Business World

Duterte and the hard state

- CALIXTO V. CHIKIAMCO

While I had voted for President Duterte in 2016, I confess that I wasn’t much of a fan in his first year in office, reaching a point of possible “buyer’s remorse.”

To my mind, he didn’t do much in his first year, which was just full of bombastic, populist promises: end “endo,” free irrigation, increase in SSS pensions, free cavan of rice, etc. While his war against drugs was on point, the way he went about it was over the top, applying pure brute force to a complex problem, and costing the country in terms of internatio­nal reputation.

I also thought he was naïve in entering into peace talks with the CPP- NDF, even to the point of appointing known Red activists in his Cabinet. He also failed to confront the oligarchy in his first year. How could he?

For example, he appointed a former Globe executive to head the Department of Informatio­n and Communicat­ions Technology. It

I’m glad that there’s a President Duterte version 2.0.

was like appointing a fox to guard the hen house. He also did nothing for agricultur­e and instead appointed Manny Piñol as Secretary of Agricultur­e. Pinol’s main policy is to continue former Agricultur­e Secretary Prospero Alcala’s failed rice self-sufficienc­y policy.

THE PRESIDENT HAS EVOLVED

However, I’m glad that there’s a President Duterte version 2.0. The man has clearly evolved in office. Perhaps, attribute the evolution to his humility about his intellectu­al capacity (“it took me 7 years to finish high school.”) but he has shown a capacity to learn and change course.

For example, while he initially bought into Piñol’s bankrupt rice self-sufficienc­y policy, President Duterte later backed Cabinet Secretary Jun Evasco’s more enlightene­d policy to liberalize rice importatio­n and reform the National Food Authority. That the NFA with the help of the rice syndicate is now trying to create a rice crisis to avoid being “reformed” is beside the point. The administra­tion is officially backing legislatio­n to remove NFA’s legal monopoly on rice importatio­n.

There are more examples: President Duterte has allowed the hard leftists in his Cabinet not to be confirmed for office and has junked the peace talks. He fired Atty. Salalima from office and appointed a competent and honest former general as DICT OIC. (I hope former Gen. Eliseo Rio Jr. will be made permanent.) He has reached out of his small circle of Davao friends and San Beda law classmates to staff the government and has been appointing more profession­als ( mostly exmilitary) to sensitive positions. He has tempered his populist impulses. In fact, he has stopped short of fully implementi­ng a jobkilling end “endo” policy. Further, it was legislator­s, and not him, who pushed for the populist free SUC (State Universiti­es and Colleges) tuition.

Even on the drug war, he has learned. He has relaunched Operation Tokhang as “Tokhang Lite,” without the headline- grabbing EJKs ( Extra Judicial Killings), which was seen as the substance of his drug war policy.

My benign, if not positive, view of the actions of President Duterte version 2.0 is that he’s trying to develop a “strong” or “hard” state.

DUTERTE MOVES AGAINST THE OLIGARCHY

In developmen­tal literature, a hard state is one which can raise

substantia­l revenues, provide basic services, keep law and order, and impose public policy over narrow private interests.

It’s with this prism that I view the tax reform law or TRAIN (Tax Reform for Accelerati­on and Inclusion). While a few have criticized TRAIN as being anti-poor because of the increased taxes and the mild inflationa­ry effects, I see it as a big step toward a harder or stronger state. The version that finally passed may have been diluted somewhat by the legislator­s, but the fact is that the administra­tion pushed for it, despite objections of powerful private interests such as car manufactur­ers, sugar producers, beverage and food manufactur­ers, and leftist groups. The ability to impose taxes is a hallmark of a strong state.

TRAIN isn’t the only instance where President Duterte has shown political will about the state’s financial prerogativ­es vis a vis private interests.

He has managed to collect Php 6 billion from Lucio Tan’s Philippine Airlines, representi­ng unpaid navigation­al charges, a debt previous administra­tions have failed to collect. He has retaken

the Mile Long Property from the Prietos, previous owners of the Philippine Daily Inquirer.

Recently, he forced PLDT Chairman Manny Pangilinan to surrender telecom frequencie­s to the government at no cost after threatenin­g to send tax auditors to look over PLDT’s books. Those frequencie­s are public property and while PLDT may have paid CURE (Connectivi­ty Unlimited Resources Enterprise­s) for those frequencie­s, CURE obtained them without paying for them.

More bitter to PLDT, the administra­tion intends to hand over those frequencie­s to a third telco player which will compete with the existing duopoly.

To try to strengthen the state, President Duterte has been attacking what he perceives to be threats to the state. One threat is the drug syndicates with their creeping influence over local, and even national, government officials and police authoritie­s. This is the reason for his drug war. The other threats are from extremists, the first from ISIS-backed local Islamic terrorists and the second, from the CPP-NPA. On the latter, he has done a 180-degree turn.

From consorting with the communists (which he admitted started when he was Davao mayor and playing local politics), he has scrapped the peace talks, ordered the re- arrest of NDF “consultant­s,” and instructed the military to go on an all- out war against the NPA.

However, a skeptic told me that a significan­t amount of TRAIN’s revenues will go to pay for increases in military and police pay. I retorted that it’s just being consistent with Duterte’s objective to strengthen the state by strengthen­ing its capacity to vanquish the state’s enemies.

 ??  ?? CALIXTO V. CHIKIAMCO is a board director of the Institute for Developmen­t and Econometri­c Analysis. idea.introspect­iv @gmail.com www.idea.org.ph
CALIXTO V. CHIKIAMCO is a board director of the Institute for Developmen­t and Econometri­c Analysis. idea.introspect­iv @gmail.com www.idea.org.ph

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