positive change. The Constitution was written in 1986, 25 years ago. In the 1986 discussions of the Constitutional Convention, it was decided that foreigners should not be allowed to influence the Filipino public so foreign media was banned from operating in the Philippines. This fine in 1986; the Internet didn’t exist then. But this is meaningless in 2011. I can tune in to CNN anytime, or download the Asian Wall Street Journal should I wish to. They can say what they like about the Philippines, they can influence should they wish to. Today it’s in your living room at the flick of a switch (sorry “push of a programmed button”). CNN can dominate you without trying. So why not let them have an office here?

Another prohibition that makes no sense is to not allow foreigners to practice their profession. For law, I’d agree. We’ve got enough lawyers (I’m hesitant to say too many as I might upset some of my lawyer friends—and they might sue me), but we have an extreme and very worrying shortage of mining engineers and geologists that could hold back the exciting growth this sector promises.

But that’s not the point. Why can’t a professional practice his profession here? Filipino professionals are excellent. A foreigner is no threat to them and they can hold their own against anyone. Just ask all those Filipino professionals who practice their profession in someone else’s country. And there’s that same damning point: Filipinos can practice in another country, but that country’s professionals can’t practice here.

The entitlement to security of tenure of workers should be deleted. Now I know there’s very strong opposition to this, but it’s opposition that comes from the one group that would most benefit, the workers themselves. Management will not arbitrarily dismiss an employee. If it dismisses an employee, either the job position is no longer needed, or the employee has not done an adequate job. So he gets replaced with someone who can. There is no job loss—that’s real security of tenure. The beauty of it is that an essential message is given, you need to work well to keep a job. So if you lose your job, you’ll work harder next time, while the company’s performance improves because a more competent worker is now doing the job.

We need to be providing the best environment for Filipinos to get and keep jobs. Apart from removing security of tenure (as being anti-worker), the minimum wage perhaps needs to be better defined—but I’d need to be convinced it is indeed beneficial to have it at all. However, most importantly, if it is kept, it should be defined by law, not embedded in the Constitution. The Constitution should set general parameters that can last a century or two. Laws should cover current conditions and specific points.

Today there are no (economic) borders in the world, except as arbitrarily dictated by a country’s leaders. Or, in our case, by an overly restrictive Constitution. The Constitution should establish the general principles and grand objectives that a nation should strive for in a general way that can stand through time. Specifics of meeting those principles should be defined by law, law that can change to adapt to changing conditions.

But think of this: over eight million Filipinos have had to leave their families, separate from their spouses to seek a living overseas. In many, many cases that worker living overseas is working for a foreign company. Wouldn’t it be far, far better (and kinder to the family) to bring the companies here?

In 1986, we wanted to protect Filipino businesses. Today they can successfully compete against anyone, and Filipinos need jobs. Then there was a strong protectionist stance, today there’s none of any significance. Closed, protectionist economies quite simply don’t work, and I challenge those who think they do to give me some examples. I’ll give them just one to make my point: Korea. Open South Korea is one of the world’s most dynamic countries with a per capita GDP of $28,000. Closed North Korea is one of the world’s unmitigated disasters. No one knows its per capita GDP, or even if it has one. Some guesstimates place North Korea’s GDP per head at $1,700 only. But it’s the same people, with the same ethnic background.

I can’t even put up a table comparing the economic figures between an open economy (of which the United States is the leader) and a closed economy because there are only two closed economies in the world today—North Korea and Bhutan. The rest are open or semi-open economies. China is now obviously an open economy, having joined the World Trade Organization years ago. It has taken off dramatically since it opened up. Vietnam is opening up too, and has been competing aggressively for foreign direct investments during the past five to 10 years. It has overtaken the Philippines. Which all proves that a closed economy is an archaic concept that, quite simply and provably doesn’t work today.

Perhaps in the 1950s, protectionist policies made sense (although I’d argue that too). Today, they make absolutely no sense in a world where the farthest place is less than a day away. Where information is a mouse click away. Where even a verbal command accesses the world.

You may not believe it, but the fantastic technological change we’ve seen in the past 20 years is just the beginning. The world is becoming totally interrelated and interconnected. Protectionist societies just won’t survive.

Someone once likened the change in society to the speed at which man could move. For hundreds of thousands of years man could run at maybe 15 kilometers per hour. Then he jumped on a horse, and it rose to 45 kph. The train advanced this to 80 kph and the soon-to-follow car to over 120 kph. In 1920 the first aeroplane took flight, with people in it, it reached 300 kph. Today the Columbia rockets astronauts into space at 28,000 kph.

Fifty years ago, I had a record player playing 78s (if you’ve any idea what those are). A couple of years ago I had a stack of CDs. Today I have a cellular phone-sized i-Pod with about 1,000 CDs in it, and it’s nowhere near full. And that’s just the beginning. This week, the second i-Pad is out, scant months after the first revolutionary one was introduced.

There is, indeed, a need to review the Constitution—but it should focus on the economic provisions as these are some of the root causes of our economic problems. These restrictive provisions have essentially shaped the inward looking and “nationalistic” economic policies of the country for decades. They are major barriers to economic progress as they have made doing business here costly and limited the entry of foreign capital needed to spur business, generate jobs, provide income and ultimately alleviate many Filipinos from poverty. –Peter Wallace, Manila Standard Today