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Gov’t threat to take over businesses scares away investors – expert

The government's threat to close down and take over private companies, in the guise of responding to the coronavirus pandemic, would drive away investors from the country, a policy expert said on Friday.

In a virtual townhall discussion organized recently by Stratbase ADR Institute (ADRi), Dr. Ronald Mendoza, Dean of the Ateneo School of Government, said there were similarities in the way the current administration threatened to end oligarchy and use the military to address the health crisis and the Marcos administration's takeover of private enterprises in the 1970s to early 1980s to address the economic problem.

“There are too many parallels with 30 years ago,” he said.

Mendoza said it was unfortunate that current political leaders focused their efforts on closing down ABS-CBN Corp. and threatening telecommunication companies at the time the country was trying to survive the pandemic.

“At this point, rising cases, rapidly filling hospitals, our return to tighter lockdown, and a slowing economy could push us toward some of the same strategies unsuccessfully deployed during the dictatorship," he said.

Mendoza said such strategies included debt-financed infrastructure projects implying trickle-down economics and the firesale of many businesses ripe for takeover and consolidation, all in the name of crisis response.

"And rather than directly address the health crisis in a timely and decisive manner, some of our leaders burn precious weeks focused on highly divisive issues such as the Anti-Terrorism Law and the failure to renew ABS-CBN’s franchise,” he said.

"This is an abuse of regulatory powers, especially in the case of franchises. This will attract less investments and the wrong kind of investments; those that disregard institutions, contracts and rule of law,” he said.

Mendoza said there are “too many parallels” with the reign of the Marcos regime, particularly the narrative track of “ending the oligarchy.”

Mendoza said the term oligarchy, which can be broadly defined as a small group of powerful individuals or groups that can shape society, can also apply to political dynasties, as they are very much concentrating power in the political system. Such situation includes ceding power to leaders who weaken checks and balances.

“You can own the business and become senator, and also become president, and also become congressman,” he said.

Mendoza said that in fact, the rise of populism, along with the “extreme degree of uncertainty” and the current crisis pushes toward the strongman rule.

Mendoza said this should not be the case in a democratic government, where human rights and contracts should be honored and protected despite any crisis.

“Protecting our national sovereignty, human rights, and contracts may look like separate elements, but they are part of the whole democratic recovery,” he said.

ADRi president Dindo Manhit said that to cope with the health crisis, the country should not abandon the rule of law. He said stronger public institutions, responsive legislation, good governance and more responsible citizenship are all the more needed at this time.

"There is a need to focus on the importance of whole-of-society solutions, strengthening institutions and legislation, the shift to e-governance and continuous political development in building a new and better normal for the country," said Manhit.

Topics: Stratbase ADR Institute , Ronald Mendoza , ABS-CBN Corp , Dindo Manhit , Anti-Terrorism Law
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