SONA 2004: Re-thinking Another Direction : QC IMC

Orchestrating Angelo de la Cruz’s homecoming and steering the country off a potentially monumental crisis can be read as a positive portent of President Gloria Macapagal Arroyo’s “New Direction” SONA – that of “putting people first.” We know of course that the move was simply a well-calculated political gambit that paid off well so far, but we have to hand it to her. We also give her credit for designing a comprehensive 10-point, six-year agenda which actually looks good on paper.

But we at the Institute for Popular Democracy (IPD) would like to be among the first to bring PGMA back to earth and give her a dose of reality check lest she gets too distracted by the after glow of the “ganda points” heaped upon her and she starts believing her own hype.

We don’t exactly begrudge her SONA’s redundant theme, however rehashed it sounds. How can there be a “new direction,” when she’s only resuming the work she should have done during the last three years as surrogate president? Further, the vaunted ten point agenda, notably the five main SONA pieces, is just a neat little package centered on three things: services, infrastructures and tourism. We’ll be contented just to see a more realistic picture.

The most anticipated among PGMA’s SONA talking points is also the most felt need of the people: job creation and economic growth. Let’s look at some of the facts. On the positive side, growth has accelerated in the last two years. Notwithstanding the government’s tremendous need to borrow because of record fiscal deficits, there is significant scope for the Banko Sentral to support a growth-oriented monetary policy, without causing inflation and interest rates to rise uncontrollably. Jobs will continue to be created, modest though the numbers may be.

Yet there is also an ample supply of threatening news. Joblessness is worse than levels reached during recent crises periods and disappointment will ensue if not enough jobs are created. Poverty remains very high and this means that there is little scope for further austerity measures. Inequality among the rich and poor grows evermore -- it will not be easy to mobilize political support for policies if there is a sense that ensuing sacrifices and benefits are not being fairly allocated.

”Six to ten million new jobs in six years” looks like an impressive set of numbers. But ten million jobs should be treated as the minimum aspiration. Coaxing the economy to produce only six million jobs is bound to result not only in a bigger number of unemployed persons by the end of the president’s term, it will also translate into an unemployment rate that is close to 14 percent, higher that today’s starting point. As more young people enter the labor force and as more people decide to look for jobs every year from hereon six million jobs will not be enough. As of now the number of unemployed has reached five million. In April this year another 5.8 million workers are underemployed and looking for more opportunities for make ends meet.

When you factor in the feeble government finances that resulted from poor tax collection, heavy debt service burden and heavy contractual obligations among others, we can’t help but wonder where the resources for the gargantuan task of job creation will come from?

The fiscal crisis is like a ticking bomb. The question is whether this can be defused before i) bottlenecks begin to emerge in the infrastructure sector that are crucial for supporting job creation; ii) before the poor and underemployed population becomes restless and demands from the Arroyo administration that it provides income from public projects in place of the promised but unrealized jobs and private incomes; and iii) before government borrowing starts to compete for limited funds that the different job creating economic sectors also require.

It is not obvious that the Arroyo presidency realizes the importance of a running start on these matters. Six years seems like a long time but windows of opportunity will close quickly if the government’s ability to articulate, orchestrate and lead reforms does not become apparent.

It seems fairly understandable that an insecure president, haunted by a tainted mandate and saddled with the unenviable title of “bogus president” will resort to the most shrewd strategies and tactics to gain the leverage and momentum she so desires. But crafting a six-year, 10-point agenda program which reads more like a wish list but devoid of a mechanism to rally the society towards concerted and concrete actions is not the way to go.

We call upon the new administration to burden itself less on overcoming its weakened mandate but rather on undoing what it has contributed to the political and institutional crisis the country has confronted in recent years. It will be the beginning of the end for the Arroyo administration’s agenda for reform if it does not focus and expend its highly limited stock of political capital efficiently.

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