It's the Economy, Student Part 1 of 4

This is the full text of a paper written by former president and current Pampanga representative Gloria Macapagal Arroyo which was released to the media yesterday during a press briefing at the Manila Hotel.

[I wrote this article on and off in my spare time during my house recuperation, re-hospitalization and hospital detention from October to December 2011.]

Part 1 of 4

The economy I turned over.


Countless studies have shown that rapid increases in average incomes reduce poverty. Policy research, notes economist Stephan Klasen, has shown that “poverty reduction will be fastest in countries where average income growth is highest.”


When I stepped down from the Presidency in June 2010, I was able to turn over to the next Administration a new Philippines with a 7.9 percent growth rate. That growth rate capped 38 quarters of uninterrupted economic growth despite escalating global oil and food prices, two world recessions, Central and West Asian wars, mega-storms and virulent global epidemics. Our country had just weathered with flying colors the worst planet-wide economic downturn since the Great Depression of 1930. As two-thirds of the world’s economies contracted, we were one of the few that managed positive growth.


If you look around you in our cities as you drive by the office towers that have changed the skyline, if you look around you in our provinces as you drive over the roads, bridges and RORO ports where we made massive investments, that is the face of change that occurred during my administration.


By the time I left the Presidency, nearly nine out of 10 Filipinos had access to health insurance, more than 100,000 new classrooms had been built, 9 million jobs had been created.


We built roads and bridges, ports and airports, irrigation and education facilities where they were sorely needed. To millions of the poor, we provided free or subsidized rice, discounted fuel and electricity, or conditional cash transfers and we advanced land reform for farmers and indigenous communities.


No amount of black propaganda can erase the tangible improvements enjoyed by hundreds of thousands of families liberated from want during my decade at the helm of the nation. But these accomplishments have simply been part of the continuum of history. The gains I achieved were built on the efforts of previous leaders. Each successive government must build on the successes and progress of the previous ones: advance the programs that work, leave behind those that don’t.


I am confident that I left this nation much stronger than when I came into office. When I stepped down, I called on everyone to unite behind our new leaders. I was optimistic and I was hopeful about our future.

However, the evidence is mounting that my optimism was misplaced. Our growth in the 3rd quarter of 2011 was only 3.2 percent, well below all the forecasts that had already been successively downgraded. The momentum inherited by President Aquino from my administration is slowing down, and despite his initial brief honeymoon period, he has simply not replaced my legacy with new ideas and actions of his own.


The politics of division.


In the last year and a half, I have noted with sadness the increasing vacuum of leadership, vision, energy and execution in managing our economic affairs. The gains achieved by previous administrations – mine included – are being squandered in an obsessive pursuit of political warfare meant to blacken the past and conceal the dark corners of the present dispensation. Rather than building on our nation’s achievements, this regime has extolled itself as the sole harbinger of all that is good. And the Filipino people are paying for this obsession--in slumping growth, under-achieving government, escalating crime and conflict, and the excesses of a presidential clique that enjoys fancy cars and gun culture.


Vilification covering up the vacuum of vision is the latest manifestation of the weak state that our generation of Filipinos has inherited. The symptoms of this weak state are a large gap between rich and poor — a gap that has been exploited for political ends — and a political system based on patronage and, ultimately, corruption to support that patronage. Recently, politics has seen the use of black propaganda and character assassination as tools of the trade.The operative word in all of this is “politics” – too much politics.


I know that the President has to be a politician, like everybody else in our elected leadership, whether Administration or Opposition, and we must all co-exist within this system. But what really matters is what kind of politics we espouse, not how much. The enemy to beat is ourselves: when we spread division rather than unity; when we put ego above country and sensationalism above rationality; when we make everyday politics replace long-term vision in our country’s hour of need.


Everyday we draw nearer to what may be our country’s hour of greatest need, because an increasingly ominous global environment is aggravating our self-inflicted weakness. The leadership’s palpable deficiencies in vision and execution are hurting our economy at a time when the rest of the world faces the ever more real threat of a double-dip recession, one that we may have escaped the first time during my term, but might not be able to avoid again.


Our dream of growth


In order to avoid such a grim outcome, we must pursue the economic growth of our country as the permanent solution to our age-old problems of poverty and even corruption. Every postwar Administration to my recollection has sought to advance the economic growth of our country as a matter of highest priority. Only by enlarging the economic pie can there be more and bigger slices for everyone to enjoy.

It is in poverty that we find the material roots of the problem of corruption – because the political system based on patronage--and ultimately, corruption to support patronage--is made possible only by the large gap between the rich and the poor. This will persist until and unless we enlarge the economic pie. Unfortunately, the present Administration has chosen to turn the problem upside down, anchoring their entire development strategy on one simplistic slogan: “Kung walang corrupt, walang mahirap.” If there is no corruption, there is no poverty—this is a proposition that also tells us that the undeniable persistence of poverty to this day therefore means the continuation of corruption under this Administration.


The Economist commented earlier that: “…The President’s approach to fighting corruption…is to punish the sins of the past rather than try to prevent crime in the future. Mr. Aquino has proposed few reforms to the system.”


Meanwhile, most analysts are downgrading their growth forecasts for this year and the next. The Dutch bank ING cited the government’s “under-spending in the name of good governance” as the reason for lowering its growth forecasts. Now more than ever, as the rest of the world faces renewed threats of financial and even sovereign defaults as well as economic recession, it is high time for us to return to the commitment to growth that has been the primary objective of every administration in the past.


See part 2 of 4.