President Gloria Arroyo of the Philippines may have heard the angry demonstrators outside the legislative building when she delivered her second State of the Nation address since taking power in January 2001. If she did, they did not put her off her stride. Her message to Philippine parliamentarians continued to be tough and uncompromising. The economy needed faster reforms, corruption, not least in the police, must be stamped out, law and order would remain a priority issue and drugs and drugs lords the number one target.
This ought to have been music to the ears of the demonstrators outside, but it was not. Their core grievance was the pace of Arroyo’s reforms. Most ordinary Filipinos have become cynical about their governments. When popular revolution drove the Marcoses from power in 1986, there were a few heady weeks when it seemed that real, positive changes would embrace the vast mass of people. Corruption had disfigured the economy to the extent that a relatively small clique of families close to the Marcoses controlled most key economic activity.
These families remain financially dominant today and with their wealth comes political power. Arroyo herself is a product of this background. Their sincerity in wanting to bring about fundamental change should perhaps never have been in doubt. What has been questionable has been their ability to drive through change in the face of opposition from their peers.
One of Arroyo’s key plans is to force price cuts by introducing competition to the electricity industry. She wants to privatize the county’s main energy provider. If it works, this project will be inspired. However, two dangers must be considered. The first question is: will competition actually force other power utilities to improve their performance so that prices can be lowered economically? Perhaps, more importantly, will the privatized utility actually perform efficiently, or will it become simply another source of wealth for the already wealthy?
Much, therefore, rides upon the effectiveness of this proposed privatization. If the president gets it right, it will be a key marker in her political career. Unfortunately, given the country’s reputation for corruption, the odds against success must be high. It will require all the president’s political acumen and forcefulness to drive the project through.
The price of failure on the other hand could be high. The man in the street is still waiting for the economic dividend that seemed imminent when the Marcoses were driven from power 16 years ago. The economic potential of the Philippines has yet to be unleashed. The imbalances in the economy and the tenacity with which a small group hangs on to financial dominance, are crucial distorting factors that have held back growth.
Arroyo’s sincerity should not be doubted. Nevertheless, the stark truth may be that ordinary Filipinos are starting to give up hope in their country’s political elite. The president needs solid successes that improve the lot of the majority of the poor. The corruption crackdown must be pressed home with full vigor, without fear or favor. More importantly, the planned electricity privatization must not be allowed to become another opportunity for payola. If this project fails, the consequences could reach far beyond the price of electricity.
