Ms. Coronel is the executive director of the Philippine Center for Investigative Journalism.  This is part 1 of a condensed version of the speech she delivered on April 22, 2006 before the graduating class of the UP School of Economics. This article was published in the Opinion Section, Yellow Pad Column of BusinessWorld, May 1, 2006 edition, page S1/5.

Economics is one of the most prestigious degrees given by this great university. A diploma from the UP School of Economics is something that you should justifiably be proud of and it deserves a place of honor on your wall. Economics, they say, is the queen of the social sciences. It certainly is not a subject for the faint-hearted student. I was a political science major here at UP many years ago, and I can tell you that many of my classmates – some of whom are now topnotch lawyers, government officials and diplomats – could barely pass Econ 101.

Being only a journalist, I am very honored to have been asked to speak to such an esteemed group. I am also pleased that journalists and lawyers are no longer alone. It used to be that law and journalism were the most reviled and joked about professions on this planet – until economists came along. While doing deep research for this piece, I went into Google and typed the phrase “economists jokes.” There were 374,000 links! I am sure you all know the various versions of the how-many-economists-are-needed-to-change-a-light-bulb joke.

But seriously, if you ask me who has done more damage to this country – is it lawyers, journalists, or economists – I think I’d have a difficult time choosing. Not that my own profession is blameless, but I think it’s a toss up between lawyers and economists. The disastrous economic policies of the Marcos era, after all, were the handiwork of some of the brightest economists this country has ever produced – some of them, by the way, products of the UP School of Economics. Marcos, another UP product, was a brilliant lawyer, but he didn’t bring the country to the brink of economic ruin all by himself – he had the benefit of professional advice from topnotch economists.

But let me also say that in 1984, it was also the best minds of the UP School of Economics that produced the most incisive and devastating critique of the economic crisis. That “white paper” on the Philippine economy was widely read by the business community, academe, and by civil society and helped forge a consensus on how the Marcos regime had plundered the economy and impoverished the people. It also presented an alternative agenda for recovery. Uncharacteristically for economists, at the heart of this alternative agenda to halt what it called “the downward drift in the economy” was a call for democratic politics and greater public participation in decision making. It said that the authoritarian system under Marcos, which did not have effective checks and balances and accountability, “facilitated the economic excesses and mistakes of the past.” It added, “the waste and inefficiency entailed by economic concentration in both the private and public sectors have been abetted by the concentration of political power.”

This paper is so refreshingly uneconomistic. It doesn’t talk of economics as a rarefied field but links it to the greater political and social world out there. Let me confess that I had forgotten about this paper and read it again thoroughly only recently, when I bought a copy that was on sale at the UP Press bookstore two weeks ago. At only P15, it’s  one of the few bargains left in this country. Its also as good an indicator as any of how the peso has depreciated in the last 20 years.
In many respects the white paper was ahead of its time. Much of it also rings true, even today. For instance, its observations on social inequality and the great disparities in wealth – are still valid. One of the greatest – and most tragic – failures of 20 years of democracy has been its inability to bridge the yawning gap between rich and poor. The Philippines remains one of the most unequal societies in the world, on a par with Brazil, and less egalitarian than neighboring Indonesia, Cambodia and Vietnam. Sadly, Marcos’s failure to address inequity is also democracy’s failure.

The paper also had this to say about democracy. It would be naïve, it said, to assume that the existence of democratic processes or institutions such as elections, a free press, etc. would automatically bring about the desired economic consequences.  Citizens have to be offered real choices during elections, it said. In addition, they had to be informed if they are to choose well.

“The success of democracy rests, to a large extent, on information availability,” said the paper. “The quality of people’s participation in decision making and their perception of their interests is greatly affected by the amount and quality of information they have.”

This is a very prescient statement. A decade later, the economist and Nobel laureate Amartya Sen would publish his influential book on the link between information, public participation, democracy and economic development. By the late 1990s, Sen’s work would influence such mainstream development institutions as the World Bank.

The basic insight dates back to Adam Smith. More than 200 years ago, the founding father of modern economics wrote that information is the great leveler. A free market, he thought, is unable to function if information is withheld or limited to a few. Inadequate information distorts competition and gives undue advantage to vested interests. In analyzing the East Asian crisis of the late ‘90s, latter-day economists have echoed Smith, tracing the roots of the malaise to bad information and prescribing more transparency in business and government.

You cannot imagine how happy I am to see that economists now realize what journalists have known for centuries: that societies function well only if citizens are well informed and that a free press is crucial not just for a functioning democracy but a healthy economy.

In the world of business – whether in the Philippines or elsewhere in Asia – transparency means information about who is doing what, who owns what, who is borrowing, from where, how much, for what, and how well everyone is doing, and who is being bailed out, protected, subsidized and at whose expense. These are questions that strike at the heart of power. Information can chip away at the heart of power. This is why journalists like myself are concerned about threats of increasing restrictions on the press and on the freedom to speak out. If our democracy is damaged and dysfunctional now, it will be a disaster if our freedoms are curtailed.

You don’t have to take this journalist’s word for this. This was what the sharp minds of this School said 22 years ago.