PLMC?

"Will this bloc be the least economically developed within the ASEAN region?'

 

 

Just about a decade ago, our country’s representatives to ASEAN conferences, whether ministerial or sub-ministerial levels, would joke about the way the Philippines was gradually being left out in economic development by other countries in the region.

ASEAN was created in August 1967 when the foreign ministers of Malaysia, Indonesia, Thailand, Singapore, and the Philippines signed its declaration to accelerate social and economic progress and promote peace and mutual assistance in the Southeast Asian region. The signatory for the Philippines was then Foreign Secretary Narciso Ramos, the father of former President Fidel V. Ramos.

The attempt at organizing an economic and collaborative bloc was preceded by failed attempts, from the dissolution of the SEATO, sponsored by the US and the so-called Free World at the time to fight communism; then the MAPHILINDO, with then Pres. Diosdado Macapagal, Tunku Abdul Rahman, chief minister of Malaysia, and Indonesia’s Sukarno, which broke off almost as soon as the ink dried on the document creating it.

Then there was ASA or Association of Southeast Asia with Thailand, the Philippines, and the Malaysian Federation in 1961, later expanded to include Singapore and Thailand to become the founding members of ASEAN. Later, Brunei became ASEAN’s sixth member, and then the Socialist Republic of Vietnam when it opened up in 1995 after stabilizing itself despite a series of wars, civil and international, against France and then the USA, which it defeated. Laos, Myanmar and Cambodia followed later such that by the turn of the millennium, ASEAN had 10 member states.

Note that the Philippines always played a key role in the formation of ASEAN. At the time Magsaysay, Garcia and Macapagal were our presidents, the Philippines was yet the more progressive economy with a functioning democracy in the region, thanks in large part to the reconstruction and rehabilitation efforts of Presidents Roxas and Quirino.

The last four members of ASEAN were what the founding members would often call the VLMC bloc. As the new millennium began, they were also the least economically developed within the ASEAN region.

But ten years or so after the millennium began, political economists were observing how Vietnam seemed to be catching up fast, even as an authoritarian military regime in Myanmar stifled growth, and Cambodia was still reeling from the genocide of the Pol Pot years. Laos for its part, with a small population, seemed to be content with its socialist economy’s marginal gains.

By 2012, those of us who would participate in ASEAN and ASEAN plus Three (to include Japan, China and Korea) conferences were quite wary about Vietnam’s eventually overtaking us, and VLMC becomes PLMC. By then of course, Singapore had become one of the wealthiest countries in the whole world, with its per-capita income higher than even some highly developed countries in Europe. Malaysia, especially during the growth years under Mahathir, and Thailand, with its tourism boom and agricultural growth in the 80s and 90s, had already surpassed the Philippines, despite frequent changes in government, stabilized only by the revered authority of its king, Bhumibol Adulyadej. Oil rich Brunei, with a small territory and an equally small population hardly had any economic problems.

The other day, Albay Rep. Joey Salceda, a brilliant economist, declared in so many words, that VLMC had become PLMC, and warned that unless we “open up” the economy and become less restrictive, governed by a Constitution forged during the “revolutionary” period of Cory Aquino’s leadership, even Cambodia may catch up with us.

I have been to all the countries of ASEAN except Brunei, and indeed, the prospects can be frightening. Cambodia with a manageable population vis-à-vis land area is now gaining much ground, with a huge agricultural plain blessed by ample amounts of water for irrigation.

It is of course being aided by much assistance from China; its alignment with the second wealthiest nation on earth a given. Myanmar, with a population half ours but a contiguous land area more than twice larger, can be a sleeping giant now, and once it gets past its political troubles, punctuated recently by another military coup, it can rebound with its ample natural resources.

Of course, we can blame COVID-19 as much as we want for the difficulties we are experiencing nowadays, after more than a decade of steady growth began by GMA, then BSA, and PRRD. Previous to that, FVR began dismantling monopolies in telecommunications, oligopolies in banking and the financial sector and started the process of systemic reforms.

But Joey Salceda says these are not enough, and indeed, the health mismanagement of the pandemic exposed the soft underbelly of our economy. What could have been an escape from a previous boom-and-bust economy into steady growth got busted by the pandemic.

With a 9.5-percent decline in 2020 GDP, and a 2021 inflation analysts foresee as in the 5-to- 5.2-percent average range, with vaccine availability along with logistics and distribution problems yet awaiting clear solutions, COVID-19 continues to hound the country.

In his speech, nicely entitled “The Philippines and Vietnam: A Tale of Two Countries” (borrowing from Charles Dickens famous novel with its “the best of times; the worst of times”), Salceda defined the culprit as the 1987 Constitution and its restrictive provisions, and the resistance of many to further opening up the economy, which promoted oligarchies enriched by regulatory capture and the lack of capital from foreign direct investments.

Dissecting the issue of restrictive economic provisions and the solution being to amend the 1987 Constitution will however have to take a backseat in these days of the COVID-19 surge preceding what looks like a contentious and multi-personality presidential election a year and two months hence.

It will be up to the next leadership after President Duterte to re-start the debate and usher in the political reform needed to give flesh to Salceda’s plaint. But the reforms cannot be restricted to the realm of the economic, they have to include the political and the social, even the cultural.

It is going to be a Herculean task, but it will all begin with choosing the right leader in May next year.