Constitutional Reform – where is the business case?

A business case. The lack of one is the big elephant in the room that the whole debate around the Constitutional Reform agenda seems to be tiptoeing around. Constitional Reform is a textbook replacement problem. See it from a Project Management Lifecycle (PMLC) perspective and this becomes quite evident.

Most PMLC schools of thought (management consultants tend to develop different flavours of it for their respective consulting brand quackery) define five key lifecycle stages: Propose, Investigate, Design, Build, and Test. For big implementation projects, initial funding approval is conditional on the basis of a solid business case to proceed.

The Investigation stage is usually the most crucial stage. It is where user requirements and solution options are identified, itemised, articulated, and costed. Any evaluations of the options presented on the basis of their benefits (or, more broadly, added-value) can only be in the context of the cost of the whole exercise.

The bottom line of any change initiative in the Philippines — reduction of poverty — is something nobody in the National “Debate” seems to have any disagreement on. Say then that the benefit part of the business equation is “reduction of poverty”. What are the options then to consider for the cost side of the equation? Obviously there are two broad options:

(1) Do nothing (i.e. continue using the current Constition for the foreseeable future).

(2) Change the Constitution

The first costs nothing. The second will cost us in terms of:

(2.a) The actual administrative costs of organising the movement, convening the investigation and design forum, and implementing (agreeing and ratifying) the new charter.

(2.b) Continuity costs in terms of disruption to governance and distraction of a population that tends to fixate on political circuses (as if elections every six years isn’t an already costly distraction in a Third World society like ours).

(2.c) Risk profile; i.e., is the problem with Filipinos really to do with the nature of our politics?

In short, there is only one benefit of any real consequence in the bigger scheme of things and two options and their costs against which this one benefit should be evaluated against in a proper cost-benefit analysis.

The obvious question when replacing an asset (our current pseudo-US-style Presidential system) then becomes quite simple:

Have we already been using this asset in its existing form in an optimal way?

Specifically, does this current system offer us enough room to move which we simply refuse to or lack the brains to harvest?

* * *

We need to be careful and make sure we don’t gather up unhealthy momentum that may reduce our ability to remain reflective and introspective about certain belief systems that could be starting to snowball. The holding up of Presidential Systems and Oligarchs as strawmen or bogeymen should be avoided and we should, instead, remain focused on the whole point of such exercises and initiatives lest we ourselves get blinkered by our own zealous agenda-driven rush towards an as yet uncrystallised solution that could deliver ill-understood outcomes.

Remember the 1986 Edsa “Revolution”. 😉

Perhaps for our own benefit, as Ben Kritz points out, we need to encourage people who are opposed to constitional reform to come up with more modern and more robust arguments to make sure that a balance is maintained and that the constitional reform agenda is not perverted by unhealthy popularity.

Answering the question of whether we have exhausted all efforts to derive as much value as we can from the current system of governance is the key to anyone who opposes Constitutional Reform coming out as an intelligent challenge to it. This is what I mean when I cite the opposers’ need to modernise their approach and leave behind the old moronic style of politicising the debate the way relics of 1980’s thinking like Ellen Tordesillas do by insulting the intelligence of the public in the way she applies quaint scare tactics that tend to work on the smallest minds of our society.

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42 Responses to Constitutional Reform – where is the business case?

  1. BongV says:

    1 – The cost of doing nothing is there for all to see.

    * Most restrictive – per Heritage Foundation
    * Among the least competitive economies

    Plus of course having to print all the development studies that have been prepared by all the consulting agencies kinda re-invents a wheel that does not need re-inventing.

    2 Speaking of continuity – what is there to continue in the first place when the intention of constitutional reform is to stop the continuity of the flawed economic policies embedded in the constitution – lest we expect the different results from the same flawed economic policies embedded in the constitution.

    3. Exhausting efforts – needs to be further qualified in terms of strategic or tactical efforts because pursuing improved tactical efforts based on flawed strategic directions kinda sounds.. like the typical pinoy. Thus optimal usage of a FLAWED policy environment is just like maximizing use of the Titanic while it is sinking.

    4. Oligarchies are results of the dynamics of protected economies – (http://en.wikipedia.org/wiki/Oligopoly) – while bogeymen exist in children’s books. Oligarchs, monopolies, and cartels – exist in the real world – Economics 101 – so it just boils down which world we want to live in – has local and foreign companies competing to deliver value or to be typical pwede na Pinoy mentality. We can speculate to kingdom come – the question is are our speculation supported by facts and overwhelming empirical data.

    • benign0 says:

      There are two ways to frame the costs associated with the Do Nothing option: (1) in terms of what can’t be done and (2) in terms of what hasn’t been done. What you do on your first statement is more around the earlier. But the latter has more to do with the question of whether or not we’ve sweated the current asset enough. Kung baga, is there something that could be done with the current system that hasn’t been done which is incurring us opportunity costs?

      If we limit this evaluation to access to foreign capital, then we are not providing a complete picture of what would possibly constitute this opportunity cost. There are other things that could contribute to poverty alleviation (perhaps yield results that could equal if not even surpass the results that access to foreign capital might yield) that could be done under the current system that may even have nothing to do with access to foreign capital.

      And that’s what I mean by being focused on the intended outcome at the Investigation and Design phase in a way that is not coloured by pre-conceived notions of what the “solution” ought to be. Project Managers have a term for it — premature solution mode.

      I’m not questioning the need for constitional reform. What I am questioning is a premature fixation on a particular aspect of it. I’d even understand if it is being treated as a hypothesis that is subject to testing. But from what I observe, it is a solution that is being pitched.

      Which is why I am hoping for a healthy debate — one where the opposing side provides equally robust arguments.

      That puts a bigger perspective around your second assertion which you frame around the “continuity” issue. The continuity thing is bigger than that specific aspect of the reform agenda — the “flawed economic policies”. We need to view it in an apples-to-apples manner. A single set of “flawed” policies “embedded” in the Constitution is but a component in a wholistic evaluation of said Constitution in the context of a goal to alleviate poverty. Access to foreign capital is not the only factor that impacts poverty (or wealth, for that matter) in a society. Education, domestic capital creation, reproductive health, population management, tax structure, and many other things impact the economy — and wealth/poverty of individuals. All of those have varying issues to do with the nature of the Constitution. As such, using access to foreign capital as a defining sales pitch for Constitional Reform is like balancing a pillow on top of a pinhead.

      Which brings us to the third point re “flawed strategic directions”. Let’s say for argument’s sake that the mission is to reduce poverty in our society and that the broad strategy is to amend the Constitution to achieve that mission. The strategic initiatives within said strategy could then be to (1) improve economic freedom, (2) increase entrepreneurial activity, and (3) reduce population growth. Within each strategic initiative would be programs and within each program would be the actual executable projects.

      Again I stress that all of the above so far is for arguments’ sake. Note also the application of the concept of MECE (mutually exclusive, collectively exhaustive) in the development of the execution framework in a way that maintains traceability to the whole point of any execution exercise (i.e. the Mission). You can see that before you can even come to a prescriptive statement like “open the economy to foreign investment” (presumably with the goal of “reducing poverty”), there is a heap of other factors of potentially equal weight that compete for the honour of being pitched as the official tagline for Constitutional Reform.

      Perhaps then, referring to the fourth point re “oligarchies”, the issues to do with the existence of oligarchs also is embedded somwhere in that MECE framework I illustrated above. Which brings to question the assertion that oligarchs exist primarily because an economy is “protected” (and by the way their existence should not be confused with being in an oligopolistic situation, as oligarchs can still exist in open economies).

      • Orion says:

        If you had probably done some research  about how FVR and GMA were relatively much more efficient at running things than Cory or Erap were, you’d have noticed that FVR actually tried to set up a Parliamentary-esque “informal-cooperation” system called LEDAC (Legislative Executive Development Advisory Council) which was meant to get the Legislative committees and  Executive Departments coordinating and working together to synergize their programs and policies. Why is this important? Because uncoordinated Executive and Legislative branches going into too many different directions is a recipe for disaster. 

        Now LEDAC significantly sped up stuff compared to when LEDAC was not yet formed, but unfortunately, it was still TOO SLOW compared to how a real Parliamentary System would run where the Legislative IS the Executive. That is why FVR and Joe Almonte realized that speeding up the governance process would only work with a shift to a real Parliamentary System as opposed to you are proposing which is to effectively “try stretching the current status quo system to its limits.”

        FVR already did that and unfortunately he found that the processes were still too slow. Yes, they were faster than before LEDAC was created, but it was still not as fast as it should be as it did not account for the multi-lateral (and multi-partisan) nature of the legislature with its coalitions and alliances versus the uni-lateral nature of the executive vested solely in the Office and Person of the President.

        Moreover, in the economic sphere, FVR did his best to get as many laws passed that would make exemptions to the 60/40 constitutional provisions. He circumvented those provisions through special laws which actually imposed hard-to-reach requirements on companies that wanted to come in. These laws allowed for 100% ownership, but they also required companies to be based in faraway export processing zones, had employee quotas, and many more.

        The problem here is that very often, companies are cautious  about investing in a new place. Instead of pouring in a billion dollars into operations in the Philippines in one go (which would then qualify a company for 100% ownership), most foreign companies want to play it safe.

        They’ll want to start small. Play it by ear first. See if setting up a crew of 100 people will work and then organically expand, eventually, constant expanstion may mean that they will eventually reach 2000 or even 5000 employees and over 1 billion dollars in capitalization.

        But initially, these companies will play safe and not want to throw a huge amount of money. 

        In that situation, their initial “test-foray” into the Philippines is ineligible for 100% ownership because they won’t be at that “huge enterprise” class of mega-companies.

        That is why FVR and Almonte also realized that these “circumventing laws” that meant to allow 100% ownership were just not enough. The Philippines needed jobs badly. Small, Medium, or large, it didn’t  matter. FVR and Almonte wanted companies to come over and invest. But no thanks to the 1987 Constitution, small and medium scale foreign investments were not allowed unless they went along with the 60/40 provisions.

        That is yet another proof that FVR (and Almonte) as well as GMA (who also did the same thing) had tried as much as they could in order to “exploit” or stretch the current FAULTY and FLAWED 1987 Constitution beyond its limits. Alas, there is a limit to how far an inherently flawed Constitution can go. And that is why the most economically-minded leaders (FVR and GMA) have been the strongest proponents of Constitutional Reform.

        Truth be told, there is a lot of intense analysis of facts and a need for extensive research to be done for one to arrive at the same conclusions that BongV, Chino, Dindo, Arnel, Jason, etc, and I have all arrived at. 

        I’ve been thinking about all this for close to 15 years now. It’s not like we just latched on to some movement that was already being pushed long ago. On the contrary, several of us independently did our fair share of number-crunching, extensive and intensive research, and analysis to find out that there was ABSOLUTELY NO OTHER WAY AROUND the flawed and faulty 1987 Constitution. In short, many of us got to the same conclusion separately and independently. (What does that say about certain types of minds thinking alike?)

        Those of us who are spearheading CoRRECT™ are already at Get Realist stage 4 as far as our mind-processes and paradigms for analysis go. We analyze not just to analyze. We analyze in order to seek solutions.  And since several of us (esp. yours truly) have been analyzing these issues for years (in my case more than a decade!), the solutions we have come up with are not in any way premature. We’ve thought these through much longer than others (including yourself) have.

        To be a bit honest about it, those who are still at Stage 3 are the ones who need to do the catching up. We at Stage 4 are not obliged to slow down to accommodate those who seem to have resisted going to Stage 4. If several of us are already doing Calculus, the guy who’s still struggling with the simple Algebraic equations should not hold those of us who are currently doing Integral Calculus up. 

        The solutions are already staring at us in the face. They simply are appropriate fixes to each of the obvious flaws of the 1987 Constitution. There really is no need to beat a dead horse. We know what it died of and who owns it and it’s already beginning to stink. It’s time to bury it and there’s really no need to ask the same questions of “what did the horse die of” and  “who owns the horse” because we already have all that info. Holding us up and preventing us from doing what needs to be done achieves nothing.

        I honestly would suggest reading the EPILOGUE of Lee Kuan Yew’s “From Third World to First” so that you can gain a better understanding of my thought processes and bias towards pragmatic idealism, rather than “analysis paralysis” idealism. (I would assume that some of the others like BongV are of a similar mindset as well.)

        To be absolutely honest about it, last week’s feature on Lee Kuan Yew was meant for *ahem* (no kidding!) —> your benefit. I wanted to emphasize to you that Lee Kuan Yew’s mentality closely matches mine (or rather, I strive hard to match his), where “superior analysis” is just a means towards coming up with superior solutions. Singapore would not be the economic and human development powerhouse in Asia it is today if Lee Kuan Yew and his team got stuck in GR Stage 3. If and when there are a few flaws that result from solutions made at GR Stage 4, then you do a downward shift to GR Stage 2 to look at where the problem is, tell your colleagues about the problem, and then together move back to Stage 4 again to find a “patch” solution that would attack those little flaws. Solutions should not be thought of as final. Instead, they should be seen as attempts to solve at least majority of the problem at hand. Next step, you fix the remaining problem that could not be addressed in the first pass, and so on and so forth. But asking for perfect instantaneous solution is a recipe for ending up with NO SOLUTION.

        Besides, Constitutional Reform was very clearly explained in my recent post to merely be an ENABLING STEP, not a silver bullet. Those who refer to it as if it were being peddled as a silver bullet (and no pro CoRRECT™ guy has ever thought of it or peddled it as a silver bullet) and then try to refute that are erecting a strawman argument.

        That is all. 🙂

      • benign0 says:

        Actually, Orion, you will note that though you cite historic examples of how past presidents tried to circumvent foreign ownership provisions in the 1987 Constitution, that whole exercise still revolves around the aspect of access to foreign capital, which as I highlighted in my previous comment does not by itself make a case for the overall constitutional reform initiative as an overall solution to poverty alleviation and certainly does not categorically disprove the possibility that working with the current system can yield the same outcomes in some other way.

      • ChinoF says:

        Way I see it, that FVR et al tried to find circumventions to foreign ownership restrictions means that the restrictions are a problem. But circumventions aren’t enough. It is highly likely that Constitutional Reform will obtain better results. We can even quote Butch Abad on that.

      • Orion says:

        Actually, Benign0, your fixation on a so-called “business case” aside, the fundamental principle of “Rectifying what is Faulty” is compelling enough by itself.

        If you’ve got a leaky pipe, do you just leave it be? Or do you fix it?

        It’s your choice to fix it or leave it be. Usually this has to do with your ability to tolerate certain cost-burdens. As you probably know, there are costs involved with a leaky pipe. Your water bill is likely to be bit higher than usual because of the leak. Your kitchen sink is always wet. Maybe someone’s always slipping, or you waste time having to mop that area every 3 hours.

        That’s the same thing with a faulty Constitution.

        A faulty Constitution may, for instance, prescribe a system of government that is too slow when it comes to reacting accordingly to emergency or special circumstances. That system of government, for instance, may be inefficient, so that it consumes so much in public funding but produces so little by way of results. That system of government, for instance, may prescribe a leadership-selection system that yields higher chances of incompetent but popular people to emerge on top, and as we know, lower quality of leadership has a high probabilistic causal relationship with lower quality policy-making and decision-making which then leads towards lower quality results.

        A faulty Constitution may pose significant opportunity costs thanks to provisions found in it which discourage large numbers of would-be investors from coming in.  The cost is that instead of easily creating new jobs for the people, those jobs do not get created all thanks to the Constitution’s provisions. Missed opportunities to create jobs is clearly a problem to me. One obvious manifestation of this mass poverty and a  huge outflux of migrant workers looking for work abroad.

        A faulty Constitution may define a country as being unitary, so that in the end, everything revolves around the capital city, thereby neglecting the other regions. An obvious manifestation of this is mass poverty in the regions, and worse, mass migrations from the rest of the country towards the capital as most job opportunities are seen to exist only in the capital.
        These issues mentioned above are all hitting the Philippines at the same time.

        The very fact that there is something flawed and faulty and posing extra costs and burdens upon Philippine society is compelling enough a reason to decisively get all those flaws rectified.
        You do not need to create fancy jargon about a  “business case” when all you need to do is to acknowledge that since something is wrong, it therefore needs to be fixed.

        CoRRECT™?

        * * * * 

        As Chino properly pointed out, the fact that there were efforts to circumvent those Constitutional Flaws means that they are real problems with an accompanying cost-burden. Efforts to circumvent such flaws are, in fact,  only second best solutions. The best solution is simply to fix those identified flaws head-on. If it’s broke, FIX IT!.

        The case for CoRRECT™ is as simple as that. 😉

      • benign0 says:

        I don’t think that’s a very sound analogy, Orion. In the case of a leaky pipe, pinpointing the leak as the issue is a straightforward exercise that yields a crystal clear conclusion to which can be prescribed a very limited set of solution options.

        In the case of the goal of alleviating poverty, there is no one single leak, so to speak. Constitional reform with a goal to alleviate poverty is good. But all aspects of said reform need to be considered and an open-minded approach to considering and evaluating these should be applied.

      • BongV says:

        b0,

        “If we limit this evaluation to access to foreign capital, then we are not providing a complete picture of what would possibly constitute this opportunity cost. ”

        the evaluations are pretty much covered by a wealth of studies on the Philippines competitiveness – and the need to augment LDI with FDI. Are we going to optimize like Kuh Ledesma – via protectionism.

        The fact remains that Philippines constitution restricts investments to Filipinos only or joint ventures where Filipinos must own 60% or more.

        A lot optimization programs take place due to tight competition – a protectionist policy doesn’t do well for innovation, as there’s not much pressure to optimize. Why in the world will ABS-CBN “optimize” when it doesn’t have honest-to-goodness competition? It is assured of revenues whether it optimizes or not. And when it optimizes under an oligopolistic market – company profits are optimized but consumers LOSE OUT due to lack of choices – there’s no one else to buy from except the protected companies. Is that a good way of reducing poverty?

        Well it reduces the poverty of the monopoly business – now if that’s poverty reduction for the monopoly business and poverty expansion for the consumer.

        Let’s just forget this entire thing and just go become like North Korea – fully protected fully optimized by the government – universal health care, free education – don’t worry about quality of life – people are clueless about life on the outside anyways.

        ‘ala na if that’s the tack – Philippines is hopeless – you can all shout cultural reform till the cow turns white –

      • benign0 says:

        Don’t get me wrong, Bong. I’m not against foreign capital flowing freely into the country (though I do have some observations on how Pinoys tend to respond to lots of money orbiting within their immediate reach) — as long as this capital contributes to expanding industrial capacity and increasing economic productivity.

        So do separate the subject of (1) consumer choice and (2) access to capital which you seem to have muddled up together in your above comment. Each has different implications on the criteria I italicised above.

        IN terms of consumer choice I think Pinoys have ample loads of that. Indeed, the variety of products in Manila’s supermarkets dwarf the variety of goods available here in Australia! That access to choice is brought about by import liberalisation. Has that benefited the country? Perhaps, in terms of more competition and lower prices. But it also exacerbated excessive consumerism — Filipinos no longer beg for food, they beg (and in some cases prostitute themselves) for celphone load.

        Access to capital also indirectly contributes to consumer choice — by making it easy for more capital to be accessed to develop prorduction capacity within Philippine borders that can compete with locally owned production capacity.

        Obviously I prefer the latter as I personally believe there should be restrictions on the importation of consumer non-durables and liberalisation on the importation of capital goods.

        While I did get into a rant about Kuh Ledesma’s protectionist stand towards the entry of foreign artists, the question still remains: is foreign artists’ unfettered access to the local concert circuit essential to the economic wellbeing of the Philippines and in synergy with our industrial expansion aspirations? Indeed, China is prospering despite its having a Great Firewall that bars Facebook among other “foreign influences”.

        As that guy in your “Evil Foreign Investment” article pointed out “China is quite skilled at taking money from foreigners without giving too much in return”. Perhaps that then becomes the question. If all this capital comes flowing into the country, will we have the skills to turn all that into outcomes that have our best interests in mind? Then again, maybe we can rest assured in the comfy thought that we can always rely on our trusty local Chinoys to do that for us.

        Those are just questions to consider: Design considerations, kung baga. 😉

      • BongV says:

        ““China is quite skilled at taking money from foreigners without giving too much in return” – The money China takes from foreigners is a pittance compared to if same money was invested elsewhere. Minimum wage of $2 per day versus $25 per hour? Foreigners will put up with to be able to get access to the local market. China is profiting from it – and so are foreigners. Moreover, China’s citizens are not allowed to own land – just like foreigners – you can’t say the same about Philippines 😉

        The issue of controls on import and export controls has got nothing to do with the 60/40. You have flexibility in fiscal policy but rigidity in investment policy – constitutional pa talaga ? 😉

      • BongV says:

        Perhaps that then becomes the question. If all this capital comes flowing into the country, will we have the skills to turn all that into outcomes that have our best interests in mind?

        would you rather that the capital not come in because you are not sure about the skills? do we know that about each individual Filipino? just look for instance at the local wet market – why do those people go through the 5/6? for lack of access to capital – they have kept body and soul together, and turned in a profit – just like their flea market counterparts overseas – and we are not sure of their skills – should we limit ourselves to criticizing their lack of ability or should we help improve their ability? if the locals providers of capital are not willing to do it – we need the flexibility to have a Grameen bank come in and address these unmet gaps. Keeping the market restricted does not give LBP, PNB, MBTC an incentive to reach out to this “insignificant” segment – forever damned to the 5/6 – and we call that poverty reduction?

      • benign0 says:

        Bongv:

        (1) Cash not flowing into the country is not something I’d like to see, obviously. So why even consider it in this discussion? In fact, did I even consider any scenario where that’d be the case? Even under the current system, funds flow in. Perhaps not in the unfettered way that you’d like to see it flow, but it does flow in. There is also all the aid we are receiving and loans from development banks like the ADB — speaking of which, it once issued a study showing how the Philippines has among the lowest realisation rates for every dollar of development funding it receives.

        (2) OFW cash currently flows in to the tune of more than 10% of the GDP. The question is: Where has all that cash been used?

        Item (2), in fact is a good case in point. It demonstrates that the money is there but the skills aren’t. Ergo, the issue in that case is more with the skills than the access to funds. Ergo, the issue in that example is more of education and less of money.

        Multiply the possibility of that sort of misrepresentation of what the fundamental problem is across the rest of the Constitutional Reform agenda and that sheds a bit of doubt on the focus on access to capital as key selling point for defining the initiative.

      • Orion says:

        Oh yes it is, Benign0. It is an extremely sound analogy.

        Please open your eyes and stop refusing to see reality for what it is just for once: The 1987 Constitution is like a leaky pipe. Instead of an analogy of there being other leaks, the other analogy really is that the leak is causing the wooden floor below to rot.

        Yes, there are other little minor leaks, but this one (the Constitution’s flaws) is the major leak we can easily work on. It is the leak which, if fixed, happens to be the one which prevents the wood under it from rotting any further. At least, once the rotten planks are replaced with new ones they won’t get wet as in the past and subsequently deteriorate.

        Your problem here is that you’re thinking that there should be some sort of “business case” behind the principle of fixing what is broken, but you forget that in real life, you don’t need such a business case to fix anything broken.

        You know, there is a certain vacuousness associated with requiring a business case to replace the busted light-bulb of your living room. Sure, you may have other lighting fixtures, but doesn’t it make sense to just fix it anyway lest your own living room start to look miserable to your visiting guests? The vacuousness of requiring said business case for such a simple activity as “fixing something that is broken” is no different from how many dysfunctional Pinoys would rather lazily leave alone a leaky faucet or a busted light or broken window because they’re “able to cope with it anyway.”

        In your case, it’s about asking for a business case before proceeding to fix what is so obviously broken and is burdening you with major recurring costs and zero benefit.

        I don’t know about you, but that suspiciously sounds like a “puede na yan” to me.

        * * * *

        Furthermore, if you had paying attention, CoRRECT™’s primary aim for now  is to build that awareness about the major flaws of the current 1987 Constitution and what their effects are on society so that those flaws may be more easily contrasted against the proposed solutions (which have already been tried everywhere else and have worked). Not surprisingly, the current “system features” that exist in the Philippines are for the most part found in societies that find themselves at the bottom of human development, GDP-per-capita, and transparency (absence of corruption) indices.

        Even the Presidential System of the USA does not truly match the one we have in the Philippines, because the Presidential System in the USA is for all practical purposes actually quasi-parliamentarism thanks to the existence of the Electoral College, as roughly, each electoral district coincides with each Congressional District. This feature mitigates the celebrity-focus and personality-centered effects of direct voting. 

        Of course, you’re not really that much into systems, and would rather focus on the culture. That being said, those of us Get Realists at Stage 4 (and 5) who have gone beyond punditry and seek solutions (and of course, concrete solutions are usually system-based solutions) do so based on what can be realistically achieved within a particular time-frame.

        If what you were looking for was some comprehensive one-shot cure-all for Philippine Poverty (a lot of which is of a cultural nature), sad to say, there is none which could bring about fast-enough effects that could tangibly and visibly improve society within a short-enough time-frame. Luckily, we did extensive research which reveals that a previously lethargic economy that is “pump-primed” not by government-spending, but instead is “pump-primed” by massive foreign investments tends to create an economic environment where previously depressed unemployed and under-employed people not only become hopeful and more dynamic, they may either find better jobs or later graduate into becoming entrepreneurs.

        (and FYI: A whole body of research shows that more stable political systems are more conducive to business and are more likely to attract foreign investors and encourage local entrepreneurs, thus contributing to better economic output. Not surprisingly, GDP-per-capita lists are dominated by countries using parliamentary systems simply because they are more stable. http://antipinoy.com/parliament_fits_the_philippines )

        This is the sort of thinking among those of us who have gone beyond the Stage 3 punditry that you are unfortunately still stuck in. We observe how other societies (both those different from us and those most like us) got their acts together. 

        Essentially, we Stage 4 (and 5)-types look for the little clusters of billiard balls and seek out where to best hit them so that multiple balls get into multiple pockets, it so turns out that fixing the flaws of the 1987 Constitution is one such cluster of  billiard balls.

        Fixing the flaws of the 1987 Constitution is an ENABLING STEP which will allow us to more easily fix other problems as well. 

        Which is now where I should pose you the question: Where on Earth were you when the whole Get Realist group was open-mindedly discussing the problems of the 1987 Constitution, and how fixing said problems would have profound effects on fixing Philippine society and even its culture?

        That question is relevant, because the underlying problem with your inability to see the rationale for CoRRECT™ is your intrinsic disinterest in finding practical system-based solutions to the problems of society. You were simply not present, not around, not participating, not interested, and not contributing questions to the numerous internal discussions we had.

        That you now pose as the party-pooper at this stage long after decisions were already made is not the fault of us Stage 4 Get Realists. You should have been there in the first place so that these concerns which you now pose today would have been made known to you. Well guess what, some of us actually asked those questions (albeit using different words) and there were clear answers to them.

        You’re like the guy who stops the teacher and asks questions about Chapter 4 while she’s already discussing Chapter 12 of the textbook because you were absent the day Chapter 4 was being discussed. Now that Chapter 12 refers to concepts previously discussed in Chapter 4, you’re holding up the class asking the teacher to “please re-explain Chapter 4.” If you were absent, couldn’t you have been responsible enough to read Chapter 4 on your own and ask help from the teacher privately after class? Why hold up the entire class?

        May I repeat: Those of us already doing Integral Calculus need not slow ourselves down to accommodate the one straggler left behind in Algebra. The onus is on the one who decided to stay behind. He should catch up, not slow the ones already ahead of him down.

        We in Stage 4 (proposing solutions) and Stage 5 (organizing to enable solution-adoption) are not obliged to slow down for the benefit of those who insisted on sticking to Stage 3 (pure punditry). So please… Please try to catch up, will you?

      • benign0 says:

        I didn’t say you need a business case to replace a busted light bulb or fix a leaky pipe — which is why I pointed out the flaw in that analogy.

        When your car doesn’t run because it’s a total wreck, guess what: buying a new one is a no brainer.

        But then would you replace your car on the basis of it not starting in the odd cold morning?

        That is where the business case approach comes into play.

      • Orion says:

        Benign0, you were clearly  not paying attention at all when I made that point privately among our group.

        I made it very clear (and perhaps you didn’t read it or maybe you ignored it) that we are only to fix what is broken. If the problem of the Constitution is only 10%, we fix only 10%. If the problem is 40%, we fix 40%. If the problem is 80%, well, we  still fix 80%.

        I made the point very clear, Benign0, that Constitutional Reform was never about “throwing out the baby with the bathwater”

        Did you ever stop to think why I insist on the term “Constitutional Reform” instead of “Charter Change?” Perhaps you never really thought to think about it properly.

        Charter Change has the connotation of throwing away 100% just because 15% is faulty. Essentially “changing the charter with a new one.”

        The term Constitutional Reform, on the other hand, clearly connotes fixing only the areas of the current Constitution which are flawed.

        In other words, we will not throw out 100% because 25% doesn’t work. What made you think that anyone was talking about “throwing the baby out with the bathwater” anyway? Was that another one of those absent-when-the-memo-was-passed days?

        It’s that simple. 😉

      • BongV says:

        First things first – get the the jobs in to a wider segment of the PI-based population – and relieve the OFWs of remittance pressures. It’s easy to spend money one did not earn but the equation changes when one is spending one’s own money.

      • BongV says:

        No one said anything about limiting access to foreign capital – opening to foreign investors does not mean closing avenues to local capital as well – that’s ridiculous .

        As has been pointed out again and again – local capital is not enough and needs to be supplemented.

      • benign0 says:

        Where exactly did I make an assertion that “opening to foreign investors” means “closing avenues to local capital”?

  2. ChinoF says:

    Even if we use the Constitution in the optimal way, we’d still see a lot of poverty and corruption.

    I hope you’re saying that while Constitutional Reform may be more costly and takes effort to do, we should still do it. To quote John F. Kennedy, “we do these things not because they are easy, but because they are hard.” And necessary.

    As an analogy, it’s much easier to do nothing and not work. But then that does not bring food to the table and if you resort to dole outs, you end up being a drain on the economy – a “vampire” of sorts. It’s harder to find work and then to go to work each day… but you must do it. It’s how you make a living.

    And Constitutional Reform is our living here.

    • Orion says:

      Actually, it is much more costly not to do anything, because at least right  after Constitutional Reform happens – especially if it is done through the cheapest route possible, Constituent Assembly  –  you can be sure that a lot of the would-be investors who were originally (or would potentially be)  interested to invest in the Philippines but got turned off by the 60/40 Constitutional Provisions would now be able to come over. That would spur growth as Filipinos hired would spend for  food and other stuff and other businesses would sprout out next to where the offices/facilities are. Employees would pay  income taxes which means added revenue. Multiply that with the influx of new companies who would no longer be deterred by some hair-brained 60/40 provision.

      For sure, there are little run-around laws that currently allow for 100% ownership. These  laws place huge requirements like being located in special economic zones, investing over a particular huge amount – say  a billion dollars or something like that, , which oftentimes foreign medium-sized companies (which  are usually “big enough” to easily hire at least 50 to 100 people are not able to qualify for, as well as hiring more than, say for instance 5000 or so local employees, and guaranteed technology transfer to name a few. (I don’t have the exact figures with me, but I just needed to express the general idea: only ultra-rich huge companies are allowed to have 100% ownership.)

      I just came from a meeting with the Israeli Deputy Chief of Missions and  he said that a large number of Israeli Start-ups and Small and Medium-Sized Tech Companies (Software Development, other stuff) wanted to come to the Philippines to invest and provide jobs to take advantage of the English ability of Filipinos. Unfortunately, these companies were not big enough  to qualify for those extra-humungous investment requirements that would allow them to have 100% ownership rights. 

      Then came Vietnam’s trade mission. Generally, their English sucked on the average, but they did have some well-educated types who knew a fair amount of decent English that  was workable. Some were really good. Of course, the average Vietnamese on the street knew no English. But what attracted them were the open arms: 100% ownership regardless of how much their investment was as long as they were hiring Vietnamese workers. They also easily threw in tax holidays and stuff because Vietnam’s government (which is like a “one-party parliamentary system”) was so fast in coming up with tax incentive schemes, compared to the slow process in the Philippines where the Executive branch wanted to grant certain concessions to encourage investors, but the Legislative was at odds with the Executive or was too slow to move in sync because it was trying to play a  “fiscalizing role.”  (Another “gridlock” case)

      * * *

      For sure, oligarchs aren’t a bogeyman at all. The point should not be missed that for all it’s worth, the end result is what matters. 60/40 provisions, whether the intention was to protect oligarchs or not, have in actuality benefited ONLY the oligarchs. 

      Moreover  the Presidential System is also NOT a bogeyman. That the Presidential System is inherently defective (yes, even the USA one – according to most eminent PhD’s from Ivy League pol-sci faculties) is just a plain and simple fact backed by pages upon pages of empirical data, evidence, and info that Presidential Systems are structurally inferior to Parliamentary Systems. No bogeyman at all. Just plain facts. The internet is out there, and if one doesn’t trust the internet, there’s always the library.

      The facts don’t lie: Presidential Systems suck and for the Philippines to insist on sticking to the status quo presidential system while we know what kinds of disasters and difficulties it has continually brought upon us falls under what Einstein would call “insane.”

      Reviewing all the old AP articles on Constitutional Reform with an open mind is all that is needed for the “doubting Thomases” to realize that indeed, the pro-CoRRECT™ AP’ers (esp. those spearheading CoRRECT™) actually already painstakingly did their homework ages ago. 

      • ChinoF says:

        In the end, I did conclude that on the cost: doing nothing is costlier, in terms of the consequences. More and more OFWs, more broken families and more people in poverty wanting dole-outs. If people aren’t able to see the connection between OFWism and broken families, then that’s puking idiocy already. If people aren’t able to see the connection between protectionism in the Philippines and poverty, then that’s a puking vested interest or stubborn bias already.

  3. benign0 says:

    To recap and put it quite simply (and as I said earlier — and in the article itself): Now that the initiative is underway and gaining momentum, the goal should be framed around the issue and not the solution. By framing the goal of Constitutional Reform around, say, “poverty alleviation”, then perhaps (1) the proposed shift to a parliamentary system and (2) the opening up of ownership to foreigners will be evaluated from the context of that goal among other aspects of Constitutional Reform.

    Thus, the ability to achieve said goal through as many aspects of Constitutional Reform as can be evaluated will be the focus. It opens the possibility of Constitutional Reform that need not involve one or the other aspect — so long as the goal is achieved.

    • Orion says:

      The goal is simple, Benign0. No need to over-intellectualize and get bogged down by analysis-paralysis.

      What’s the goal? It’s fixing what’s broken because the brokenness burdens us with heavy recurring costs (and opportunity costs).  Why the need to generate so much paperwork just to fix a busted light-bulb?

      Isn’t that reminiscent of the very vacuousness which you so love to decry?

      * * *

      There’s the story coming from one of the many Gladwell-esque books out there talking about trends that crime was high in a US city and term after term mayors were concentrating a lot on beefing up the local police force to improve enforcement. Crime – mostly of the petty night crime type – didn’t really decrease that much.

      The costs of enforcement just kept increasing. That  was until a new  mayor realized  that the existing streetlamps all had used-up lightbulbs. “Pondido” in Tagalog. So he decided to have all those lightbulbs replaced. Suddenly the city was brightly lit at night and almost instantaneously, crime-rates fell.

      As crime rates fell, businesses improved (more people do business when there is less crime and less social instability). More people got hired – including poor people. That even further brought crime-rates down. And so on and so forth. 

      See how fixing something so obviously broken can oftentimes have such a profound effect?

      • benign0 says:

        You’re still using that “leaky pipe” analogy in your use of the term “obviously broken”. Perhaps refer to my previous comment where I respond to your assertion that this analogy is an “extremely sound” one.

      • Orion says:

        Benign0,

        Of course! It’s a nifty little analogy to emphasize that you need to fix something that’s broken. More importantly, you also need to fix first those things that can more easily be fixed first, instead of making a whole wishlist of so many things to fix and require that all be fixed at the same time. Start learning to be more practical. Choose first those broken things that you can more easily fix, especially those that have an effect on other things. Prioritize.

        The Constitution is one such thing that affects other things, and it is something that can more easily be fixed. At least when you compare fixing the flaws of the Constitution as against fixing the flaws of Pinoy Culture, it’s clear which of the two is much more feasible in a relatively short span of time. Looking also at the direction of probabilistic causality, you may even realize that fixing certain aspects of the political system by  fixing the flaws of the Constitution which set up said system in the first place would actually help in fixing Pinoy Culture.

        Take the over-emphasis on personalities and celebrities. The current  presidential system exacerbates the highly personalistic nature of Pinoy culture. But in India, while the Indian masses are highly celebrity-focused (they worship their Bollywood stars and Cricketeers like gods), the parliamentary system  in place there has actually caused the masses to choose parties  and their respective platforms and not the personalities behind them. More importantly, India’s parliamentary system prevents celebrities from becoming Prime Minister.

        In short, a superior system can mitigate the negative effects of Pinoy cultural dysfunctions. If you actually applied a bit more thinking to this exercise, you may have also realized (based on historical evidence of how societies can reform themselves) that superior systems, when appropriately implemented on societies with certain dysfunctional cultures, may actually help not just in mitigating the effects of said dysfunctions, but also reform the society’s culture as well, thereby reducing (or eliminating) said dysfunctions. You may want to do some extra reading about how societies may reform themselves or mitigate their inherent cultural tendencies through system-based approaches. I recommend L’esprit des lois (“The Spirit of the Laws”) by Montesquieu.

        * * * *

        Return to reality… Get Real, Benign0! 

        The 1987 Constitution is full of flaws and those flaws are burdening us with costs and opportunity costs… Ergo: You need to fix said flaws… No ifs, no buts.

        It’s that simple. 😉

  4. ricelander says:

    Poverty is simply people having no work or having no means to sustain a living. So how do you create jobs? Simple. Investment, investment, investment. All else will follow. You choke its sources, you choke the economy.

    I don’t know. We don’t seem to have an entrepreneurial economic elite in the caliber of those who created say Ford, Toyota, Samsung, Nike, Sony, Microsoft etc. Oh I forgot we have San Miguel. What I’m getting at is: where is the money of our oligarchs invested in. Is it in industries that promise huge return of investments that create economic opportunities for people or in safe investments that limit returns only to themselves.

    I was thinking: how does say car manufacturing compare in terms of wealth creation with say agriculture? Manufacturing in the Philippines is practically dead, is it correct? It is manufacturing that offers job opportunities for the low skilled, and barely educated. Manufacturing creates the highest value for every peso invested thus a bigger economic pie. We went free trade to force our industries to shape up without liberalizing investment to help them shape up, they closed shop instead.

    Oh well I don’t have time to arrange my thoughts , but there…

    As Obama would say, the best poverty alleviation program is a good economic development program.

  5. Hyden Toro says:

    In trying to Innovate a New System. You have to build a PROTOTYPE Project or Model. The project will determine how the system responds to the Environment. It will also determine its weak points; and strong points. This minimizes Initial Shock to the environment; being introduced to the new system…same as in replacing with a new type of governance…
    I cannot be more clear…

  6. benign0 says:

    Orion,

    In what you say here: “More importantly, you also need to fix first those things that can more easily be fixed first, instead of making a whole wishlist of so many things to fix and require that all be fixed at the same time”, that simply brings us back to the original question in the article itself. Two options: (1) Do Nothing or (2) Reform the Consititution — where is the business case?

    Referring to your baby-with-the-bathwater analogy here, the question then becomes: Are we changing it because it is 10% broken? 40% broken? 80% broken? Either way, you convene all the necessary forums (whether this be a constitutional convention or a constituent assembly) to formulate the change and execute it. If it is just 10% broken, then that opens the argument to whether or not the other 90% of it can be addressed through legislation under the current system. Or even how much of that 90% should be addressed through Constitutional Amendments, and how much of it through mere legislation.

    To extend your analogy:

    Are we filling up an entire swimming pool with water just to bathe a baby?

    But we don’t know that, do we? That is because we have been focused on just two components of this initiative: (1) shift in form of government and (2) access to foreign capital.

    • Orion says:

      Benign0, 

      Again you miss the point thanks to over-intellectualization, adding complexity to what is really a simple issue.

      The 1987 Constitution has flaws, and those flaws have obvious significant direct  costs and opportunity costs. Opportunities are wasted, progress is slowed down because of the political system’s inherent flaws that make policy changes (when need be) unable to adapt to new conditions. 

      Just like busted light bulbs, there are costs to not fixing them: you’re in the dark at night, you won’t find what you need, or if the lights are for public spaces, there’s a public safety implication.
      That’s why you simply need to fix the lights: change the faulty bulbs. No need for extra bureaucratic paperwork there: it’s a no brainer. It’s busted, fix it. Not fix it, and suffer the costs. Same thing with the Constitution. It’s got flaws, so go ahead and fix those flaws. Not fixing those flaws means you suffer the costs of said flaws.

      Sometimes, Benign0, your questions (which bog down the whole progress of moving to the next step) stem from an almost absolute lack of knowledge regarding how certain things work. The Constitution, like it or not, was given such special status as a document so that even merely changing the punctuation, spacing, or capitalization of words can’t just be done informally or by simple legislation. 

      That’s why in my recent article, I mentioned that:

      “Little thought was placed by most members of the public into realizing that any slight change that had to be made to the 1987 Constitution, be it a change in punctuation, a deletion of a word or line, or placing in any additions that could make clarifications to the existing text, ultimately required grand nationwide initiatives such as a full-scale “Charter Change” movement, just to make little revisions.”

      A lawyer associated with the CoRRECT™ Movement explains it as thus:

      “There exists a Hierarchy of Laws:

      The Constitution prevails over Congressional laws, which in turn prevail over LGU ordinances. The Constitution is the highest law of the land, in other words. The Constitution is approved by the people at large, statutory laws by Congress and the ordinances by the local Sanggunian. Thus, only the people themselves can amend the highest law of the land. Congress cannot repeal what the people themselves enacted. The other way around however is possible, the people repealing acts of Congress. 

      Ideally, the Constitution should be limited to general principles, because its the elected government (congress, president) who are supposed to know the details better, and it is really burdensome if not impossible to let the people themselves amend the constitution every now and then in case it doesn’t work. 

      If the problem is found in the Constitution itself (i.e. economic restrictions), then we really have no choice but to go for constitutional amendments involving the people at large. This is the problem we have because many defective provisions are found in the Constitution itself.”

      So again, if you had actually done the necessary research and relevant fact-finding first before you started your tirades, you would have been able to put a little bit of thinking into realizing that even if you only had 10% flaws in the current Constitution, you have absolutely no choice but to have to use the prescribed processes for Constitutional Amendments and therefore mere legislation by Congress cannot do this.

      Here is the important point: 

      You were either absent or simply disinterested in paying attention to the on-going discussions and debates we had internally regarding the flaws of the 1987 Constitution. These same questions you raise today are the exact same questions that were raised by other Get Realists during those major discussions which happened in late 2009 and once again in mid-2010. 
      That you missed out those issues because you were not paying attention (or simply shut off because the topic moved into Stage 4 (finding solutions) out of the Stage 3 cultural nitpicking agenda you prefer) is precisely why you are right now asking such Grade 1 questions to PhD’s. (ok, that’s a little exaggerated, but you get the drift…)
      These fundamental questions were answered ages ago. You just weren’t interested in participating. Now that we’re already moving forward, you’re suddenly trying to slow us down by asking questions that were already raised long ago during the problem-identification phase.

      Catch up, will you? 

      It’s that simple. Really™ 😉

      • benign0 says:

        As you said yourself, Orion: “even if you only had 10% flaws in the current Constitution, you have absolutely no choice but to have to use the prescribed processes for Constitutional Amendments and therefore mere legislation by Congress cannot do this” — which further strengthens the thesis that there is a lot of cost to consider to which the ROI must stack up. A full blown Charter Change initiative that potentially could result in only a 10% fix is a serious go/no-go evaluation exercise.

        Which is why the options are quite simple:

        (1) Do nothing; or

        (2) Change the Charter.

        Regardless of how big or how small the changes that need to be made, you yourself highlighted that there is only the above two options.

      • Orion says:

        Benign0,

        That’s why “Do Nothing” is not  an option, because the direct cost burdens and wasted opportunities and many more will not go away and will even just get worse. Picture that against the ever-increasing population and you can see how “Do Nothing” cannot even be considered.

        That being said, if out of two options, 1) Do nothing    versus    2) Constitutional Reform,  Do nothing is not an option, then of course you know that Constitutional Reform is the way to go.

        If you can see that Constitutional Reform is the way to go, then why did you question it, when quite obviously, the massive recurring costs to our society (Massive unemployment being unable to get eased by foreign investment infusions and sprouting of new companies, sending out millions of Filipinos to work abroad away from their families, etc) are obviously much, much more than the relatively low cost of doing Constitutional Reform initiatives.

        Why? Because for the most part, there are already sunk costs associated with the already-existing bureaucracy that can factor in said costs of change initiatives. If, for instance, a Constituent Assembly is used to amend the Constitution, then it will not cost extra because what you will be convening is the same Congress that already is being paid to act as legislators. The only difference is that the Constitution will need to be ratified by a plebiscite, and if you didn’t realize, there is an election coming up in 2013 that can be ridden on. There are no significant costs incurred if the Plebiscite rides on  the already factored-cost of the 2013 “mid-term” elections.

        Or if the more expensive “Constitutional Convention” (which I am not that big a fan of, I’d rather go with the cheaper Constituent Assembly) were chosen, then the 2013  Elections can be used for it. 

        The way forward, therefore, is to stop being a nay-saying nitpicker, and open your mind to possibilities. If you had used not just a bit of thinking but a bit of imagination as well, then maybe your arguments wouldn’t seem so clueless about how solutions are supposed to go.

        Remember this Tagalog saying?

        “Kung gusto, maraming paraan; kung ayaw, maraming dahilan…”

        Look at yourself, dude… Are you the former or the latter? Because you’re no longer nitpicking against cultural flaws here. You’re trying to put down obvious solutions that should have been done ages ago. And for what? To fulfill some fancy of filling up bureaucratic paperwork before getting anything done? 

        A business case to fix a faulty light-bulb? Common sense, dude.

        Fixing the light-bulb costs something too: buying the replacement bulb, and expending actual effort in taking the defective bulb out and  replacing it with the new one. But the benefits of fixing it clearly far outweigh the costs of not fixing it.  People almost always decide to fix something faulty because it is obvious to them that the benefits of getting it  fixed far outweigh the costs of not doing so. 

        The whole group already discussed these things over and over again several times before, but you never for once chimed in to let us know your doubts. (still, the same stuff you bring up were already brought up – but you wouldn’t know that because you were absent or not paying attention). Now here you are coming up with the most clueless of questions that waste our time because these are questions that were raised long ago. It was your fault that you didn’t pay attention. 

        Do not be that which you have fought hard against. 

        It’s that simple. Really™ 

      • benign0 says:

        Re: “That’s why “Do Nothing” is not an option, because the direct cost burdens and wasted opportunities and many more will not go away and will even just get worse. Picture that against the ever-increasing population and you can see how “Do Nothing” cannot even be considered.”

        Orion, The assertion that wasted opportunities “will not go away and may even get worse” if we keep the current Constitution and to “picture this against […] ever-increasing population” as a case to dismiss the Do Nothing option (i.e. keep the current Constitution) is precisely the case that needs to be made; i.e.,

        (1) Your assertion about population can be addressed through legislation under the current system; and,

        (2) Your assertion that wasted opportunities are not going away under the current system implies that they are situations fully accounted for by the specific components being championed here — (a) the shift from presidential to parliamentary system, and (b) opening up full ownership of assets to foreigners.

        Item (2) is quite a BIG assumption there.

  7. Hi BenignO,

    Before I go to my comments, let me lay down first the premises of the article. Per wikipedia, a business case is “the reasoning for initiating a project or task”. I guess there technical definitions, but I suppose we should make our discussion as simple as possible.

    With this in mind, given that the “agreed” goal is poverty alleviation, my understanding of your article is that it poses the question “how and why will the lifting of economic restrictions in the constitution lead to poverty allevation.”

    My simple answer to that question is that the lifting of foreign investment restrictions lead to poverty allevation by creating jobs. Direct investments create jobs, whether they are local or foreign. By looking at foreign investments as a source of jobs, we are merely looking for ADDITIONAL sources for our purpose. We do not look at it as the sole source of jobs.

    Of course, my simple answer is not a business case. As for a more detailed paper, or a business case as you would call it, complete with citations of authority, to explain how foreign direct investments help economic development, please see the following: http://www.oecd.org/dataoecd/47/51/1959815.pdf. I suppose this paper can be a global business case since the study is comprehensive.

    As for the benefits of direct foreign investments in the Philippines (in the areas where they are allowed to enter), I understand that BOI (boi.gov.ph) and PEZA (peza.gov.ph) can provide some data, i.e. jobs created, revenues generated, etc. They ordinarily have a target of amount of investments per year, and a report if they are able to reach target.

    Apart from the cited article as the proposed business case, I think that asking advocates of economic liberalization to present one is only HALF of this policy review as we may call it. The other HALF is that we should also ask those who propose that we do nothing and retain the economic restrictions to present their own business case. It cannot be one-sided because from all indications things are not working out, i.e. unemployment rate; underemployment rate; economic growth rate; population growth rate; poverty level; etc. Thus, the review must not only see where we should go, it should also see where we are now, how and why we are here at all.

    Since the restrictions have actually been there for the past 75 years (1935 Constitution), those in favor of retaining them have no excuse in presenting the empirical evidence to back up their case. Have the restrictions led to poverty allevation? More particularly, and these are the questions I always wanted to ask, how many jobs have they created because of the restrictions? How much taxes have they paid? For the advocates, the most we could do is cite the experience of other counties (i.e. OECD report), as well as the experience of PEZA and BOI in the AREAS NOT RESTRICTED. As for the areas restricted, of course there is no data and we can only extrapolate.

    If I may digress, in constitutional law there is this basic principle of “equal protection of the laws”. This principle makes no distinction whatsoever, whether foreign or local, in the application of the laws. As a general rule, the law must apply to all equally and fairly, unless there are reasonable exceptions to deviate. In the case of business investments, the economic provisions of the constitution make an exception. They protect the business interests of local businessmen against foreign investment. If this protection did not prejudice the workers and the consumers, then maybe it would be justifiable. Since however there is a comprehensive and global business case to the contrary (i.e. OECD report), then we should revisit this policy of exception.

    BTW, I just belatedly replied to your queries posted in the “dodongakakakiko” blogspot. I didn’t realize there were posting there.

    • benign0 says:

      Dodong, hope you don’t mind if I re-iterate what I told Bong in an earlier comment:

      ===
      Don’t get me wrong, Bong. I’m not against foreign capital flowing freely into the country (though I do have some observations on how Pinoys tend to respond to lots of money orbiting within their immediate reach) — as long as this capital contributes to expanding industrial capacity and increasing economic productivity.

      So do separate the subject of (1) consumer choice and (2) access to capital which you seem to have muddled up together in your above comment. Each has different implications on the criteria I italicised above.

      IN terms of consumer choice I think Pinoys have ample loads of that. Indeed, the variety of products in Manila’s supermarkets dwarf the variety of goods available here in Australia! That access to choice is brought about by import liberalisation. Has that benefited the country? Perhaps, in terms of more competition and lower prices. But it also exacerbated excessive consumerism — Filipinos no longer beg for food, they beg (and in some cases prostitute themselves) for celphone load.

      Access to capital also indirectly contributes to consumer choice — by making it easy for more capital to be accessed to develop prorduction capacity within Philippine borders that can compete with locally owned production capacity.

      Obviously I prefer the latter as I personally believe there should be restrictions on the importation of consumer non-durables and liberalisation on the importation of capital goods.

      While I did get into a rant about Kuh Ledesma’s protectionist stand towards the entry of foreign artists, the question still remains: is foreign artists’ unfettered access to the local concert circuit essential to the economic wellbeing of the Philippines and in synergy with our industrial expansion aspirations? Indeed, China is prospering despite its having a Great Firewall that bars Facebook among other “foreign influences”.

      As that guy in your “Evil Foreign Investment” article pointed out “China is quite skilled at taking money from foreigners without giving too much in return”. Perhaps that then becomes the question. If all this capital comes flowing into the country, will we have the skills to turn all that into outcomes that have our best interests in mind? Then again, maybe we can rest assured in the comfy thought that we can always rely on our trusty local Chinoys to do that for us.

      Those are just questions to consider: Design considerations, kung baga. 😉
      ===

      In short, I’ve got no argument against the need for more capital and more jobs. I’ll check out your blog later. Cheers! 🙂

      • ChinoF says:

        “China is quite skilled at taking money from foreigners without giving too much in return.”

        If one learns about the story of Fraport, and others, they’ll realize that Filipinos have been doing the same thing… but in a different way.

  8. Hi Benign0, you asked: “Have we already been using this asset in its existing form in an optimal way?” Are you actually hoping there is an answer to that? Or aren’t you simply suggesting we should #1. Do nothing?

    • benign0 says:

      Hi Arnel, more like hoping there is an answer to it. Actually, the search for an answer to it is pretty much the underlying driving idea of GRP as far as I’m concerned. 🙂

    • BongV says:

      i say… let’s just do nothing… no headaches.. no efforts.. no worries.. be happy 🙂

    • ChinoF says:

      That question certainly comes off as something the other side would use. I would dare answer, yes, and it failed. For me, we can connect the condition of the country, as well as the various circumventing laws created (like the foreign investment laws), as the proof of it.

  9. ChinoF says:

    I believe a good business case has been made in the book Presidential Bandwagon by Yuko Kasuya on our political system, that the presidential system is rife with provisions that enable corruption, such as the pork barrel arrangement. It’s not said directly in the book, but it will give you the idea that parliamentary government is better. Or at least, change the Constitutional provisions to change these structures that aid corruption.

    Another business case in the problem of local vested interests and elite families (oligarchs) is made in the books Greed and Betrayal by Cecilio Arillo and An Anarchy of Families by Alfred McCoy. The oligarchs were never a conspiracy theory.

    And the business case for changing a lot of things, including Constitutional Reform, is explained in two documents: Arangkada Philippines by the Joint Foreign Chambers (but researched by Filipinos), and Democratic Deficits in the Philippines by Clarita Carlos (published by Konrad Adenauer Philippines). They say the same things as most AP writers do, that Constitutional Reform is needed to improve our economic status and can aid in culture change.

    Benign0 is so hotwired about the mediocrity of Philippine media, but one needs to realize that the Constitution enables this mediocrity. Article 16, section 11 of the 1987 Constitution says that media can only be 100% Filipino-owned. This keeps it in the hands of those that use it for manipulation. For example, if ABS-CBN again defaults on debts (the reason it was seized in the Marcos era) and has to be sold off, it likely cannot be taken because no one else in the Philippines has enough money who’s interested in a TV media business. MVP already has Channel 5. So it is likely to stay in Lopez hands.

    100% Filipino ownership keeps industries in the hands of those that enforce mediocrity. Shipping and education are two other such industries. In the case of education, we can see how poor in quality our educational system is compared to our Asian neighbors. In the case of shipping, a lot of ships sink and lives are lost. So we need to remove these 100% Filipino ownership limits – which needs Constitutional Reform. These may constitute a good enough business case, although one can find more.

  10. Nigel Pope says:

    The business case could possibly be based on a simple analysis of competitors.

    If you look at other ASEAN countries, the Philippines has basically fallen behind each one except for Myanmar and I predict that foreign investment in Myanmar over next the next 3-5 years will cause it to overtake the Philippines economically in that time period.

    That’s essentially your business case: the current system – including the Constitution and a system of government that allows a Simpson character to get elected because everyone just watched the back-to-back episodes where his parents died – has failed and a replacement system must be designed.

    Or we will be the next Myanmar.

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