The nation and its leadership find ourselves in a precarious situation.
Short-term threats and exigencies (e.g. Abu Sayyaf, destabilization
efforts, natural calamities) continually preoccupy the government that
is at the same time faced with the threat of an unraveling coalition
that has, from the beginning, been the foundation of its support base.
The seeming comeback of traditional politics of accommodation and
re-building of political bases likewise endanger the current
administration’s “new politics” stance. Meanwhile, our recovery from
the East Asian crisis remains deficient and glaringly lagging behind
our neighbors in the region. With the external environment remaining to
be unpromising and with major trade and investment partners facing
major problems of their own, business and investor confidence are
incessantly dampened.

The main danger, however, is the apparent loss of momentum, tempo, and
will to effect authentic economic and political reforms. There is a
growing cynicism among sectors of society that, EDSA notwithstanding,
no major changes are impending. Furthermore, what seems to be the
emerging prospect is an agenda of compromise and shrinking options.
Thus we find ourselves in a vicious cycle of a low growth scenario that
feeds on low investor confidence which in turn feeds on expectations of
future scenarios as well. The result is a weak growth scenario with
limited political and structural reforms.

It is in this light that the Yellow Paper II must be viewed.
Undeniably, key reforms and clear policy directions are needed to break
the impasse, and a new perspective on old situations essential if we
are to successfully hurdle the challenges that face us today. While
palliative efforts are indeed necessary to keep significant sectors at
bay, long-term reforms must not be sacrificed for shortterm
tribulations and exigencies. Rather, the Yellow Paper II proposes that
it is by addressing fundamental issues in an innovative manner that the
country can move beyond short-term concerns and pursue long-term goals
of growth and development.

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