“Yet impressive GDP growth was largely driven by debt-fueled private consumption and property investment, which included awarding big contracts to fast-growing and highly leveraged construction firms. Investment in industry, on the other hand, has languished. The government has shown little interest in encouraging the building of new plants and attracting big industrial investment from abroad—which should be meat and drink to a land with industrial ambitions.
“What is more, too much easy money (thanks to America’s ‘quantitative easing’) flowed into the country. Quicker returns were to be had in financing infrastructure and property than from investing in industry.”
This could have been written about the Philippines. It wasn’t; it was (with minor amendments) in an article in the Economist (Jan. 11) about Turkey. But much of it could equally apply here.
I’ve written often on this, but it continues to bother me because my concern, and the concern of many, many other observers, remains. Real action to really create jobs just isn’t there. Oh, the promises are, the intent is, but the action isn’t. The factual numbers tell you that. More people without jobs tell you that.
Now this isn’t all some weakness of the government; the legal system and society as structured must also accept much of the blame. You can’t win a government contract without a loser taking it to court—and the court accepting it. Or well-intentioned but misguided critics blocking an intended project. The Mactan controversy today proves my point. The Philippines has become a far too litigious country and, worse, has a Supreme Court that just doesn’t understand business and puts legal technicalities ahead of societal benefit. No government can win against this. No society can blossom when the legal system stifles it. (I can give and have given numerous examples of this if anyone wants to challenge it.) Congressmen have threatened impeachment of the whole Supreme Court—an unprecedented move and one that won’t prosper. But it highlights the growing concern over the high court’s decisions.
As to the administration, let me take one example to drive home the much wider situation of intent versus action: the international airport. It’s been 20 years since Naia 3 was proposed and still it’s not fully, legally opened. This administration has now delayed it even further by challenging a court-ordered payment to the contractors. Maybe the amount can be questioned, but the cost of not complying is far higher than whatever it might (or might not) be reduced to, as the last 12 years have proven. Just pay it and get on with it. Even when it is concluded, the airport will still be one of the poorest in the region. And still there’s only one runway when a second one could be built with strong political will and a Supreme Court that supports it by agreeing that the constitutionally mandated right of eminent domain does, in fact and action, override any residential rights as long as it’s with proper remuneration. (I’ve suggested payment of 50 percent, even 100 percent, over market value for the land; it would be cheap.) Then finally deciding on Clark (it’s too far) or another location, as proposed by Ramon Ang. But what is necessary is to decide and do, not endlessly discuss.
If I sound unfairly harsh, consider this: In a span of 20 years, Malaysia has built at least 10 new terminals with capacities ranging from 800,000 passengers per annum (ppa) to about 100 million ppa. Upgrading existing terminals took three years at most to complete. Indonesia has built at least six new terminals with capacities ranging from six million to 22 million ppa. Our neighbors recognize that international travel is growing exponentially and are preparing for it. If they can do it, why can’t we? We’re going to be left behind—again. Mon Jimenez’s dream of 10 million tourists won’t be possible because planes will have nowhere to land. Naia 3, along with five other small terminals, can only handle a total of 8.1 million ppa, not 10 million.
Let me go back to my previous point: that the Philippines is a litigious country. The underlying problem is that Philippine society has adopted the highly litigious American system into a personalistic, hierarchical society. There couldn’t be a worse combination. You can’t get anything done without someone blocking it—too often successfully, or at least so as to create long delays.
President Aquino is determinably trying to break the corruption culture. He’d do the country a world of good if he’d try to break the litigious culture, too.
Let me give you an example from a joke that is built on reality:
Johnny and Mark get into a fist fight at school.
1960-Crowd gathers. Johnny wins. Johnny and Mark shake hands and end up best mates for life.
2010-Police called, arrest Johnny and Mark, charge them with assault. Both are expelled even though Mark started it. Both children attend an anger management program for three months. School board implements a bullying prevention program.
We need to go back to 1960 where things could just be done. The President should challenge the courts, make decisions, let antagonists sue, then fight them in court while the project goes on. Ignore—yes, ignore—misplaced TROs. There’s no place for them in a developing country.
It’s time some radical steps were taken. This is one of them. The people need jobs, not TROs.
I can go on and on but have no space. Just take it as a given that so many actions haven’t happened and the number of jobless just continues to grow. And will continue to until the government takes direct action to address the many outstanding issues and finishes them. With a court system that supports that action.
NATO? No Action, Talk Only.