Tuesday, June 20, 2006



To argue that Charter change (Cha-cha) would make government more responsive to the people�s needs is a blatant lie. Cha-cha actually sets the stage for more attacks on the general well-being of the people in three ways.

By Antonio Tujan Jr.

IBON Features-- It seems that the room for Malaca�ang to maneuver its Charter-change (Cha-cha) campaign is getting narrower by the day. Presidential chief of staff Michael Defensor short of admitted that Malaca�ang has already given up on the con-ass (constituent assembly) route to Cha-cha after he claimed that the Sigaw ng Bayan initiative may overtake moves to convene Congress into a con-ass. Former president Fidel Ramos is also now reportedly supporting the supposed people�s initiative, apparently an effort to drum up and gather support for Sigaw ng Bayan which is hell-bent to submit its petition backed purportedly by 10 million signatures before the Commission on Elections (Comelec) next week.

Malaca�ang�s desperation to ram its version of a people�s initiative in spite of obvious legal questions and widespread public opposition (including from the Church and business) to the ongoing Cha-cha process has intensified after talks between the House of Representatives and the Senate on the issue of con-ass flopped as expected. The latter actually tried to reach a compromise with the proposal of Senator Richard Gordon, who chairs the Senate�s constitutional amendments committee, to deal with economic reforms first. But apparently such offer does not serve the political agenda of President Gloria Arroyo, the patron of pro-Cha-cha House members and main beneficiary of current Cha-cha efforts.

More attacks on the people

Indeed, the obvious truth is that Cha-cha is neither about lofty development goals nor improving the people�s lot. Ask a man on the street and he or she would say that Cha-cha is all about the narrow political agenda of President Arroyo and her party Lakas, which dominates the House. Seven out of 10 Filipinos who are aware of Cha-cha think so based on a nationwide survey conducted by IBON last March.

To argue that Cha-cha would make government more responsive to the people�s needs is a blatant lie. Cha-cha actually sets the stage for more attacks on the general well-being of the people in three ways.

First, it intensifies FDI (foreign direct investment) liberalization that in the long run destroys more jobs than it could create. Second, it takes away even the lip service that the 1987 Constitution gives to the promotion of economic sovereignty and public good and welfare. And third, it perpetrates an illegitimate regime that has long ceased to represent the ideals of Edsa Dos, much less the people�s general interest, as seen from its track record of anti-poor economic policies.

False formula

Yet members of Arroyo�s Consultative Commission on Charter Change (Concom) continue to peddle the deception that Cha-cha means solving the widespread unemployment and chronic poverty in the country. In an article, for instance, Concom member Gonzalo Jurado criticized IBON for saying that the people will not gain anything from Cha-cha. According to Jurado, the IBON statement is incorrect because Cha-cha is actually about creating jobs and reducing poverty.

Jurado�s underlying premise, which is a recurring theme in all past Cha-cha efforts, is that the globalization of the 1987 Constitution through Cha-cha would create favorable economic opportunities for Filipinos and his simplistic formula is that FDI liberalization is equal to national development.

However, such formula does not only lack sophistication but has long been proven false. From 1991 to 2004, 93% of the 2,156 changes in FDI policies worldwide were for various degrees of liberalization. Consequently, the average annual FDI inflow (factoring inflation) to poor countries increased from $71.7 billion in 1980-89 to $379.1 billion in 1990-2004, or a 429% growth in FDI inflow. But between 1990 and 2001, the proportion of people below the international poverty line in poor countries only slightly improved from 27.9% to 23.1% while in Africa, poverty incidence even worsened from 44.6% to 46.4 percent. Meanwhile, global unemployment rate deteriorated from 5.6% in 1993 to 6.2% in 2003 with global employment-to- population ratio (i.e. the share of employed workers with the working age population) declining from 63.3% to 62.5% during the same period.

One of the countries that changed its FDI policies in favor of liberalization was the Philippines through various laws like the Foreign Investment Act of 1991. The liberalization frenzy of the 1990s brought in FDI that is even much larger than the total FDI that flowed in the country in the previous decades, with one estimate showing that two-thirds of accumulated FDI since 1968 came in the second half of the 1990s. From 1995 to 2005, cumulative FDI in the Philippines reached $12.37 billion. During the same period, around 629,813 workers became jobless due to various economic reasons while the number of poor Filipinos (based on official poverty statistics) increased by over 4 million between 1985 and 2000.

Private capital for private profits

What happened? The obvious truth is that at its core, FDI is simply private capital that aims to produce private profits� it has no noble humanitarian goals whatsoever and whatever development gain is only peripheral to profits realized. If left unregulated, it could be very vicious in its quest for profits as it drains host economies of its resources and destroying local industries and productive forces.

FDI per se is not bad� in theory, foreign capital can be a factor in economic growth if the attraction of FDI is designed to meet certain requirements of the economy. But in the Philippines as in most countries, what is happening is its complete reverse because the economy is being designed to meet the specifications of FDI.

As such, FDI promotion has also meant compromising even the most basic human rights of the people. A case in point: To attract P1 of FDI, the Arroyo regime is waiving P5 in potential revenues, even as it only spends 14 centavos for health and P1.50 for education out of every P10 it spends.

Aside from generous fiscal incentives that drain public coffers of resources, workers� rights and welfare are also sacrificed to entice FDI. Wages are kept artificially low� since 2001, the nominal minimum wage in the country has increased by only 16% while the daily cost of living has jumped by 29 percent. The present average minimum wage in the different regions could only fulfill 36% of the cost of living.

Proponents of Cha-cha aim to globalize the constitution not only through FDI liberalization but through systematic abrogation of various State responsibilities and duties and strengthening of private (and foreign) business by creating a policy environment more conducive to privatization and deregulation.

A random review of the Concom proposals reveals that several important provisions of the constitution that clearly identified the role of the State in ensuring that the people live decently by ensuring just wages, gainful employment, accessible social services, genuine agrarian reform etc. have been entirely deleted. For the Concom, it is simply �editing� the �excessive detail� and �motherhood statements� of the charter. But in the context of globalization, it is undoubtedly a deliberate effort to legitimize and expand the ongoing privatization and deregulation of public utilities, schools, hospitals, etc.

Single biggest reason

Behind the hard-sell for Cha-cha as some sort of a wonder drug that would cure the country�s political and economic ills is the glaring reality that the current Cha-cha drive is simply a way out of the Arroyo regime�s political quagmire. Through Cha-cha, Arroyo attempts to weaken the opposition by drawing in various sectors of the elite who stand to gain from Cha-cha as well as consolidate and expand her support from pro-globalization comprador and foreign interests who have been awaiting the Cha-cha to institute the additional neoliberal reforms they are demanding.

The current Cha-cha drive is being pushed by the Arroyo faction to increase the concentration of political and economic power in the hands of a few. This is the single biggest reason why the people should resist all efforts to change the 1987 Constitution now.

The political and economic problems of the country are not the result of a defective constitution but of structural flaws inherent in a social system that is under the control of elite and foreign interests. Cha-cha can only be an instrument for genuine political and economic reforms if it is the result of a changing balance of power in favor of the oppressed and dominated. This means that the process of changing the constitution must be a process directly driven by the people�s struggles. IBON Features

IBON Features is a media service of IBON Foundation, an independent economic policy and research institution. When reprinting this feature, please credit IBON Features and give the byline when applicable.

No comments: