Friday, February 21, 2014

Aquino asks why GDP growth doesn’t lower unemployment

Frankly Speaking
By Frank Wenceslao
(File Photo)
(File Photo)
A US-Pinoy and Harvard-trained economist with a Washington DC think tank told me the above question shouldn’t been released publicly because Aquino’s top and middle-echelon officials probably lack knowledge or really don’t know the correlation between government actions and private sector reactions in sharing the nation’s resource endowment.
With the possible exception of Finance Secretary Cesar Purisima my source and I agree that most if not all administration top policy advisers are unaware there’s such correlation. Neither have they recognized the country’s power engine (its heart) is still mired in unabated corruption like the plaque that blocks blood flow until it causes heart attack or stroke.
I was asked to read a book or related papers on “The Relationship between Economic Growth and Government Corruption in Third World Nations” which should be Eco 101 for Aquino’s top officials. Reading the book and related analyses is alarming and leads to understanding that the sputtering economy has put the country on a slippery slope slowly but surely sliding towards disaster. The medical staff often at crossed-purposes have yet to put their act together after four years. To be asked the above question each will resort to finger-pointing because he or she hasn’t the slightest idea why even the most favorable GDP report by the international community shows job creation is falling behind the number of the unemployed and new entrants to the labor force.
We’ve predicted that when Aquino ends his term poverty would be worse than when he came in unless he undertakes a major revamp of his administration and, to paraphrase MALAYA’s Ray Arcilla, to get rid of the deadwoods in his Cabinet and those tainted with corruption that belie whatever Aquino claims of effectively fighting this evil.
The most useless in the Cabinet is Paquito Ochoa. A number of US-Pinoys who went all out for Aquino in 2010 are unanimous that under any agreeable measure of performance of public administration and national development, Ochoa’s contribution to Aquino’s presidency is nil that has advanced the country’s interest domestically and in foreign affairs. It’s as though Aquino and Ochoa have agreed the less known what the ES and his all-lawyer staff have done, the better for the country’s national interest in the world or Aquino’s legacy.
Unlike President Obama’s White House staff that exploits every opportunity to advance his agenda the Malacañang counterpart is gripped with timidity it seems ashamed to be involved in debates of national import and just leave it to the President to defend, for instance, Ochoa’s “glass” house that he surely couldn’t afford with his legitimate income early in the administration. Hence, the first object probably of investigating his ill-gotten assets pursuant to RA 1379 including other proceeds of corruption when the time comes.
Ochoa is too lazy even to answer legitimate communications to the OP. To show the difference of the OP from the White House, when early in the Obama administration suggestions were asked to solve various U.S. problems, I sent my two-cent worth as I used to do in the Philippines. To my great surprise, I received not only acknowledgement of my suggestions to be considered but also to continue communicating my ideas to the White House (attached). In the intervening time as my disappointment with President Obama’s policies rises, I continued to regularly receive White House announcements, the latest of which is dated 2/13/14 I received on Valentine’s Day (also attached).
That’s as it should be what Ochoa, other Cabinet and top Aquino officials should do to citizen’s suggestions. Even unworkable ideas are worth responding to show government concern. The common excuse that they are too busy is hogwash because of the hundreds, even thousands of clerical staff who can draft single-paragraph responses to be signed by bureau chiefs concerned. Arrogant bureaucrats don’t imagine how happy the letter senders are receiving reactions to their suggestions.
Instead, Ochoa has the temerity to insult my colleagues and me by not extending the courtesy (never mind me but my fellow Filipinos supporting the Aquino administration) of responding to the letters and emails about their proposals I’ve summarized to help the Aquino administration fight corruption. We didn’t expect Ochoa would fully agree with the proposals but to be silent for several months now is the worst insult he can do fellow professionals like us who’re just trying to help. Who does he think he is?
It’s his officials like Ochoa who’re now albatrosses hanging around Aquino’s neck. The criticism is turning around that he shouldn’t have appointed officials without working knowledge and experience in national development whose main credentials are they’re his friends or classmates he’s presumed to serve his administration honestly. At the very least his top appointees should have had executive experience in public service or private sector with honesty to be hoped for.
Unless Aquino fires Ochoa for incompetence, the latter will be like a leech sticking on his body like past executive secretaries such as President Carlos Garcia’s Pajo. Or, Aquino should show he really means business fighting corruption by asking Ochoa to submit in chronological order when did Janet Napoles begin to retain the services of MOST (Marcos, Ochoa, Serapio & Tan) Law Firm? It’ll be recalled MOST straightened in 24
hours a Napoles had with the NBI that led Aquino to ask for the NBI director to resign. Apparently, she complained to MOST of being shaken down by NBI officials but nobody asked how much Napoles paid to get MOST act so fast. Maybe Aquino should ask Ochoa about this incident.
Or, would Aquino again pretend so naïve he wouldn’t have the law firm and its rocket-speed growth rate investigated, as follows: (a) How many new clients has the firm added from June 2010 to date? (b) How many lawyers have been added to cope with such increase of clientele? (c) How much increase have MOST billings registered during the said period? (d) What legal services in chronological order had the firm rendered to Napoles, the heirs of Kokoy Romualdez and other “big fishes” such Henry Sy, Lucio Tan, JG Summit, who won’t touch Ochoa with a 10-foot pole previous to June 2010? (e) List of individual and corporate clients involved in PCGG’s search and recovery of Marcos’ and cronies’ ill-gotten wealth that have retained MOST after Aquino took over?
This is the biggest improvised explosive device (IED) sent by the Taliban: Is or was MOST retained as counsel by Kokoy Romualdez before he died? When did his graft charges dismissed by the courts? Was the PCGG’s sequestration of the monies Romualdez and wife, Juliette Gomez, had with Swiss banks transferred to and held in escrow by the PNB been lifted with MOST as one of the counsels?
Whether the President acts now or not, a group of US-Pinoys will be around after the end of the Aquino administration with the UNCAC and international cooperation agreements against corruption (ICAAGs) bolstered by the U.S. and the European Union blaming corruption as a principal cause of destabilizing the world economy alongside organized crimes, international drug traffickers and terrorist organizations.
Ochoa should take note his power sooner or later will be gone. Hence, it’s not too late to make amends not to me but to other Filipinos he insulted in case Ochoa might have forgotten that one who ignores history’s lessons is doomed to repeat it. Who could’ve thought world indignation against war criminals would give birth to the Nuremberg Tribunal that tried, convicted and hanged top Nazi leaders, or the International Criminal Tribunal now trying the butchers guilty of genocide in Kosovo and other parts of the former Yugoslavia?
Let me emphasize, moreover, the ICT is a UN body established to prosecute war crimes committed during the ethnic wars in the former Yugoslavia and try their perpetrators. The tribunal is an ad hoc court which is located in The Hague, the Netherlands. How easy therefore for the UN to add penal provisions to the UNCAC and place the investigation, prosecution and trial of those accused of kleptocracy and gross corruption that have impoverished a poor nation like the Philippines when it can clearly be proven that Aquino and his top officials whether wittingly or unwittingly committed the crimes due to their inexcusable incompetence tantamount to plunder and for the accused to be tried before the ICT.
My colleagues and I nevertheless wish to help President Aquino turn around the deteriorating economy. In its simplest terms, development economics is the science of balancing the nation’s capital stock between the needs of government and the private sector in a market economy like ours. Any serious imbalance, say, government using a lopsided share of the nation’s capital stock must be corrected because this adversely impacts the private sector’s investment capability to create wealth and jobs.
A nation’s capital stock is similar to a pizza pie. If the government gets bigger slice, say, higher taxes to support ambitious infrastructure program and entitlements not wisely thought through; the private sector naturally gets less to invest in productive activities with better returns in the number of jobs created than in the government infrastructure projects whose job-creation is hindered by politics and corruption, thus not cost effective.
This lopsided imbalance of resource allocation if allowed to continue even if bridged by borrowing and foreign aid end more often than not in worse results. The conditions could turn from bad to worse when revenue and borrowed capital were invested in industries served by roads and bridges that begin breaking up due politics and pork barrel scams. A new administrations may decide new policies and programs but the rising population growth and unemployment require more funding for social services remedied by higher taxes and more borrowings until these sources of funds lag far behind. On top of it is the rehabilitation of natural disasters further pushing the deteriorating political, economic and social conditions as had happened in Marcos’ last three years. It turned wrong policies and programs that Marcos technocrats had adopted that Aquino’s officials are doomed to follow because their medicines are turning out to be worse than the disease.
This is as true as the law of supply and demand. When the resources lost to government inefficiencies and corruption continue that a remarkable GDP growth rate doesn’t translate to more jobs created, the Philippines is now firmly on the said slippery slope unless Aquino bites the bullet and undertake top-to-bottom revamp of his administration if only for the private sector to regain confidence a turnaround can be expected sooner rather than later.
Since it’s too late to find people to take over top positions, Aquino should engage in deep selection on the possibility “co-pilots” have been doing the work anyway and have proved better than the tired pilots to safely land the planes. Of course, the President can appeal to private industry to lend experienced executives and serve in their respective specialized jobs.

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