Friday, November 16, 2007

What to do with the Philippine oligarchs

I have once taken note that with Catholicism and Spanish Aristocracy, the basis of our elitist, patrimonlialist and hierarchical system could be explained in the following:
The friar system reformists like Rizal intended to dismantle had an entrenched network of power relations among its surrogates, mostly landowning families of Chinese descent who originally had served as stewards for the estates of the monastic orders, morphed into hispanized hacienderos, then transitioned as mutually-buttressing guilds or factions of Marxian bourgeois and cosmopolitan elites. In hindsight, one would be hard put to surmise whether the uprising fueled by Rizal’s ultimate sacrifice could have ended the system (had the Americans not come into the picture from out of the blue). The fact is that Rizal had been fearful in Fili, and rightly so, of “(freeing) the slaves of today, if they will be the tyrants of tomorrow.” For, those who were waiting in the wings—to succeed to the powers of the Pulpit—were fawning sycophants, hostage and servile but only to the fat friar. To the ignorant and powerless, like the Crispins and the Basilios of Noli, they were as fiendish and callous hirelings who savored every conceivable scent of power, as was the petty and abusive parish sacristan mayor who, as the darker side of the Filipino character in the novel, had made use of every niggling authority it had arrogated unto himself. Still, and in fairness, there were many of them who emerged as the ilustrado, the enlightened ones, and joined the nationalist movement against Spain and then, but only for a fleeting chapter, against the Americans.

Many ilustrados, to preserve their privileges, abandoned the nationalist cause to collaborate with the Americans even while the war was in progress. They saw themselves as heirs apparent and logical beneficiaries of yet another “royal grant” from the new sovereign.
Let me fast forward to more contemporary events.

The political instinct of Ferdinand Marcos, it is fitting to remember, has served him well in his practical analysis of power politics in the Philippines. One of his claims was that the scourge of the country has in the main been the oligarchy of economic elites, some 60 families of a population of 40 million then. These families, mostly of Chinese descent, by their elitist bent and plutocratic complex, think they own the country (of about 85 million souls today), so for them it is just right to govern it – through their trapo surrogates.

Marcos’ solution to the problem was to dismantle the old power and wealth. Unfortunately, by doing so through the use of dictatorial powers, he created another version just as virulent.

Cory Aquino and the EDSA Revolution that ended the dictatorship restored political and civil rights to the Filipinos, but she stopped short at confronting her own shadow and those cast by the reinstated oligarchic clan of which she is a part. She’s just a transition leader, the convenient excuse.

Aquino’s successor, FVR, a West Pointer and a Marcos cousin, was well aware of the “perverse symbiosis” between the oligarchs and trapos, yet he knew as well without doing a Marcos any meaningful change initiative on his part would have limited chance of success. His reform programs could have picked up more steam if he was accorded longer time to lead. In the end President Ramos conducted himself as a good soldier and decided to respect the constitutional limit of his presidential term.

Supposedly populist Erap, once a Marcos lieutenant, was seen as a threat to “the rules of the game.” To the chagrin of the established elites, President Estrada has closely associated himself with the Binondo Chinese (Rizal’s Chinaman?); he in fact has driven a wedge between the “new immigrants” and the “Makati elites.” Consequently, his term was rendered short-lived. It was however under Erap’s watch that many more of the Marcos cronies sneaked back to power.

Wily Gloria Arroyo is the quintessential conservative (i.e., she has professed not wishing to be great, or adventuristic, intending only to “conserve” - even after EDSA II had swept her to power ahead of her schedule after evicting the “Champion of the Poor” - the old tradition and ideology of “market and democracy,” thereby keeping intact the existing wealth and power distribution). So, logically, in the presidential election that followed, the Establishment opted for Arroyo to rule instead of another Erap in FPJ, the Opposition candidate and the Man who would have been Da King.

The oligarchy of the economic class likes it when the political class like Arroyo, beset with one scandal after another, is helpless, a lame duck. If she can’t effectively muscle her way, the powers that be could simply sit tight, allowing the system to operate by auto-drive.

On the other hand, the oligarchy secures itself from external pressure for as long as it toes the Washington Consensus line in an “almost sycophantic” fashion even as on the sly it nurtures relations with its “roots” from China, the awakened Dragon with creeping global extremities. That way, it gains more confidence of having wider latitude to navigate the waters of regional as well as global political economy

A crack in the wall has however begun to appear as more and more of the oligarchs’ counterparts in the region have been consistently outperforming them. That nasty sore spot exposes the Philippine version of oligarchic regime as one of a lower or inferior form especially in the eyes of the “move-on” Filipino middleclass. As a result, this class has become increasingly “relatively deprived” even while going through some sort of enlightenment, as well as perhaps conscience-stricken by the inhuman plight of the vast hoi polloi and the Payatas horde.

To cut to the chase, the holy mess the Philippines is in today has been about the extreme disparity in wealth and power between the oligarchs and the rest of society. The problem is confounded and yet propped up by the twin ideology that’s supposed to serve as the solution – the “market and democracy” construct first hailed by President Manuel L. Quezon as the “new ideology in Asia.” For, what was seen as “the greatest event of modern civilization in the Orient” did not seem to fit the following Philippine realities outside of some borrowed idealism:

- First, the Philippine oligarchy is exceedingly family-centered which has yet to subordinate its ancient roots to the Filipino nation-state. (This baggage is non-existent in longtime world economic power Japan and in the “tiger economies” of Taiwan, South Korea and China which are all essentially homogenous societies; on the other hand, city-state Singapore has confronted this problem by decreeing integration, while Malaysia has institutionalized affirmative action for the Bumiputra, the “sons of the soil.”)

- The oligarchy is content with rent-seeking and paper entrepreneurship and of late is ignoring or failing to make the most of the OWF-generated boon as a medium for sustainable growth and development. Even as corporate entrepreneurs the oligarchs are still basically engaged in family-enterprise capitalism (where as owners they, rather than professional corporate managers, continue to be in control of the entrepreneurial decision-making) but, take note, are somehow disposed to leapfrog right into modern financial capitalism (of the speculative financier type or as traders in money), possibly skipping in the process the productive and employment-generating stages of industrial and managerial capitalisms.

In a nutshell, my preferred prescription for a successful solution to the scourge of oligarchy includes:

- The “tsinoy” oligarchs must do a Rizal (himself a direct descendant of Cue-Li Lam, an immigrant from Fujian, China) to form the Second Filipinos (the First Filipinos being Rizal and co.).

- Like the pariahs and the pirates of the ancient (who were the direct ancestors of the First Filipinos), the oligarchs, matching the risk taken by the OFWs, must venture into vigorous productive entrepreneurships.

- As risk-takers, the oligarchs must not allow their resourcefulness and imagination to be needlessly constrained, contained or contaminated by what was once touted as the “new ideology in Asia,” those pre-conceived notions of “market and democracy” that are themselves being re-imagined to obviate the inevitability of fading or dying away in a “creative destruction.” Instead, they could just attach a neutral appellation to the transformation process, a tag as simple as Design A or Design B.

The design could be something like operating under a Bayanihan Pact, an entrepreneurial arrangement where the oligarchs emerge as national business elites in partnership with the State, a representative group from the private sector, and the bureaucracy (hence, there’s no need for a bloody confrontation) in the nature of a Philippine, Inc., just as a Japan, Inc., a Korean, Inc. or a China, Inc., of recent time or the French, Inc. the British, Inc. or the American, Inc. of the old.

The U.S., the most advanced economy today, differed in economic strategy during its growing pains from the longer established European powers. Alexander Hamilton argued that a young country should use measures to shield its own industries from the vagaries of the market.


Blogger HILLBLOGGER said...

Hi Abe,

I've just been to cvj's blog where he praised your Bayanihan Pact treatise.

Through his blog, I learned that you have written Build and Perish, which I will ask my children to get me for Christmas. I have also read your posts Wanted: Empire Builders and Tapping the leadership of the economic elites (although need to re-read them when kiddies are not around heckling me for this and that for in-depth appreciation.)

If I may leap ahead, I'd say that Abe's Bayanihan pact could be extended and brought out on a worldwide scale because the issues involving wealth (oligarchs) and poverty are not confined only to the Philippines.

The Philippines today is a victim too of the current trend by a number of people in the world to stash away wealth in so few hands.

There is a strong indication that an economic take off across the board all over the world is the only way forward otherwise there is a distinct possibility that civil wars or a WW and populist dictatorships would take over as they are happening now in a number of countries, the Philippines included albeit not quite in tyraniccal fashion (yet).

Americans should take the lead in fact for they possess the most advanced economy in the world.
But how can that happen when Americans themselves do not believe that global wealth should be shared? A way forward is for Americans to be less insular in their outlook.

Recently, I stumbled on the Becker-Posner blog courtesy of another blogger in Norwegian Would. Of particular interest to me was their thread on 14 Oct 2007: Globalization and Inequality--Posner's Comment.

I cite the Becker Posner blog because they typify the view of most American 'oligarchs'.

Here's my view of that particular entry of theirs (Globalization and Inequality):

Clearly written by an American with a rather "insular" view of the world. I accept his ideas based on that premise, but I think we have to look wider than a national basis and consider how we are going to bring prosperity to the billions of poverty stricken in the world. This is the role of the UN and it may mean that the rich nations (G8/G15) have to give up some wealth.

Global wealth has increased. Considering marginal incomes in the US may work as everyone has access to education and there are jobs for almost all those prepared to work and there are equal opportunities to gain wealth if one is clever enough. Much of the world is not in the same situation. Billions of families live on less than 1000 dollars a year and the UN is rightly concerned with these people. It is not enough to say I am in my country and everything is fine - especially with the globalisation of the economy. That way lies the development of disgruntled people who resent the consumption of a minority of the inhabitants of the planet and, in the extreme, are people prepared to commit terrorist acts. This makes the income inequality more than regrettable, unfortunate, deplorable etc - it makes it dangerous.

I agree we are citizens of our nations. We are also citizens of the planet and on this planet there are finite resources of energy, minerals and food. As such we have to consider the wider picture when we consider our relations with the world. We can no longer be insular. Technology is helping and will help more - indeed it will become our saviour or I fear the numbers of humans on the planet is in for a drastic correction.

Education is also different in different countries. In the US the education level is high and I agree that there is little that can be improved and the marginal cost is probably too expensive. However let us look at a country where the literacy rate is 25% (e.g. Afghanistan). In this country how do we run an administration, a legal system, and form a government. No-one can read notices, no-one can fill in forms, no-one can do accounts, no-one can record a contract. Life is based on what you can say and what you can remember - Your Word is Your Bond. This is not a world with which the average US company can deal. The cultural difference between our trade practises, with their armies of legal advisers, and the practises of companies in such a company lead to huge difficulties. Of course more education is needed. Sadly over three quarters of the world is in desperate need of more education.

Mr Posner needs to look more widely and see what the UN sees. He needs to use some imagination and get outside the little island that sits in the middle of the Atlantic and Pacific Oceans.

November 17, 2007 9:21 AM  
Blogger HILLBLOGGER said...

Have a good weekend! -- Anna

November 17, 2007 9:22 AM  
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November 17, 2007 10:54 PM  
Blogger Abe N. Margallo said...


I have been on a road trip and I’m sorry for this late reaction to your excellent and very provocative comment. I’ll respond as soon as I’m back. Thank you.

November 19, 2007 10:10 PM  
Blogger Bong said...

My preferred solution is a market-driven solution.

Level the playing field by removing the pro-oligarch policies embedded in the constitution.

specifically, allow full foreign ownership of real estate (subject to qualifications provided in the Singaporean and Taiwanese models). Allow foreign capital to compete against the oligarchs - they either meet the challenge or sink.

A level playing field will bring in more capital from overseas - either from foreign investors in joint venture with OFWs or foreign investors alone. This in turn will allow the utilization of idle resources that are untapped or undercommensated by the oligarchs. This will spur the economy as people have more choices (instead of being limited to the lousy services of oligarch-owned companies like Meralco, Maynilad, PLDT, Globe, Bayantel, Benpres Holdings).

The expected outcome is a reduction in the numbers of the DE group and the expansion of the middle class.

This needs constitutional amendments. It is ironic that the people who will benefit most from charter change, are the ones resisting it - thanks to the oligarch media machinery which has bamboozled the masses into believing that the oligarchs are on their side - nothing can be further from the truth.

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that's why the church is against the RH bill,They want more filipino women to produce more ignorant Filipinos,The church and the oligarchs are well connected to each other,we will produce more domestic helpers for all around the globe,so that the remittances will be intact,oligarchs businesses will grow more,no need of agrarian reforms,the discontent will be minimal.

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