A boost for Cha-cha from Spain?

By Domini M. Torrevillas

(taken from http://www.sigawngbayan.com/042006/pages/news_from_all_over_0717.htm)

We had it coming. That perhaps, would be the more sober reaction to what amounted as a direct dig from Oscar Via Ozalla, director of trade and investments of the Spanish Ministry of Trade and Industry.

As bannered in this newspaper last Friday, the Spanish businessmen had expressed concern “over the inefficiency of the bureaucracy and inadequacy of infrastructure in the Philippines which they said were discouraging foreign investments from pouring into the country.”

The more bothersome part of the story was the portion about the statement of Ozalla, that while he did not want to criticize the Philippine government, it was important to point out that its efforts were not high enough to attract greater investment into the country, despite the Arroyo administration’s fiscal and economic reforms.

“I know that you have made steps in the right direction. They are still not enough because Spanish companies need more.” This was a direct quote from Señor Ozalla that our reporter included in her story on the June 28 forum held at the Spanish capital, which was attended by many of the host country’s businessmen. Also present in the forum was the Philippine Trade and Industry Secretary Peter Favila and presumably, members of the country’s trade delegation.

One would have expected that being an official of the host country, Ozalla would be diplomatic about it and put his messages across a little more gently. But no, he laid it on thickly, even mentioning the inability of the Congress to pass the 2006 budget that, he said, could delay infrastructure development and the delivery of social services.

I could only imagine the discomfiture of Secretary Favila and the other Filipinos in the forum as Ozalla continued to fire away in carino brutal fashion. He said the Philippines must find the right framework and must work double-time to get more investments from Spanish businessmen who are now searching globally for places where they could invest their money.

Businessman, of course, will always go where adequate infrastructure and an efficient bureaucracy will ensure a hospitable climate for their investment and enable them to realize a decent return for their money.

As far as infrastructure is concerned, Ozalla may well be echoing the observation made last May by Joachim von Amsberg, World Bank country director for the Philippines. In a report on the Philippines, Amsberg has noted that infrastructure development in the country has failed to keep pace with the rapid urbanization and high population growth.

“This situation has serious consequences on the country’s competitiveness and in particular, its growth and poverty reduction targets, including the Millennium Development Goals,” the WB official was reported as saying.

Amsberg was right on the button regarding the effect of these issues on the country’s competitiveness. In the 2006 World Competitiveness Yearbook, the Philippines ranked 49th overall among the 61 countries surveyed. It ranked 14th among 15 countries in the Asia-Pacific region, and occupied the last spot—No. 61—in terms of basic infrastructure. The survey was conducted by the International Institute for Management Development (IMD) which is based in Switzerland. IMD released the results some two months ago through the Asian Institute of Management (AIM), its partner in the country.

To improve our attractiveness as an investment destination, Favila said we should be aggressive in marketing the Philippines and in developing new strategies as Vietnam and China have liberalized their policies with respect to the land and issue.

“We cannot do that without amending the Constitution. But we cannot just watch. We have to do something.” Favila was quoted as saying.

Amending the Constitution to ease current restrictions on the entry of foreign investors is one the amendments that the advocates of charter change have been pushing. They contend that liberalizing economic policies will bring in much needed foreign capital in the critical areas which neither the government nor the private sector have the resources to develop.

Allowing the entry of foreign investors in these restricted areas will solve the inadequacy in infrastructure and the perennial problem of the joblessness that consign millions of Filipinos to a life of misery and want. This is what lawyer Romela Bengzon, former deputy secretary general of the Constitutional Consultative Commission, has been hammering on.

Now also a member of the Constitutional Change Advocay Commission (AdCom), Bengzon says the criticisms that Ozalla and the Spanish businessmen arid this regard come as an unintended boost to Cha-Cha and serves to affirm the need for reforms in political and economic structure of the country.

She paints a dismal picture of the employment situation, pointing out that in the past 10 years spanning three administrations, unemployment ranged between 10-11 percent; and underemployment stood at 25 percent of the country’s 40 million workforce.

A corporate law practitioner and investment counselor, Bengzon is quite knowledgeable on the subject of foreign investments. The law firm that she heads as managing director has helped foreign clients set up joint ventures, financing projects, or enter into full or partial equity participation in Philippine companies. Some have organized foreign subsidiaries and representative offices in the country. All these resulted in thousands of jobs.

The figures she ticks off appear impressive—if these can be realized. She claims that if the Constitution is amended to liberalize the entry of foreign capital, investments can rise in three years from the current 18 percent to the 35 percent needed for sustained development. Gross domestic production can double in eight years, and in 12 years, the country can see a 100 percent increase in present per capita income of $1,100 which is equivalent to about P58, 300 under the present exchange rate.

“We can finally lick poverty and catch up with out neighbor nations,” Bengzon enthused. She hastens to add though, that economic reforms would be meaningless if political structure is not reformed as well, and this should come through a shift to the parliamentary system with a unicameral legislature. Such a shift, she says, will eliminate the inherent gridlocks in a bicameral legislative system that often, also results in paralyzing conflicts with the Executive branch.

Bengzon and her AdCom colleagues find solid support from Senator Edgardo Angara, chairman of the opposition party, Laban Ng Demokratikong Pilipino (LDP). During the party’s National Congress at the Manila Hotel last May 24, Angara said that the LDP has consistently advocated amendments to the Constitution since 1992. He assailed the “anachronistic political and administrative structure of government that largely accounts for our country’s appalling underdevelopment, in contrast with our more dynamic neighbors.”

Added Angara: “There is need to open up our highly protected investment system that has thoroughly discouraged investments and job creation in the country. We need to lift restrictive regulations on foreign investments, including management of educational institution, mass media and advertising, to make it more flexible. Flexibility in regulation of foreign investments in key areas of the country such as natural resources, fisheries, telecommunication, roads and highways is important.”

Favila, Ozalla, amsberg and Angara. Openly or impliedly, they seem to be humming the same tune that the AdCom people and the rest of the pro-Cha-cha gang are playing. The question is, will the rest of the country dance to their music? (FROM THE STANDS By DOMINI M. TORREVILLAS, The Philippine Star, 07/06/06)

Many other lands revising Charters

By Jarius Bondoc

(taken from http://www.sigawngbayan.com/042006/pages/columns_bondoc_0707.htm)

Insular Filipinos see domestic events as unique only to the islands. Unnoticed by them, for one, is that many other countries are revising their constitutions to suit changing times. Global Filipinos—10 million or so overseas workers and emigrants—are not myopic. So they observe charter changes in other lands as similar to the objectives in the Philippines: freer economy, abler government, and greater autonomy.

Yemen lifted economic restrictions in its Constitution in 2001. Among the major amendments was a proviso that “the state shall oversee foreign trade and promote internal trade and investment”—often narrowly interpreted to shield inept local businesses, to the loss of investments and, consequently, employment. Rewritten as “the state shall oversee freedom of trade, encourage competition and protect investment,” Yemen then passed enabling laws that drew foreign investors and eased joblessness.

Taiwan last year began discussing constitutional re-engineering in the wake of public fatigue over partisan disputes and legislative gridlock. President Chen Shuibian unveiled in August a two-phase revision, the first aimed at clean and efficient government, and the second at international competitiveness.

German legislators last week rewrote the country’s post-war charter to refine its federal system, among others. Pushed by Chancellor Angela Merkel, the bicameral parliament voted jointly to hand more authority to the 16 regional states over health, education and environment programs. Surpassing the required two-thirds majority, 448 of 614 legislators passed 24 other major revisions—seen as a boost to modernization. The Bundesrat, or upper house, had often blocked or watered down reforms, most recently in 2003 concerning the Agenda of then-chancellor Gerhard Schroder. Consequent agitation for abolition of the Bundestag tamed some members and inspired voters to elect known reformists.

In Bolivia, plans are underway to elect a 255-member constitutional convention. Radical socialist President Evo Morales is hoping such a body would pass his package of political reforms, including land redistribution, legislative efficiency, and local autonomy as demanded by the fertile Sta. Cruz region. The convention has been given only a year to review the charter because deemed overdue.

All this sound so like present talks in the Philippines for charter changes. The Advocacy Commission’s main message is to delete seven provisos hostile to investors, and so wipe out poverty via employment. It then aims to protect these economic gains with a stabler political system: a unicameral parliament balanced by full regional autonomy. Oddly, there are similarities even in terms. The Bolivian constitutional convention is called Constituent Assembly, which in the Philippines means amending by the legislature, as what happened in Germany.

There are other reasons for constitutional amending in still more countries. One is the global tide of democrization, about which Yemen president Ali Abdullah Saleh counseled fellow Arab leaders two years ago. “Trim your hair now,” he warned, “or some one will shave it for you.” Saleh set the example with general elections and gender equality guaranteed as basic constitutional rights. Soon after, Qatar, Kuwait and Saudi Arabia followed suit with municipal election and, in the case of the latter, suffrage for women beginning last month.

In Japan, the birth of a baby girl to Crown Prince Naruhito and Princess Masako has reignited debate whether a woman may occupy the Chrysanthemum Throne. Japan’s constitution forbids women from ruling as emperor, but under such rule, the imperial line of succession would end with Naruhito or his brother Prince Akishino. Neither has so far fathered a male heir. Prime Minister Junichiro Koizumi has voiced reluctance to amend the fundamental law, but women have ruled before and at least one senior politician, Chief Cabinet Secretary Yasuo Fokuda, has said he would support rewriting for a female emperor.

In America, flag burning has incited both houses of Congress to debate a section that would protect Old Glory from protest fires. The federal Supreme Court had ruled in 1989, and again in 1990, that the torching Stars and Stripes is a form of free expression—an inviolable right. But relenting to lobby by a Citizens Flag Alliance, the House of Representatives passed the amendment 286-130. To be ratified, it needs two-thirds vote in the Senate, and then win support of at least 38 out of 50 state legislatures.

The US amendment, the 27th in the 219 years if it passes, has a long way to go. There is a prevalent feeling among Americans, shared by the Filipino elite for historical reasons, that a constitution is an immutable, sacrosanct document never to be touched. And yet Jefferson had warned against such thoughtless faith as tantamount to letting the dead rule over the living.

Taiwan, whose form of government like the Philippines’ copied America’s, is also faltering in the amending process. Opposition leaders acknowledge that the political and economic reforms are urgent, but nonetheless are blocking these because they happen to be President Chen’s initiative. It’s unclear who is aping whom. But like in the Philippines, foes of constitutional reform in Taiwan are resorting to name calling, partisan scheming, and political trickery.

Too bad reform is so slow in RP, which is why it has been left behind. Thailand lifted economic restrictions a decade ago; comparing economic vigor, the Thai baht is far stronger than the peso although they used to be at par in 1996. Parliaments react at the first sign of crisis instead of prolonging the agony, just like in Netherlands where a public furor caused by the immigration deputy forced the dissolution of the entire cabinet. Spain last month stepped farther into federalism when Catalonia voted to be the third of 15 regions to be autonomous. In RP, meanwhile, a small town mayor is preventing election officers to verify signatures in a grassroots initiative. It’s the anti-reform that probably makes Philippine events unique after all. (The Philippine Star, 07/07/06)

WHAT PEOPLE DON’T KNOW ABOUT THE PROPOSED CHA-CHA

By One Voice
(taken from http://www.onevoice.org.ph/index.php/?page_id=20)

The proposed Cha-Cha is being presented as empowerment of the people. Yet, if we examine three documents, namely the Draft Petition of the “people’s” Initiative (DP), House Resolution 1230 (HR), and the report of the Consultative Commission on Charter Change (CC), the proposed charter changes will do the opposite: give more political power to the few who already have too much of it.

1. It will take away our right to vote directly for the President/Head of State. Only members of Parliament will choose the Prime Minister.

“The Prime Minister shall be elected by a majority vote of all the Members of Parliament from among themselves.” (DP-Art. 7, Sec 1; HR-Art. 7-A, Sec. 3; CC-Art. 8, Sec. 2):

“The President shall be elected from among the Members of the Parliament by a majority vote of all its Members for a term of five years…” (HR-Art. 7, Sec. 2; CC-Art. 9, Sec. 2)

2. It will create a powerful Interim Parliament composed of incumbent politicians that would decide whether 2007 elections would be held or not.

• Interim Parliament will be composed of incumbent senators, congressmen, and Cabinet Secretaries: “There shall exist, upon the ratification of these amendments, an interim Parliament which shall continue until the Members of the regular Parliament shall have been elected and shall have qualified. It shall be composed of the incumbent Members of the Senate and House of Representatives and the incumbent Members of the Cabinet who are heads of executive departments.” (DP-Art. 18, Sec. 4(1); HR-Art 18, Sec. 1; CC-Art. 20, Sec. 8 & 9)
  
• Interim Parliament will be left alone to decide when the next elections are to be held including those for local positions: “The interim Parliament shall provide for the election of the members of the Parliament, which shall be synchronized and held simultaneously with the election of all local government officials.” (DP-Art. 18, Sec. 5(2))

3. It will create a super-President with additional Prime Minister powers. This is because the President will keep the powers specified by the 1987 Constitution, while enjoying the powers of Prime Minister – an arrangement vulnerable to abuse.

• Impeachment becomes more difficult, if not nearly impossible: “The incumbent President and Vice-President shall serve until the expiration of their term at noon on the thirtieth day of June 2010 and shall continue to exercise their powers under the 1987 Constitution unless impeached by a vote of two thirds of all the members of the interim parliament.” (DP-Art 18, Sec. 1(1))
  
• Interim Prime Minister will only perform functions delegated by the President. He or she will be chosen by the President: “The incumbent President, who is the Chief Executive, shall nominate, from among the members of the interim Parliament, an interim Prime Minister, who shall be elected by a majority vote of the members thereof. The interim Prime Minister shall oversee the various ministries and shall perform such powers and responsibilities as may be delegated to him by the incumbent President.” (DP-Art 18, Sec. 5(1); HR-Art. 18, Sec. 6; CC-Art. 20, Sec. 12 & 13)

4. Open the door for those in power to stay on indefinitely.

There is no prohibition in any of the proposals against incumbents, including the President, from running in any parliamentary elections to be held in 2010. Moreover, there is no limit in the number of terms: “Each Member of Parliament … shall be elected by the qualified voters of his district for a term of five years without limitation as to the number thereof….” (DP-Art. 6, Sec. 1(2); HR-Art. 6, Sec. 1(2); CC-Art. 7, Sec. 4(1))

5. Open the door to other amendments (DP-Art. 18, Sec. 4(4)), some of which may not even be known to the people today, such as amendments to weaken the Supreme Court as a check against martial law and, conversely, give more powers to the President to declare it. Once the Interim Parliament assumes plenary powers, it will be hard to stop.

• CC deletes the following from Article VII, Sec. 18 of the 1987 Constitution: “The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing.” (CC-Art. 9, Sec. 8)
  
• And restores to the President the power to declare martial law in “imminent danger…” of rebellion, which was used by President Marcos to declare martial law but which was removed in the 1987 Constitution. (CC-Art. 7-A, Sec. 12)

The truth is, there is nothing in the present Charter that hinders economic growth and social development. On the other hand, there are inherent dangers in making hasty changes in the Constitution under a flawed and legally questionable process.

Constitutional reforms, if necessary, are best done through a more transparent and representative Constitutional Convention after the 2007 elections, where any changes will not benefit those in power today.

We do not need the proposed Charter change. We need real change.

One Voice

Liberalism and Federalism

By Ronald Meinardus and Gerhard Raichle
(taken from http://www.fnf.org.ph/liberallibrary/liberalism-and-federalism.htm)

Federalism in Germany: “The Federal Republic of Germany shall be a democratic and social federal state.” This is one of the key paragraphs of the German constitution, as it establishes the principles the state is based on. The writers of the constitution deemed federalism so important that they included this provision among the few elements that are not amendable under any circumstances. Federalism has long become a part of the Germans’ political culture. Often, they refer their our country simply as “die Bundesrepublik” – the Federal Republic. This shows how central the concept of political decentralization has become for them.

In Germany, the 16 federal states have substantial authority. The citizens of the states do not only elect their own state parliaments, who then choose their own state governments headed by veritable prime ministers. Importantly, these politicians wield genuine political power. They are responsible for all affairs pertaining to culture, internal security, the media, local government and regional taxation. In addition, the “Laender” have a significant say in national affairs.

Like the Philippines, Germany has a bicameral legislature. But unlike here, the members of the Upper House are not elected on a national level. The Federal Council, as it is called, is more like the Senate in the United State, representing specific regions, in our case, the regional governments. In the legislative practice, a majority in the “Bundesrat” has the right to block all laws that directly or indirectly affect the interests of the regions. According to estimates, more than fifty percent of federal legislation is conditional on approval by the regional entities.

The basics od Federalism: While supporters of this system argue this mechanism has effectively protected the states against encroachment of their rights by the central government, others say the principle of federal solidarity and national burden sharing stands in the way of economic development and modernization. The Friedrich-Naumann-Foundation has been one of the driving forces of this public debate regarding the future shape of federalism in Germany. It is, therefore, a pleasure to share with the readers of this Philippine book some more fundamental thoughts about federalism. We hope that after reading this chapter you may agree with us that the quest for federalism deserves a high ranking on the agenda of any liberal reform policy.

Let us begin with the basics: “Federalism” denotes a form of decentralized government, where – in legal terms - the component parts of the federation (be they states, provinces, laender or cantons) possess statehood of their own that in some cases have existed prior to formation of the federation. There are other cases, were a federal state was created by the devolution of power from a previously centralized government.

The Principle of subsidiarity: The underlying principle on which every federal constitution rests is the principle of subsidiarity. This stipulates that decision making power should rest as close as possible to those it affects. This is obviously a fundamental liberal principle which reaches far beyond the constitutional structure of the state. Freedom is the supreme principle of liberalism, which is just another term for self-determination or autonomy. If liberals speak of freedom, they first and foremost think of the freedom or the autonomy of the individual. Accordingly, liberals believe that the right to make decisions should first and foremost rest with the individual.

In a political or collective context, this is not always possible for practical reasons. For instance, we cannot decide individually on which side of the road we would like to drive our cars. Still, the autonomy of a small group leaves more freedom with its members than that of a large group as fewer fellow-members engage in the decision-making process. From a liberal standpoint, therefore, wherever collective decision-making is unavoidable, this should be exercised in the smallest possible unit. Consequently, any delegation of power from smaller to larger units should be subjected to the burden of proof that the smaller unit is unable to cope with the problem in question. In practice, this means that all those matters should be left in private hands or in the hands of the citizenry for which a need of government interference has not explicitly been proven. This is the essence of the principle of subsidiarity, which is not only a core principle of liberalism but also the essence of the concept of civil society. Applied to the organization of the state, subsidiarity will result in a decentralized form of government where only those matters are dealt with at a central level that cannot be dealt with adequately at lover levels.

Accomodating diversity: One major merit of federalism lies in its capacity to accommodate diversity. When a country is subdivided in sufficiently small and autonomous subunits, different religious, ethnic or cultural groups can arrange their affairs according to their own preferences in their areas. This is the case where the boundaries of the sub-units coincide more or less with the religious, ethnic or cultural division lines permitting each group to have at least one of those units "as its own". Even where such groups or groupings neither exist nor play a significant role, a federal structure makes it easier to take into account regional peculiarities, as the local or regional government or administration can address such peculiarities.

Generally, where there exist many decision-making centers covering limited areas, more people will get what they want from those who govern them than where only one decision-making body is in charge for the whole country. In the latter case, you may reach a situation, where 51 percent of the population could dictate to 49 percent. In short: When administrative borders coincide, by and large, with ethnic or other division lines within a country, federalism can be a highly effective method of solving minority problems.

By securing room for a wide variety of solutions – or attempts at solution - federalism promotes “competition as a method of discovery” (F.A.v.Hayek). The direct opposite of a "one-solution-fits-all" approach, federalism tends to minimize the risks involved in errors of political decision-making: if such an error affects the whole country, the damage will be considerably severer than if it affects only one province. Worse, still: if the system allows for only one approach (i.e. the one covering the whole country), the probability of identifying the most conducive policy is much smaller than if different policies are applied in the various sub-units of the country. It is an age-old and empirically well-supported experience that competition produces incentives for individuals and collectives to strive for better results. This basic experience is also valid for the organization of the state. While centralist states lack this dimension, federalism may provide for such competition among the sub-division.

Checks and balances: Basically, it is all about sharing political power and control. Sharing and checking political power is the very essence of democracy - the better the system of checks and balances in a country, the better the quality of its democracy. In a democracy, division of power should not be confined to the classical separation between the three traditional powers – legislative, executive and judiciary. In addition to this horizontal division, what may be termed a vertical division of power is crucial. To check the power of the central government, it is essential to devolve authority and rights to lower levels.

As consequence of this vertical separation of powers, federalism foresees a clearly defined allocation of responsibility at the various levels of government. In other words, each state level should hold clearly defined powers and responsibilities exclusive to it. There should be no mixing or "sharing" of power among different levels of government as this would only result in a blurring of responsibilities. The voters should always be in the position to identify the origin of a policy. They should know, for example, who to blame or who to credit for the quality of public services or the level of taxation in a given case. Without such transparency, a rational decision at elections becomes difficult. This transparency is a precondition for democratic accountability.

Last but not least, for responsibility and accountability to be genuine, the transfer of political powers must be accompanied by a transfer of fiscal powers. Devolving power to decentralized units makes sense only if the necessary taxation powers go with it. As long as the central government controls the financial strings, all "devolution" or “decentralization" is but sham devolution and sham decentralization. He who pays the piper calls the tune – this is as much a truism in politics as anywhere else.