Nations at critical junctures – Our transition after

Once upon a time, about three decades ago, the country faced a critical juncture. Within five tension-filled days of hectic and unimaginable developments, the country’s political leadership convulsed. Ferdinand Marcos was forced into exile and Corazon Aquino took to the helm in a show of People Power.

“Other nations at critical junctures.”  Recently, we have been witnessing (through the news lanes) the trying times for other countries. The developments in Ukraine (in far Europe) showed enormous similarities to the drama that unfolded for us in 1986.

After several days of intense disruption due to mass demonstrations, and almost as a consequence of firing and killing of many demonstrators, the Ukraine’s politicians dismissed the sitting president and installed a replacement government.

As I write, there are continuing dramas of similar struggles against incumbent governments. In Thailand and in Turkey, mass gatherings are trying to force the prime minister of each country to leave office. The clamor for their removal represents a demand for accountability. Corruption is being used as the reason for this demand.

In Egypt, the people are demanding a change in government. Only two years ago through people power, they toppled their leader, Mubarak, and then elected someone who turned out a big disappointment so that they toppled him again. Now, however, the government is essentially under the control of the military, whose leader is considering a run for the presidency. This is likely to end up in the same military dictatorship all over again, like that of Mubarak before, and of Sadat and Nasser before.

In Venezuela, the people are rising up against a government bent on tilting social and economic policies to build a socialist state with the help of price controls, subsidies and state enterprises. The result is that this resource rich country is experiencing hardships for the people due to scarcities of basic essentials, high inflation, poor balance of payments position, and high crime rates.

“Crises are seldom sudden events.” Crises – political or economic – do not happen overnight. They often arise from the confluence of developments that build upon one another.

These events happen in a deeply divided country where political discontent is fuelled by economic issues. Often, the high incidence of poverty, income inequality, corruption and mismanagement of economic affairs compete for attention as the cause of political divisions.

A crisis often brings in a deluge of unwanted and uncertain imponderables. It is best to hold off an on-coming crisis through reforms.

But such a route of reforms often means to take bitter medicine ahead of time. The “easy” approach is to resist reforms. The failure to heed – or procrastination – leads to a worse outcome: crisis. In a crisis, the deluge of uncontrollable events often takes place.

“The Philippine debt crisis of the 1980s.” In 1982, Mexico suffered a debt crisis and the Philippines was caught in the contagion. The rise in interest costs of outstanding debt suddenly became unaffordable for countries with high outstanding debt.

Then, before any debt restructuring could be devised, however, the Aquino assassination took place. (At the time it happened, Marcos was sick and just taken off the operating table.)

The assassination simply overturned any developments that could have helped to relieve the consequences of the debt problem. For this event put a stain on the country’s international credibility. From that point on, it was difficult to obtain new financing inflows.

Of course, the economic and financial crisis arising from 1983 played a big role in the EDSA events of 1986.

“Costs of political and economic crises.” So, the EDSA revolution of 1986 was simply a continuation of a prolonged crisis that had swept the nation earlier. A series of negative developments transpired thereafter.

The drop in output was felt two years in a row, almost close to 10 percent two years in succession followed. Many planned investments were scuttled. Private sector programs virtually stopped, falling down in sympathy.  Government projects were held up with dire consequences.

The successor government was so enamoured with the idea of a “new beginning.” It failed to take adequate inventory and appreciate the value of what it had inherited from the previous government.

In trying to diminish the accomplishments of the previous government, in demonizing a lot of what was done before, the new leadership forgot that their takeover of government was to start with the legacy of works that the previous government had undertaken and accomplished for the nation:

These were quite substantial. These included an array of infrastructure investment in roads; in irrigation; in power plants dependent on a variety of energy sources, many of them indigenous; in transportation, in the provision of school-buildings, in rural electrification.

The succeeding government refused to commission a nuclear power plant that was ready to go on service. That project was the bridge to steady supply of power in the country at that point in time. It was also a source of cleaner and cheaper energy for the country.

At that point in time, the country was at pace with the efforts of Japan, South Korea and Taiwan to move into nuclear energy. (Today, China and Indonesia are in active pursuit of this energy program).

The rest of course is history: the worst energy crisis in our post-independence history would happen. This was a serious error of the transition from Marcos. We would miss up on the big wave of foreign industrial capital that relocated from Japan and other countries to other Southeast Asia during the late 1980s and early 1990s.

The energy development program was not the only aspect of government that suffered during the transition.

The civil service – especially the senior civil service institution being carefully nurtured during the period – was diminished and disrespected by the succeeding government.

We can ask ourselves today: how many laws and institutions of the republic are in place today because they were part of the economic, social and institutional reforms undertaken during the 1970s? A fair scrutiny would tell us that there are a lot on which we continue to depend today.

“A lesson to be learned?” The lesson of history for us – the lesson that all other countries need to learn, I suppose – is that any new government can build from what a previous leaderships has accomplished.

The rhetoric of politics might be harsh and sometimes needs to be harsh against a predecessor. But it should improve on the value added and accomplishments of the previous regime. Nation building improves as a consequence.

My email is: [email protected]. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/