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    May 21, 2010

    Breaking the Cycle


    HONG KONG — The goals of president-elect Benigno S. Aquino III of the Philippines are obvious: better governance and faster, more equal economic growth. The big issue is how to achieve them.

    This will revolve around two questions. Is he tough enough? And, can the system be changed?

    Mr. Aquino, known by his nickname Noynoy, inherits the mantle of honesty from his mother, the late Corazon Aquino, but also memories of her failure to bring lasting improvements in governance, even in the promising conditions for change that followed the fall of Marcos.

    The issue of clean government leads to so much else. Mr. Aquino’s large mandate owes a lot to the expectation that the Aquino reputation can deliver a much more honest administration than that of his predecessors: the outgoing president, Gloria Macapagal Arroyo, and Joseph Estrada, who came before Ms. Arroyo. So should he start by showing that corruption will not be forgiven by pursuing all reasonable allegations against the Arroyo administration?

    There are many Filipinos who expect retribution. But as the record of failure to prosecute successfully the Marcos family and others who prospered inordinately during the Marcos years showed, an often politicized legal system makes that very difficult.

    As Joel Rocamora of the Institute for Popular Democracy in Manila put it: “Exposés of corruption form a vital part of our system of political competition. Political ‘outs’ are always looking to expose corruption by the political ‘ins’ but nothing systematic is done about corruption because the ‘outs’ do not wish to poison the well for the time when they manage to become the ‘ins.”’

    It seems unlikely that Mr. Aquino, elected as an honest nice guy from a famous family rather than a reforming zealot, can quickly change the outlook of much of the political class of which he is a part.

    What he can do is leave his predecessors alone and set a new example by avoiding political appointments to top offices. He should fill not only his cabinet but the many lesser positions with professionals from outside the circle of elite names and regional political families — and be merciless if they misbehave. Somehow he must try break the cycle of “ins” and “outs.”

    That will also mean abjuring alliances with local power holders that sap central authority. This is essential for Mr. Aquino’s next task: Suppress the private militias, gambling rackets and other illegal activities that have been allowed to flourish in many provinces in return for political support. The massacre of political opponents of the governing family in Maguindanao last year was an extreme case but highlighted the wider problem of Manila’s feeble grip.

    Mr. Aquino might remember that Marcos was (and remains) popular in many quarters because of his suppression of the gun culture and local warlordism.

    Strengthening of central authority is also important to the economy. At present, scarce public funds are frittered away on local pork-barrel projects to buy congressional loyalties. Mr. Aquino might do better to keep new legislation to a minimum than have to buy votes.

    Next on the agenda of strengthening the state and the economy is to make the elite pay taxes, without which the improvements in infrastructure and education the nation needs to attract private investment will not happen.

    Ms. Arroyo had some success in improving government finances, but as much by keeping spending in check as raising revenue collection.

    Private investment, local or foreign, also needs an environment that provides more certainty as well as being less influenced by the size of kickbacks to power holders.

    For the past decade, the economy has been kept afloat by the remittances — now $16 billion a year — of overseas Filipinos. Foreign capital inflow has been negligible and local capital has flowed out.

    Without a huge improvement in governance and a shift away from the reliance on remittances to locally generated growth, the Philippines will remain marginalized in Southeast Asia. Many observers view the country as irrelevant despite its strategic importance and its need for common cause with Vietnam, Malaysia and others in resisting China’s claims over the South China Sea.

    Mr. Aquino cannot change a political system designed to minimize central power in a nation already splintered by geography. But if he can combine toughness with honesty, Noynoy may yet be able to raise standards and set in motion a cycle of improvement.