The economy of the few, by the few and for the few
by Ernesto R. Gonzales, Ph.D.

The Manila Times
09 November 2003

TWENTY-TWO years ago, Dr. Mahathir bin Mohamad became Prime Minister of Malaysia. At the time, our Divisoria was a lot better physically, compared to Kuala Lumpur. Upon retiring, Mahathir leaves behind a Malaysia that is now able to negotiate squarely with the richest and most powerful countries in the world. Malaysia has indeed attained NIC-hood, the status of newly industrialized countries.

Sixto Roxas, a noted economist, recently talked before the Kilusang Makabayang Ekonomiya held at the Club Filipino. He revealed that his talk was actually the same piece he delivered when he was installed as chair of the National Economic Council of the Diosdado Macapa-gal Government in the 1960s. His message was very clear, namely, that nothing significant has happened ever since up to now.

Dr. Bernie Villegas, dean, School of Economics, University of Asia and the Pacific presented during the Society of Catholic Social Scientists Philippines (SCSS) symposium on October 23 that the lessons we must learn from the just-retired Mahathir is that the best model for an economy is to get out of the �Latin American Trap.� The Latin American Trap is distinguished by its dependence upon the failed dogmata of macroeconomics principles.

Fifty-seven years from the restoration of Philippine independence in 1946, we find ourselves in a situation of frustration and the realization that we have not done anything right after all. The prevailing tendency is to point a finger at persons instead of at institutions as the culprits behind our economic failure. Institutions are managed through prescriptions from scientific study of society, economy, polity and ecology. When all of these have failed, one can only see the human person as the limiting factor. But man is not like inanimate institutions.

He is a human being. As a human being, he must be a moral person. As a moral person, he must be right in the eyes of God. If he is morally right, he cannot do wrong to his fellowman.

I believe that the spirit behind Mahathir�s bumiputra, the policy that placed Malaysians first and foremost, is his love for Malaysia and Malaysians.

This is the great spirit behind the colossal business and economic infrastructures that he has built for Malaysia and the Malaysians.

In contrast, our situation in the Philippines may be described with accuracy as the economy of the few, for the few and by the few, instead of the Philippines for the Filipinos. This is a highly immoral situation if we go by the documents of Vatican II of the Catholic Church. Vatican Council II says:

��economic development. . . is not to be left to the judgment of the few individuals or groups possessing too much economic power, nor of the political community alone. . . . It is likewise necessary that the voluntary initiatives of individuals and of free groups would be integrated with state enterprises and organized in a suitable and harmonious way. Nor should development be left to the almost mechanical evolution of economic activity nor to the decision of public authority.�

Malaysia for the Malaysians. Or bumiputra. This explains why Mahathir was so effective in his economic policy that had mobilized the Malaysians. When he became prime minister, he said: �You made me prime minister of Malaysia. Thus, this government will work with the Malaysians for the good of Malaysia.� True to his word, the entire Malaysian bureaucracy was shaped by bumiputra whereby the prime minister and the bureaucracy worked as one. This made the whole of Malaysia work as one for all Malaysians.

In the Philippines, in contrast, the many work for a privileged few. Thus the poor pay taxes mostly through indirect means, but most of the rich do not. Aliens enjoy tax bonanzas so that we may be able to have more of them enter our economic system. Upon entering the economic system, they work for themselves and not for the Philippines. Moreover, when a Filipino exports from the Philippines he gets zero tax rebate. In our society, depriving our laborers with their right to security of tenure is being tolerated. Although it is not legal, labor contractualiza-tion is now widely practiced in this country, and the labor authorities act as if they see nothing and hear nothing. The poor elect leaders to run government; as soon as elected, these leaders forget the poor. They run government so that they could serve themselves and the interest of the rich.

When a Filipino wants to create something for himself he has to contend with the rigors of a patent system that favor the interest of the rich. Sometimes the products of his poverty are sold to the buyers of intellectual property abroad at the expense of the poor Filipino. When a Filipino tries to free himself using the forces of the marketplace, he is asked to pay many kinds of taxes: withholding tax, value-added tax, corporate income tax and personal income tax. Moreover, he is asked by the bureaucracy to construct facilities beyond his financial capability. When the funds of government run dry, foreign loans are drawn and spent for the benefit of the rich. Yet, it is the poor who must pay back those loans up to the point of depriving himself of the amenities he ought to have.

One of the strongest cries of the citizenry in EDSA 2 was contained in the fourth cornerstone of governance promised by Mrs. Gloria Macapagal-Arroyo: moral recovery. But moral recovery is not the job of government; it is a work that can only be done by a leadership with a human heart. What shapes the human heart is the higher system of beliefs held dear to one�s self, like God. All those who profess leadership, whether in House of Representatives, the Senate, Malaca�ang, the Supreme Court, in industry, the Church, in �civil society� so-called, or in NGOs, must have his heart properly anchored in a belief system from which flows moral leadership.

What is wrong in the national economic system cannot be corrected by another erroneous economic policy. It can only be corrected by a human heart that genuinely cares for the poor and truly interested in the welfare of the nation, in general and not just for a small segment thereof. For such an objective, manipulation and hypocrisy just won�t work.

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