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How we lost the edge after EDSA ‘86

CROSSROADS TOWARD PHILIPPINE ECONOMIC AND SOCIAL PROGRESS - Gerardo P. Sicat (The Philippine Star) - February 24, 2021 - 12:00am

The EDSA revolution in 1986 is celebrated as an important date in the nation’s history.

For many in that particular date in time, it provided the nation with new opportunities and directions. My focus is on the economic aspects of those opportunities which failed to materialize fully as the years went by.

These days, it might be fair to ask how far it has brought us from the aspirations of that period. Many wonder whether we have achieved much after all.

The EDSA ’86. The EDSA revolution brought into power Corazon Aquino as president. From Feb. 24, 1986 to March 25, 1987, she ruled the country with absolute power. But she brought in the 1987 Constitution which restored most of the pre-martial law political institutions.

The new political constitution was seen as a restoration of democracy. But it also reinstated many elements of the nation’s political and economic directions that made it difficult to achieve economic progress.

Lost opportunity early during EDSA ‘86. The period immediately following Corazon Aquino’s accession to the presidency was one of great opportunity lost. She was a reluctant leader on whose shoulders were put the responsibility of nation-building.

Unfortunately, she was not adequately prepared to handle the mantle of leadership. She lacked the essential drive that made leaders want to lead. She lacked what her husband – the assassinated Benigno Aquino Jr. had: the drive and the quality of foresight to cross the treacherous waters of leadership. She turned, mostly for guidance, to political handlers and supporters who had different motives and agenda.

Had she been well-advised, she could have seized the moment from the very start to restore the nation’s financial footing after the severe financial and economic crisis that the country had experienced before she succeeded into the job by seeking the support of the international community to move forward.

For on her assumption, she had accumulated enormous goodwill that could have been put to good use. The big moment was when she appeared before the Joint Session of the US Congress to address a nation that could have been of great help during that moment of financial weakness. However, she let that goodwill moment slip by.

Eventually, it lost its shine. By then, she had been perceived to be one of a kind among Third World leaders who did not know much about how to lead. When she allowed a prolonged, rudderless debate on whether to honor the country’s international debts, she put the country back to the process of learning new principles of leadership the long and difficult way.

She had a capable finance minister whose time was wasted fighting local battles in the home front. As a result, it took much longer to return the country toward financial normalcy. Many economic projects of value that were on stream were discarded or abandoned.

The discontinuity in government operations was also a victim of the transitional failure to stabilize finances and project activities that were on-going. This happened across some important ministries of the government.

Among many decisions regarding the economy which she took, perhaps the worst one was that concerning the nuclear power plant project. This was a major project that promised long term steady supply of inexpensive power, with further built in capacity to double power generation quickly. This project went to waste at high cost.

She listened to critics of the nuclear power project who criticized it on political and safety grounds. Her decision not to commission it for power generation plunged the country into an electricity crisis that would last for years, well beyond her presidency. It would make the country lose competitiveness in energy costs compared to neighboring countries.

The 1987 Constitution. One of the earliest acts of Mrs. Aquino was to oversee the displacement of the 1973 Constitution (which was a product of the Constitutional Convention, although during its last year the convention was influenced by the martial law environment).

Today, this is the constitution that continues to rule our political lives. With minor modifications, the 1987 Constitution is in many ways similar to the 1935 Constitution. It could even be said that even if the nation’s political structure is governed by this constitution, it is almost as if the nation is essentially on cruise control operating under the 1935 Constitution.

One of the modifications introduced in the 1987 Constitution was to extend already restrictive economic provisions of the Constitution to new areas: advertising, education and some professional labor markets. In that sense, it expanded already highly protectionist economic provisions.

In the course of years after EDSA ’86, the nation moved forward economically because we have also done some good policies. Yet we have not done as well as our neighbors in terms of the benefits of economic growth.

These neighbors are expanding their global markets faster than we are able to. Compared to us, the more massive entry of foreign direct investments in their respective economies (in absolute amounts and in per capita terms) means that they are reaping larger benefits from globalization than in our case. With faster and larger volume of foreign direct investments into their  economy, they reap job gains through rising higher wages, the result of increasing productivity.

Much of our gains from globalization come from the earnings our workers send home as remittances. Many of our workers have become immigrants to labor markets abroad where they earn money for the upkeep of family who remain at home. Of course, we have built the BPO (business process outsourcing) industries significantly, thus providing job opportunities for highly skilled, college educated labor in the country.

In contrast, our neighbors in East and South East Asia make direct use of foreign capital and expertise to set up new industries that expand domestic manufacturing capacity in their countries. As a result, their workers, both their highly educated and those who are poor and with less skills, find their jobs at home where they live. These economies become the base for new production for export to other world markets.

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For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/

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