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Nov 07

Visit pinoybigbriber.com, Now Na!

Visit pinoybigbriber.com! Now Na! Thanks to Rebolusyon2006, to Ceci da Supastar, to DPS Class 67, and to gourmet blogger Market Manila for their linking to the site!

As they say in showbiz, “in fairness,” reservations on this activity are expressed in Iniibig ko ang Pilipinas! Milder criticism (on questions of translation) in caffeine sparks.

I’ve signed two online petitions, the first calling for a snap election (a position I’ve adopted in my column, so I’m just being consistent) and another one, petitioning for clemency for Marilou Renario, a Filipina OFW facing the death penalty in Kuwait.

A hat tip to Piercing Pens for pointing to the Time Magazine article, Crisis – Again – for the Philippines’ Arroyo, which quoted me.

Now here’s a question, not because I hope it happens (I hope to God it never does) but with the following: Oil and gold soar as US dollar wilts and Asia marker Tapis crude breaks $100/bbl for 1st time and with the widely-held assumption George W. Bush is looking for excuses to bomb Iran, what do you think will happen if the lifeline of remittances that keeps our economy afloat, suddenly gets strangled or even cut?

What then, do you do in a crisis situation where the head of state depends on lavish cash-giving to maintain political support, and where a significant chunk of the population detests her? What then?

The President has no reservoir either of popularity or good will, to bank on. Her allies support her conditionally, and voraciously. People can ignore anything political because their escape route abroad has been planned. Those at home can wait for remittances. Cut off that escape route, throw a monkey wrench in the sending of those remittances, and then what happens?

The President can cut tariffs and keep the cost of oil low for public transportation. But the middle class will feel the pinch, as will large corporations with their fleets of vehicles. Transport costs for products will escalate. The sectors in the economy growing are not big enough to absorb those who suddenly have to give up prospects of going abroad, and Heaven help us if some sort of general state of war erupts in the Middle East and causes trouble, in turn, in Muslim-dominated nations. You get my drift.

You may not need a government with legitimacy in normal times but you need one when there’s a crisis that affects all sectors, including those who craved stability at all costs, because their pocketbooks weren’t affected by “political noise.”

Anyway, on to the political scene.

A shrewd observation from John Nery in his column:

The photograph showing Lakas-CMD party leaders giving the thumbs-up sign purports to show renewed “unity of purpose” forged in a summit in Malacañang last Saturday; instead, it projects an air of vulnerability. President Gloria Macapagal-Arroyo herself, in the center of the picture flanked by Speaker Jose De Venecia and ex-President Fidel Ramos, does not seem to be too pleased; we’ve seen her strike a happier pose before. Executive Secretary Eduardo Ermita is all the way on the left, almost literally marginalized. (Indeed, he is cropped out in the photo published in the Inquirer.) The lone senator in the gathering is a rookie and a lightweight, Sen. Juan Miguel Zubiri; in the photo, he is dead center, but in the political crisis that the President is working mightily to resolve, he is firmly in the periphery.

Not least, Ermita’s rival as the President’s most influential alter ego, Interior Secretary Ronaldo Puno, is not in the picture. Of course, that’s because he is not Lakas-CMD, but Kampi. But that’s precisely the point, isn’t it?

Puno, of course, has the last laugh: Kampi gave cash gift to solons–party exec. Over at b[email protected] Holdings, he has something to say about that:

Can you believe that? I don’t.

1. Why only now? Abante and Villarosa should have made that admission on the day the issue was forced out. The timing reeks of planning. After all, after Panlilio and Mendoza exposed the cash gifts to governors, the supposed source of funds admitted giving cash two weeks after the fact. And since there was no visible and audible outrage, the people has given the politicians a clear signal – rob us more, fool us more. So admitting now is just OK, right?
2. Why give money to non-party mates? You take care of your own, right? Poor Angelica Jones. (Background: the showbiz actress ran for the position of provincial board member under KAMPI. She lost, and blamed the party for not supporting her.)
3. Where did KAMPI get all that money? Mike Arroyo? Iggy Arroyo? Jose Pidal? Wow, I had no idea KAMPI is this rich. Maybe I should join the party, no? Most probably I’d get the laptop that I am eyeing. Hmm.
4. Ronaldo Puno once claimed that the money did not come from them, instead pointed to Lakas’ Jose de Venecia.

Not that Eduardo Ermita isn’t beyond a chuckle or two. Konfrontasi between Puno and Ermita had tongues wagging that Ermita was on his way out, that Puno was ascendant, and that the Batangas mafia in the cabinet were out, too: but the Batanguenos seem to have struck back -and struck a deal. They’re still in the official family and not out in the cold.

Now a conspiracy theorist might explain the “Hail, Hail, the Gang’s All Here” Kodachrome moment at the Palace in this manner, as a text message has it:

See if you can check w ur sources: gma s cptv of lakas due 2 anthr tape gvn her fri. night by nidntfied source. She ws up n abt ntl 3 am of sat. tryng 2 determine who tpd it. If gma does not hold up 2 truce, lks wl pounce on her. It dpnds how puno wl counter 2 sve queen. D war s nw btwn lakas n kampi. ermita as proxy vs puno, oppo wl jst play their role.

When I asked for clarification, the following arrived:

Apparently jueteng pay off w GMA present. Its in her house daw in Forbes. Or in La Vista.

Another source opined,

If true, Obviously k chavit galing yan. Dats d bomb he threatened to explode coz of erap pardon.

Yet another message said,

Yun tape kung jueteng di si chavit ang source. Blackmail yan and gma unlike erap will give chavit wat he wants.

But in the end, the best that text messages can provide are leads, which can lead to wild goose chases and dead ends, or the opening of a real can of worms. But there’s no need to go into conspiracy theories.

As far as the Inquirer editorial goes, it’s all posturing:

The exemplar of this progress is the increasingly institutionalized Malacañang cash bar and buffet, courtesy of the President. This Tuesday, after weeks of bumbling and confusion, the source of the half-a-million-peso cash buffet servings to congressmen was finally revealed. It was the President’s very own pet political party, Kampi, that doled out the money. Manila Rep. Bienvenido Abante Jr. claimed that Deputy Speaker Amelita Villarosa claimed in turn to have doled out the cash, and that he was surprised Kampi was giving him, a Lakas-CMD party member, money. But he said thanks for the half a million, anyway.

To be fair, Abante shouldn’t have been surprised. Party affiliation has never been so meaningless as it is now. We should point out that no president, ever, has been so promiscuous when it comes to party affiliation, thus rendering it inconsequential. Ms Arroyo is titular head of Lakas-CMD, of the Liberal Party and of Kampi. All previous presidents were content to head one party or movement at a time. But this is part of Ms Arroyo’s claims of progress.

The acerbic Manuel Buencamino also looked at the same picture Nery did, and this is what he concluded:

Those “small hurts” did not look so small when Fidel Ramos was pounding his desk protesting the pardon of Joseph Estrada, when Gloria Arroyo’s aides bribed 190 congressmen to force Speaker de Venecia to refer the bogus impeachment complaint to the House justice committee, and when de Venecia responded with an ultimatum letter to Gloria Arroyo asking her to fire her most loyal henchmen and to undergo a moral recovery, even if there were no morals there to recover in the first place.

The family disagreement looked so large and irreconcilable a split looked inevitable. But size became relative when the grand vision emerged–“unlimited power and unrestrained plunder up to and beyond 2010.”

And so the ruling family’s capos decided, “Our loyalty to our country ends when our loyalty to our party begins.”

Lakas-CMD will not split into two lines, one behind Mrs. Arroyo and the other behind the Speaker, because Gloria Arroyo made sure everyone saw who held the slop bucket.

Under Erap it was “weather-weather lang”; under Gloria it’s “pera-pera lang.”

Gloria Arroyo will not be impeached over the ZTE broadband deal. The leaders of the ruling party, their group picture splashed on the front page of last Monday’s papers, gave the thumbs up for this administration to continue with plunder, human-rights violations, extrajudicial killings and, most important of all, to keep those cash-filled envelopes coming.

It doesn’t matter that Joey de Venecia III told the truth. Not when the AFP is the AFGMA and the PNP is “Pulis Ni Pidal”; not when businessmen are under the spell of a brother of fugitive businessman Dewey Dee; not when the perfumed set continue to consider themselves and the Arroyo couple as “somos”; not when the guardians of morality, the Catholic Bishops’ Conference of the Philippines, allow themselves to be wined and dined by Malacañang.

Gloria is not afraid of civil society anymore. The only people who still scare her “are those soldiers kept in General Esperon’s jails.

And here’s the clincher: with the President saying that the bottom line is, indeed, the bottom line, of big business and the bigshots in her various pet parties, something has to give. As Buencamino says, in the continuation of his column,

Under ordinary circumstances, those soldiers, charged with mutiny and attempted coup, would be considered traitors. But these are extraordinary times, and those soldiers hold the moral high ground over Gloria Arroyo’s generals who are perceived to have turned their back on everything they learned in the academy.

And so, with each new scandal, the prisoners of Esperon gain more respect from the public and the rank and file in the military.

Now, I don’t know about you, but I don’t think a coup is the best solution to the Gloria Arroyo problem.

I have no doubt those soldiers detained in Tanay are highly principled, honest and patriotic. But a junta, no matter how pure and well-meaning at the outset, has a tendency to degenerate into a dictatorship, as history has shown countless times.

So I think it’s best for the civilian population to take care of the Gloria problem before the military becomes impatient and does it for them.

Over the weekend, I received an alarming text that confirmed rumors that the soldiers are losing patience and a bloody civil war is in the offing if civil society delays on its duty to oust Gloria through impeachment or people power.

The text message read:

“While Malacañang was loudly rejoicing over the neutralization of civilian society, a high-ranking general was quietly dispatched to Tanay to plead with the detained soldiers not to issue any more inflammatory statements against their superiors. He told them their uncompromising position was beginning to seriously affect the chain of command; the rumbling among the rank and file was growing stronger. From Tanay, the general went straight to Malacañang to report that his appeal was turned down.”

We are foolishly marching toward civil war, the most uncivil of wars, because we continue to buy the lie that human beings will tolerate injustice as long as they have a full stomach. History does not suffer fools gladly.

The deals, if anyone doubted they’ve been signed, sealed, and delivered, have their details trickling out in the headllines: first order of business, House rejects supplementary impeachment case of UNO and the second order of business is the clincher, House Ethics panel rules to clear JdV of charges.
This is just silly: Summit of 4 living presidents pushed. If thats what the officials want to do, there are two institutional means for accomplishing this. The first is the Council of State. The second, is the National Security Council.

My Inquirer Corrent (see the previous entry by John Nery, Sleepless in Glorietta) entry is on the competing presentations of the police and Ayala Corp., as well as Newsbreak’s report. Newbsreak’s article is particularly interesting, because I think nearly everyone has smelled stinky gases from the sewers of nearly all the major malls, so if methane ends up the culprit, some sort of action needs to be taken.

On to the world beyond our borders. US Senate approves more funds for RP so long as government solves killings.

In Thailand, Tycoon Politics Return to Thailand.

In The Freedom Agenda Fizzles, Fred Kaplan describes how American officials frantically tried to convince the President of Pakistan not to impose martial law. Apparently, he proved unwilling to be swayed, unlike our own president who received a visit from US spookmaster Negroponte in January, 2006, when GMA was serious about proclaiming martial law. Read Pervez’s Power Play for an additional blog roundup. Meanwhile, in Islamabad, Ousted Top Judge Calls for Uprising:

Sacked top judge Chaudhry called on his countrymen to save the constitution, prompting authorities to sever mobile phone coverage in parts of Islamabad as he addressed a meeting of lawyers by telephone. “I want lawyers to spread my message to the people of Pakistan,” he said to cheers from supporters before all lines went dead. “The time for sacrifice has come, to rise up for the supremacy of the constitution,” he added.

In his blog, The Washington Note says Dubya’s stuck in a trap of his own making:

The fact is that we have to deal with democrats and dictators around the world. The CNN clip did a good job showing how we had worked with Saddam in the past and other tough self-dealing thugs like Noriega, Marcos, and the Shah. We could get away with that in the Cold War when America was clearly a better overall alternative to the Soviet Union — but today, there is nothing else for global citizens making choices about their own governments to compare America to.

Our choices define us — and yes, we still have to deal with some of the world’s bad guys. But Bush set up a huge hypocrisy test which he shouldn’t have. George W. Bush’s pretensions in January 2005 puffed up a democracy bubble that Musharraf has definitively punctured.

In South Korea, Philippine school linked to scandal in South Korea over fake diplomas. Note that its South Koreans who faked their diplomas, not Philippine schools.

A final word about the fucked-up NPC mural. Pardon my French.

Look, if you are going to commission an artist’s collective, regardless of what you spend, you don’t fuck around with their painting. Don’t like it? Ask for revisions, but considering you commissioned a collective, which is a type of organization that obviously has ideological principles as its foundation, good luck with that. Still don’t like it? Return it. Don’t have time? Tough, don’t put the painting on display. Still want something on your wall? Put up a government poster, if you’re the NPC.

But when you fuck around with a painting expect a big, royal, resounding “Fuck you!” in return. You’re dealing with artists from Angono, not corporate drones who can Photoshop on client demand.

Conrado de Quiros says it better.

And good news, particularly since no renaming of streets was involved: Finally, a boulevard named after ‘Ka Pepe’ Diokno.

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129 comments

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  1. Joselito Basilio

    Leah wrote :
    I wouldn’t want a priest as president no matter how honest he is.
    we had the president take orders from the Vatican from 1986-1992. does anyone want Henrietta Mendoza back at MTRCB?
    _________________________________
    Where’s the logic? You don’t want a priest to become a president because a non-priest (Cory) took orders from Vatican for 6 years. The trouble with us is we endlessly whine without offering a solution to the problem we face. What’s wrong with a priest, or a militant priest at that, becoming a president.? Why a priest? Why not? No one bears the torch of hope other than Fr. Ed.

  2. Joselito Basilio

    The distinctions between EDSA People Power I and EDSA People Power II, particularly in regard to the justiciability of the challenges to the legitimacy of the governmental regimes resulting from them are found in the ruling of the Supreme Court in Estrada vs. Arroyo, viz.:

    “The legal distinction between EDSA People Power I and EDSA People Power II is clear. EDSA I involves the exercise of the people power of revolution which overthrew the whole government. EDSA II is an exercise of people power of freedom of speech and freedom of assembly to petition the government for redress of grievances which only affected the office of the President. EDSA I is extra constitutional and the legitimacy of the new government that resulted from it cannot be the subject of judicial review, but EDSA II is intra constitutional and the resignation of the sitting President that it caused and the succession of the Vice President as President are subject to judicial review. EDSA I presented a political question; EDSA II involves legal questions.”

  3. BURAOT

    as i read your article and stumbled on Buencamino’s, i felt utterly hopeless again. ano nang nangyayari sa bayan natin? pera-pera na lang talaga ang labanan, wala nang prinsipyo. at tayong mga nanonood sa mga nangyayari, nakatanghod lang sa mga susunod pang mga kababalaghan. although some tries to write about it, like we do,and some do something about it, like cause-oriented groups, still, majority of our people, without any reaction at all, are really accepting it as a fact: “OK lang yun, ganun talaga.”

    we can never wait for the military to do something, unless it turned bloody. besides, as Buencamino pointed out quite clearly, kahit na gaano ka noble ang intention ng military, there is a history and a tendency for it to turn dictatorship. is that what we want?

    di na pwedeng walang pakelam, di na pwedeng “ganun talaga ang kalakaran”. we as a people, need to do something fast.

  4. Mike

    shaman, your response begs the questions. were the prosecutors really “bought”? where’s your proof? wasn’t pork barrel distribution part of the current system? — Bencard

    How about the money bags that Kampi now admits to giving congressmen and governors? That money wasn’t pork barrel, which would have been properly disbursed, with receipts. Isn’t it clear that the money was for buying the loyalties of these officials? Or you won’t believe it until you see a Malacanang voucher saying so?

  5. anthony scalia

    Shaman of Malilipot,

    “It might interest you to know that one of the first things that Park Chung Hee did when he seized power was to prosecute the business profiteers who profited from corruption in the South Korean government. Twenty-four leading businessmen were arrested. (Just imagine Donald Dee and Sergio Ortiz-Luis under arrest.) Only Lee of Samsung escaped arrest because he was abroad at the time. Later, he and some prominent business leaders offered to donate a substantial part of their fortunes to the government”

    “So, it’s not true that all the government can do is set down policies and press the auto-pilot button, and, presto!, you get rapid economic growth.”

    Very true. I wholeheartedly agree. The private sector was the key.

    “In fact, Park laid down an economic development program that the private sector unquestioningly followed, or else… ”

    Really, ‘unquestioningly’ followed? Well what was the result of this ‘unquestioning following’?

    “And Park also did launch some sort of a morality campaign. Oh, yes, Park’s was an authoritarian, centralized government. So was Chun Doo Hwan’s. So was Lee Kwan Yew’s. However, Mahathir showed that the right kind of leadership can be wielded in a democratic environment. Okay, he was a “strong” political leader. So did Thaksin when he led Thailand to recovery after the 1997 financial crisis.”

    Again, very true.

    “All this shows that economic development cannot be left entirely to the private sector.”

    Excuse me? Maybe for Singapore, where most of the big businesses there are owned by the state-owned Temasek. But not for South Korea, Japan, Taiwan.

    “It is the government that has to spearhead economic growth. And more often than not, “government” means the national leadership”

    Spearhead? The government? How? A la Singapore? Its always the private sector who spearheads grwoth. At best, government can only provide the right environment.

    “The question in the Philippines today is whether we will find the kind of leadership that will propel us to rapid economic growth in an authoritarian or democratic milieu”

    Clue – our rich neighbors do not have the democracy that we have

  6. anthony scalia

    cvj,

    let me break down this quote of mine:

    “Guess what? The South Korean private sector did not wait for ‘democracy’ to be restored, for the shenanigans to be eradicated, before it created companies and jobs. And the growth was not a snail’s pace”

    this way:

    “Guess what? The South Korean private sector

    did not wait for ‘democracy’ to be restored

    for the shenanigans to be eradicated

    before it created companies and jobs. And the growth was not a snail’s pace.”

    Thats why your statement “Contrary to your impression that the South Koreans were docile during the dictatorship, they actually had an active resistance movement” continues to baffle me. Sablay to say the least.

    I said the Koreans did not wait for democracy to be restored before it created companies and jobs. Unlike the attitude of so many Pinoys na hinihintay palagi ang perfect moment before doing something.

    But since you posted those info, I have to honor them by commenting on them also

    “This outrage in 1980 jump-started the democracy movement in South Korea which culminated in the ending of the dictatorship in 1987”

    Noted. When the dictatorship ended in 1987, South Korea was not an economic ground zero. The 1987, post-military dictatorship South Korea was very well-off than present-day Philippines.

    “Don’t compare the brave South Koreans of yesterday with the docile Filipinos of today. Ang mga Koreano, hindi nagpapagago.”

    Hey hey, ang mga Pinoy ngayon hindi na rin nagpapagago – di nagpapagago sa mga taong nagsusulsol pa rin ng rally, people power EDSA 3 or 4, impeachment, etc.

    At lalong hindi nagpapagago ang mga Pinoy sa mga nagsasabing aalis si GMA pag nakatanggap ng postcard eviction notice!

    May mas gago pa dun – umaasang aalis si GMA pag tanggap ng mga postcard!

    May mas gago pa dun – nagtataka kung bakit di umaalis si GMA pag tanggap ng postcard!

  7. anthony scalia

    cvj,

    your reference to hvrds is interesting.

    Washington SyCip, part of the problem? Really now

    The ‘reciprocal control mechanism’ are set up for those who received any form of state aid. Both government and the chaebol cooperated in coming up with the appropriate policies.

    But it was not like the government acting like big brother over the chaebol.

    Policies, plus state financing – these are all what the government provided the private sector. Oh yes one thing more, the government ensured that the right environment was there for business to flourish. During the period of rapid growth, there were no rallies, no impeachments, no terrorism, no insurgency, no people power and anything of that sort.

    By the time ‘people power’ toppled the dictatorship in 1987, South Korea was already rich! By then, rallying is a luxury they can afford!

    “The chopsticks economies he refers to have a long history of formal national fedual structures in place. But they all followed a national mercantilist dirigist economic paradigm along the same lines as proposed by the then father of U.S. industrial mercantilism Alexander Hamilton”

    “If we had followed this paradigm at the end of the second world war then we would have destroyed the landlordism in the country by force and installed a genuine agrarian reform program that means that there would have been no parity rights for the Americans and all multinational corporations would have been nationalized and there would have been no Washington Sycip. That is what Japan, South Korea, PRC and Taiwan did.”

    It seems that the ‘national mercantilist dirigist’ paradigm went for naught immediately after world war 2 (for Japan) and the Korean war (for South Korea)

    Japan, South Korea are both severely devastated by wars. Japan and South Korea prospered for what they did right after those wars!

    As for Taiwan, did you know that even as recently as 1980, the Philippines was still ahead of Taiwan?!

    What could be the connection of agrarian reform to those countries’ rapid growth from the 1950s onwards?

    “It is precisely Washington Sycip who benefitted from the policy framework of the Washington Consensus.”
    “He has become rich though the policy of debasing the national currency”

    Oh really? How? Im curious, really. Tsk tsk tsk too bad no specifics were given. How did he ‘debase’ the national currency?

    “It’s the fact that they followed the right economic policies.”

    The problem is, the “rightness” of a policy does not become obvious at least until after a decade. Now its easy to say they were right because the results are there decades later. But try to judge the policies at the time they were laid down, before any result was visible.

    It is worth stressing a thousand times that the private sectors who worked within the framework of those policies produced the economic development their countries are now experiencing.

    Why don’t we take a cue from them? Removing the chief executive never crossed their minds. Energies were focused on job creation.

    “If we followed Washington Sycip and his elitists, it will just be more of the same failed Washington Consensus policies that benefit only themselves.”

    Really? To begin with, who are his ‘elitists?’ and what do they espouse?

    For discussion purposes only – How sure are you that the result would be the same? That is, if we followed SyCip and his ‘elitists’?

    Too bad SyCip was not touted as a business entrepreneur role model. He said he formed SGV to beat the British CPA firms that were operating in the country at that time. Not only was he successful, he was able to make SGV the biggest auditing firm in the Philippines, and for some time, in the whole of Asia.

    In case you didnt know, SyCip was a product of the Philippine public school system.

    I’m all ears (or should it be all eyes) on your dossier on SyCip. Bring them on!

    As Jessica Zafra said, we don’t have to agree with Washington SyCip, but we have to listen to him

  8. Shaman of Malilipot

    “to a sore loser, any exercise is “useless”. the essence of democracy is the rule of majority. it’s not perfect but the alternative is worst.” – Bencard

    Oh, my dear Bencard, your kind of democracy is all form but no substance.

  9. Shaman of Malilipot

    So, Anthony, without the “right environment”, where would economic growth be? We’ve all known where – languishing in low single digit rate. Can the private sector create the right environment by itself?

    The government spearheads economic growth by, yes, you’re right, creating the right environment. The private sector does the rest, precisely because we are a free market enterprise economy, not a state enterprise economy. And the government has to sustain that environment; it’s not a one-time deal. Put a national leadership at the helm with the wrong set of priorities and the economy will tail-spin. The private sector will be blunted. So, which is the real spearhead? The government or the private sector?

  10. cvj

    Clue – our rich neighbors do not have the democracy that we have – Anthony Scalia

    Not true. Some are, some aren’t. Japan, South Korea and Taiwan are democracies. Your misconception is that democracy or the lack of it is the key variable in bringing about economic development. It’s not. Inequality is a bigger factor.

    “Guess what? The South Korean private sector did not wait for ‘democracy’ to be restored, for the shenanigans to be eradicated, before it created companies and jobs.” – Anthony Scalia

    The South Korean ‘private sector’ (i.e. those who are not in government) was doing both. The private sector was actively working for economic development while at the same time, they (in their capacity as private citizens) were fighting for democracy. The Koreans worked hard on both economic and political fronts. Same applies to us who oppose Gloria. It’s disingeneous to automatically conclude that those of us who are in the opposition are not also doing our part on the economic front especially since you do not know what each of our day jobs are.

    It seems that the ‘national mercantilist dirigist’ paradigm went for naught immediately after world war 2 (for Japan) and the Korean war (for South Korea) – Anthony Scalia

    The ‘national mercantilist dirigist’ paradigm that hvrds referred to were implemented in South Korea by Park Chung Hee after the Korean War and in Taiwan by Chiang Kai Shek after their defeat by Mao and retreat into the island. Land reform was a key first step since it removed inequalities that would have acted as a barrier to implementing an industrial policy based on the ‘national mercantilist dirigist’ paradigm.

    As for Taiwan, did you know that even as recently as 1980, the Philippines was still ahead of Taiwan?! – Anthony Scalia

    I don’t know what you mean by ‘being ahead’ but the GDP per capita (‘PPP converted’) of Taiwan in 1980 was already USD 3282.36 compared to our USD 1753.51. They overtook us in 1968.(Source: World Penn Tables)

    The problem is, the “rightness” of a policy does not become obvious at least until after a decade. Now its easy to say they were right because the results are there decades later. But try to judge the policies at the time they were laid down, before any result was visible. – Anthony Scalia

    We’ve already had a couple of decades to see that the Washington Consensus model that all our Presidents (real & fake) have implemented has failed as compared to the national mercantilist dirigist policies that our neighbors followed.

    It is worth stressing a thousand times that the private sectors who worked within the framework of those policies produced the economic development their countries are now experiencing. – Anthony Scalia

    No one is arguing against the role of the private sector. Where i disagree with you is on the role that government plays and the role of private citizens in disciplining government.

  11. vic

    Democracy as I have known it. Democracy could be defined as the government where people are free to express their views without fear of disappearing and never be seen again and totally forgotten. such is the case of so many we call “deciperados” or the disappeared. That although the Majority rules, the minority still has the voice and that voice should be respected, otherwise when that minority turn to go into the majority, the respect that was not extended to it will also not be extended to the new minority. We call it the continuity of Democratic Process (just in every day simple terms, as I consider myself a simple man).

    Also that the rule of law as we know where the Democratic Principle is founded upon is applicable to all, not just to the minority or the majority, the marginalized or to the privileged but All. I think the Bearded President of the U.S. summed it up succinctly that is “a government of the people by the people and for the people”..nowhere he actually said of majority or minority..majority or minority only matters in government, nothing to do with democracy….

  12. anthony scalia

    shaman of malilipot,

    “So, Anthony, without the “right environment”, where would economic growth be? We’ve all known where – languishing in low single digit rate. Can the private sector create the right environment by itself”

    No, but successful businesses have shown that they need not wait for the right environment to be in place before succeeding.

    “So, which is the real spearhead? The government or the private sector?”

    It should be the private sector. If growth rates aren’t that big and sustainable yet, its because the private sector isnt doing enough. It only means the private sector must grow even more, which requires more entreprenuers to step up, which requires a single minded focus on company and job and value creation, and forget all about changing the chief executive.

  13. anthony scalia

    cvj,

    “Japan, South Korea and Taiwan are democracies”

    But they don’t have the same ‘freedoms’ that we trumpet that we have here.

    “The South Korean ‘private sector’ (i.e. those who are not in government) was doing both. The private sector was actively working for economic development while at the same time, they (in their capacity as private citizens) were fighting for democracy.”

    Okay, assuming arguendo that the Sokors are ALSO working for democracy (while working for their econ devt), well which one caused their prosperity? Comparing them with Pinoys now, all efforts are just on ‘restoring democracy’! Take note, as you earlier said, democracy was restored in 1987, but South Korea by then was already advanced!

    Its hypergrowth years were during the years of the military dictatorship!

    “The Koreans worked hard on both economic and political fronts. Same applies to us who oppose Gloria. It’s disingeneous to automatically conclude that those of us who are in the opposition are not also doing our part on the economic front especially since you do not know what each of our day jobs are”

    Well, what are your day jobs? Do you have a direct hand in channeling foreign direct investment here? Can you easily persuade foreign businessmen to invest here? If yes, then please continue doing it, and thanks.

    Can you blame us people holding a ‘disingeneous’ conclusion? As far as I can recall, and for as long as I have been observing the Philippine scene, those so-called ‘opposition’ are just that, good for opposing, but doing nothing good for the country. They have no strengths but merely rely on the perceived weaknesses of the incumbent.

    But if you are like Manny Villar, who presents himself as an opposition, yet has invested his wealth here, doing his share of job creation (every time a house is built several industries experience movement – cement, trucking, hardware, banking etc), then I salute you. Keep on opposing GMA, but keep on investing here. Because what will prosper the Philippines is not the efforts to kick out GMA but your investing.

    “Your misconception is that democracy or the lack of it is the key variable in bringing about economic development. It’s not. Inequality is a bigger factor”

    For the Philippines, that may be a key variable. Its not a coincidence that our rich East Asian Neighbors do not practice Philippine-style democracy, at least during their hypergrowth years.

    “I don’t know what you mean by ‘being ahead’ but the GDP per capita (’PPP converted’) of Taiwan in 1980 was already USD 3282.36 compared to our USD 1753.51. They overtook us in 1968”

    That’s GDP per capita. What matters is over-all GDP. Can you please compare what was the GDP of both countries by 1980? At present the Philippine per capita GDP is bigger than China and India, yet they are considered more advanced than the Philippines. If you can show that the GDP of Taiwan is bigger than the Philippines’ in 1980 then I stand corrected.

    ‘The ‘national mercantilist dirigist’ paradigm that hvrds referred to were implemented in South Korea by Park Chung Hee after the Korean War and in Taiwan by Chiang Kai Shek after their defeat by Mao and retreat into the island. Land reform was a key first step since it removed inequalities that would have acted as a barrier to implementing an industrial policy based on the ‘national mercantilist dirigist’ paradigm’

    I am still at a lost as to what creature is this ‘national mercantilist dirigist’ paradigm! What I know is that our rich East Asian neighbors got to where they are because their companies focused on exports to the rich industrialized nations. Land reform was never a factor.

    The proximate cause of their economic success was not land reform but their export-driven companies! I dont see the ‘connect’ between land reform and the export-driven thrusts of their companies. Well, isa lang – maybe these companies were formed by people using cash from selling their lands to the government pursuant to land reform.

    “We’ve already had a couple of decades to see that the Washington Consensus model that all our Presidents (real & fake) have implemented has failed as compared to the national mercantilist dirigist policies that our neighbors followed”

    I think I asked what was that model? What are its components? You cannot just sweepingly declare that they failed. In the first place, were they even implemented?

    One thing i know, an anti-GMA stalwart, Cory Aquino, is a huge stumbling block to the CARPability of Hacienda Luisita.

    “Where i disagree with you is on the role that government plays and the role of private citizens in disciplining government”

    Noted. Thats our deadlock.

    I just think that we’d produce more returns if we focused on job creation alone. Perish the thought that GMA will step down. All those rallies and EDSA attempts are useless. They don’t bring food to the table (maybe sa mga rallyists for hire) A coup de etat is not worth it, with its incalculable collateral damage.

    If you want to strike back at GMA, then gather and document all evidence now, then file an avalanche of cases against her when she becomes a plain citizen on June 30, 2010.

    But no more of actions that will reverse the gains and the slow momentum. It is for everybody’s benefit if the growth is sustained for more years. Trickling down takes time.

    I believe in the free market, and the less government intervention the better.

  14. cvj

    But they don’t have the same ‘freedoms’ that we trumpet that we have here. – Anthony Scalia

    I don’t know where you get that impression but below are Freedom House’s ratings of the three countries’ Political Rights and Civil Liberties. (The lower the score, the freer.)

    Year: 2007
    Philippines:
    Political Rights score: 3
    Civil liberties score: 3
    Status: Partly Free

    South Korea:
    Political Rights score: 1
    Civil liberties score: 2
    Status: Free

    Taiwan:
    Political Rights score: 2
    Civil liberties score: 1
    Status: Free

    We used to be ‘free’ back in 2005, but it deteriorated in 2006. Both South Korea and Taiwan has been classified as ‘free’ since this report was first made available in 2002.

    Okay, assuming arguendo that the Sokors are ALSO working for democracy (while working for their econ devt), well which one caused their prosperity? – Anthony Scalia

    For South Koreans, a tangible result of their working for democracy is the high-level conviction of two of their Presidents i.e. Choon Doo Hwan and Roa Tae Woo. The former was a dictator while the latter was his protege. This demonstrated the primacy of rule of law (relative to our situation) which is one of the pillars of economic development. Imagine what signal a Gloria Arroyo conviction would send to future wannabees.

  15. cvj

    That’s GDP per capita. What matters is over-all GDP. Can you please compare what was the GDP of both countries by 1980? – Anthony Scalia

    Actually no. What matters is per capita GDP.

    The proximate cause of their economic success was not land reform but their export-driven companies! – Anthony Scalia

    Land reform (1) freed up capital for investment into industry and (2) created a class of consumers from former peasants. In Taiwan, the government also channeled income from fertilizer sales to farmers into industry. In both Korea and Taiwan, the greater social equality brought about by land reform also gave the government the political runway to concentrate resources on a few industrialists thereby achieving economist of scale. In highly unequal societies, resistance to such concentration of resources makes such a policy more politicallly costly.

    I think I asked what was that model? What are its components? You cannot just sweepingly declare that they failed. In the first place, were they even implemented? – Anthony Scalia

    On Washington Consensus, i’d like to direct you to Joseph Stiglitz’ book Globalization and Its Discontents for starters. It’s basically a policy mix of financial liberalization, privatization, deregulation and trade liberalization among others.

  16. cvj

    sorry, “economist of scale” above should be “economies of scale”.

  17. anthony scalia

    cvj,

    “We used to be ‘free’ back in 2005, but it deteriorated in 2006. Both South Korea and Taiwan has been classified as ‘free’ since this report was first made available in 2002.”

    Oh no, another fan of (very subjective) surveys. From an organization supported by the US government! One web site even describes Freedom House as an organization created by Franklin D. Roosevelt to prepare the US public opinion for war.

    You know the reasons for the low score – because of perception, and because of what happened to mediamen, missing people, extrajudicial killings etc.

    And as you said, ‘we ‘used to be free’ in 2005. Those countries are johnny-come-latelys when it comes to freedoms that we enjoy.

    Id still stick to the very obvious fact that Philippine democracy is ‘freer’

    You should have known the methodology of Freedom House.

    By the way, Freedom House’s Freedom in the World reports are given less credence in academia. Only the gullible media cite them.

    “For South Koreans, a tangible result of their working for democracy is the high-level conviction of two of their Presidents i.e. Choon Doo Hwan and Roa Tae Woo. The former was a dictator while the latter was his protege. This demonstrated the primacy of rule of law (relative to our situation) which is one of the pillars of economic development. Imagine what signal a Gloria Arroyo conviction would send to future wannabees.”

    Not responsive to my question of which of the two acts ‘simultaneously done’ – acts towards economic development and acts towards restoration of democracy – was the key to their prosperity?

    The acts towards democracy? By 1987, the year democracy as restored, South Korea was already rich! To repeat, in 1987 South Korea was not an economic ground zero, not reeling from devastation. They’re rich! Now did they become rich by toppling the corrupt dictators?

    Now rule of law as pillars of economic development? well there was rule of law all right during the hypergrowth years of South Korea – no rallies, no impeachments, no ‘EDSAs’ no people power (till the mid 1980s), no attempts to remove the chief executive – during those times, which enabled the economic builders to focus on what they’re doing.

    During the hypergrowth years, Korea wasn’t exactly enjoying Philippine-style democracy!

    “Actually no. What matters is per capita GDP”

    Well that’s another deadlock. and that makes the Philippines better than India, and just a striking distance off China. Hey that should be shouted from the mountaintops and bannered in headlines – the Philippines is better than the global leader in offshoring, India!

    “Land reform (1) freed up capital for investment into industry…”

    I gave that one possible ‘connect’

    “and (2) created a class of consumers from former peasants” In Taiwan, the government also channeled income from fertilizer sales to farmers into industry. In both Korea and Taiwan, the greater social equality brought about by land reform also gave the government the political runway to concentrate resources on a few industrialists thereby achieving economist of scale.”

    True, but those arent what made Taiwan into what it is today. Taiwan owes its present lofty status to its decision to be export-oriented. Like Korea.

    “In highly unequal societies, resistance to such concentration of resources makes such a policy more politicallly costly”

    True.

    “On Washington Consensus, i’d like to direct you to Joseph Stiglitz’ book Globalization and Its Discontents for starters. It’s basically a policy mix of financial liberalization, privatization, deregulation and trade liberalization among others”

    Well thanks for the reference. But I’d rather know what components of the Washington Consensus was implemented here.

  18. cvj

    You know the reasons for the low score – because of perception, and because of what happened to mediamen, missing people, extrajudicial killings etc. – Anthony Scalia

    And aren’t these legitimate indicators of our lack of freedom? If someone gets killed or abducted for speaking out, you don’t think that reflects on the health of our democracy?

    During the hypergrowth years, Korea wasn’t exactly enjoying Philippine-style democracy! – Anthony Scalia

    But they were fighting for it nonetheless and they achieved both economic progress and freedom (with the improvement in the rule of law that came with it).

    Even if you compare the period when both countries were under a dictatorship (from 1972 to 1985 when the Philippines was under Martial Law so was under a dictatorship just like South Korea), you will see that Korea still grew faster. When both turned into democracies at around the same time, Korea also grew faster. Your conclusion that democracy (or its absence) is the variable that determines the pace of growth cannot explain the above.

    Regarding export orientation, that is not the complete story. Rather, it was a combination of ‘export promotion’ and ‘import substitution’ or in hvrds’ terms, a national mercantilist dirigist economic paradigm (although much less protectionist than a similar policy implemented by the United States in the 19th centurty). Alice Amsden, in her book ‘The Rise of the Rest’ gives an account of this policy mix as implemented in Korea:

    South Korea, with the highest growth rate of exports in “the rest”, induced firms to become more export-oriented by making their subsidies contingent on achieving export targets, which were negotiated jointly by business and government and aired at high-level monthly meetings. These meetings were attended regularly by Korea’s president, Park Chung Hee, and were designed to enable bureaucrats to learn and lessen the problems that prevented business from exporting more, information that was likely to have contributed further to export activity. Reciprocity involved long-term lending by the Korea Development Bank (KDB). Starting 1971, at the commencement of Korea’s heavy industrialization drive, the KDB began to offer credit ‘to export enterprises recommended by the Ministry of Commerce and Industry”. The more a company exported, the more likely it was to receive cheap, long-term loans (as well as tariff protection for its sales in the domestic market)” [emphasis mine]…

    “…The reciprocity principle in Korea operated in almost every industry. In electronics, for example, the question could be asked why the chaebol-affiliated enterprises did not confine their business to the domestic market where they could make large profits without difficulty. The primary reason was that the government did not permit it. An important Korean industrial policy for electronics was protecting the domestic market. In return for protection of the domestic market, the government required the enterprises to export a part of their production.” [emphasis mine]

    So in the case of South Korea, it is not a question of ‘either/or’ i.e. export promotion vs. import substitution, but the right combination of both.

    Well that’s another deadlock. and that makes the Philippines better than India, and just a striking distance off China. Hey that should be shouted from the mountaintops and bannered in headlines – the Philippines is better than the global leader in offshoring, India! – Anthony Scalia

    The reason why we cannot ‘shout from the mountaintops’ is that what matters, aside from per capita GDP, is the rate of GDP growth where India (a democracy btw) is ahead of us. The reason why absolute size of GDP per se is not as important as the other two measures is because it does not give an indication of a country’s productivity (as measured by GDP per capita) nor its rate of productivity growth (as measured by rate of GDP growth per capita).

    So why do you think India, which is a democracy, is also growing faster than us?

  19. anthony scalia

    cvj,

    “And aren’t these legitimate indicators of our lack of freedom? If someone gets killed or abducted for speaking out, you don’t think that reflects on the health of our democracy?”

    No.

    may I remind you, that those ‘legitimate indicators’ are of an Arroyo vintage, that the ‘freer’ countries you cited became ‘freer’ just now.

    And I will strongly disagree with the view that the killings and other violations were caused by the government. But Id still blame government for failing to protect the victims

    “Even if you compare the period when both countries were under a dictatorship (from 1972 to 1985 when the Philippines was under Martial Law so was under a dictatorship just like South Korea), you will see that Korea still grew faster. When both turned into democracies at around the same time, Korea also grew faster”

    Very true! Now what could be the difference? Why did Korea grow faster in the midst of a dictatorship, while the Philippines did not even grow? Answer below.

    “Your conclusion that democracy (or its absence) is the variable that determines the pace of growth cannot explain the above”

    No, that is not my conclusion. Your retorts were focused on my citing of Washington SyCip that the problem of the country is too much democracy. Then you cited the dirigist ek-ek which led me to respond to it…

    And if wikipedia is authoritative, it said that one of the factors for the success of the East Asian tigers (includes Korea and Taiwan) is “Non-democratic and relatively authoritarian political systems during the early years.”

    Maybe you forgot the drift of my comment to Shaman, the private sector is the key to development, that we need not wait for the perfect leadership to move forward.

    Ever wonder why I kept on harping the private sector? Because that is where the greatest need is. The best and the brightest Pinoys, instead of creating companies and jobs, would rather migrate to first world countries. We are not as patriotic as those Koreans and Taiwanese who sacrificed for their countries, during their growth years.

    Its sad, but it seems nobody bothered to build companies and jobs during the Marcos years. The sole goal was kick out Marcos and restore democracy.

    Worse, the best and brightest all suffer the delusion that kicking out GMA is the sine qua non for prosperity a la Korea! So thats where the thrust is now, kicking out GMA, ‘dahil ginagago na tayo!” What a waste of talent and resources!

    “An important Korean industrial policy for electronics was protecting the domestic market. In return for protection of the domestic market, the government required the enterprises to export a part of their production”

    “So in the case of South Korea, it is not a question of ‘either/or’ i.e. export promotion vs. import substitution, but the right combination of both”

    Very true! A combination of both, really!

    Which one do you think brought more riches to the exporters? The domestic market, or the markets of the rich industrialized nations?

    Again, if wikipedia is authoritative, it said that another success factor of the East Asian tigers is their focus on exporting to the rich industrialized nations. Not to deny the profitability of their domestic markets, but the profits really went north with their exports.

    whether export or domestic market, their private sector was very active in creating jobs and value. wish it were the same here.

    “So why do you think India, which is a democracy, is also growing faster than us?”

    i thought you said what matters is per capita GDP?

    Why? Im glad you asked –

    no impeachments, no ‘EDSAs’, no people powers, no agitators, no “kami naman’ opposition, no rallies

    many Indians willing to sacrifice for their country, either by not migrating to a First World country, or returning home

    many entrepreneurial Indians focused on job and value creation, who have no time for thinking how to remove the president or prime minister and no time for rallies, mass actions, postcard sending etc

    many entrepreneurial Indians creating wealth for their country

    and even a minute increase in the productivity of hundreds of millions of the Indian workforce results in increased GDP. to match the same GDP increase, the Pinoy workforce, 40-50 million, needs to be much much more productive. but how can the Pinoy be expected to be more productive when
    his work is interrupted by rallies, strikes, attempts at EDSAs and another people power, impeachments, postcard sending, etc

  20. cvj

    And if wikipedia is authoritative, it said that one of the factors for the success of the East Asian tigers (includes Korea and Taiwan) is “Non-democratic and relatively authoritarian political systems during the early years.” – Anthony Scalia

    Then Wikipedia (specifically the one who wrote that passage) is making the same attribution error as you and Washington Sycip. While there are countries that prospered under dictatorships, there are also countries like us that stagnated under one.

    Its sad, but it seems nobody bothered to build companies and jobs during the Marcos years. The sole goal was kick out Marcos and restore democracy… – Anthony Scalia

    That’s an inacurrate characterization of the Marcos years. There was entrepreneurial/business activity at that time but the difference is that the Marcos government did not implement policies similar to that of South Korea which led to the rise of the Chaebols in the latter’s case.

    …Worse, the best and brightest all suffer the delusion that kicking out GMA is the sine qua non for prosperity a la Korea! So thats where the thrust is now, kicking out GMA, ‘dahil ginagago na tayo!” What a waste of talent and resources! – Anthony Scalia

    That is a truncated and strawman understanding of the opposition to GMA. The issues against Gloria Arroyo are her lack of legitimacy (aka her cheating) and her undermining of our institutions that we need as the basis for a functioning society. I don’t think the private sector can do its part if the Philippines is on its way to becoming a failed state.

    i thought you said what matters is per capita GDP? – Anthony Scalia

    I guess you overlooked what i said above (at 1:09am):

    what matters, aside from per capita GDP, is the rate of GDP growth.

    no impeachments, no ‘EDSAs’, no people powers, no agitators, no “kami naman’ opposition, no rallies – Anthony Scalia

    Not true. While i was in India, i saw that they also had rallies.

    many Indians willing to sacrifice for their country, either by not migrating to a First World country, or returning home – Anthony Scalia

    Both India and the Philippines have a large pool of people working overseas and both have a large immigrant community in the West.

    many entrepreneurial Indians creating wealth for their country – Anthony Scalia

    What India and South Korea have in common is that their governments were more successful in pursuing industrial policies that encouraged the growth of their private sector firms, i.e. what you refer to as ‘dirigist ek-ek’.

  21. anthony scalia

    cvj,

    “That’s an inacurrate characterization of the Marcos years.”

    No, what i wrote was very accurate.

    ———————————————————-

    “There was entrepreneurial/business activity at that time but the difference is that the Marcos government did not implement policies similar to that of South Korea which led to the rise of the Chaebols in the latter’s case.”

    No, entrepreneurial activity was not enough to produce Korea-like results. The policies were there, there was just a few takers. And the quest to migrate was already there.

    ———————————————————-

    “That is a truncated and strawman understanding of the opposition to GMA”

    No it is not. Just a picture of reality, and the misplaced priorities of many.

    ———————————————————-

    “The issues against Gloria Arroyo are her lack of legitimacy (aka her cheating) and her undermining of our institutions that we need as the basis for a functioning society.I don’t think the private sector can do its part if the Philippines is on its way to becoming a failed state”

    Lets go back to Park Chung Hee’s time. He has ‘undermined the institutions’ of his country. Yet how come when democracy was restored in 1987, Korea was very rich. Compared to the Philippines post EDSA 1. Prior to 1987, it can be said that Korea was a failed state.

    Face it, we don’t have enough patriotic, entrepreneurial countrymen that see beyond GMA. What we have are Pinoys still thrilled by the romanticism of people power removing a President.

    ———————————————————-

    “Then Wikipedia (specifically the one who wrote that passage) is making the same attribution error as you and Washington Sycip.”

    Sorry to say, no, that was not an error. Di mo lang matanggap ang statement ni Washington SyCip. Did it ever occur to you that SyCip has survived more presidents than anyone else, has been in the Philippine business scene actively since the 1950s? That if there is anybody who has the credibility to say something definitive about the Philippines, it is Washington SyCip?

    Just because it differs with your view, it is already in error? I hope you can back it up with authors like Alsem.

    ———————————————————-

    “While there are countries that prospered under dictatorships, there are also countries like us that stagnated under one”

    Agreed.

    ———————————————————-

    “what matters, aside from per capita GDP, is the rate of GDP growth”

    i refer you to my query to you earlier:

    ‘If you can show that the GDP of Taiwan is bigger than the Philippines’ in 1980 then I stand corrected’

    to which you replied with a one-liner:

    ‘Actually no. What matters is per capita GDP.’

    ———————————————————-

    “Not true. While i was in India, i saw that they also had rallies”

    Really, please pray tell me what are the rallies for. The resignation of the president? The prime minister?

    ———————————————————-

    “Both India and the Philippines have a large pool of people working overseas and both have a large immigrant community in the West”

    Agreed. But in terms of number of returnees, Indians lead Pinoys.

    ———————————————————-

    “What India and South Korea have in common is that their governments were more successful in pursuing industrial policies that encouraged the growth of their private sector firms, i.e. what you refer to as ‘dirigist ek-ek’”

    Asus, where do you think are the traces of the ‘national dirigist mercantilist’ policies you claim that the Indians and Chinese pursued?

    If the Indian offshoring industry is an indication, insiders say that its a good thing their industry boomed in the mid 1990s, becauyse if the boom took place much earlier, the Indian government would have nationalized their industry. Indian policies simply caught up with the already growing offshoring industry.

    Yes, the policies may have helped later, but the self-starting, diligent, resourceful and entrepreneurial Indians began their businesses without the benefit of policies.

    Yan ang kulang ngayon sa mga Pinoy – those who are self-starting, diligent, resourceful and entrepreneurial. Pero how can we expect Pinoys like them to rise if all they do is either migrate or just think “patalsikin na now na”

  22. mlq3

    this debate about korea and india is making me impatient. it ignores the often bloody confrontations between the koreas and their authorities. it ignores that park chung hee was assassinated. it ignores the confucian culture of the koreans which has never been an aspect of our culture and is about as useful as saying we should engage in a mass conversion of filipinos to protestantism so that we can engage in a more capitalist mentality ala weber’s observations. it ignores the indian’s problem with the “license raj”or how we are facing many of the same issues as the thais, malaysians and indonesians are wrestling with, and how we can learn from them as much as they learned from us.

  23. anthony scalia

    mlq3,

    noted. it stops there.

  24. mlq3

    anthony, i have no intention on stopping the vigorous debate you have going. i just wanted to point out where i felt both you and cjv were entirely missing the point.

  25. cvj

    mlq3, Anthony, regarding India’s takeoff and, in particular, the role of dismantling the ‘license raj’ and the Information Technology sector in bringing this about, this is what Economists Dani Rodrik and Arvind Subramanian say in their paper “From “Hindu Growth” To Productivity Surge: The Mystery Of The Indian Growth Transition*”.

    But what exactly are those “appropriate” policies that made the Indian miracle possible? The
    conventional story about India, which can be glimpsed in any number of policy-oriented papers and newspaper articles, goes like this. Until 1991, India’s policy makers followed misguided policies that closed the economy to international trade, erected inefficient industries under state guidance, riddled the private sector with extraordinarily cumbersome and detailed regulations, and suffocated private economic activity with controls and bureaucratic impediments. Then in 1991, the big breakthrough happened. Spurred by a balance of payments crisis, Indian policy makers turned to technocrats such as Manmohan Singh, who promptly began the process of liberalizing the economy. Trade barriers were slashed, foreign investment was welcomed, the license raj was dismantled, and privatization began. The economy started to boom, with software exports and call centers leading the way.

    Like all caricatures, the above story has elements of truth in it. It is indeed the case that until recently India had one of the most over-regulated and closed economies of the world. It is also true that the economic liberalization of 1991 constitutes a watershed event for the Indian economy. But the main difficulty with the standard account, as summarized above, is that the pick-up in India’s economic growth precedes the 1991 liberalization by a full decade. Even a cursory glance at the growth record reveals that the more-tha -doubling of India’s growth rate takes place sometime around 1980, with very little discernible change in trend after 1991. In fact, some indicators, such as economy-wide total factor productivity, even go in the “wrong” direction, showing a deceleration after 1991. Therefore, the striking post- 1980 improvement in performance can not be attributed to the liberalization of 1991. The latter may well have played a role in sustaining and deepening an ongoing process of growth, but we need to look elsewhere than the reforms of 1991 to understand how India made the transition to high growth. A related implication is that more recent phenomena such as the boom in IT and related services cannot have been the original source of India’s economic growth.

    Anthony’s claim that Indian policies simply caught up with the already growing offshoring industry is not historically accurate since the basic policy change (what they call government’s ‘attitudinal shift’) and the growth acceleration tooke place a decade earlier. In explaining the source of India’s growth acceleration the authors explain that distinction between pro-market and pro-business.

    We would stress that our characterization of the 1980s reform is not about whether“liberalization” took place but about how it happened. Some accounts of of the 1980s point to the easing of access to foreign technology, to foreign capital goods, and to foreign direct investment (with the entry of Suzuki into the domestic car market as the most telling example) as examples of “liberalization.” To us, these reforms in the 1980s, were not proliberalization but pro-business in the important sense that they served to boost the profits of existing businesses without threatening them with real competition. Allowing a single foreign firm, Suzuki, to enter the domestic car market under existing conditions of limited external liberalization (and subject to local content requirements) is very different from opening the domestic car market to all foreign producers, which is the normal liberalization strategy and 20 the approach adopted in the 1990s.25 This pro business rather than pro-market/procompetition o ientation manifested itself in the greater focus on “internal rather than “external” reforms. In addition, even the internal reforms which favored business were slanted more toward favoring pre-existing activities rather than facilitating new businesses (i.e., through entry by domestic firms). This approach had the political economy merit of avoiding the creation of losers. And it appears that the economic impact of favoring existing activities, which must have entailed some inefficiency, was not only not negative but actually positive. This is reflected in the fact that the growth of the 1990s also appears to have taken place in states with a large initial share of registered manufacturing, some of it built up during the 1980s. Thus, India’s “reforms” in the 1980s, which essentially amounted to more import substitution, were attractive from a political economy perspective because they created virtually no losers. This is reminiscent of China’s reforms as well, although the latter obviously took on a very different form.

    To use Anthony’s term, it’s again more of that ‘dirigist ek-ek’.

    Now the question is, where did these existing businesses come from in the first place? For that, we have to look to Alice Amsden’s account on the Indian government’s reciprocal control mechanisms (which included the much-maligned license-raj).

  26. cvj

    Just because it differs with your view, it is already in error? – Anthony Scalia

    First of all, we cannot both be correct so if i believe i’m right, then Washington Sycip must be wrong and vice-versa.

    I hope you can back it up with authors like Alsem. – Anthony Scalia

    I suppose you mean Amsden. No need for that since i’m familiar with the elitist mindset. Washington Sycip wants a dictatorship because he believes it would give arbitrary powers to technocrats like him which would speed up formulation and facilitate the execution of his favored policies. This despite the fact that our biggest economic downturn in our history happened when technocrats like him (Cesar Virata and Jobo Fernandez) were given free hand by the dictator Marcos. Haven’t we already learned this lesson?

    Really, please pray tell me what are the rallies for. The resignation of the president? The prime minister? – Anthony Scalia

    Their political leaders don’t have the same legitimacy issues as their Filipino counterparts.

    ‘If you can show that the GDP of Taiwan is bigger than the Philippines’ in 1980 then I stand corrected’ – Anthony Scalia

    The absolute value of the GDP which you refer to above is different from the rate of GDP growth which i said was important.

  27. cvj

    it ignores the often bloody confrontations between the koreas and their authorities. – mlq3

    I pointed to the “the Kwangju massacre where 200 pro-democracy protesters belonging to the workers movement were killed and 1000 injured.”

    it ignores that park chung hee was assassinated. – mlq3

    You’re right, i should have brought that up as i did in a previous exchange with Ca T on this topic.

  28. anthony scalia

    (sorry mlq3 i have to post this:)

    cvj,

    wait, did i ever insinuate that the IT industry of India was the main driver of Indian growth?

    I pointed out to the indian offshoring industry as the best example of self-started and self-driven industry without the benefit of a government aid. And that the policies just caught up with the industry.

    When asked why did they choose IT, these Indian entrepreneurs said that because they had no choice, as IT was (then) the only business they could form without going through government red tape.

    The ‘policies’ that caught up were the policies relevant to the Indian offshoring industry. Take note that phrase was on the same paragraph. Kindly refer to that paragraph. I was not referring to the whole Indian economy.

    The Indian National Dept of IT was formed when India’s IT and IT-enabled services prowess became obvious. This Department really helped the industry further. But such prowess could not have surfaced if not for the initial efforts of the Indian entrepreneurs.

    Imagine if the size of the Philippine offshoring industry is the same as that of India. It may not be enough to cause the Philippine economy to leapfrog, just as the Indian offshoring business may not make a dent to India’s over-all economy, but at least you have millions less unemployed to worry about.

    My over-all point has been – we need more Pinoys like those Indian self-starters. The problem is, Pinoys are either migrating or thinking of ‘patalsikin na now na’

    And removing the chief executive will not usher in economic development.

    I wonder where did you get ‘the dismantling of the IT sector’?! For your benefit, you may want to check the history of the Indian IT giants Infosys and Satyam, as it will also give a history of the Indian IT industry. Then you can verify if ‘dismantling of the IT sector’ is accurate or not.

    And may I remind you that your quotation from Dani Rodrik and Arvind Subramanian actually helps my argument. (Take note, the ‘policies’ that caught up refer to the offshoring industry, not general policies).

    They argue that what triggered the real growth was whewn the government became pro-business. The entry of Suzuki was mentioned – a private sector activity.

    Accept it, policies do help, but private sector involvement is what brings the money in. Pinoys still suffer from the malady of waiting for the right policies before doing anything.

    By the way, Rodrik and Arvind put it well, “…rapid economic growth is attainable under appropriate policies.”

    Not removing chief executives.

    How can we expect government to come up with policies if the Senate wastes its time on investigations that are irrelevant to the needs of the country? Thats not being pro-business!

    “First of all, we cannot both be correct so if i believe i’m right, then Washington Sycip must be wrong and vice-versa”

    Sorry, but your view is wrong. If you can back it up with info from authors like Amsdem, then maybe I’ll believe you. You were able to cite authors in rebutting my arguments. Why cant you do the same with respect to the views of SyCip on democracy? Sorry but that quote from hvrds doesnt qualify.

    “I suppose you mean Amsden.”

    Ah yes, Amsden.

    “No need for that since i’m familiar with the elitist mindset.”

    Oh really? Sorry but you don’t.

    “Washington Sycip wants a dictatorship because he believes it would give arbitrary powers to technocrats like him which would speed up formulation and facilitate the execution of his favored policies.”

    Maybe mlq3 can help verify this – Washington SyCip was at best a government adviser. He never occupied a government position, just those 1-peso a year advisers IIRC.

    Maybe it didnt occur to you that Washington SyCip was pro-business all along – like the indian government in the 1980s, as per Rodrik and Arvind?

    “This despite the fact that our biggest economic downturn in our history happened when technocrats like him (Cesar Virata and Jobo Fernandez) were given free hand by the dictator Marcos. Haven’t we already learned this lesson?”

    SyCip never occupied any government post, much less a policy-making post. What makes you think that if SyCip were given a post, he would do as poorly as Virata and Jobo? And are you sure Virata and Jobo were given a ‘free hand’? During Marcos’ time, nobody had a ‘free hand’!

    “Their political leaders don’t have the same legitimacy issues as their Filipino counterparts”

    implied answer – no, the rallies in India that you saw were not on removing chief executives. and how sure are you that their leaders do not have legitimacy issues?

    “The absolute value of the GDP which you refer to above is different from the rate of GDP growth which i said was important”

    Hey hey, you only said

    ‘rate of GDP growth was important’

    after i gave that statement that

    ‘Well that’s another deadlock. and that makes the Philippines better than India, and just a striking distance off China. Hey that should be shouted from the mountaintops and bannered in headlines – the Philippines is better than the global leader in offshoring, India!’

    which is my reply to your earlier statement that

    ‘Actually no. What matters is per capita GDP’

    because the per capita GDP of the Philippines is bigger than India’s.

  29. cvj

    Sorry, but your view is wrong. If you can back it up with info from authors like Amsdem, then maybe I’ll believe you. You were able to cite authors in rebutting my arguments. Why cant you do the same with respect to the views of SyCip on democracy? Sorry but that quote from hvrds doesnt qualify. – Anthony Scalia

    As requested. Here is what economist Dani Rodrik has to say in his paper on Democracy and Economic Performance.

    While East Asian countries have prospered under authoritarianism, many more have seen their economies deteriorate—think of Zaire, Uganda, or Haiti. Recent empirical studies based on samples of more than 100 countries suggest that there is little reason to believe democracy is conducive to lower growth over long time spans.3 Neither is it the case that economic reforms are typically associated with authoritarian regimes (Williamson 1994). Indeed, some of the most successful reforms of the 1980s and 1990s were implemented under newly-elected democratic governments—think of the stabilizations in Bolivia (1985), Argentina (1991), and Brazil (1994), for example, or of the Polish transition from socialism.

    Should we be agnostic then about the economic implications of democracy? Since civil liberties and political rights have intrinsic value independent of their economic consequences, it is good to know that fledgling democracies do not necessarily face any tradeoffs. But there is more to be said on behalf of democracy.

    As I will demonstrate in this paper, democracies perform better than authoritarian regimes in a number of respects which have received scant attention to date. I will show four results in particular:
    1. Democracies yield long-run growth rates that are more predictable.
    2. Democracies produce greater stability in economic performance.
    3. Democracies handle adverse shocks much better.

    The entire paper is available in the web. Just google.

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