...THE SUDDEN end of the US Fed’s quantitative easing and rapid reversal of capital flows? A war with China over disputed territories in the West Philippine Sea? Thousands of OFWs in Saudi Arabia, Iraq, and the UAE, which have been hit by sinking oil prices being terminated and heading home?
No, no, and again no.
The biggest threat to the economy is not external and is not any of the above, but internal: the possible lack of fair and credible elections in 2016.
This will cause national political disunity and foster institutional and policy instability. If elected under a cloud, the next government will focus on fighting for political survival instead of addressing urgent economic issues.
When people ask me what is the source of the current economic boom, I tell them that it’s not Daang Matuwid, or fiscal prudence, or socioeconomic reform measures, or the It’s More Fun in the Philippines tourism campaign. The current above average growth rates the country is experiencing now are due to only one factor: the 2010 elections in which Benigno Aquino III got a clear and unmistakable mandate to govern as President.
That undisputed mandate -- and it’s undisputed because of his large margin over his next rival and because computerized elections for the first time enabled a winner to be proclaimed quickly -- enabled him to unite the country and tackle issues like corruption and malfeasance in office. Without that undisputed mandate, he wouldn’t have the political wherewithal to impeach a Supreme Court justice or pass a controversial Reproductive Health Law.
Contrast 2010 with the disputed election of 2004 and even further back, to the controversial assumption to the presidency of Gloria Macapagal Arroyo on the back of Edsa People Power 2 and the dubious Supreme Court decision declaring that former President Estrada had effectively resigned.
Former President Arroyo never had a clear political mandate and she spent much of her extended term corrupting institutions, such as the Church, the bureaucracy, Congress and the judiciary, and fending off threats to her rule -- from attempted coups to the Hyatt 10 mass Cabinet resignation -- to ensure her political survival. The country’s economic potential could not be achieved because politics got in the way. It’s therefore politics, and not economics, which is a strong predictor of economic performance.
Should we be concerned about 2016?
Certainly, the current controversy about the Commission on Elections’ (COMELEC) seeming favoritism for Smartmatic to handle the computerized elections in 2016 is a big cause for concern. Smartmatic got an easy pass the last time around because it was the country’s first nationwide computerized elections, and the margin between the winner and the runner-up was too large. Smartmatic’s less than exemplary performance could be ignored. However, doubts about Smartmatic’s technology, efficiency, and transparency never went away.
Therefore, COMELEC’s bulldozing over reasonable objections to the redeployment of Smartmatic’s technology could handicap the 2016 elections with a large cloud of doubt. That cloud of doubt may not matter in uncontested elections, but they do matter, especially if elections are close.
COMELEC could be seeding a time bomb in the belly of the economy if its choice of technology does not produce fair, orderly and credible elections in 2016.
Compounding this concern over COMELEC’s actuations is the current predicament of the governing Liberal Party. The LP doesn’t have a clear winnable candidate for 2016. Its “sentimental candidate,” Interior Secretary Mar Roxas, is a hard sell. Pre-election surveys put him in single-digit category.
Despite all the speculations, it’s unlikely that the Liberal Party will adopt Senator Grace Poe as its candidate, or that Senator Poe will embrace the Liberal Party. Many observers forget that it was the Liberal Party which conspired with former President Arroyo to rob Senator Poe’s father, Fernando Poe Jr., of the presidency (look up the “noted” legalisms of the LP leaders to swipe away attempts to reveal massive cheating). Can the Liberal party bigwigs really trust Senator Poe to protect them, or vice versa?
The Liberal Party, therefore, has few options, except perhaps to eliminate the opposition (Juan Ponce Enrile, Jinggoy Estrada, Bong Revilla, and Arroyo already jailed), and if he can’t be impeached or jailed, thrash Vice-President Jejomar Binay enough as to narrow his lead, and have a Liberal Party-controlled COMELEC make a difference. It’s a plausible scenario and this is the reason there must be vigilance in safeguarding the electoral process, for the sake of the economy.
However, there’s another element of possible political instability: the failure of President Aquino to apply Daang Matuwid to his own allies and friends.
Ousted Laguna Governor ER Ejercito was quoted as saying: “Masyado nang malalim ang atraso ng mga Aquino sa mga Ejercito. Tinanggal na ni Cory (Aquino, former president and Benigno’s mother) si Erap bilang mayor at presidente. Ngayon naman, tinanggal ako saka si Sen. Jinggoy. Selective justice. Bakit ang mga taga-Liberal Party, hindi nila ginagalaw? Bakit puro taga-oposisyon?”
Ejercito added that he wants to see President Aquino go to jail.
A little bit of history will help us understand why the failure of President Aquino to apply Daang Matuwid to his own allies and friends is such a destabilizing political factor.
In the pre-martial law era, the unwritten rule was that the two factions in the political elite (Nacionalista and Liberal) had alternate and equal chances at power. However, former President Marcos broke that rule when he became the first president to get reelected in 1969 by using “guns, goons and gold.” The consequent economic crisis and student protests gave then-President Marcos the pretext to declare martial law and essentially eliminate the opposition.
After the People’s Power Revolution, Cory Aquino restored the system of pre-martial law politics but even she recognized that the stability of traditional elite politics rests on giving the principal factions of the elite fair chances at power. She, therefore, allowed former First Lady Imelda Marcos and businessman Eduardo Cojuangco to return from exile and run for the presidential elections in 1992.
However, President Aquino may be breaking this unwritten rule by essentially eliminating the opposition, not through martial law as former President Marcos did, but by using Daang Matuwid applied one-sidedly.
The 2016 elections will therefore prove crucial to political stability and sustainability of economic growth. If all factions are given fair chances at power, and if the elected President has a clear and uncontested mandate, we will have political unity and an economic boom, irrespective of who is elected.
Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.
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source: Businessworld
