In recent weeks, President Estrada has trained the guns of his anti poverty crusade in the direction of the 1987 Constitution. Naming his latest move the Constitutional Correction for Development or CONCORD, the President has called for the removal of the constitutional restriction on foreign ownership of land, foreign exploration, development and utilization of natural resources, foreign operation of public utilities, foreign ownership of mass media and foreign engagement in the advertising industry. His reason: the economic provisions of the Constitution stand in the way of massive foreign investments that can decisively lift our country from mass poverty by providing more jobs and livelihood and better incomes for the majority.
A strange twist, CONCORD has become sweet revenge for Fidel Ramos, Mr. Estrada's predecessor whom he criticized during the last presidential election for adopting an economic strategy that only made the rich richer and the poor poorer. For what Mr. Estrada is doing now is not only to affirm the globalist liberalization strategy of Philippines 2000 but to carry it to its extreme: completely open the Philippine economy to global forces in one stroke. The champion of the poor has taken up the cause which the Philippine economic elite had lustily applauded under the past administration, and this time, the new found advocate has more brazenness and zeal.
As to what entered Mr. Estrada's calculations or how he was able to arrive at his proposals is anybody's guess. What is clear is that in exchange for such monumental moves as scrapping the nationalist provisions of the Constitution which are hard-earned historic gains of our people's struggles, the President offers little in the way of enlightenment. His arguments cannot at all stand the test of our economic experience and those of other countries. Nor can we see in them the necessary discernment of our economic prospects in the era of rapid globalization.
The argument that CONCORD will result in an upshot of foreign direct investments (FDI) is not founded on our experience and is simplistically assuming too much. The constitutional restrictions on foreign ownership have long been relaxed to the point that foreign investors hardly cite it as an impediment to FDI flows. The grant of 25-, 50-, and even 75-year leases on land to foreign agribusinesses and laws like the condominium law have practically given foreigners access to control and use of land, plus the added advantages of not having to pay real estate tax and avoiding the social cost of being direct targets of Philippine nationalism. A liberal interpretation of what constitutes the total capital of a corporation has gone around the 60-40 (in favor of Filipinos) equity requirement. Total shares include both common and preferred, enabling foreigners with dominant common (voting) shares to still appear as the minority owners.Besides, where shares are widely distributed among several holders, ownership of even 20 percent of total stocks can give an entity effective control of a company.
If FDIs are not coming, it behooves Mr. Estrada and his administration to look for other reasons. The 1998 World Investment Report will help them in their search. It states that while a liberal policy on investment is necessary to attract FDIs, it is never and can never be sufficient. Ms. Solita Monsod, writing for the Philippine Daily Inquirer ( Aug. 29, p.8 ) cited that recent research as well as earlier studies list down the following other determinants for increased FDI flows: market size, growth, production costs, skills levels, adequate infrastructure, economic stability, and the clarity and stability of rules which can effectively rule out corruption and other forms of rent-seeking. This explains why countries with varying nationality restrictions on investment equity like Thailand, Malaysia, Singapore and especially China are among the top 20 recipients of FDIs worldwide. China, with the most stringent nationality requirement, is number one in the list of twenty.
The CONCORD proposals also ignore our experience with foreign investors, especially the multinationals, which should teach us not to relent on regulation and restrictions. Studies after studies during the past three decades have shown that foreign investors borrow local funds for their projects rather than bring in substantial capital, rely more on capital-intensive technology with no appreciable increase in employment, dislodge easily local investors thanks to the former's advantages in technology and management, and repatriate huge remittances to their mother companies abroad, contributing more to decapitalization of the country than capital growth.
Foreign ownership of land is not only completely unnecessary. It will effectively dismantle agrarian reform or what remains of its promise. It will also undermine the long-time advocacy for a land use to protect agricultural areas, ensure food security and support agrarian reform. The CONCORD qualifier exempting agricultural land from the amendment is meaningless. Once the land market is open to foreign buyers, the current strength of market forces and landowner resistance especially in prime agricultural lands will multiply several times over the already weakened capability of the state to enforce any legal barrier between urban and non-agricultural land on the one hand and agricultural land on the other hand. Add to this the rampant corruption in government and the existence of legislations and executive rules which conflict with those protecting areas for land reform and we can see how all these things will write finis to the reform.
Granting for the sake of argument that the exemption will work, the entry of foreign buyers into non-agricultural land will raise land prices and may even encourage a rampage of land speculation, irrespective of the actual availability of land buyers. Because urban and non-agricultural lands are scattered all over the archipelago and stand side by side with agricultural areas in many parts of the country, the rise of real estate price in the urban areas will be accompanied by the rise of agricultural land price. Let us remember that CARP is expropriatory not confiscatory, so the success of agrarian reform hinges in one important respect on the ability of the state to buy land for the farmers. Land prices whether pegged around so-called market rates ( so-called because of the existence of many distortionary factors in land price determination ) or at prices set by compulsory acquisition are already prohibitive enough, making it difficult for government to raise the needed money to buy land. How much more if land prices will shoot upward and possibly in rates much higher than before. Mr. Estrada should not tell us that there will be exemption prices for agricultural land. That is not how land markets work.
The exemption also raises suspicions of deception. Isn't agriculture the main thrust of the Estrada administration? Hasn't the President reiterated on many occasions the need to bombard agriculture with private investments? How come agricultural land is now being exempted from this grand extravaganza opening to foreign investments? Could it be that Malacanang knew that exemptions won't work anyway.
Urban land speculation and even a real rise in sellers market in urban lands under the impact of foreign entrants into the land markets will make it more difficult for the government to provide socialized housing for the poor and for the low-income middle classes to access to low-cost housing being mostly provided by commercial real estate developers. Is this poverty alleviation, much less poverty eradication? The President may argue that with taxes accruing from real estate purchases and real estate holdings and the general rise of the economy he anticipates, the government will be able to raise the money for massive socialized housing. But the train of argument will run full circle. The costs of socialized housing will rise, especially land purchases. And what if foreign investors will not come in numbers as expected? Meantime, a basic guarantee of reserving a basic life-giving source--land for Filipino nationals shall have been given up by then.
The President has been given advice by his predecessor, Mr. Ramos, a fellow globalist liberalizer but who now appears more moderate of persuasion than Mr. Estrada, to rely not on Cha-Cha but on passing needed legislations and to exercise efficient economic management to seek gains from globalization to enable the country to lift itself from mass poverty. We have a different advise. Pro-poor legislations and good economic management in in the interest of the common good are indeed important ingredients in the fight against poverty. But these will not be enough. More basic reforms have to be done.
We welcome the President in his desire to make the 1987 Constitution really pro-poor and more attuned to the new times to enable the country to prosper in a more globalized setting. But instead of launching a cannonade against the nationalist provisions which until now has a protective use for the large underprivileged, he must unleash the fire on how the Constitution assigns a higher place to the guarantee of private property than social reforms and the claims of the common good, even equalizing it with life and liberty, and on the system of governance it sets up which in the past thirteen years has failed to empower the poor and middle-income majority.
It is useful to recall a bit of the not so distant past. The campaign for the ratification of the 1987 Constitution evoked three kinds of responses from the progressive movements: Yes, Critical Yes, and No. The Yes and the Critical Yes camps, especially the latter, acknowledged the weaknesses of the Constitution. But they argued that its guarantee of liberal freedoms and recognition of certain social reforms were acceptable enough, especially in light of the very pressing need to institutionalize the EDSA regime then battling for its life with militarist ultra-Right forces. On the other hand, those who campaigned for No anchored their rejection on the ground that the proposed Constitution was basically in favor of the economic and political elite, that it gave preference to private property over social needs and social reforms, like land reform.
The 1987 Constitution was of course ratified, riding on the crest of Ms. Aquino's popularity and the antifascist sentiments of the people. But it was very obvious that issues with deeper implications for empowering the masses and lifting them from poverty were drowned in the ratification campaign by calls to give Cory a chance and a form of liberal democracy to stabilize. This bandwagon call plus bombs and bullets rained on the guerrilla bases of the national democratic movement which led the No campaign contributed a lot to clinch the ratification vote.
We refer to history not to find fault or say " we told you so" stuff, but to learn from it. Those who favored the 1987 Constitution have valid points. But perhaps it is time to listen to those voices drowned by Cory exaltations and military bombs. Almost thirteen years after the Constitution was approved, majority are still poor and marginalized, and the political system remains in the hands of the same old political dynasties and the very rich. Land reform remains a dream for a big majority of farmer-tillers. Indeed, people can march in the streets, speak out more freely and organize openly but the little pro-poor, social and democratic reforms gained had to be won bit by bit, the hard way.
The fundamental limits to social empowerment are basically reflected in the 1987 Constitution. The prior guarantee to private property over and above social needs and social reforms extends to the provisions on rural and urban land reform. Land reform in the Constitution is qualified by "priorities" to be set by Congress. It is a qualified, watered-down land reform. No wonder then that landowners can invoke more provisions, more rights, more institutional protection apart from the de facto power they hold when confronted with CARP. How can land use, the protection of agricultural areas for food security and equity reform, and drastic steps to restore ecological balance go forward within the property framework of this Charter? The President speaks of globalization. Now that global commons like land, water and clean air are becoming scarcer for most of us, especially for the poor, it is high time to revise the relationship between private property and social claims in favor of the common good. Other changes like redefining ancestral domain from being state lands to lands owned by the community in accordance with customary law are crucial to empowering our indigenous peoples and to realizing their right to self-determination.
Everybody speaks of lack of political will by the Philippine state. Whenever the promise of reforms are blocked or waylaid, the usual plaint is lack of political will. But where should we expect the will for reforms to come from? The same political and economic elite who are favored by the status quo?
The 1987 Constitution provides for a political system that has built-in advantages for political dynasties and the very rich to retain themselves in power. The electoral system, the powerful presidency and the presidential system of government are beyond the reach of a poor but deserving candidate or a political party based on the grassroot poor. Even the provision for a multi-party system and partylist representation in the lower house of Congress cannot help much in developing strong grassroot representation in government. What is needed is a shift to a parliamentary mode of government with proportional representation to allow more popular access and accountability in the system of governance. Electoral reforms must be strengthened to level the electoral playing field for party initiatives coming from the grassroots and the poor majority. The adoption of a federal system can also be studied as one option to make government closer and more accountable to the people below, and to correct regional imbalances in the assignment of national priorities and resources.
The built-in conservativism of the political structure is what makes the CONCORD choice of the constituent assembly mode of amending the constitution skewed in favor of the ruling classes. It will seriously delimit popular participation in the making of decisions fundamentally vital to the nation's present and future. According to the President, convening Congress to a constituent assembly is the easier and cheaper track. Indeed, easier, because the protection of national patrimony is historically not a big concern for most of the elite. And cheaper, because it will cost less to buy most members of Congress than throwing the whole question to the people through a more popular and lengthier process of a constitutional convention mode of amending or changing the Constitution. But if we are to engage truly the urgent issues of poverty eradication and empowerment of the poor majority, and economic development in the era of globalization, the people must be involved and must be empowered every step of the way. The far more popular and democratic process is calling a democratically elected constitutional convention whose decisions will be subject to a national referendum.
The President's CONCORD has flung a brazen challenge to the nationalist provisions of the Constitution, calling it obsolete in the era of globalization and a failure in liberating the vast masses from poverty. He has called for a new type of nationalism which will benefit the masses. His meanings can be found in the CONCORD proposals which are bound to court disaster for our country, especially the poor. His mistake arises from an erroneous reading of our history and our current prospects--probably the result of listening too much to the glib neo-liberal talk of many of his political advisers and business confreres.
The nationalism that Mr. Estrada decries is the nationalism of the elite he often likes to rant against. It is not the revolutionary nationalism which since Katipunan days has equated national aspirations with humane life for all our people. If our nationalist struggles have not so far gained liberation for the poor, it is because revolutionary nationalism has always been frustrated by the combined forces of imperialism and the local elite who fit nationalism to their narrow class interests.
He is right, though, in asking for a redefinition of nationalism in these times of rapid globalization. Giving meaning to the experiences and aspirations of what today comprise the community of peoples, ethnic groups, classes and sectors, residents here and abroad under the name Philippine or Filipino will demand something more than what traditional nationalism or revolutionary nationalism can provide.
It means a new consensus on how we are to come together as a community, on our common goals and aspirations, and on our view of the relevance of the nation-state and how it should function in a highly inter-dependent world.
We should go global, Mr. President. That is the way of the future. The benefits of info-tech and hi-tech revolution and cross-cultural exchanges should be tapped to enable our people, especially the poor, to rise to a prosperous and dignified life. But we should play in the global world intact as a national community, able to harness our resources and strengths to benefit us all. Unlike the globalist neo-liberals who pander to the markets, we ask that we employ the activism of the state and civil society to make markets work for both equity and growth objectives of national development. The state has to take the decisive and lead role because the majority are still poor, marginalized and disempowered, requiring protection, support and assistance. This is something the markets cannot provide on most occasions, and civil society still not equipped to handle. For the state to succeed in this role, it must perform as an active political institution, a unifier of culture, a development planner, and a custodian or steward of public resource like land.
We should play the global game as one national entity, though our community has broadened to the larger multi-ethnic, multi-locational Pinoy community that we have become. The globalizing world remains a world of nations, competing and cooperating, sharing common interests but retaining different objectives, and still uneven in development in terms of power and wealth. So long as these conditions remain, the Philippine nation is a vital instrument of the poor to rise to a better life and of the rest of the nation to improve their lives. There is no sense giving up national rights and using it to protect our people. By weakening the nation CONCORD will weaken our people, especially the poor.
PADAYON ( Continue the Struggle ! )
Council of Leaders:
Ricardo B. Reyes - Chair
Manuel Steve Quiambao - Vice-Chair
Ramon Casiple - Secretary-General
Belinda Formanes - Deputy Secretary for Internal Affairs
Angel Mendoza Jr. - Deputy Secretary for External Affairs
Malou Perpetua - Treasurer
Lito Rallistan - Auditor
Office: 262 Compound, 15th Avenue, Cubao, Quezon City
Tel. No. : 438 9762
