The Long View: What’s at stake in the Senate race


The Long View
What’s at stake in the Senate race
By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 00:23:00 03/15/2010

OVER the past few years the only real obstacle to the President’s ambitions has been the Senate. The Senate we elect in May can either hinder or help the next administration, depending on two things: who is elected president, and whether that president will enjoy the support of a cooperative majority in the upper house. Put another way, the next president has to have a working majority in the face of what will surely be a committed opposition coming from the supporters of whichever of the two main contenders loses (including one of the two main contenders who, if defeated, will remain in the Senate) plus the bloc of the current administration which might position itself as a critical swing vote on bills and the chamber’s leadership.

The conventional wisdom, backed by the example of every administration since 1935, is that the House will be controlled by the next administration, with the Speakership essentially determined by presidential patronage. This was the case even in the era of the two-party system, when the ruling party lost the presidency but retained the House (in 1953, when LP incumbent Quirino lost; in 1961 when NP incumbent Garcia lost; and in 1965, when LP incumbent Macapagal lost, the administration party in these instances maintained its control of the House). By midterm of the Magsaysay, Macapagal and Marcos administrations, House control had shifted to the incumbent’s party. President Arroyo wants to deny the next president the Speakership – a bold bid indeed.

The Senate, on the other hand, goes into 2010 with 12 senators with terms until 2013: two independents, Escudero and Honasan; two Liberals, Aquino and Pangilinan; two Lakas Kampi-CMD, Arroyo and Zubiri (who is already being touted as the leader-in-waiting of the Frankenstein Coalition since the President will be going to the House and Teodoro’s chances are slim); two from UNO, Lacson and Trillanes; two NP, Alan Cayetano and Villar; an LDP, Angara; and an NPC, Legarda. In reality, the blocs might be more like this, based on the two front-runners: the Aquino bloc of four (Aquino, Escudero, Lacson, Pangilinan) versus the Villar bloc of five (Arroyo, Cayetano, Legarda, Trillanes, Villar) with Angara, Honasan, Zubiri up for grabs depending on who else gets elected.

If Aquino wins, the Liberals and allies will start off with three in the Senate; if Villar wins, then the NP and friends can count on four to start with, unless Legarda also wins, in which case the starting count can be four or three, depending if the NP tandem wins or not.

Veteran senators Pia Cayetano (NP), Drilon (LP), Enrile (PMP), Estrada (PMP), Sergio Osmena III (affiliated with LP), Recto (LP), Revilla (admin) and Santiago (PRP) are widely expected to win: that’s already eight, leaving only four slots for the rest, including Lapid of the admin and Sotto of the NPC, and first-timers, of whom, for now, the ones with the best chances seem to be Guingona and Biazon of the LP, Marcos of the NP, De Venecia of the PMP: in the latter’s case, one can only hope (properly, to my mind) that he’s poised to be suitably rewarded for his whistle-blowing efforts by election to the upper house.

If we assume the top eight as shoo-ins, this expands the respective LP and NP blocs from four to seven and five to six. The wildcard bloc, so to speak, would go from three to seven, but more likely disposed to collaborate with the LP than the NP.

But the LP could considerably improve matters if it manages to get Guingona and Biazon elected (with Hontiveros-Baraquel and Roco still having a fighting chance at this point), which is the challenge confronting Francis Pangilinan, the LP campaign manager for his party’s senatorial ticket. At stake is his future within a party long uneasy about his past closeness to Villar, and his prospects as either a potential Senate president or even vice-presidential contender in 2016. Either he will actively seize the reins, barnstorm the country, move heaven-and-earth to get the resources needed by the LP ticket to get at least four more from its ticket elected, or he will have to take the blame and the corresponding dilution of his political clout, if the slate he manages fails to achieve its electoral potential.

The NP, on the other hand, can still work on getting Gwendolyn Pimentel and Gilbert Remulla who remain viable contenders; if the LP manages to elect two more, its bloc would reach nine; the NP could conceivably elect eight in total.

In both cases even if they lose a senator because Aquino or Villar becomes president, the nucleus of an administration majority is there: with the Estrada (PMP) and PaLaKa blocs angling to decide the actual leadership of the Senate. Any bloc with 13 members determines the leadership of the Senate and the prioritization of bills. A bloc of 16 will be as iron-clad a majority as one can ever hope for, enabling constitutional amendments to pass, for example. Any bloc with at least nine members can block things quite effectively, including a shift to a unicameral parliamentary system; a bloc of eight can’t, on its own, stop things, but makes a case-to-case coalition to stop specific legislation quite easy, not to mention keeping the leadership on edge about coups.

The electorate, conventional wisdom also says, likes to cherry-pick its choices for the Senate on the basis of promoting a kind of informal checks-and-balances by not giving any slate too strong a showing; balanced, in turn, by a mischievous combination of electing senators either on the basis of solid qualifications or merely for entertainment value. Considering the challenges ahead, a critical choice, at least for supporters of the two leading contenders, is to ensure their presidential bet also obtains a working majority in the upper house.

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  1. MLQ3

    The Fight for the 12 Senatorial slots will be basically like the 2010 Presidential Race: A Fierce Battle Between the Liberal Party and the Nacionalista Party.

    A strong Aquino Presidential Victory will bring in more LP senators.

    Most likely 6 LP senatorial bets will make it if Noynoy has a very strong showing in the poll (i.e., Hontiveros, Roco, Biazon, Guingona,Drilon and Recto).

    Also,don’t undersestimate the darkhorse (BG Danny Lim).

    EQ

  2. Based on what the surveys reveal, name recall is the primary factor for election to the senate. Those who seem to be firmly on course to win a senate seat are either incumbents or former senators. Those who have a fighting chance, are scions of prominent names.

    I see this procedure as dodgy. It’s playing dice with loaded cubes. It’s a rather undemocratic exercise in democracy.

    There should be a better way to elect our senators.

  3. As un-PC as it is to say, the fault does not necessarily lie with the system, but the electorate. Any change in the form of government is only a panacea. The issue still is the relatively uneducated nature of the electorate (for another example see the Villar Rally article in todays – March 16, 2010) Inquirer). That will only change with wholesale long-term education prioritization and reform.

    Another sad complication in trying to project where Senators may fall in relation issues is many just change stances more frequently than I change socks. Political expediency, for now, will likely be the name of the game.

    • mlq3 on March 16, 2010 at 1:07 pm
      Author

    your objection is undemocratic in itself, don’t you think?

  4. The masses are the same everywhere you go in the world. Our middle class? As employees, probably the best in our region. Our elite? Not in the same level as the elite in other countries. They are the stinking dead rat in the living room.

  5. “your objection is undemocratic in itself, don’t you think?” – mlq3

    If one believes in laissez-faire, especially in unadulterated form, then any intervention to level the playing field would be viewed as “undemocratic”. Allow the elite to continue preying on the masses. Repeal social justice provisions in the law. Let the rich continue to amass even more wealth, as the poor should be allowed to become even poorer and more helpless.

    If toadies to the elite, like Manolo Quezon, had their way, the oligarchy’s capture of government and the bureaucracy, to maintain their stranglehold on the economy and the political authority of our country, should be inviolable. 🙂

    • mlq3 on March 16, 2010 at 7:38 pm
      Author

    that would be a nice response except it totally sidesteps my question.

  6. As Brian Brotarlo points out, our masses are no different from those elsewhere. Except that, compared to more enlightened societies, our masses are more abused and have very few safety nets. Our elite, meanwhile, are the stinking corpse of our society. Or as Brian Brotarlo describes them: “the stinking dead rat in the living room”. Far from being enlightened and benevolent, our elite monopolize resources, wealth and opportunities for advancement. They corner everything, including political power, to the exclusion of the rest of society. Our political system is lopsidedly in favor of the elite. The masses have almost no chance for upliftment, except, perhaps, if they make it in the boxing ring or as clowns in showbiz. The middle class at least have a safety valve. Using education as a tool, they can secure jobs abroad and leave the country. The masses don’t even have the luxury of access to education.

    Libertarians may disagree with Magsaysay’s assertion that those who have less in life should have more by way of the law. They will point out that it is “undemocratic”. But, as history teaches us, no social class will willingly give up its perks and privileges. There have to be measures, sometimes not so pleasant, to ensure that the playing field is kept on an even keel. This is the difference between regressive countries like ours and the progressive countries. Their elite may be just as greedy and predatory as ours. But laws are in place and enforced to make sure that doesn’t happen. In our case, our elite make the laws and, often, enforce them as well. Their is a capture of government, to the exclusion of the majority.

    This is the situation that creates bureaucratic capitalism and booty capitalism. It benefits the very few to the detriment of the majority.

    • mlq3 on March 16, 2010 at 11:07 pm
      Author

    the question is not social justice legislation or policies. the question is limits beyond the term limits that already exist, and what you propose is class legislation: so where is your example of class legislation? based on the examples you provided? europe? the uk, france, spain? asia? japan, malaysia, indonesia, thailand? india? where, outside of lining people up against a wall to liquidate the portions of society you dislike, will you have limits? i’ve pointed out before that you can specifically target classes for leveling purposes: the way the british taxed the aristocracy out of political office (but never figured out how to eliminate the influence of the old school tie in public an bureaucratic office). so granted your hatred for specific portions of the popualtion, how will you democratically eliminate them as you’d wish, in a manner that isn’t on the lines of an undemocratic proposal?

    again, you sidestep the question and you aren’t addressing it at all. how do you propose to legislate your opinion without creating a tyranny as bad or worse than the one you say needs to be eliminated? the start was supposed to be term limits. what next?

    • SoP on March 17, 2010 at 12:53 am

    Just raise taxes on the rich. The chinoy tycoons will move back to China or elsewhere. Others will stay put because they can’t compete with elites in other places. They got nothing else to live on beside their local empires.

  7. Term limits were a farce. That didn’t solve anything. But there must be a way that the elite’s capture of government can be diminished. The Philippine example is scandalous. So called “democratic proposals” are not on the table. There have to be drastic changes which may not please everyone.

  8. Asset inequality (as opposed to income inequality) has been shown to create a damper on growth in cross country studies. This is what Salceda refers to as the “structural constraint” that makes poverty reduction via growth very inefficient in RP and creates the so-called inequality-poverty trap.

    The great difficulties in introducing asset reform should forewarn us against hoping that it can be fulfilled in the next five years among the sugar plantations, the “final frontier” of aggie reform.

    Perhaps, to answer MLQ3’s question in the form of an amendment to SOP’s point, we should introduce a land tax on these large estates. Taxing all of the rich even those engaged in “new” industries would reduce our competitiveness. A land (as opposed to income) tax should be studied in my opinion because our land Gini is greater than the income Gini (a measure of inequality).

  9. GINI and GDP both have to grow. A government, of course, can target GDP and leave GINI to trickle-down laissez-faire, but a government that targets only GINI without throwing large chunks of largesse to GDP-growth is asking for trouble. Very simply, packing up and going elsewhere is always a viable alternative to the rich, and without the capital, then a nation sinks very rapidly.

    Voters have to elect representatives that are attentive to GINI. And the class-warfare angle does not have to rear its head, either, since many GINI-factors are also contributors to GDP-growing strength, e.g. education, public health and public safety.

  10. Inclusive growth (including the poor in growth) is what is argued for which is different from pro-poor growth (the notion that the growth of incomes for the poor should exceed the growth rate of all others) since reducing the land gini will not necessarily reduce the income gini.

    Btw high asset inequality has also been shown to reduce the effectiveness of educational interventions (Deninger and Olinto 2000). Income redistribution will not be sufficient to address the results of asset inequality.

    The erosion of trust and social cohesion which results from high social inequality and the corruption it engenders limits the ability of governments and markets to operate efficiently and invest in growth.

    It stymies tax collection, leads to inadequate provision of public goods and lowers faith in impersonal processes of government, i.e. rule of law. It increases the penchant of our countrymen to run to the arms of corrupt “fixers” aka politicians who offer “help” in the short term in exchange for votes-a vicious cycle.

    Any candidate who offers to improve trust, good governance and rule of law must therefore provide policies that will deal directly with these “structural constraints” as part of an overall package of reforms.

  11. @thecusponline

    So, you’ve identified asset inequality as the primary driver behind corruption and social inequality. Well and good.

    What is the solution then to righting this specific structural constraint and how will it empower the poor?

    Asset (ie land) redistribution? Inherited wealth taxation?

    • SoP on March 17, 2010 at 2:01 pm

    Reduce taxes on corporations-foreign and domestic, reform bankruptcy laws and reform corporate law to adhere to international accounting standards.

    (I dare anyone to present me with Hacienda Luisita Inc.’s financial report for this quarter or any quarter-this would never happen with Western style corporate reporting).

    Then, jack up taxes on land and personal income taxes, forcing these elites to incorporate. Make them subject to the whims of the market, where the weak fail and the strong gobble up the weak. There I just solved the problem of asset inequality for you.

    • SoP on March 17, 2010 at 2:05 pm

    But you have to be sneaky sneaky with reform. Jacking up land taxes will never see the light of day in an elite-captured legislature. But corporate reform is more palatable and populist, so it is doable. That is the first step. Other reforms can follow down the line.

  12. http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100317-259146/Villar-allies-slam-Aquino-over-Hacienda-Luisita

    Cojuangco won’t give up Luisita. That’s why Manolo wrote that revisionist article on Social Justice.

    I’ll go for Gordon now.

  13. How does doing that necessarily help the poor?

    Jacking up land and personal income tax? Hasn’t focusing on income tax been proven ineffective? Now the argument is income redistribution, which has been shown in multiple instances to be an ineffective model. Unless, in this instance we are referring to bringing in a dividend tax, which brings in a whole host of other issues.

    Asset redistribution, unless done properly, can destabilize an economy and cause serious social polarization and unrest. The question should be, what truly is the distribution of land in the country? How much is held privately and how much is held in private corporations? What is the ultimate benefit of forcing ‘elites’ to incorporate…incorporate what exactly? I must be missing some vital statistic with regards to the elites.

    The poor have two knocks against them: little education and limited access to credit/assets/entrepreneurial outlets. The same report that thecusponline quoted concludes saying that their data supports policy makers focus on education for human capital development, but that they The key necessarily isn’t redistributing assets, but providing the poor access to assets/investments/credit that will allow them to leverage their education and their labor more productively.

    All of this of course focuses on breaking apart and redistributing the top of the pyramid (to use an old term), not necessarily on elevating the bottom of the pyramid.

  14. Structural constraints do exist, and they are exacerbated because the elite have captured government and the bureaucracy. This makes structural reform all the more difficult. Our farcical version of land reform, for example, discriminated against the land-owning middle class and hardly touched the elite. Loopholes, as was evident in the Hacienda Luisita case, and access to power made sure that they would be untouched. The middle class, without access to legislators (to provide the loopholes) or to the bureaucracy, was helpless. They were made the scapegoats by an elitist government that wanted to pay lip service to social justice.

    By the way, being motivated by hate for the upper classes cannot be on my agenda because I am part of that class. A sense of realism and a sober assessment of my colleagues and of our country’s predicament are what lead me to conclude that the high social inequality and massive corruption are the result of greed and self-serving (though myopic, in my view) policies largely brought forward by the social group to which I belong.

    My many travels and business dealings in different countries have allowed me to make comparisons. And it has enhanced my conviction that, when foxes are running the chicken coop, it can only result in mayhem.

    Improving education for all would certainly have gone a long way towards leveling the playing field. Instead, we have reduced public education to a pitiful state. And have heaped scorn and starved our public school teachers, instead of elevating them to the loftier status they deserve.

    While it is true that, even in more progressive countries, old schoolboy networks among the upper class persist, it is overshadowed by meritocracy. Sure, old school ties help. But it has to be backed up by merit and achievements.

    • SoP on March 17, 2010 at 6:15 pm

    GAAP rules dictate that businesses with a capitalization of a certain amount be publicly traded. In the Philippines, companies literally worth billions are still privately owned. These should be forced to be incorporated so the public (and by public I mean anyone (pension funds, corporations-domestic and foreign, a taxi driver) can call a broker to buy into that pool of shares) can have ownership. Public ownership has been shown to make efficient operations out of rent-leeching, inefficient operations (like your MERALCO), so they can become lean and profitable. That may not sound much to a regular Juan dela Cruz, but the not so immediate impact is that price distortions (like you power bill) are prevented.

    Now imagine if that can be done to haciendas dotting the islands. Nobody knows how much land is held by private individuals and corporations because, respectively, private haciendas are not incorporated according to GAAP rules and corporations are not reporting properly according to GAAP rules. Knowing what is out there and being able to account for it via a standardized set of accounting principles, dissectable by share holders and the public on a regular quarterly basis, is the first step to any effort to redistribute. How can you redistribute that you cannot count?

    • SoP on March 17, 2010 at 6:31 pm

    Now imagine a scenario into the future when our government and corporations are comfortable with reporting requirements and rules. That should make land taxation easier.

    Jacking up taxes is good because it will weed out only those owners that can profit (after jacked up taxes) from these lands from the lazy asshole owners. Thus, those land holders that are not utilizing their land to their full potential will be forced to sell it, opening up the market and resource inputs (your labor, capital, entrepreneurship parts of the equation) to free land, and by free I mean free from the constraints of old style rules that enable your caciques to lock-up of this valuable resource.

  15. Speaking of stocks, our stock market is an insider’s bazaar. There is very little transparency and is driven largely by insider trading and rumor. Economic fundamentals largely don’t exist. The pool of reliable companies one can trade or invest in is relatively small and management is generally not investor-friendly (i.e. they take the best parts for themselves and hardly leave any scraps for hapless minority stockholders). And, as is the case with almost everything in our country, agencies that should exercise oversight over these companies are captured by these very companies. There is no oversight to speak of.

    This strikes at the very core of trusting our business enterprises.

  16. That I do agree with. In that respect reform comes from enforcing currently existing rules, or at least, like you said applying currently existing rules. GAAP rules, the new Basel frameworks and policies etc etc have already been adopted in some of our banks. Regulatory oversight and enforcement is limited to non-existent here and that needs to be rectified.

    There was actually one comment I had in my second post that was some edited out by me relating to land banking – which I think relates to your second point concerning lazy owners.

    The other concern that has not been brought up vis-a-vis unequal distribution of assets relates to the privatization of government corporations – not necessarily land. Allowing corporations to control multiple utilities (tollways, telecommunications, power and water) is a farce. The corporations, as you said, should have been publicly listed as opposed to spun off into the hands of closely held private corporations with shady international ties and back-end funding. There are also structural issues that place severe barriers for non-politically aligned (domestic and international government) corporations from entering the utilities.

    With regards to privatization though that seems more representative of the continuing culture of cronyism and corruption than anything else – a situation that can only be broken through re-asserting the separation of the three branches and repairing and enhancing a battered judicial system. Transparency is well and good, but does nothing if every knows what’s happening and can do nothing about it.

    Strengthening regulatory framework and imbuing the oversight agencies with powers of enforcement, backed by a judiciary that interprets and enforces as opposed to creating law, is a necessity.

    • SoP on March 17, 2010 at 7:13 pm

    That’s because there is no money Carl. I think they should legalize jueteng and give all the gambling license fee earnings to the Ombudsman and Security and Exchange Commission, let them hire more lawyers and accountants, increase their salaries to ‘non-bribable’ levels.

  17. One other consideration is that our banking system has been remarkably gun-shy in terms of extending small business loans. I have long thought that a well-organized small business focused government agency that will help coordinate and support small business and entrepreneurial endeavors through education/support/training would go a long way to addressing asset/credit inequalities.

    • SoP on March 17, 2010 at 7:18 pm

    And I hate the unquestioned per-hectare-distributed demagoguery surrounding the land redistribution religion. The focus should have been production, not the # of farmers granted lands. Our per tonnage rice output has decreased and per kilo price increase since CARL.

    The focus of CARL should have been production, production, production, not distribution. Did CARL increase production? That should have been the metric of our CARL program from the outset.

  18. There have been a number of studies done on the CARP both in terms of its outputs (hectares of land covered and distributed) and its outcomes (aggie labour productivity, incomes and family expenditure). The bottomline: when done correctly, distribution mixed with access to inputs, infra, technology, finance, and the like has been a boon for its recipients.

    As for dealing with low production in general, let’s face it, there are a number of factors, such as the rice importation program, land conversion and diversion of agriculture funds along with natural causes that have led to low output. The man-made causes arise out of poor governance and corruption.

    With regard to improving incentives to investing, a number of growth diagnostics primarily the one of Hausmann, Rodrik and Velasco (HRV) have been used to determine what the most binding of constraints there is. The 2008 paper by Alessandro Magnoli Bocchi, “Rising growth, declining investments: The puzzle of the Philippines” uses this approach.

    • SoP on March 17, 2010 at 11:11 pm

    The bottomline is inputs, infra, tech, finance and the like are paid for by the tax payer. It’s a direct subsidy to the CARP grantees whereas in the past farm owners (those evil people who underpay farmers) used to get by rotating their money to produce rice, no government subsidy needed.

    ,b>Can you imagine a CARP program for salesladies? What if we grant salesladies 50 sq. m. each for SM department malls, call it CRAMP program (Comprehensive Retail Mall Program)? We will compensate Henry Sy for the hundreds of square metres of mall space lost to him and reallocated to sales ladies. Not only that, the government will also pay for the utilities, transport of goods from warehouses to mall space and finance (salesladies will need help on the initial stock). The government will borrow money and run deficits to finance this whole scheme because God knows salesladies are one of the most underpaid employees and are also the largest employment category for women. Sounds ridiculous doesn’t it? Well, that’s CARP program for you. I don’t understand why we’re all bent out of shape financing these farmers when there are other job sectors out there-OFW’s, salesladies, fishermen, etc that are not getting any kind of direct financial support from taxpayers. What the fuck makes these farmers so goddamn special?

  19. Low agricultural production is the result of lack of infrastructure such as irrigation, drainage and post-harvest facilities. Also the lack of equipment for tilling and preparing the soil. Then there’s the lack of financing for inputs, such as top-quality seed material, fertilizers and pesticides. Let’s not even get into farm-to-market roads, cost of moving produce from the countryside to the centers of consumption or the providing viable farm-gate prices for agricultural producers.

    There’s a whole lot of preparation involved in agricultural production, and it must be planned out in great detail. For a country that considers itself to be agricultural, we take a very cavalier attitude towards agriculturally productive. Our ignorance and indifference about the countryside is appalling.

  20. Yes, I think the confusion lies in the fact that not all Agrarian Reform recipients are on previously owned land. Much of the lands that have been released for distribution were public lands on the frontier (the low lying fruit), so an argument for public provision of infrastructure and other public goods exists.

    Much of the previously tilled land that was distributed did not require these public investments, but then a lot of them around Metro Manila have been converted into commercial and industrial property, which has affected rice production.

    Why agriculture and not other sectors? Well it accounts for about 2/3 of our labour force and produces about 1/3 of our output. Therein lies the problem. If we are to impact poverty, family incomes and overall growth in GDP, agricultural productivity needs to be lifted.

    • mlq3 on March 18, 2010 at 9:48 am
      Author

    revisionist in what sense?

    Ben Kerkvliet

    Dear Mr. Manuel L. Quezon III,

    A friend referred me to your /Philippine Daily Inquirer/ column of 8
    March 2010. It’s pleasing to know that someone as informed and
    influential as you have read and appreciated the book I wrote some years
    ago on the Huk rebellion. More pleasing is to see that you and others in
    the Philippines continue to stress the need for a serious land
    redistribution program in the Philippines.

    Best wishes,
    Ben Kerkvliet


    Ben Kerkvliet
    Emeritus Professor
    Research School of Pacific and Asian Studies
    Australian National University, Canberra, A.C.T., Australia

    Affiliate Graduate Faculty
    University of Hawai’i at Manoa
    Honolulu, Hawaii, U.S.A.

    office address: Political Science Dept.
    2424 Maile Way
    Saunders Hall
    University of Hawai’i
    Honolulu, HI 96822, U.S.A.

    home address: 1355 Frank Street
    Honolulu, HI 96816, U.S.A.
    home phone: ++ 1-808-7443698

    • SoP on March 18, 2010 at 4:25 pm

    Therein lies our difference. You think agricultural productivity is the solution to our millions of poor farmers, while I see our millions of poor farmers as the problem to our agricultural productivity.

    It is paradoxical to put ‘millions of farmers’ and ‘raised productivity’ in the same sentence. You should look up the definition of productivity sometime.

    If we just instead spent the hundreds of billions spent on CARP on expanding our urban areas, we would have hit the twin problem low productivity and mass unemployment with one stone.

    Instead, we went for the counterproductive route of re-buying and re-distributing land with hundreds of billions over the decades, just to fall back to square one: those millions of farmers are still stuck in the country side. No country ever developed by keeping their people in the country side. Even your beloved Taiwan and South Korea had to urbanize eventually. The problem with you and Carl and Brian is you want to reinvent the wheel, and make our efficient farms like Luisita, who already are on the second or third stage of agricultural efficiency, to fall back to square one. It’s the Filipino copycat mentality I guess.

  21. SoP
    To shift people from agriculture to industry, you would first need to lift the productivity of the agri sector. To do that requires we invest in transport and road infra which would not be exclusive to agricultural use alone, but would be useful for tourism and other business needs as well.

    The bias towards urban development is a reality. The fact is most of our infrastructure investments are concentrated already at metropolitan enclaves. You would begrudged what meager portions are allocated to rural regions.

    The equity and growth concerns lie behind the need for asset reform, as I mentioned above, the high level of inequality is creating structural barriers to growth. The first best solution would be asset redistribution. Barring that, there are second best interventions that provide access to human and financial capital to the poor. The kind that has been shown to work in Brazil and Mexico.

    Hope you see the light someday!

    • SoP on March 18, 2010 at 6:06 pm

    No you don’t. To shift people out of the countryside to the cities or abroad, they just have to catch the next bus going to the city! This is the most preposterous thing I’ve heard in a while-that we need to make farms productive before people start leaving. It’s counter intuitive if you think about it.

    It’s actually CARP that’s holding back farmers from moving to the cities. The government, bullied by the left, has dangled the promise of 1.5-3 hectares per farmer. Without this, farmers would have left for the cities already, but no. They hold out in the hope of getting their free land, where, once granted the land certificate, they immediately “sell the whole farm” for 3 to 5 million pesos to whoever wants to buy-the former landlords or the newly minted OFW’s looking for land investment. So the biglang yaman farmer gets the cheese, and we are left with massive deficits and foreign debt. It’s like a reverse bailout of the worst kind because these farmers blow their money on buying a tricycle or jeepney and the rest on gambling on cockfights or lavishing their kumpares with inuman sa kanto every night ’til the money runs dry.

    • SoP on March 18, 2010 at 6:11 pm

    That’s the reality of asset redistribution for you. To make people hold on to assets, they have to had worked hard for it first. Giving away free land is like handing winning lottery tickets. And we all know that 80% of lottery winners lost it all within a few years. The same thing is happening with our farmers. You need to wake up and realize that farmer aren’t the brightest lot. A lot of these farmers are selling their land and falling back to square one, with nary a vision of the asset redistribution you imagine.

    • SoP on March 18, 2010 at 6:16 pm

    …with nary a vision of the asset redistribution utopia you imagine.

  22. revisionist in what sense?

    Exactly. I was looking for a smaller word than revisionist, particularly with a limited meaning. Something like self-revisionist? Know what I’m talking about?

    I think you know that Luisita will not be given up. The shadow I mentioned some time ago is the shadow that the Cojuangcos enjoy and families like the ultra-rich Gokongwei’s do not possess.

    • SoP on March 18, 2010 at 6:32 pm

    This is why the land redistribution will never with Filipinos because unlike your Taiwanese and South Koreans who have a Confucian approach to work and investment, your typical Filipino farmer is a short-term thinking, instant-millionaire minded, consumption machine hell bent on spending it all on sabong, G.R.O.’s, good time at the beer house every night and engrande fiestas and birthday celebrations. Whatever they don’t spend on consumption is “invested” on house and lot, a tricycle or jeepney, or paying astronomical fees to migration agents who would get them a job overseas. When they fail their mentality is “hey I could always go back to working as an indenture peasant”.

    There are more anecdotal evidence of this sort of farmer than the imagined one who sticks by his land and reinvests the season’s crop earnings for the next planting season. Maybe a Chinese or Korean, Taiwanese or Japanese farmer in the 1950s yes. But I wouldn’t count on a Filipino farmer to have industrious, Confucian devotion to his land.

  23. SoP, If you knew anything about the development of Taiwan and Korea, you would realise that your arguments do not have a plank to stand on.

    Aggie reform came before industrialisation in those countries. The egalitarian conditions kept the govts there free from elite capture. The US learnt from its Phil experience when it instituted land reform in East ASia. They benefitted from the formal titling system that Japan had introduced when it occupied Taiwan and Korea.

    You should instead argue that land reform cannot be imposed in a democracy. The successful programs occurred as a result of revolutions or geopolitical reasons, ie the US occupation of East Asia after the war. In fact if you compare CARL with other similar attempts by democratic countries in Lat Am, it is quite favourable to CARL.

    Unfortunately, when the US tried to institute land reform from 1898-1918, they had to pay a premium for the friar lands, which made it hard for farmers to pay it back. The program conflicted with their attempt to institute formal property rights, as the US colonial govt did not want to evict delinquent or squatting farmers lest it weaken their legitimacy. They instead instituted elections as a way to attract the pro-independence movement away from the armed struggle (see Iyer and Maurer, 2009).

    That is why the RP differed in its devt compared to the rest of East Asia.

    • SoP on March 18, 2010 at 6:55 pm

    How is the current titling system of CARP in the last 30 years different from the East Asian experience? As far as I can tell, there are no differences. Both are legitimate exercise in property rights. Except for the cultural differences. Filipino farmers are selling up, while East Asians held on their land and increased agricultural productivity by reinvesting earnings.

  24. I am willing to grant that the Confucian ethic created a meritocratic culture in bureaucracies in East ASia, but prior to land reform, these countries remained feudal in nature despite the presence of the mandarins or public servants representing the Emperor.

    After land reform, the meritocratic ethic coupled with egalitarian conditions enabled a strong state bureaucracy to emerge independent of political elites.

    The mandarins were put to good use in disciplining the chaebols and zaibatsus if they did not perform. The rents that were achieved by these conglomerates were properly reinvested as a result. The weak bureaucracy in the Phils could not do the same because they were subject to elite capture. Initial wealth effects distorted the allocation of resources away from the most productive use of capital.

  25. There are stark contrasts in property rights. Spain actually did not bother to institute a formal titling of lands. The US found multiple systems of formalising ownership. Squatting actually increased rather than decereased when they tried to institute property rights. Why should the poor farmers invest in a torrens title when they were free from eviction and the cost was so high.

    Thus Iyer and Maurer found that regions that had formal property rights did not differ in their growth from those that didn’t. Today, regions where agie reform communities or ARCs are settled perform better in terms of economic and social welfare measures not to mention better peace and order. IT is among non-ARCs where the tendency to sell back lands has occurred. I agree with you in that it is better to do things right or not do it at all except that the law mandates that we do.

    In East ASia, Japan meticulously maintained records of lands. AS a result the cost of instituting land reform and property rights were much lower (avoiding the market and policy failures observed in the RP). They continue to benefit from political stability and secure property rights to this day.

    • SoP on March 18, 2010 at 7:35 pm

    I see you harp on low level corruption as being worse than the top level corruption in your posts.

    Cultural aspects are more of a factor in our current predicament than could ever be elucidated by you or the studies you cite. I feel scholars and pundits don’t take our unique cultural aspects into consideration in their recommendations.

    I feel like any plan to change our system must take into consideration our unique “animal spirits”. We cannot simply transplant the experience of one country into our system, hoping it will change us the way it has changed other peoples.

    Elite capture or not, the bureaucracy will always be a unfair, greedy, asshole because the Filipino is an unfair, greedy asshole. You have to plan the system around this notion.

  26. I agree that development is not a “one size fits all” thing as demonstrated by China which did not require formal property rights to foster growth. The PR offered in TVEs is different from the system in the rest of the country.

    Believe me I can cite studies which point to trust, culture and social capital for you. And I agree they should figure in our analysis. The problem is that social inequality has been shown lowers trust, social cohesion and civic cooperation which leads to the type of behaviour that you allude to increasing the transactions costs in business and implementing policy.

    If we tried to address all these problems from the top down as we have tried in the past and as recommended by the Washington Consensus Plus, we’d wind up where we are now because of our poor budget to fund all the interventions. We have to prioritise and sequence collective actions with the help of the diagnostic tools I mentioned above. Let’s hope someone in the next admin makes good use of these tools.

    • SoP on March 18, 2010 at 8:18 pm

    CARL has expired and won’t be extended. That ship has sailed and it’s time to brainstorm a new plan. It’d be amusing to bear witness to the next decade while I waste my youth trolling this website.

  27. CARL has been extended for another 5 years. So I guess same old same old…Believe me I would hate for you to waste your youth!

    • SoP on March 20, 2010 at 9:15 am

    You almost had me convinced. I’ve had some time to think about it and I now don’t agree with land reform/asset distribution as a panacea to all our problems.

    If I read your comments correctly, you think asset redistribution is a way to alleviate poverty because its gini whatever can attract more investments and it will actually alleviate poverty. And when there is less social inequity, it will make more honest people out of our corrupt bureaucracy because they won’t need to appease the rent seeking populace/elites in their transactions with them because they now have more incomes.

    The reason I disagree with this plan is it all rests on land reform, which we can’t sustain with our debts. You hinted that democracy, and I take this as meaning land compensation, is holding us back in instituting true land reform. As compensation involves paying hacienderos with borrowed money, you might be hinting at nationalization/government land grab as a way to get to true asset distribution without having to do with our funding problem. That will obviously not work with our elite captured congress nor am I in favor of it.

    Our main problem is debt, debt, debt and democracy. This is our unique historical position which means we have to come up with a unique plan and throw out the historical books, so to speak, and forget about drawing inspiration from other countries.

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