| The Political Economy under the Estrada Administration |
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| Tuesday, 29 June 1999 | ||||||
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Mainstream economics relegated political economy to a backseat position during the dominance of neo-liberalism in the 1980s till the early 1990s. But the tide has changed. Market failures in the 1990s, as exemplified by the successive global financial crises that culminated in the Asian crisis, have forced a retreat of free-market orthodoxy. Keynesian economics, including its left-wing variety, has recovered lost ground. Further, even the strongest advocates of neoclassical economics have recognized the need for better institutions and better regulations. Suffice it to say that in this condition, political economy has likewise made a comeback. David Ricardo (The Principles of Political Economy and Taxation, 1817) defines political economy as "an inquiry into the laws which determine the division of the produce of industry amongst the classes who concur in its formation." In this connection, the study of economics is consciously and organically linked to what is called "the practical aspects of political action" (The MIT Dictionary of Modern Economics, 4th edition, 1996). Against this background, we can proceed to inquire into the political economy of the Estrada administration. How is the wealth (or the produce) being divided? What courses of political action have been undertaken by the dominant forces to capture the economic gains arising from public policy? It is tempting to say that the Estrada administration is a reactionary one, with hard-earned reforms being thrown out the window. Indeed, the accession of Estrada has revitalized the Marcos cronies and empowered a new circle of businessmen and power-brokers who were in the thick of Estrada's campaign for the presidency. And it is payoff time, and many want to recoup their investments at the soonest, not even waiting for the economy to first recover on a sustainable basis. What is common to the motley group of businessmen in the Estrada camp is that they principally depend on their close personal connection to Estrada to advance their business interests. Mark Jimenez, who has to face criminal charges in the US but whom Estrada calls a "corporate genius," arguably symbolizes the breed of businessmen that Estrada favors. Being adept at wheeling and dealing is now synonymous with being a corporate genius. Another symbol is Lucio Tan, the kapitan notorious for allegedly being a big-time tax evader. Yet, we must concede-and this is an objective fact-that reformers occupy strategic positions in government. Some of these reformers are liberals such as Felipe Medalla (Economic Planning Secretary) and Benjamin Diokno (Budget Secretary). The liberals do play a progressive role, for they are allies in the fight against the rent-seekers. The progressives such as Boy Morales, Karina David, and Liling Briones, are a significant force, if only they would consciously work in unison. We can also include as reserves in the struggle for reforms two more categories, namely: a) the ex-radicals like Orly Mercado and Gemma Cruz-Araneta and b) the honest bureaucrats (a term used by Dean Raul V. Fabella) like Brother Andrew Gonzalez. Unfortunately, the liberals, progressives, and other allies have not cohered. In fact, not one among them has taken the lead to craft and push forward the reform agenda. At least, in Ramos's administration, the ideological Almonte-Carpio team orchestrated the reform agenda through means fair and foul, which nonetheless resulted in weakening the monopolies in telecommunications and transportation. The lack of activism or intervention on the part of the reformers has cleared the way for the political attack of rent-seekers and cronies. Public policy is being redesigned to tilt the "division of the produce" in the latter's favor. On the other hand, the efforts of reformers and honest bureaucrats have largely been confined to defensive action.
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