Mr. Malaluan, a lawyer with a formal training in economics, is a founding member of Action for Economic Reforms. This article was published in the Opinion Section, Yellow Pad Column of BusinessWorld, November 14, 2005 edition, page S1/5.

For a society teeming with politicians and engaging in frequent elections, we ironically lack good political parties. Party politics in the Philippines is personality-oriented and is based on shifting opportunistic alliances. Competing political parties do not offer relevant public policy choices based on platform. They stand on platforms of generalities and when elected into power, implement the same elite project of creating a political and economic environment conducive to the mingling of big business and corruption.

There are some emerging platform-based parties, notably the party-list groups AKBAYAN, BAYAN MUNA and SANLAKAS. They are socialist-oriented parties that appeal to a still limited segment of the electorate. But there is still a large segment of the voters, especially among the middle class, who are open to progressive parties but are not ready for a socialist project. To broaden voters’ choices and promote pluralism, it will be most welcome to have a platform-based non-socialist progressive party.

Such a party is organizationally different from the existing bourgeois parties, including those perceived as reformist like the Liberal Party. Such a party is not oriented towards personalities. Its members have strong adherence and accountability to party platform, processes and decisions. Its members have a high regard for transparency, honesty, integrity and fair dealing in and out of government. Party candidates, officials and full-time personnel abide by a defined set of accountability mechanisms, including disciplinary actions for violation of party’s principles and policies. Such high organizational standard is a key to transforming the corrupt behavioral norm in politics and in government.

More to the point, such party’s platform gives priority to social and economic justice that has eluded Filipinos even after the reinstallation of formal democracy in 1986. Such party emphasizes equity in income, wealth, resources and opportunities, alongside a strategy of sustainable growth and development.

Necessarily this entails a re-examination of the long standing policy of reducing government role to its barest. The strategy of deep, universal and unilateral trade liberalization along with the removal of state support to agriculture and industry only led to disastrous results. The program failed to deliver on its promise of global competitiveness and instead, resulted in losses in local employment and income. The program was only successful in taming inflation, which meant little in the face of shrinking income. Our experience with wholesale privatization (for instance, in water and electricity) and full financial liberalization (the 1997 financial crisis) is likewise

In hindsight, it was a reckless policy of full liberalization. We could have learned from China, which is now globalization’s darling. And yet China shows much greater care in its liberalization policy.

It was not the case that our productive forces in terms of capital, skills, technology and industrial capacity, at the time of transition from dictatorship to formal democracy, were on the verge of breaking out from the stranglehold of lack of competition. What we actually had (and still do!) were a sizable immobile labor, little capital, low level of entrepreneurship, stunted credit market, limited access to land, and limited information. This should have warranted a critical assessment of the potentials and the limits of the market mechanism, and a careful balancing of the role of government with market reforms.

We should likewise question the basic assumption that competition and self-interested behavior are the main driving forces of development. Other powerful motivations, such as nationalism, cooperation, group loyalty, and a shared understanding of the collective good, have helped other countries develop. The de-emphasis of these motivations in the Philippines has made it very difficult for the country to solve many of its problems such as tax evasion, corruption, and low domestic investments.

Given space constraint, we can only enumerate some of the elements that should form part of the new progressive party’s development platform:

  • Recover the government’s strong, strategic presence in key public interest areas such as public health, water, energy and electricity, natural resource extraction, and banking.
  • Reverse policy of withdrawal from tertiary education. Education is our only remaining lifeline to survive in this era of globalization. State colleges and universities, particularly the University of the Philippines, must wake up from their political intramurals and mediocrity and start producing world-class graduates not only in production engineering and product design but, more importantly, in knowledge-based high technology such as computers, telecommunications, microelectronics and optoelectronics. Solve the problem of high unemployment, mass poverty, and gross inequality by reviving agriculture and industry through asset reform and selective but judicious use of tariffs, directed credit, public enterprise and other forms of support.
  • Implement focused intervention on education, livelihood, health and nutrition, and population control, to communities under extreme poverty
  • Rationalize labor export by emphasizing higher levels of skills, better labor standards and protection, and Philippine-based mutual benefit programs to maximize remittances and expertise.
  • Diversify the government¡¦s financing strategy, to include an aggressive debt reduction strategy beyond just increasing indirect taxes.
  • Evolve a foreign policy that is less centered on the US, and that finds strength and strategic value in strong Asian regional cooperation.

Such a program is not a throwback to the era of the old, if not obsolete, model of dirigisme and protectionism. To the contrary, it is a program that respects conventional economic wisdom such as the significance of markets, competition, and incentives¡at the same time recognizes that innovative heterodox approaches as economic history and contemporary developments have shown.

Play a decisive role in spurring sustained growth and development.

Finally, while such a bourgeois-democratic party appeals to the ranks of the middle class and enlightened section of the upper class, it derives strength from grassroots membership and alliances with other non-elitist, mass-based parties and organizations.