EMPOWERING THE REGIONS, THE WAY FORWARD

 

EMPOWERING THE REGIONS, THE WAY FORWARD

 

As far as anyone can remember, Metro Manila had always been far ahead compared to any other region in socio-economic development. To correct this imbalance, many have pursued the regional decentralization of government, based on the social theory of “subsidiarity,” saying that regional government systems are in the best position to handle regional affairs.[i]

 

As the late Dr. Gonzalo M. Jurado noted, regional government systems promote the dispersal of development by securing the benefits of “location” (or advantage of proximity to the regional center), by attracting the forces of “agglomeration” (or advantage of concentration in the regional center where there are already large concentrations of people and investments), and by facilitating “friendly competition” (or advantage of competition among regional centers to deliver the best services at the most reasonable prices).^[ii] If I may add, they also institutionalize the systematic “integration” of the social and economic service functions of select government agencies, consolidating their operations, administration, control and supervision under a singular authority.^[iii]

 

So how exactly should we pursue regional decentralization? Based on what we already know, there are at least three (3) ways to do this - by regional authority (RA), by autonomous region (AR), and by sub-state (SS). RA is like SBMA, but for a much bigger area like Central Luzon, and without the tax incentives usually granted in freeport and economic zones. AR is like the BARMM and its predecessor ARMM. SS is like the component state of Sabah, that by “accession” has joined the federal state of Malaysia.[iv]

Is there a national consensus on how to pursue regional decentralization? Based on my personal obversation, there is none. In  Luzon, the people and their leaders are apparently open to RA (as they already have the SBMA). However, they are indifferent if not opposed to either the AR or the SS. Note that even the Cordillera region did not create its own AR, even if so provided in the 1987 Constitution. In Mindanao on the other hand, I recall the words of our late mentor, Fr. Romeo “Archie” J. Intengan, S.J. He once told me that as far as the Muslim communities are concerned, anything less than “accession” to a federal state would not be acceptable. Knowing that Fr. Archie spent a good part of his life in the South during the martial law years, I take his subtle observations as words of wisdom. In Visayas, it seems their sentiment is closer to Mindanao.

So how do we move forward if there is no consensus? Well, the answer should be obvious. We should take the “bottom-up approach” and let the people of the regions decide for themselves, rather than take the “top-down approach” and impose on the regions uniform structures designed from the top. We need to consider that there are many factors that influence the success or failure of regional decentralization, including culture, demography, geography, natural resources, public funds and even insurgency.

While we have heard about the benefits of regional decentralization, people do ask – are there are pitfalls along the way? Yes, there are pitfalls ahead. Can we avoid them? Yes, of course, we can.

 

So what are these pitfalls? From my engagement with people's organizations and concerned citizens, the major concerns include the“Balkanization” of the nation (or the secession of sub-states from the federal state), the huge cost of funding multiple regional assemblies, double taxation that overburdens the taxpayers, and a complicated legal system (with divergent legal frameworks across the regions) that hamper doing business and job creation.

To prevent “Balkanization,” the federal constitution may categorically prohibit secession, and to this end, vest solely in the federal state the establishment of military (AFP) and police (PNP) forces. Borrowing from the laws establishing freeports and economic zones, the SS may have “internal security forces” which are actually government security guards with the limited task of protecting persons and properties.

 

To avoid the huge cost of funding multiple new regional assemblies, the present mayors and district congressmen may be designated as ex-officio members of these assemblies. Under the 1943 Constitution, local officials were made ex-officio members of the national assembly.

 

To avoid double taxation, we can temporarily retain the present public finance system where only the national government collects the major taxes (on income, value added and import duties), and thereafter allocate to the regions their fair and equitable share in the collections.

 

To avoid a complicated legal system, we can also temporarily prohibit the enactment by the SS of laws on banking, insurance, commerce (on goods and services), insolvency, intellectual property rights, professional practice, immigration, naturalization.

 

Looking at all these limitations on the SS, are we not rendering it inutile? No, we are not. They retain the government powers most important to them, i.e. the power to approve plans, programs and projects, and the power to allocate public funds.

 

So how do we move forward in empowering the regions? Check out the People's Draft (a crowd-sourced constitution), hashtag #PeoplesDraft. It is ready for discussion and deliberation on all points raised, and even more.

 

 

Demosthenes B. Donato

13 September 2019

Makati City, Philippines

 

---

[i] Principle of Subsidiarity – “theory in sociology, that functions which subordinate or local organizations perform effectively belong more properly to them than to a dominant central organization;” Webster’s Third New International Dictionary, (c) 2002, page 2279.

[ii] Gonzalo M. Jurado, Notes on the Federal Structure for the Philippines, pages 2-4, 10 September 2012.

[iii] Demosthenes B. Donato, Advantages and Disadvantages of Regional Decentralization, 27 August 2016.

[iv] Principle of Accession – “the act of becoming joined (as in a confederacy or union);” Webster’s Third New International Dictionary Unabridged, (c) 2002, page 11.

WHY LEFTISTS REJECT FOREIGN INVESTORS

 WHY LEFTISTS REJECT FOREIGN INVESTORS

 

Before I answer the question, let me first define what I mean by “leftists.” I refer to the advocates of nationalist democracy (NatDem) and socialist democracy (SocDem), who knowingly or unknowingly, may have been influenced by teachings of the communist movement, specifically the Communist International (Comintern) of 1919-1943.[i]

 

The Comintern was an international organization that advocated world communism.[ii] It was determined to "struggle by all available means, including armed force, for the overthrow of the international bourgeoisie and the creation of an international Soviet (i.e. council) republic as a transition stage to the complete abolition of the state."[iii] Comintern “accepted the revolutionary potential of nationalism in the colonial world.”[iv]

 

Notably, the communist ideology was rooted in Marxism and similar schools of thought, that concerned itself only with the poor worker class, the rich capitalist class, the conflict between the social classes, the inevitable social revolution, and the goal of common ownership of the means of production.[v] In other words, it was NOT concerned with nationalities, ethnicity or race.

 

Nonetheless, in order for the ideology to penetrate the colonial world (then ruled by the capitalist powers of Western Europe and North America), the Comintern adopted the strategy of agitating the colonized to rise up against the colonizer under the banner of “nationalism.”

 

Thus, their adherents were indoctrinated about the “evils” of foreign owned businesses (which were mostly from the Western capitalist powers), and thereafter sent on global missions to uproot and destroy them. Once the Western colonizers were weakened if not defeated, the pure communist ideologues can come in to establish a new world order.

 

Looking back at my law school days, where I joined a SocDem group called Sandata, that was affiliated with a larger coalition called Bandila, I guess I was among those indoctrinated with ideas of “nationalism” that was basically anti-foreign. In fact, in our course on constitutional law, we were made to believe that limitations and restrictions on foreign investors under the Filipino First policy, was “nationalist” and therefore patriotic.

 

Today, the communist movement for global hegemony has dissipated, but its anti-foreign doctrine lingers on among “leftists” of different shades. I guess they have forgotten, or maybe they never got to know, that the anti-foreign doctrine was merely a strategy to penetrate the colonial world for the eventual entry communism.

 

I for one no longer believe that foreign investors are almost always predators, who are simply out to exploit the country and its people. Rather, I see them as simply businessmen, like any other, who are willing to invest capital and buckle down to work, in exchange for reasonable profits.

 

If we take a survey of workers or employees in the country now, I guess many if not most of them, will prefer to work for a multinational company (owned by foreign investors), instead of a purely local company (without any international exposure). This is because from what I have seen, multinational companies generally offer higher salaries and benefits.

 

Just to be clear on this point, this is not because these foreign investors are benevolent. It is simply because their foreign owners and management are used to much higher salaries and benefits in their home country. On the other hand, if we look at the local investors who are used to hardship, I guess it follows why they are also hard about salaries and benefits.

 

As I look now at the Filipino First policy, that by law restricts or limits the entry of foreign investors into the country (thereby creating a captive local market), I see that it makes the fundamentally wrong assumption that the profits earned by Filipino businessmen, will “trickle down” to the Filipino workers and consumers.

 

On the contrary, economic experience shows that enterprise owners on one hand, have contradictory interests in relation to enterprise employees and customers on the other hand.  See Theory of the Firm: Managerial behavior, agency costs and ownership structure, by Jensen and Meckling (1976). https://www.sciencedirect.com/science/article/pii/0304405X7690026X. Law of Supply and Demand, by Chappelow (2019). https://www.investopedia.com/terms/l/law-of-supply-demand.asp.

 

The enterprise owners will simply flow as much profits to themselves, unless or until the enterprise employees and customers push back, whenever they can. The same motivation for profit of course applies, regardless of the foreign or local ownership of the enterprise.

 

Today, the biggest dollar earners of the country are the OFWs (overseas Filipino workers) who work for foreign employers overseas, and the BPOs (business process outsourcing) that are generally owned by foreign investors.

 

Ironically, industries dominated by enterprises majority or wholly owned by Filipino businessmen, have the worst performance. We have the highest power cost (i.e. power distribution), slowest internet (i.e. telecommunication), expensive transport costs (i.e. mass transportation), unpredictable water supply (i.e. water distribution), highly politicized mass media, and largely untapped mineral and energy resources.

 

As I see it now, the Filipino First policy is nothing but a Businessmen First policy, where the Filipino workers and consumers are last priority. They will need to get jobs overseas if they want better pay. Otherwise, they will have to swallow the high domestic consumer prices, because there’s no other choice locally.

 

Notably, some associations of big businessmen join hands with the indoctrinated “leftists” to block the entry of foreign investors that they fear will challenge their monopoly or oligopoly of the local market. I guess their motivation is obvious, and there’s no need to write another article about it. They simply seek to perpetuate their stranglehold of the local market, legalized by no less than the constitution and the laws, and maintain their artificially high market prices, without having to worry about new players that will force them to compete like hell.

 

 

Atty. Dindo B. Donato, General Counsel

Tanggulang Demokrasya (Tan Dem), Inc.

16 July 2020. Makati City, Philippines.

 

Disclaimer: The views and opinions expressed in this material are those of the author

and do not necessarily reflect the official policy or position of TanDem.

 

 

---

[i] https://en.wikipedia.org/wiki/Communist_International.

[ii] Id.

[iii] Id.

[iv] Id.

[v] https://en.wikipedia.org/wiki/Communism.