"Instead of sustained development and well-being, we have had grumblings and disappointment all over the place."
"Instead of sustained development and well-being, we have had grumblings and disappointment all over the place."
I first heard of the phrase “Commanding Heights of the Economy” from a recognized intellectual and statesman, my boss and mentor, the late Blas F. Ople.
Born of humble beginnings, he rose to become, among others, the longest-serving Secretary of Labor and Employment in our history, Secretary of Foreign Affairs and Senate President. It was during his stint as President Marcos’ Labor and Employment Secretary in 1977, that he was elected first and so far the only Filipino President of the International Labor Organization General Assembly at which time this United Nations organ held the World Employment Conference in Geneva. The WEC then validated the proposition that in time globalization will alter the world economy in a big way affecting the flow of goods and services and with these, people, finances and technology. But that will be another story.
I recall that Ka Blas, as we came to reverently address him, advised our small discussion group reviewing the impact of the then newly issued 1974 Labor Code of the Philippines (PD 442) that we should never lose focus on the “commanding heights.” He was referring, at that time, to the critical sectors that dominated economic activity which in the 1970s consisted primarily of—the public utilities, i.e., power, transportation, water, communications, among others; natural resources (mining and wood processing). He noted that these sectors, being the primary drivers of production, employment and consumption in the 1970s, should be harnessed essentially for the public good. As such, these should either be under government control or heavily regulated to ensure that their impact on the country’s economy and the people’s well being is secured and sustainable. He was not, of course, discounting the contribution of agriculture and fisheries which still employed the majority of our people, but these sectors share in the total economy was shrinking considerably.
I am constrained to mention Ka Blas’ admonition now in the light of our own experience with globalization and its twin, privatization, which were the buzzwords and the underpinnings of the push towards greater private sector intrusion into what we came to understand as the “commanding heights of the economy.” At some point from the early ’80s to just about the beginning of the second Aquino’s term, we were made to believe that these twin initiatives were the best that ever happened to the country. But what a price we had to pay. The cost of our utilities—power, water, transport and communications—grew exponentially almost equal or even higher than those of most developed countries. It is definitely the highest in ASEAN.
The hyped benefits of private sector takeover of these basic sectors were far from expected. And the worst, as is now apparent, is not yet over. Instead of sustained development and well-being, we have had grumblings and disappointment all over the place.
Which brings us to our point. Now that President Rodrigo Duterte has raged over the onerous provisions of the water concessions in the expanded MWSS service areas, the call for government takeover of that vital sector—water and sewerage services—has grown louder and will definitely not go away. Something has to be done about it. It is not enough for the public and definitely this administration to talk about it. Something concrete, comprehensive and sustainable should ensue with this explosion of rage.
The MWSS administration walked gingerly around this issue apparently shocked at the level of rage which has attended it. But they should have anticipated this a long time ago which grew even stronger last summer when the water lines grew even longer by the day as the two water bearers—Manila Water and Maynilad—battled each other explaining their woeful performance over the last two decades. Their explanations, to say the least, were way too late and unavailing. They now have to bite the bullet, so to speak, or risk losing their concessions altogether. Worse, they may just have to refund all the extra charges, fees and other freebies they have gotten through the years which they have not repaid in full and responsible service to their millions of customers.
And if President Duterte’s vow to go after the onerous contracts which have been entered into by government for the takeover, as it were, by mostly favored by successive administrations after 1986 private sector (individuals and corporations) not only of our utilities but our natural resources and other public holdings as well (including those sequestered in the first Aquino administration, many of which whimsically and illegally) then, hopefully, we will have a real appreciation of the benefits of the so-called best-governance practices, whether by government or the private sector, as applied to the country’s development and the people’s well-being.
In so doing, we will not unduly burden ourselves with the ideological debate between government control versus the free market not only over the commanding heights of the economy but over all other economic activities. Truth be told, there are sectors which government has to cede as these require nimbleness and innovation. As well, there are those like utilities which cannot simply be entrusted to the tender mercies of the market. Even the most doctrinaire practitioners of central planning or the free market have come to accept this truth: That a mixed economy properly and responsibly worked out remains the better option.
Even the original movers of China’s economic reforms and growth to become the second largest economy in the world—Deng Xiaoping and his deputy, Chen Yun—appreciated the value of a mixed economy. So even as they believed that the state’s need to control the commanding heights of the economy, they decided early on which constituted such sectors and which one could be conceded to the “reformed” private sector. The mixed venture came to being and became acceptable as it ensured pragmatic performance with solid growth and results while lifting millions of Chinese from poverty. In a word, it gained legitimacy as the Chinese people agreed to discipline themselves under the guidance of the Chinese Communist Party in exchange for real, not imagined, economic gains and some higher meaning in life beyond simply materialism.
We will soon see if the same can be said of President Duterte’s latest initiative. If the results of the recent survey is any guide, he is well on the way. And that will really mean a Happy New Year indeed. Sana na nga.
A Blessed New Year to us all.