NEWS ANALYSIS

GMA’s 10-Point Agenda 
Promises for the U.S., Power Firms

Ms. Arroyo’s 10-point agenda goes nowhere to resolving the country’s basic ills. Her so-called “legacies” are a just a mix of populist rhetoric, assurances that government will be attending to the needs of big business, and vacuous cries for “unity” and “peace.”

BY SANDRA NICOLAS
Bulatlat.com

At first glance, the “10-point agenda” outlined by Macapagal-Arroyo during her inaugural address last June 30 seems innocent enough, and even desirable. Taken verbatim from her speech they are:

1. “I shall have created more than six million jobs, perhaps, even 10 million jobs… I shall have supported three million entrepreneurs by giving them loans and helping them become good managers… I shall have developed one million hectares, if possible two million of agribusiness land by making them productive and transporting their products to the markets efficiently.

2. “Everyone of school age will be in school in an uncrowded classroom, in surroundings conducive to learning. Hangad kong makapasok sa eskuwela ang bawat bata. Mayroong sapat na lugar sa silid-aralan at may computer sa bawat aralan. (I wish for all children to be able to go to school. With enough classroom and computers at every school).

3. “I shall have balanced the budget by collecting the right revenues and spending on the right things.

4. “The network of transport and digital infrastructure on which my government embarked in the last three years will have linked the entire country.

5. “Power and water will be regularly provided to all barangays (villages).

6. “Metro Manila will be decongested with economic activity growing and spreading to new centers of government, business and community in Luzon, in the Visayas and in Mindanao.

7. “The Subic-Clark corridor will be the most competitive international service and logistic center in the Southeast Asian Region.

8. “Elections will no longer raise a single doubt about their integrity. The electoral process will be completely computerized.

9. “Peace will have come to Mindanao. All insurgence shall have turned their swords into plowshares. They will have become so absorbed into one society that the struggles of the past will be just a stuff of legend.

10. “The divisive issues generated by EDSA I, II and III will also be just memories shared by friends from every side in those upheavals… Only the lessons of unity, courage and a just closure left alive in their hearts.”

They have been hailed as “inspired” and showing how “action-oriented” and “results-oriented” the new president is. Unfortunately these have to be read against harsh economic and political realities. 

Empty promises

The agenda opens with a seeming blockbuster double-bill: jobs for millions and education for all. Progress, moreover, won’t just be in Metro Manila but spread throughout the archipelago. The only problem is that the government has done dismally in these areas, historically and especially since 2001 when Ms. Arroyo took over the presidency after Edsa Dos.

The “one million jobs a year” claim of government is a particularly deceitful half-truth where jobs “created” are cited outside the context of the needs of a growing labor force. Measured against that – which is what government must ultimately be responsible for – there were 473,000 more jobless Filipinos in 2003, the last full year of Ms. Arroyo’s term, than in 2000. The average annual unemployment rate even deteriorated from 11.2 percent in 2000 to 11.4 percent in 2003.

Put another way, Ms. Arroyo’s half-term presidency saw the highest recorded unemployment rates in decades and the highest number of jobless Filipinos – nearly 5 million in April 2004 (see Gov’t Destroys .5 M Jobs, Record 5 M Jobless) – that the country has ever seen. Barring catastrophic economic collapse, the one-million-jobs-a-year target will likely be met. But though seemingly a lot this low target is just not enough.

The way Ms. Arroyo aims to “create” these jobs is also revealing. In the version of the 10-point agenda posted by the Office of the Press Secretary, it is more explicitly stated that six million jobs are to be created through opportunities to entrepreneurs, loans to small and medium enterprises, and land development for agri-business. To be sure this panders to individual business aspirations. Yet in the absence of a genuine industrial and agricultural strategy necessary for building a solid domestic economic base, pockets of individual wealth only obscure the absence of economy-wide development.

The most fundamental economic reforms needed are genuine land distribution and real support services, a deliberate industrial investment policy, and judicious protectionism. Promoting individualistic “entrepreneurship” in the absence of these can only result in increasing joblessness. Even the stated goal of developing agri-business land is ominous – implying a renewed drive to enable agricultural land as collateral that will ultimately increase land re-concentration and landlessness.

The quality-education-for-all promise, on the other hand, is not so much a half-truth but an outright lie considering the trend in national government spending on education. The long-standing insufficiency of the government education budget already shows in the dismal lack of teachers, classrooms, desks and books as well as rising out-of-pocket expenses of parents.

But real spending on education – meaning taking inflation into account – has been falling since 1998 and especially so since Ms. Arroyo came to power. The P129.9 billion budget for education in 2003 is 5 percent less in real terms than that in 2000 (in contrast, the 2000 education budget eroded 0.6 percent in real terms compared to 1997). Re-enacted in 2004, this budget will mean even less with inflation so far this year already accelerating to some 4.2 percent.

The glowing promises are belied by the apparent and worsening government neglect. And while there is no doubt about the need to modernize education, the promise of computers in every school is peculiar given the sorry state of the basics. Indeed, given the fact of an eroding education budget and deteriorating public schools, the appeal to modernizing aspirations is manipulative and borders on the insulting.

Business assurances

Yet while the people have little to hope for, big business has been assured of government efforts to give them opportunities for profit. The 10-point agenda affirms Ms. Arroyo’s support for some of foreign investors’ currently most preferred investment areas: power and water, service and logistics, and transport and technology infrastructure. Investment areas where, conveniently, major U.S. corporate interests are involved. We can take a few examples.

It is surely no coincidence that the USAID-funded AGILE’s crafting of the power sector-privatizing EPIRA in 2001 was closely followed by a US$5 million USAID/U.S. Department of Energy project providing “advisers” to the Philippine Department of Energy and the Energy Regulatory Commission. U.S. companies are active in the country – including Mirant, Unocal (Philippine Geothermal), Enron, CalEnergy, Covanta, Intergen, Sithe, Bechtel, El Paso, Ormat, and CMS Generation. Mirant alone has over US$ 2.5 billion in total investments in the power sector.

The country is also entirely dependent on imported equipment. Government efforts in “power and water,” “transport and digital infrastructure,” and “service and logistics” invariably mean massively profitable opportunities for suppliers. The U.S. is particularly well positioned and imports from it take up large chunks of the domestic market: telecommunications (45.6%), information technology (27.8%), electrical power (24.4%), construction (21.1%) and water (15%).

However, the experience of private sector provision of public goods like power, water, telecommunications and transport infrastructure is to turn these more and more into luxury goods only for those who can afford them. Water charges per cubic meter have increased 253% (Manila Water) and 427% (Maynilad) between 1998 and 2003. Power rate hikes were already higher by 150% between the mid-1990s and 2003. Further increases are already looming, most immediately in toll way fees come July 5.

Services for the people, certainly, but only to the extent that there’s a profit to be made. There is a similar situation in the declaration of a balanced budget by 2009. “Balance” that is not as innocent as it seems because what Ms. Arroyo means by the “right” revenues and the “right” spending, if Philippine economic history is any guide, is unfortunately not so right for the people.

The problem of a national government surplus of 0.1 percent in 1997 steadily worsening to a 4.6 percent deficit in 2003 is well-known already. Likewise with the burden of P3.4 trillion in national government debt at the end of 2003, including contingent liabilities which reached P723 billion in February. Big business is worried about the impact of fiscal problems on the country’s – and their – credit ratings.

The possible tax measures being floated include on text messages, tobacco and liquor, petroleum products, and gross income which reportedly could earn the government at least P50 billion annually. Also being considered are a further expansion in the VAT to 12 percent – with P14 billion in additional earnings yearly – and the “rationalization” of fees, charges and fiscal incentives. The Bureau of Internal Revenue also claims up to P102 billion in “leakages.”

Cutting through the technicalities though, the basic problem is that budget deficits have historically been reduced through harsh austerity measures hitting social services the worst. And it seems that Ms. Arroyo’s priorities are no different.

Not only has social services spending historically fallen far short of meeting people’s needs for education, health and housing, real spending on these taking inflation into account has even drastically fallen since 1997 – by 6 percent (education) to as much as 36 percent (health). In contrast debt payments have more than doubled in real terms and military spending increased by about 5 percent. Notable also is the supplemental budget passed pre-elections to finance just the elections and a pay hike for the military.

Vacuum-packed

The last cluster of the so-called “legacies” that she said she wants to leave after her term are simply underwhelming and most quickly dismissed, especially when measured against recent behavior.

The long-delayed computerization of elections is a tacit admission of the malleability of current manual methods. But even then, computerization as such is distantly secondary to the real problem of Philippine democracy: that whatever the methods of counting, it is a political exercise dominated by economic elites with strict limits on the extent to which the genuinely progressive can participate and be meaningful.

Finally, the calls for “unity” and “peace” cannot but ring hollow for so long as the basic reasons why there is unrest and dissatisfaction continue. The overwhelming number of Filipinos are poor, sick, ill-educated and badly-housed because of a political and economic system that places elite and imperialist profits above all. And yet the 10-point agenda – already reported to be at the core of the upcoming Medium-Term Philippine Development Plan (MTPDP), the government’s six-year economic blueprint – is noticeably silent on some vital issues such as landlessness, low wages and the onslaught of so-called globalization.

Ms. Arroyo’s 10-point agenda goes nowhere to resolving these. It is immediately clear that her so-called “legacies” are a just a mix of populist rhetoric, assurances that government will be attending to the needs of big business, and vacuous cries for “unity” and “peace.” Bulatlat.com

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