The FOCAP Prospects Forum

Focap prospects forum

Focap prospects forum

The Foreign Correspondents Association of the Philippines held its yearly ‘Prospects Forum’ last January 19. Its guests and speakers were Senator Manuel Villar, economist Ben Diokno, security analyst Sydney Jones, businessman Joey Concepcion, and lawyer Michael Mastura, who is a member of the MILF peace panel.
Villar, who said “the landscape is changing,” said we must now look for a new economic model. Jones predicted there will be no peace pact this year, Kato and Bravo, the two MILF commanders the AFP is pursuing, will not be caught, and “Dulmatin will be declared dead or captured at least once this year.”
One dramatic moment was when Mastura declared: “I am a Jihadist. Look at this face…” as he differentiated between one who “strives in the way of Allah” and another who is simply using violence as a means to an end.
Here are my notes, for those who would like to have an idea of what the forum is like. Just remember: these are not for quotation, because I sometimes omit words or make mistakes. (I check the notes against my tape when I have to use a particular quote for a story).
Those who would like to use the information here, please check with any of the speakers or with Focap if the notes were correct.

Our banks have not been lending, even to prime…
How do you think your previous experience with private sector will help? We always say this country has been mismanaged…left behind…reason never used management as criteria for choosing a leader. When you choose a leader without any managerial experience that the economy will be mismanaged…if you interviewed applicant to be president of a company, first thing ask is experience in management. You cannot talk about your dreams, doubt if hired if talk about noble intention and dreams. Experience as businessman, former house speaker, senate president, gone through a lot of crisis, experience in divisoria and tondo, all of these experiences would prepare anybody for a crisis like this. I have been living crisis after crisis all of my life. This is a tough crisis. If you talk of probabilities, it is always better to get somebody who knows how to swim if you are drowning.

What do I think about the phil economic? There are two ways of looking at it…we would not be affected, as you can see most fil are still optimistic that effect will not be much…talking to businessmen most saying we will not be so affected…we are ready. We just came from 1998, we’ve been hit. Many of companies still in conservative mode, most companies in real estate are big, not heavily leveraged, because of our experience in 1998. Our banks are primitive and the financial sophistication of financial companies all over the world are one of major causes of this problem. How can we have sub prime problem we are not even lending to prime companies? Like the 1920, controlled by few families, loans decided by owner…we will not be affected much because precisely our financial system is still primitive. It’s not good, but it is…that’s for the bank…economy in general…still have basic, while exports go down the ofw remittances will provide the cushion. 7.2 was without pump priming, still 3-4%gdp growth this year if gov’t pump primes.
(new economic model might look like, did not mention corruption as a problem)
The new economic model, I said we must now look for a new one that might fit country. One time imf adopted straitjacket, one size fits all formula. Going over, surprised most were outdated prescriptions used in 1920 depression in us…gov’t raised taxes, reduced gov’t spending, reduced deficit, prescriptions that exacerbated in 1930s…surprised same prescriptions telling phils every time there is a crisis…always hear us experts telling us if not us way, must be wrong way. With what is happening to the us now, very clear that we must have own model. Not Russia, us, china…India. We are phils. We must now assume that we have certain circumstances that are different. Like the ofw, they don’t have this. What is the impact of this to our people? This makes us different from our countries. New economic model, my ball is for us to craft this. This must not be the same as what we have been using. Ccrruption is an issue facing phils and all developing countries in the world but if we are talking about addressing the crisis now, doubt if this will be one of main solution. Must be something solved over time. Right now, this is very immediate, and this must be addressed. Problem in phils is different…highest leaders accused and makes it difficult to address this problem.
(start researching for new economic model…that study would include examining constitution with view to revising certain provisions) the problem with that is that you may never come up with model. Thing is we need model right now. If we include that as part of economic model…only worried about time constraint, must have idea of what we want to do for our economy. The economic provisions, possible being used as technique to push for political aspects of consti change…not convinced…seriously believe they can change just economic provisions…formulation of economic model should not be a subject that must be done first. Economic model independent of consti change process.
(time to rethink liberalization) definitely. This is the Washington consensus. Deliberalization…we liberalized too fast…what we’re talking about is timing, pace. We liberalized too fast…than china and Russia and they’re better off now. We opened country too fast, too soon because we were told that was the way…to me all of these should be questioned, liberalization, privatization, these are the three…privatization…US, Europe, nationalizating. Deregulation, the gov’t now is all over the world increasing regulation. This is the opposite of that consensus. And then of course privatization…even the idea of liberalization has been questioned too many times already. We should have moved at a slower pace and we could have saved our manufacturing base and our small and medium enterprises.
The ofw is the result of our failure to manage our economy well. If we had a high rate of growth in the last few years we wouldn’t have it…it’s a given, whether you like it or not, it’s there…what we want at this point while we have not been able to address the main problem…in the long run, we don’t want this. Meanwhile we are unable to do so so what we need to do is provide safety net for unfortunate OFWs, legal assistance, medical assistance, those who are in jails must be provided with legal assistance, and those who want to come home with basis should be given transportation pay. They should be sent home, there should be a system whereby we can get them back, they can come home, regardless of whether they are documented or not. When you have 9m people there, you have to assume that not all of them will be okay. Given that certain percentage of them will not be okay. This is where gov’t should come in. ofws abroad are probably the most exploited.
Problems of inefficiency, we’re extremely inefficient. We are just coasting along, we have not seen anything new…budget never used to really finance a program, just the gov’t would take a look at budget, add a few percentages…we have to change this because we cannot continue growing at this pace, unable to address the population problem…we are not doing badly, but neither are we growing at rate…bring these people out of poverty…management, you talk about efficiency, maximization of resources, using resources in pursuit of strategy, these are management…
(is chacha likely before 2010, what political form will it take) if there will be change, towards parliamentary….asking about probability…attempting one very very high. Succeeding, 50-50…need are two institutions, house rep and supreme court. Senate not needed because of gray area in constitution. Provision that can be interpreted as voting jointly or separately. If separately doomed because senate will never allow it…what this would require is concurrence of sc. If you want chacha you only need two institutions: house and supreme court. You do not need the senate. The senate is not needed. If the house succeeds in getting the required number of votes and if you look at the history of the house that is not difficult to do. The sc is now controlled by the admin, they even want to remove the chief justice.
(wouldn’t that mean unrest) the unrest is something we leave to ruler. There is calculation…of course if you want to do it you will have to analyze effects on people, agree or not, if conclusion is probably get away with it, they will. The probability of them succeeding is lower…
(similarity in economic model) clearly the Chinese model is working for cihna. The results show…at tend of day…that the Chinese model is working for china. The phil model is not working for phil. Fils not as entrepreneurial as Chinese, caution phils against Chinese model…Chinese are different, want own businesses, look down on people who are employed. In phils, want to win respect, want to be employee, getting high pay, but just employed. There is difference in culture. India is more like phils, bureaucratic, they are not as entrepreneurial as china, also very politicized, more similarities with India than china. You look at us model and phils, wonder why we follow us model. Like a rural bank adopting the business model of Citibank.
(what plans or actions when you become president…corruption…nothing happened, now we’re one of most corrupt countries in world) two things, the big ticket items. The new president must not be corrupt, you must show you must the example and people close to you must not be involved in big corruption. Small corruption is really difficult…left with question of going to radically increase pay and incur significant deficits or keep on telling them not to be corrupt. At end of day remedy is to double or triple salaries. Need to increase pay significantly, pay of judges, election personnel, etc, that is more difficult. At highest level, what you can do is just be example. Not disagree that corruption is more important.
(if elected what do with corruption accusations against arroyo and her family) we have the law and the system is there. If anybody is accused of corruption we have the law, don’t think one should shortcut it. (actively dig deepeer into these issues compared to what is being done now) against everybody, I guess not just the president. Against any cabinet member, all, you can try…(will you be more aggressive than others) everybody will say that when he is elected, remove corruption. Don’t think you should trust him. Either lying or don’t know what he is talking about.
(if this administration pushes through with plan to amend corruption…will this trigger new round of unrest in military and street protests, in the level of what we say in 1986 and 2001) hard to say. People including myself are disappointed in people’s reactions…cannot predict what gov’t will do and how much control gov’t has over military. People are more difficult to predict, just happens. Attended opposition rally last December, don’t want to use pathetic, slightly better than pathetic, but not kind of rally that would start any significant unrest. If people react, that will influence the way that military will react?
(run for presidency) that’s the problem. There was a party…thought I shouldn’t lie…there are so many imponderables and don’t want to be saying I will not run…assuming parameters are same, I will run. But there is a big if, a big but. Number one, will there be election? Difficult to be campaigning for something that is uncertain. I’m available…but we don’t know what’s going to happen in next few months or this year…may join, may disagree with that government.

Landscape changing…everything will be different…what effects? Slower exports, factory closures and layoffs…higher unemployment, home and abroad. Lower fdis which mean lower long term grown and lower employment opportuniies and higher unemployment and underemployment…
Exports growth from jan-oct2008 slowed to 1.9%, target was 11%.
Exports expected to worsen in 2009…exports to us understated…because our exports to other countries end up as exports to us.
In jan 2008, only 150,000 jobs were created. 488,888 new wage and salary disappeared. Job loss was offset by creation of relatively less desirable own-account jobs (397,000) and unpaid family workers.
27% or 351,000 were unpaid family workers…in july, 1.2m new jobs were created but half were in agricultural sector. Employer of last resort. If you can’t find a job, go back to province and plant something. Surprisingly 197,000 new public administration jobs. Many of those are broom sweepers. Manufacturing jobs continue to disappear. Transportation, storage and communications sector has started to layoff workers — 107,000 jobs lost.
Third effect on fdis. fdis fallen sharply because of credit crunch and risk aversion…
Sydney jones: no peace agreement in 2009, kato and brave won’t be caught, dulmatin declared dead at least once this year. Aceh instructive for what could happen in Mindanao. Aceh easier than Mindanao, easier to define than Bangsamoro, aceh rebel movement unified leadership. Even with more simpler conflict to solve you needed very strong gov’t intervention on number of front and don’t think rp gov’t addressed conflict in Mindanao as seriously as it should. In Mindanao to make any kind of progress, compared to what Malaysians had and suspicion of Malaysia in manila. In aceh you had yusuf kala, at top ranks of gov’t and wiling to use political capital to ensure agreement work. No equivalent in Mindanao and until you get that not get agreement and end conflict. Not enough to have pres’l advisor, need someone willing to spend political capital…head off spoilers, identify, and head off at pass. Aceh only two sets of spoilers military – which pres himself dealt with and congress. In Mindanao you’ve got far more problems and spoilers, from local politicians to problems with lumad, army, and foreign jihadis all coming together in mix. Think through how to deal with spoilers, like pinol, marginalize or coopt. Somebody has to think of strategies for dealing with spoilers, up to now hasn’t happened. Need clear shot at system…only possibility is new gov’t…otherwise long pattern of incremental…no major change…unless people are wiling to think of a new way of dealing with conflict, new strategy and keep on pushing hard issues in front, not going to see any progress. Don’t believe milf has any interest in having foreign jihadis in territory, still people coming in and out. Nov 2008 people coming into phils and going back via Malaysia, darul islam or kompas, through contacts with milf. Not want but fact and has to be dealt with. Final lessons are make sure parties can deliver, more energy into actual institutional preparation for conflict, give spoilers stake in outcome but find more ways to deal with them…got to be more clarity than so far…aceh clear Indonesian sovereignty wasn’t going to be a question…
Joey: phils has different business model. We export labor.
Mastura: no serious analysis needed to say that we will not be able to sign anything. Don’t think the president has the political capital to deliver. She will be a lame duck president beginning today. No need to predict she will be one. Systemic corruption that was asked of manny villar…is the fruit of the structure. Unless we undo the unitary structure in this country, we will never move. Filipinos do not have a culture of closure. Nego bet milf and gov’t is about closure of centuries of conflict, from Spanish times we have been fighting while nation under…we have to undo colonial structure under which we have been imprisoned. Commonwealth of phils was mercantile idea, republic only changed through parity rghts…gov’t willing to change commonwealth mercantile system into new economic system that made sure they have parity rights. The land issue, the amendment proposed by nograles is about land based issues. And until and unless this gov’t willing to do away with people becoming monopolistic, oligopolistic manipulators, character of corruption is manipulative corruption at center, can a presidential candidate do something about redistribution of vested interests? The problem is vested interests that also form despoilers of peace process in south are so entrenched that unless and until leader with pol will will redistribute vested interests, no amount of economic reform will happen. What this country has is a policy of mendicancy…there will be no obama like…to this day those vested interests are still recovering their vested interests…only asking for a recovery of that…that is correct for Filipino nationalists but very hard for moro nationalists like me. Happy that Sydney jones…my thinking is very regional…happy to note the element of connecting and linking milf to terrorist group is now very clear. Hope when obama admin comes in they will have a new deal with us…moa was drafted by moros, brains of moros. ..after 9/11 there was islam phobia…salamat had idea of writing bush…statement there was americans were interested in solution to bangsamoro problem…assigned usis to deal with problem rather than state department…thought sending message coming to Mindanao to deal with moros again through peace process.
(villar talking about charter change…no settlement…given two sets of circumstances, could be widespread hostility)
Very little spread…don’t think milf has interest in spreading it further…would like to keep open option of peace…on part of military, don’t think that this time around there is any pol advantage to be gained in manila by spreading fighting in areas where they are…wonder if there’s going to be decision in manila…time in economic crisis to keep expensive military operation going when there are no results.
Mastura: the moa ad is unfinished agenda…supposed to move us over to final pol settlement…which is political compact…moa ad does not spell out structure, institutions…unless and until we can sign this, do away and move to compact agreement, no political settlement. On fighting, there is stalemate. I see stalemate that has run over long period of time. That is why gma gov’t willing to get Malaysia as facilitator because enhance coming out of standing issues…
Rundown of Foreign jihadists with presence in Mindanao and local groups affiliated to. By poverty or islam?
Manny: very sensitive issue…feel while they should not be ignored, we cannot just take one position. The proposal really surprised a lot of Filipinos not just governors around area. Feel agreement is to meet requirement of lot of players, maybe gov’t want consti change, us want agreement in south, the milf…it was done in a very secretive way, that was the problem and surprised a lot of people including myself. How this would be addressed, guess mike right but cannot be
done in one year. Going to be long process. Have to cconsider both sides. I can see where mike is cmoing from, talking about history…have to look in global perspective these kind of problems? At all times ensure situation does not ignite conflict. Difficult balancing act.

Mastura: there is humanitarian tragedy…internally displaced people, if not tragedy, more than half Darfur, only 250,000. All the international ngos are there. Incidentally the red cross…don’t know what violence…the military report…
About 50, mostly Singaporeans, handful of Malaysians and Indonesians…stranded there, went for training, several want to come back to Indonesia. Ji, with lot of Filipinos, moros. One estiamte in jamal kuba…is a hundred…
Second group which is more dangerous, headed by umar patek works mostly with asg but moves fluidly through milf and mnlf territory. People arrested from group in Davao oriental…some effort at greater communciatino bet two groups, not totally cut off, interaction with Malaysian marwan, based in pawas area more than jolo, might be more as result of fighting. People from Indonesia are from darul islam and contacts all with milf, not asg or mnlf. Abu badrin, mogosin, Afghanistan at same time as umar patek, based on interrogation depositions from Indonesia, meets every Indonesian who comes in from outside.
How head off people like pinol, got to figure out incnetive structure for getting them to go along. Not just gov’t responsibility, milf has to figure out deal making in course of nego for people with vested economic interests…trad’l way to give ambassadorships to juicy countries…not sure need to think through alterantive to malysia…did good job but no robust mandate for kncoking heads. Think mandate giving facilitator and mmonitor might get some progress we have been able to see thus far. Difference with marty mandate in aceh…that ngo had no clout and indons learned lesson so gave monitoring mission and marty more robust mandate to determine problems of who right and wrong, and impose sanctions, and critical in this case.
Ddr: idea is completely ludicrous in absence of political settlement. Can’t have that first and political settlement later.
(rising unemployment…more Filipinos starting micro enterprises in 2009. Sme sector this year) big part…is smes sector…seen in world financial crisis, big businessmen with extra cash plays in stocks, bonds that collapsed severely…many of them still not affected…food company doubled sales growth. Many business model of micro and small enterprises are in very simple models…wet market, junk shop dealers, on day to day type of survival…borrow from pawnshops…micro finance institutions…greater challenge in whole effort is to direct in type of business model that this country needs, one is agricultural farming…
For diokno: what model used during erap time and was it effective? Could be used today?
Fiscal stimulus was paying contractors that fvr did not pay…to compare crisis with what we had…more manageable than this one…more unemployed people and problems…a lot of wealth destruction that has taken place, people are poorer now. Concern not so much banks…
Sydney: Take on kidnapping of icrc: hope it gets results quickly…in terms of asg, quite unclear because rumors from time to time of new leadership and questions about to degree if there is religious component. Bit of misnomer to dismiss as bandits because while element of kidnapping for ransom also over the years and perhaps more with umar patek and indons associated with them a religious component. Not followed to be sure to say what’s happening there but not discount fact that within asg there is religious component that needs to be recognized.
Diokno: erap budget approved on rizal day, before start of fiscal year. In response to asian crisis…compared today, up to now house and senate still locked in bicam committee working on 2009 budget.
Effort to form broad based, non partisan response on milf moro question: villar: committee on peace process. If chair not do anything normally doesn’t move. Chair did not make any major move for or against the agreement, pretty much during that time each senator just gave his views. A lot of us are worried about repercussions of this in the constitution, america’s role, how it will fit our constitution.
(for the whole moro question) we are interested in the senate…but for foreign relations and peace unification committee. As a body we were not able to form a group to handle this as body…many of the senators were very active in opposing this in the supreme court. Actively opposed, even filed petitions with the supreme court to stop the agreement
Diokno: you need gov’t to spend more, 2% of gdp as fiscal stimulus, 160b in our case. Willing to give this gov’t another 160b? Also hard to implement that kind of money, and we need jobs now. Thought a tax refund, give everybody…a quick way of stimulating economy…some 9-10b ofws, $70b remittances. If you adjust exchange rate from 48-55. Additional hundred plus billion in pocket of ofws…don’t pass through gov’t, also help export industry and import because make importation costly.

Joey: to play with currency today would be dangerous…matter of perception…we’re doing great, not felt yet the financial crisis. To some extent in real state, in cars.,..aircon and refs are still strong…
Villar: we must now look for new economic model and not assume immediately that traditional policies…
We believed this was mixing up counter insurgency and counter terror…one of problems some people being pushed out of basilan going to jolo and Mindanao mainland not enough thought given to consequences, particularly to mnlf…because of ties…no comprehensive approach being taken, could be negative consequences to some very concrete and positive approach to some operations in basilan. One big unanswered question degree to which us forces continuing to work with phils army in operations against kato and bravo. Think milf has to do more with respect to renegades. Not just issue of faulting military for operations that resulted in humanitarian consequences…Darfur far worse but issue of civilian deaths at hands of kato and bravo issue that needs to be addressed, everybody waiting milf investigation on that.
I am a jihadist: public confessino. Look at this face. But I am a jihadist. To strive in the way of allah. If the word jihad is to mean people undertake extreme violence to pursue aims and purposes, then they’re not jihadist. Plain extremist. Milf pursues ideological islam…reaction of military is very unproportionate…if this nation cannot preserve and protect the lives of muslims it has no business governing us. What it should do is Singaporean formula. What we are asking is not history, that we are victims of agricultural colonies to solve problems of Luzon, we are victims of insurgency solutions, today victims of policemen who are sent to Mindanao because they are the problems of the metropole. The situation in Mindanao today is collective punishment of moros and until you can prove, we will accuse you of not taking care of moros. We are another nation, still Filipino citizen but proof is that you are unable to protect us as citizen so please let us go away..we are your problem, we do not want to be your problem anymore…
Sydney: I think there are solutions for Mindanao…
Diokno: economic will recover, one way to prepare is by having real and honest election by 2010.
Villar: know how touch it’s going to be in 2009, will have tough economic problems, tough pol problems…


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