Message delivered by Mr. Berthold Leimbach, Country Representative of Friedrich Ebert Stiftung, on the occasion of the launching of the AER publication, Philippine Institutions: Growth and Prosperity for All on August 4, 2010.

Dr. Cayetano Paderanga, Economic Planning Secretary,

Dear guests,

Friends in AER, Partners, Ladies and Gentlemen,

The publication we are launching today has come a long way. I understand that the numerous meetings were painstaking, and the coordination work was at times strenuous, to the point of testing the limits of patience of everyone involved. But such is the common tale of collaborative endeavors. To me, what is important tonight is this: the Friedrich Ebert Stiftung Philippine Office is a proud partner in this undertaking.

What led us to this evening?

In 1998, during the Residency of my colleague Roland Feicht, FES Philippines had the good fortune of collaborating with Men Sta. Ana and his team at the Action for Economic Reforms (AER) on a publication called “The State and the Market: Essays on a Socially- Oriented Philippine Economy.” I am not well aware whether this first volume was a bestseller, or whether the core messages were well-received by the audience it intended to reach, especially the students of political economy, reform advocates in search of policy alternatives and, of course, the policy makers. What I am sure about is that the book was a relevant compilation that looked at the rationale, features and the possible outcomes of what then was called “socially-oriented economy.”

That first volume was made more interesting by the fact that it was “delivered” in the heady days of the initial stages of economic globalization. It included incisive arguments of recurring themes that both the FES and the AER share keen interest on: the bridging of asset reform measures and social policies and the strengthening of democratic governance. Looking at this volume again makes one realize the applicability of the same proposals under the present conditions.

Some 10 years after that first book — and at the heels and cusps of major regional and global financial crises and local political upheavals — the AER and FES agreed that it was time to revisit the crucial themes that have been covered before and build on those themes to explore the link of long-term growth to institution-building. While the State-Market relationships are indeed complex, as in the first AER-FES book project, this new compilation on “Philippine Institutions: Growth and Prosperity for All” again offers a substantive overview of the fundamental issues of the Philippines at the current milieu, which covers even more ground thus more comprehensive in scope and more diverse in focus.

I was made to understand that the process of organizing this volume – which started in late 2007/ early 2008 – required the collaborators to raise old and new questions, this time beyond the State-Market nexus, such as: which institutions matter given the current Philippine realities? Which institutions need to be built or strengthened, and which ones need to be reengineered? What is the link of institutions to long-term growth? What critical areas need to be examined? What policy measures will have an impact on growth? The list of questions I am sure was endless – yet we managed somehow to prioritize the major themes that can be presented with solid arguments and academic rigor, as we leave the other questions for future volumes to cover.

I am personally pleased that while my predecessor Mirko Herberg was the one – together with Men – who marshaled this collaboration through the past two years – I am now given the privilege of being the accidental ‘midwife’ as we “give birth” to this book tonight. For that I am very grateful.

As a German coming to Manila in the midst of an interesting political transition, this new publication has been very helpful (full disclosure: I have been reading it in the past days) for me to focus and understand more on issues that matter to this country, which will be my home for the next years. It is not my part to review the volume and present deep-cutting commentaries, but I have to say that I am very impressed about it. It presents in detail not only the issues and debates that shape and affect the Philippine economy but also about the many areas of reform that must be reviewed and what policy and institutional prescriptions need to be considered:

  • It explains the contours of effective institutional and regulatory frameworks in the midst of competing interests, institutionalized corruption, inequitable distribution of income and wealth;
  • It examines the country’s fiscal policy and how reforms can alleviate the burden of the poorer population;
  • It provokes a rethinking of the exchange rate policy by arguing its link and importance to long-term growth;
  • It outlines clear policy areas to spur industrialization and technological upgrading;
  • It examines the link of governance and food security as it makes a case for self-sufficiency;
  • It calls for the strengthening of the system of checks and balance given the recurring problem of “imbalance” between and among branches of government;
  • It tries to sum up the constraints and challenges in local governance;

As I have said, the scope of this volume is remarkable and each article is well-argued. At the very least, I can only wish that people get to read a copy of this book and for them to set discussions and exchanges into motion — especially about the impressive number of recommendations and suggestions it offers.

The historic 2010 automated elections that the Filipino nation went through – which has been adjudged as credible and acceptable by most – is an opportunity to create a broader, stronger constituency for reform toward building robust, more credible, more effective institutions as tools for, as the book says, “prosperity for all.” Some authors of the book noted that “pressure for reform can come from below, from broad social consensus.”

Perhaps with a new government that enjoys an unprecedented high level of trust, now is the chance to reiterate the old core message that is worth repeating, which is also something that cuts across all articles is this volume: that good governance is not only desirable but necessary, and a strategic element for the real development of this beautiful country.

For FES, as a political foundation committed to the ideals and basic values of social democracy, this volume is a goldmine of lessons for democratic reform – to move the national project forward by fixing the essential nuts and bolts of strategic Philippine institutions and imagining new possibilities that should trigger long-term prosperity, and ensure that prosperity gains are enjoyed by as many Filipinos possible. After all, the task of reformers – especially those who self-identify as ‘progressives’ – does not stop at exposing the ills and weaknesses of a system but demands us to proceed to identifying and describing what is possible given a set of concrete realities. This is what the “State and the Market” has attempted to do 12 years ago; this is what the new publication “Philippine Institutions: Growth and Prosperity for All” is offering us anew.

Thank you very much.