July 3 2010
The President has chosen his economic team. It is a combination of Makati Business Club nominees, Hyatt 10 and previous Cory and FVR officials. One sees the imprimatur of Mar in a number of the choices.
As far as I can tell the new officials are honest, intelligent and unassuming, a profile the President is comfortable with. There are no stars, they are molded in the image and likeness of the President without the smoking.
What can we expect from this economic team?
One, the policies of the new Government will be cautious, predictable and incremental. There is no exciting vision – or at least none has been defined, no daring initiatives; just more of the programs of the previous administrations only, hopefully, a little better. Safe is not necessarily bad: The turtle has been known to beat the hare. Netherlands, a team of working stiffs, beat star-studded Brazil at the World Cup.
The programs will be top down. In the past this approach has not been successful. The bureaucracy and corruption in government ended swallowing most of the initiatives with little left over for the people. Trickle down economics became just that, a trickle.
The new economic team is made up largely of business types. Corporate managers are used to a meritocracy where orders are followed and performance rewarded. This is not the case in our government. The bureaucracy follows no orders, adheres to no rules other than self-preservation, prevents the best laid plans from getting to the people. Unless our economic managers are able to debug the system, their programs are unlikely to materially impact the common man. The spirit is willing but the body is not.
Two, economic decisions will be made by consensus with no clear leadership. In the Cabinet there is no stand out, somebody with the daring, character and vision to undertake the bold initiatives needed for quantum change. In part this is by design: In composing his team the President wanted no Kobe Bryant, no dominant figure. The downside is there is no one person who has the whole plan in his head, who is accountable and who will drive the economic agenda.
Constitutionally, this role is for the NEDA chief but this is unlikely to happen. For one, Paderanga is an outsider in a team dominated by MBC nominees. For another, he does not seem a take-charge person. He may produce a 10 Year Rolling Plan ( because that is what economists do) but it will be one which no one Cabinet officer is accountable to nor, frankly, cares about. Each Cabinet head will just do his own thing.
Rather than a top down Plan the Cabinet members will ignore, the President should ask each of them to submit a plan for his department with measurable targets, timetable and resources required. The President should then hold him to his plan.
The role of NEDA will be to aggregate the individual plans, make sure they are consistent and supportable on a macro basis and monitor performance. With this bottom up, zero-based approach we get accountability from the different economic managers.
Three, the economic agenda will be business friendly. This makes some sense since it is business that will create the jobs that we desperately need. However what is good for business is not necessarily always good for the nation particularly when it refers to taxes, tariffs, anti-trust, environment, utilities and labor and social safety nets. Who will provide the counterpoints to Business on these issues?
Again, NEDA is constitutionally supposed to provide the balance, resolve the conflicts of interest. For this to happen the President must, one, empower NEDA and make sure it is not just a wall flower at the dance and, two, appoint to the NEDA Board some responsible representatives from the NGO, labor, farmer and consumer sectors to give a voice to the real parties at interest, the Filipino people.
The Philippines faces tough challenges to create more and better jobs, to straighten our finances, and to build the capacity and infrastructure to take us to a new level. The President has chosen an economic team that is honest, conservative and measured. Like the President’s favorite drink, it is a cola but without the fizz. It is predictable and safe but unexciting; which I guess is fine.
It is just that some people wanted a buzz but that is not the President’s style.
My comment? If it is a cola let it be a diet cola. We do not need any more fat in government.