Decisions have ramifications

Critics of President Aquino portray him as a weak leader, one without the power, determination, ambition—and, yes, even the ruthlessness—one normally associates with a strong, effective leader. But they may be missing something: an emerging alternative character that can be equally effective—a good heart.

P-Noy (a title he prefers as it better portrays his folksy style) is acknowledged as honest (there’s been no hint of scandal), but—and this is where it becomes interesting—is now being seen more and more as good-hearted and genuinely caring for people. He has shown this with deeds, not just with political, motherhood statements as others have done.

This could propel the Philippines forward in a quite unusual way. Because people will want to help him succeed. They’ll start to think, talk and act toward investing in the growth of the country, toward genuinely bringing the poor out of poverty. There’s a kind of trust here almost completely absent during the time of President Gloria Macapagal-Arroyo, whose scandalous behavior turned away investment. She couldn’t be trusted, so the country couldn’t be trusted. As P-Noy’s “wang-wang” ban shows, he is not interested in the trappings of power, he does not need to massage his ego (e.g., with photos on billboards).

Still P-Noy needs to be an effective executive. He has to learn that he has to make decisions that take into account all factors. He has not, we believe, realized yet that decisions and actions at the national level can’t be made in isolation and they have ramifications well beyond themselves.

For example, if you put mining on hold (to buy time, which essentially is what Executive Order 79 has done), it doesn’t just slow down the development of mines, it deprives local people of livelihood. The loss of taxes means fewer schools can be built, and less exports means fewer dollars for the kitty. And miners, those already here and those interested to come, will start to look elsewhere for more welcoming environments. (Some miners, foreign and Filipino, are in Myanmar today because of the doubts EO 79 has raised.) Potential investors in other fields wonder if it’s wise to invest in a country that can change the rules of the game after they’ve invested, so they don’t come; or worse, being here already, they leave and go to neighboring countries that understand the fierce competition for limited capital investment. The loss isn’t just short-term; it’s long-term and widespread.

EO 79 bothers me. It brings doubt into an arena where certainty must be assured. If you’re going to invest millions/billions of dollars, you want to have confidence that you’ll get a reasonable return as long as you work hard and honestly at it.

Government, through EO 79, says it wants a fairer share of the wealth generated. Fair enough, but what that will be is not stated. A 5-percent excise tax (versus the 2 percent now) has been suggested, but it must go through Congress. And with elections coming up in 2013, it could take a long time for Congress to pass a law to that effect. In the meantime, no one, except those already here, will invest. Mining activities will grind to a halt.

Who is going to spend millions and millions of dollars looking for minerals to extract if, once these are found, someone else can just walk in, take over the property and make the money? You have to be an idiot to do this. But an idiot is what the government apparently expects you to be. “First option” means just that, it’s an option someone else could take from you. I can’t understand the rationale for putting that clause in; it must be removed.

As to the other contentious issue, that of local laws usurping national law, I give P-Noy credit for calling for local law to be consistent with national law. But why this additional line: “LGUs shall confine themselves only to the imposition of reasonable limitations on mining activities”? Who is going to determine what the “reasonable limitations” are? My guess is the courts, but do judges have the necessary technical expertise to fairly determine the matter? And how long will it take? Will investors wait, or go elsewhere (which means, flight of investment capital?

As to a review of existing contracts for possible negotiation, this is an absolute no-no. Contracts, particularly sovereign contracts, must be sacrosanct. They cannot be changed under any circumstances, unless clearly in favor of the investor. To say change will be effected only when it is “mutually acceptable” denies the political reality of the power of government. Here, there are no co-equal parties arguing for a fair compromise, this is a case of a cat willing to devour a mouse if the mouse doesn’t agree to its terms.

There are other sections in EO 79 that miners won’t like though they will live with and adapt to it. But the above issues must be rethought if P-Noy genuinely does want investments to flow into mining.

Coincidental to my last column, CNN released earlier this week a report on the link between guns and death. Every year, two in every million people are killed by guns in England and Australia where firearm policies are highly restrictive. In Switzerland, which has more lenient gun policies, it’s eight gun-related deaths in every million. In the United States, where 88 percent of the population has guns (no surprises), 30 in every million people are murdered; in the Philippines, where guns are readily available but not too widely distributed because of cost, it’s nine out of every million.

Between 2000 and 2009, crime in the United States fell by 20 percent, and murder by all weapons, by 13 percent. Gun-related incidents and injuries, however, increased—by 20 percent!

The link is obvious: Guns kill!