Latin American of the East

EYES WIDE OPEN - Iris Gonzales (The Philippine Star) - December 26, 2019 - 12:00am

MANILA, Philippines — The populist narrative never fails. It’s almost addicting for both the politician -- often a charismatic folk hero type -- and the masses he governs. Perhaps it’s like opium -- seemingly pleasant to the senses, intense yet calming, almost reassuring.

Populists like to portray “the people” as the underdog and the cabal of capitalist elites as the villains.

Almost always, the narrative works and the common, ordinary folks are easily lured into the trap. For them, it’s a respite from all the elitist policies in their countries.

What is populism?

Populism is defined as a political stance that emphasize the idea of the people versus the elite.

In the Philippines, this same old story always works especially during election time. It’s the reason we have movie actors turned presidents and disarming folk heroes voted as mayors.

I say it’s addicting because to the oppressed, the elite is presented as comprising the political and economic establishments to advance nothing but their interests. To the common people, it’s always a welcome rhetoric.

But most of the time, populism is only good in words. In real life, these policies almost always never work unless, of course, there is an overhaul of the existing capitalist system. But that is another story.

The water issue

The Duterte administration’s move to put the spotlight on the two water concessionaires, with threats to take over their services, is one such populist move.

For sure, his popularity ratings will soar after this.

But let’s be careful in embracing this narrative.

Sure, the water privatization isn’t perfect and the private sector has their own faults. In our place, for instance, we have had to endure waterless days. We had no choice but to invest in a cistern. The schedule of water supply during the shortage was also intermittent. I don’t know why the water concessionaires couldn’t even get that right.

But putting the water services back in the hands of government is a serious mistake. Those advocating it have no idea what they’re talking about.

I dare say be careful what you wish for, you might just get it. As Mother Teresa once said, more tears are shed over answered prayers.

Privatization

Let us remember that in the first place, the government decided to privatize the water and the power sectors because of the state’s failure to deliver proper services to the people. Decades of mismanagement caused debts to balloon that multilateral lenders had no choice but to pressure government to privatize these sectors.

This seems like choosing between the devil and the deep blue sea, and it probably is. But hey, we’re in the Philippines and we still have a long way to go before we really make things right.

The Duterte administration is right in taming corporate greed, if that is the intention, but rescinding contracts without due process will turn off investors as I said in my special report published on Monday, Dec. 23.

Investors -- local and foreign -- may shy away from the Philippines again. The result would be sporadic growth again because of unemployment and lower productivity.

As economist Raul Fabella said in a recent paper, there was a time when the Philippines had the dubious distinction of being a “Latin American country in the East.”

“Its growth episodes were short and spasmodic; its longer term was punctuated by “boom and bust”. Investment was at a canter; its till was perennially empty and made so by waste and venality; the government raising entitlements to unsustainable levels at the expense of the markets which were into hibernation; its politics was synonymous with political instability. That was also Latin America in the ‘80s and ‘90s. The current development tragedy known as Venezuela is the latest and most virulent example of the Latin American disease presided over most times by populist caudillos who were convinced they were godsend to supplant the imperfect norms of the rule of the market with their own caudillo law,” Fabella said.

Autocrats Hugo Chavez and successor Nicolas Maduro made life impossible for the market players and investors who promptly packed their bags for other climes, he added.

“This emptied the supermarket shelves and brought inflation rate to a 53 million percent from 2016! Maduro is waging a war against his own people. No wonder Venezuelans, ravaged by hunger, started for the border,” Fabella said.

Fabella is on point and I couldn’t agree more.

So let’s not fall into the trap of the populist narrative because when the long-term investment environment deteriorates, many of our growth sectors will suffer.

We only have to look at the experience of Latin American countries such as Venezuela to know that the populist narrative is only good in fiction -- a folk hero saves the world, there is endless wealth and everyone is happy.

But in reality, populist narratives can lead to dark, gory days. It’s no wonder the stories of Latin American authors are characterized by magic realism -- cities beaten down by years of violence and false progress ,or places hounded by tragic sadness disguised as great beauty.

Iris Gonzales’ email address is eyesgonzales@gmail.com. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com

LATIN AMERICAN POPULISM RODRIGO ROA DUTERTE
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