Federalism & the perils of hyperinflation
LLIES of President Duterte in the House of Representatives led by House Speaker Pantaleon Alvarez are relentless in their quest to please the President by making the President’s dream of establishing a Federal system of government come true, and of course, we need not mention the possible benefits they will gain with this change of the system of government. Meanwhile, the President’s men in the executive branch are also very busy, losing no time in justifying and highlighting the supposedly positive effects of this shift to the country.
Federalism is basically a system of government where the country will be divided into smaller subdivision called “States”. These small states will be governed by a state/ regional government. This supposedly would bring the government nearer to the people. Therefore, the programs and projects that will be identified by the regional government which will be more specific based on the distinct characteristics of the population, geography and culture of that state.
The income of the state will come from the majority of taxes and other government fees that will be collected from firms and individuals within their jurisdiction. Only small portion of the collections will go to the central government. On the other hand, the government expenditures that they will be incurring for the programs and projects by the state government will be funded ideally by the regional income.
The scenario is very ideal, isn’t it? The way how Federalism was explained above is when the system of government has already stabilized from its implementation and has gone past the infancy stage. Countries that follow the Federal system of government include the United States of America, Canada, Australia, China, The Russian Federation, Belgium, Brazil and India. With the exception of Brazil and India, all the others be- long to the Group of 20 (G20) biggest economies in the world.
Does this mean that if we shift to the federal system, there is a possibility that our country may prosper and be among the biggest economies?
YES and NO. Actually, the shift really does not assure economic growth or prosperity. It may just be a coincidence that these countries are among the wealthiest, and it has really been established whether there is a correlation between the system of government and economic growth. So, if we’re just looking at the possibility, then, yes, there is a possibility that our country will prosper as a result of the shift, but there may also be a lean possibility for prosperity. Besides, the countries mentioned above have been federalist for a long time already.
The implementation stage is the most difficult. Some use the term, “birth pains”. It will really distort the otherwise smooth sailing government system, not to mention the economy, as well. Earlier this week, Sec. Pernia, a well-educated economist and highly-respected professor, declared that shifting to Federalism will affect the national budget and the country’s economy. Only to be disputed by a human rights lawyer turned Duterte a.k.a. human-rights-violator-par-excellence apologist, Presidential Spokesman Harry Roque, who, in fairness, holds a double major in economics and political science in his undergrad, saying that Federalism will not harm the budget and the economy. I could only sigh under my breath one of Jesus’ last words in exasperation, “Forgive them (includes all of Digong’s allies) Father, for they know not what they are doing!”
Roque oversimplifies it in such a way that he is saying that the budget will not be affected because the Internal Revenue Allotment (IRA), the source of funds of the local government, which