THE PROPOSITION THAT IN THE POOR COUNTRIES DEMOCRACY AND ECONOMIC GROWTH CANNOT CO-EXIST WAS ONCE WIDELY ACCEPTED -- AND THE AMAZING GROWTH OF EAST ASIA'S "TIGER" ECONOMIES UNDER VARYING DEGREES OF AUTHORITARIAN RULE BETWEEN THE 1960s AND THE MIDDLE 1990s WAS CITED AS ITS PROOF.

IN THE WAKE OF THE REGION'S FINANCIAL CRISIS, WE MUST MODIFY THIS CONVENTIONAL WISDOM.  IT MAY BE TRUE THAT, EVEN WITHOUT DEMOCRACY, ECONOMIC GROWTH CAN BEGIN TO OCCUR.  BUT THE CRISIS SHOWS THAT GROWTH CANNOT BE SUSTAINED, AND ENLARGED, WITHOUT OPEN MARKETS AND INCREASING TRANSPARENCY AND ACCOUNTABILITY IN THE CONDUCT OF GOVERNMENT.

THROUGHOUT EAST ASIA, THE SPREAD OF THE MARKET ECONOMY OVER THIS LAST GENERATION HAS NOT MERELY BROUGHT ABOUT HIGHER LIVING STANDARDS.  IT HAS ALSO HAD A LIBERATIVE POLITICAL EFFECT.

ECONOMIC GROWTH AND DEMOCRACY

FREE MARKETS AND OPEN ECONOMIES HAD TURNED AUTHORITARIAN REGIMES IN SOUTH KOREA, TAIWAN AND THAILAND INTO FLEDGLING DEMOCRACIES.  IN INDONESIA, THEY HAVE BROUGHT DOWN STRONGMAN RULE.  IN MALAYSIA, MIDDLE CLASSES BROUGHT TO BEING BY ECONOMIC GROWTH LEAD DEMANDS FOR REFORMASI.

NOT ONLY IN EAST ASIA BUT IN MANY PARTS OF EASTERN EUROPE, LATIN AMERICA AND AFRICA, DEMOCRACY HAS ARRIVED -- ALONG WITH FREE MARKETS AND PRIVATE ENTERPRISE.  THE CAUSE-AND-EFFECT PROCESS IS SIMPLE AND STRAIGHT-FORWARD.

THE MARKET ECONOMY STIMULATES INDIVIDUAL ENTERPRISE, INVENTION, INNOVATION AND CREATIVITY, WHEREAS THE COMMAND ECONOMY RESULTS ONLY IN STAGNATION.  THE ECONOMIC OPPORTUNITY AND SOCIAL LEVELING THAT RESULT FROM THE FREE MARKET UNDERMINE THE AUTHORITARIAN REGIME -- BECAUSE, AS PEOPLE BECOME RICHER AND MORE SECURE, THEY BEGIN TO DEMAND POLITICAL PARTICIPATION AND SEEK FROM THOSE WHO RULE THEM RECOGNITION OF THEIR LIBERATED STATUS.

IN THE PHILIPPINES, CIVIL SOCIETY IS EXCEPTIONALLY WELL-DEVELOPED -- THANKS TO A SYSTEM OF MASS-EDUCATION AND A TRADITION OF POPULAR PARTICIPATION IN ELECTORAL POLITICS DATING BACK TO ALMOST A CENTURY.

PHILIPPINE DEMOCRACY FAR FROM IDEAL

TO BE SURE, PHILIPPINE DEMOCRACY STILL IS FAR FROM THE IDEAL.  IT IS WEAKENED BY LONG-STANDING ECONOMIC AND SOCIAL PROBLEMS.  NOT THE LEAST IS OUR HISTORICAL LEGACY OF A REPRESENTATIVE DEMOCRACY SUPERIMPOSED ON A STILL-PATRIMONIAL SOCIETY.  OLIGARCHIES ARE STILL ABLE TO USE THEIR ACCESS TO THE LEVERS OF POLITICAL POWER TO BEND PUBLIC POLICY TO THEIR PURPOSES.

LIKE OTHER TRANSITIONAL DEMOCRACIES, WE FILIPINOS REALLY HAVE TWO COMPONENTS IN OUR POLITICAL SYSTEM.  ONE IS MADE UP OF THE URBAN MIDDLE CLASS, INCREASING NOT ONLY IN TERMS OF NUMBERS BUT ALSO IN THE BREADTH AND DEPTH OF THE PROFESSIONAL AND BUSINESS SECTORS THAT THEY CUT ACROSS; AND THE OTHER IS MADE UP OF A RURAL ELECTORATE STILL LARGELY DEPENDENT ON POLITICAL AND ECONOMIC PATRONAGE.

BUT OVERALL POLITICAL AWARENESS IS STRONG -- EVEN AMONG THE POOREST AND MOST ISOLATED COMMUNITIES.  AS GROWTH SPREADS, THIS SHOULD MEAN MORE AND MORE REPRESENTATIVES OF RURAL INTERESTS GETTING INTO THE LEGISLATURE -- WHERE THEY CAN HELP HEAL THE CLEAVAGES IN NATIONAL SOCIETY -- CLEAVAGES BETWEEN THE RICH AND THE POOR THAT UNTIL NOW CAN EXPRESS THEMSELVES ONLY IN INSURGENCIES.

FORTUNATELY, TOO, WE HAVE A MULTITUDE OF PEOPLE'S ORGANIZATIONS WHICH TODAY INVIGORATES AND ENLIVENS PHILIPPINE CIVIL SOCIETY.  THESE VOLUNTARY ASSOCIATIONS ARTICULATE MINORITY INTERESTS -- SUCH AS THOSE OF WOMEN, INDIGENOUS COMMUNITIES, THE PEASANTRY, THE URBAN POOR, ENVIRONMENTALISTS, THE YOUTH AND SO FORTH.  MANY AMONG US BELIEVE THESE NGOs, COOPERATIVES AND PEOPLE'S ORGANIZATIONS ARE THE BUILDING BLOCKS OF WHAT WILL EVENTUALLY BECOME MODERN DEMOCRATIC POLITICAL PARTIES.

WHAT HAPPENED IN THE PHILIPPINES LAST WEEK

WHY DID FILIPINOS GATHER AGAIN LAST WEEK ALONG A HIGHWAY CALLED EDSA WHICH WAS THE SITE OF THE PEACEFUL PEOPLE POWER UPRISING AGAINST THE MARTIAL LAW REGIME OF PRESIDENT MARCOS IN FEBRUARY 1986?

BECAUSE IN THE ON-GOING IMPEACHMENT TRIAL IN THE SENATE OF THE DEPOSED PRESIDENT JOSEPH ESTRADA, THE MAJORITY OF THE SENATORS WERE PERCEIVED TO HAVE VIOLATED THEIR SENSE OF WHAT IS RIGHT.  MOST URBAN FILIPINOS JUDGED THE SENATE MAJORITY AS NOT MERELY MISTAKEN BUT CONSPIRATIONAL IN ITS VOTE TO DISALLOW THE OPENING OF SEALED BANK RECORDS THAT WOULD PROVE MR. ESTRADA'S POSSESSION OF ILL-GOTTEN WEALTH ALLEGEDLY ACQUIRED THROUGH BRIBERY, CORRUPTION AND OUTRIGHT DIVERSION OF PUBLIC FUNDS.

MOST OF THE MILLIONS OF FILIPINOS WHO WERE ANGERED AND OUTRAGED BY THE SENATE MAJORITY'S VOTE WERE MIDDLE-CLASS PEOPLE:  UNIVERSITY AND HIGH SCHOOL STUDENTS; TEACHERS; OFFICE WORKERS; PROFESSIONALS; SECTARIAN RELIGIOUS GROUPS; AND YOUNG PARENTS IN SOME 25 CITIES AND METROPOLITAN CENTERS.

THE MILITARY COMMANDERS JOINED THE PEOPLE'S CAUSE BECAUSE OUR OFFICER CORPS HAD ALWAYS FELT THEMSELVES TO BE PART OF THE MIDDLE CLASS.  HAD THE GENERALS STUCK WITH THE DISGRACED MR. ESTRADA, THEY COULD HAVE PRECIPITATED A DIVISION IN THE ARMED FORCES THAT MAY HAVE LED TO BLOODSHED.

OUR ARMED FORCES -- FOUNDED IN THE CRUCIBLE OF NATIONALIST REBELLION AGAINST THE SPANISH REGIME IN 1896 -- LARGELY REMAINED PROFESSIONAL UNTIL THE PROCLAMATION OF MARTIAL LAW BY PRESIDENT MARCOS IN 1972.  A POLITICIZED MILITARY EMERGED AFTER YEARS OF MARCOS MASSAGING AND WAS THE MAIN PROP OF AUTHORITARIAN RULE UNTIL 1986 -- WHEN A MUTINY OF THE PROFESSIONALLY-MINDED CORE GROUP OF THE ARMED FORCES SET OFF A PEACEFUL REVOLUTION THAT BECAME THE PROTOTYPE OF SIMILAR MOVEMENTS IN MANY PARTS OF THE DEVELOPING WORLD.

OVER THESE PAST TEN YEARS, OUR FOCUS IN THE REFORM OF THE ARMED FORCES HAS BEEN ON CONSCIENTIZING THE MILITARY:  TO GIVE IT MORAL REDIRECTION, TO FOCUS IT ON ITS DUTY TO PEOPLE AND NATION, AND TO RETURN THE SOLDIERS AND THE POLICEMEN BACK TO THE BASICS OF DUTY, HONOR, COUNTRY.

THIS CONSCIENTIZATION PROGRAM SEEMS TO HAVE WORKED -- JUDGING FROM THE RELATIVE EASE (AS COMPARED TO THE 1986 REVOLUTION) WITH WHICH THE LEADERS OF THE ANTI-ESTRADA OPPOSITION WERE ABLE TO ENLIST THE KEY MILITARY AND POLICE COMMANDERS ON THE SIDE OF GOOD GOVERNANCE, AND TRANSPARENCY AND HONESTY IN PUBLIC SERVICE.

MAKING PEOPLE POWER REVOLUTION UNNECESSARY

EVEN SO, I AM BEGINNING TO THINK WE FILIPINOS MAY BE APPEALING TOO OFTEN TO A POLITICAL DOCTRINE THAT SHOULD REALLY BE A LAST RESORT.

WE CANNOT HAVE A CITIZENS' REVOLUTION -- NO MATTER HOW PEACEFUL -- EVERY 15 YEARS.  WE CANNOT ALWAYS BE AS LUCKY; WE CANNOT ALWAYS BE AS BLESSED, AS WE HAVE BEEN DURING THESE TWO OCCASIONS -- IN FEBRUARY 1986 AND IN JANUARY 2001.  NEITHER SHOULD WE ALWAYS COUNT ON THE ARMED FORCES BEING THERE TO TIP THE BALANCE IN FAVOR OF CIVIL SOCIETY.

OUR COUNTRY NEEDS A PROLONGED PERIOD OF POLITICAL STABILITY AND SUSTAINED ECONOMIC GROWTH -- SO THAT OUR WORKERS AND BUSINESSPEOPLE CAN CREATE NEW SOCIAL WEALTH.  BUT WE MAY NEVER HAVE SUCH STABILITY FOR AS LONG AS CIVIL SOCIETY MUST INTERVENE TO REPUDIATE A SPECIFIC ADMINISTRATION OR OVERTHROW A GOVERNMENT, AS PHILIPPINE CIVIL SOCIETY HAS DONE TWICE IN THE LAST DECADE AND A HALF.

WE MUST MAKE FUTURE REVOLUTIONS UNNECESSARY.  FILIPINOS MUST NOT ALLOW THEIR POLITICAL PROCESSES, THEIR POLITICAL INSTITUTIONS AND THE GOVERNMENT LEADERSHIP TO FAIL AGAIN.

WE MUST PUT A STOP -- ONCE AND FOR ALL -- TO THE PERIODIC CRISES THAT CORRUPTION, EXTRAVAGANCE, CRONYISM, IRRESPONSIBILITY, AND INCOMPETENCE INFLICT ON OUR NATIONAL SOCIETY.

SURELY, WE FILIPINOS ARE JUSTIFIED IN CELEBRATING "PEOPLE POWER" (PHILIPPINE STYLE).  BUT PEOPLE POWER CANNOT AGAIN AND AGAIN SUBSTITUTE FOR STRONG DEMOCRATIC INSTITUTIONS.

THE FAULT-LINES IN PHILIPPINE DEMOCRACY

BUILDING STRONG POLITICAL INSTITUTIONS AND ESTABLISHING AN EFFECTIVE, JUST AND COMPETITIVE STATE WILL ENTAIL LONG AND DIFFICULT WORK.

WE MUST FIRST DEAL WITH THE FAULT-LINES IN OUR REBORN DEMOCRACY.  AMONG THESE BASIC PROBLEMS IS THE WEAKNESS OF OUR PARTY SYSTEM, WHICH MAKES OUR PARTIES SUSCEPTIBLE TO TURNCOATISM, DYNASTISM AND FACTIONALISM; AND UNABLE TO CHECK AND OVERCOME THE INFLUENCE OF LOBBIES, CRONY-CAPITALISTS, CORPORATE INTERESTS, AND OLIGARCHIC FAMILIES.

THAT THE MILITARY COULD STILL PLAY A DECISIVE POLITICAL ROLE MEANS THAT CIVILIAN SUPREMACY OVER THE ARMED FORCES AND THE NATIONAL POLICE MAY STILL BE INCOMPLETE.  AND THIS WE CAN SEE FROM THE VIOLATION OF CITIZENS' RIGHTS, TO INCLUDE THE USE OF STATE AGENCIES IN THE SURVEILLANCE AND WIRE-TAPPING OF THE POLITICAL OPPOSITION; THE GOVERNMENT MANAGEMENT OF MEDIA; AND THE DIRTY TRICKS UNDERTAKEN AGAINST ENEMIES OF AN INCUMBENT ADMINISTRATION.

THE PLAYING FIELD OF ENTERPRISE HAD BEEN UNEVEN -- BECAUSE DISCRETIONARY POWERS OF THE BUREAUCRACY STILL ARE TOO LARGE.  TOP FINANCIAL-ECONOMIC OFFICIALS -- NOT TO MENTION SOME LEADERS OF CONGRESS AND THE JUDICIARY (ROGUES IN ROBES) -- ARE STILL ABLE TO AWARD ADVANTAGES AND PRIVILEGES TO THE BUSINESS GROUPS THEY FAVOR.

WORST OF ALL IS THE GREAT GAP THAT DIVIDES THE FEW WHO ARE VERY RICH FROM THE MANY WHO ARE VERY POOR.  THE IRON TRUTH IS THAT, FOR SO MANY OF OUR PEOPLE, DEMOCRACY IS STILL A PROMISE UNFULFILLED.  WE STILL ARE A LONG WAY FROM INCORPORATING EVERY SECTOR OF THE NATIONAL COMMUNITY INTO THE SO-CALLED LEVEL PLAYING FIELD.

FOUR CORE BELIEFS OF THE GMA GOVERNMENT

IN HER INAUGURAL SPEECH ON JANUARY 20TH, PRESIDENT GLORIA MACAPAGAL-ARROYO ENUMERATED HER FOUR CORE BELIEFS:

FIRST, WE FILIPINOS MUST BE BOLD IN OUR NATIONAL AMBITIONS.  WITHIN THIS DECADE, WE MUST DARE TO WIN THE FIGHT AGAINST MASS POVERTY.

SECOND, WE MUST IMPROVE MORAL STANDARDS IN GOVERNMENT AND SOCIETY -- TO PROVIDE A STRONG FOUNDATION FOR GOOD GOVERNANCE.

THIRD, WE MUST CHANGE THE CHARACTER OF OUR POLITICS IN ORDER TO CREATE FERTILE GROUND FOR TRUE REFORMS.  OUR POLITICS OF PERSONALITY AND PATRONAGE MUST GIVE WAY TO A NEW POLITICS OF PARTY PROGRAMS AND PROCESS OF DIALOGUE WITH THE PEOPLE.

LAST -- BUT NOT LEAST -- LEADERSHIP BY EXAMPLE.  WE SHOULD PROMOTE SOLID TRAITS SUCH AS A WORK ETHIC AND A DIGNIFIED LIFESTYLE -- MATCHING ACTION TO RHETORIC, PERFORMING RATHER THAN GRANDSTANDING.

WITH THESE TENETS AS OUR GUIDE, I BELIEVE WE SHALL OVERCOME -- WITHIN THIS YEAR -- ANY ANXIETIES AND DOUBTS ABOUT OUR CAPACITY TO PUT THE PHILIPPINE HOUSE IN ORDER, AND TO COMPETE COMPETITIVELY ONCE AGAIN IN REGIONAL AND GLOBAL MARKETS.

WHAT CAN PROSPECTIVE INVESTORS NOW EXPECT FROM THE PHILIPPINES?

WHAT EFFECT HAS THESE POLITICAL DEVELOPMENTS HAD ON OUR ECONOMY?

THE POLITICAL PROBLEMS BESETTING THE PHILIPPINES, AS I HAVE CITED, ARE WELL-KNOWN.  WHAT HAS BEEN LESS OBVIOUS IS HOW, OVER THESE LAST 12 YEARS, OUR ECONOMY HAS BEEN RESPONDING TO STRUCTURAL REFORMS THAT HAVE BEGUN TO DISMANTLE THE CARTELS AND MONOPOLIES LEFT OVER FROM THE PROTECTIONIST PERIOD, TO OPEN THE ECONOMY TO WORLD MARKETS, AND TO SHIFT ITS DEVELOPMENT STRATEGY TO EXPORT-ORIENTED GROWTH.

DURING MY PRESIDENCY (JUNE 1992 TO JUNE 1998), CONGRESS OF THE PHILIPPINES ON MY REQUEST ENACTED 229 STRUCTURAL LAWS -- 79 FOR ECONOMIC REFORM, 85 FOR SOCIAL REFORM AND THE REST IN POLITICAL, ELECTORAL, DEFENSE AND ADMINISTRATIVE REFORM.

IN 1996, IN FACT, OUR GNP EXPANDED BY 7.2%.  AND, THANKS ALSO TO THOSE STRUCTURAL REFORMS, THE PHILIPPINES ESCAPED THE WORST OF "DOUBLE-WHAMMY" EFFECTS OF THE FINANCIAL CRISIS OF 1997-99 AND THE DEVASTATING EL NIÑO DROUGHT OF THE SAME PERIOD.

IN THE AFTERMATH OF THE FINANCIAL CRISIS, WE HAVE CONTINUED TO BUILD ON THESE FUNDAMENTALS.

AND NOW THAT THE ESTRADA ERA IS OVER, THESE FUNDAMENTALS SHOULD BEGIN TO COUNT ONCE AGAIN.  AND THEY INCLUDE THE COUNTRY'S BEING RANKED "NUMBER ONE" IN THE CATEGORY OF "KNOWLEDGE JOBS" -- AS INDICATED BY THE AVAILABILITY IN THE PHILIPPINES OF QUALIFIED ENGINEERS; INFORMATION TECHNOLOGY WORKERS, AND COMPETENT SENIOR MANAGERS, PER THE WORLD-WIDE SURVEY OF MARCH 2000 BY THE U.S.-BASED META GROUP.

POLITICALLY, WE FILIPINOS HAVE EMERGED FROM OUR "CALVARY" MORE CONFIDENT IN OUR ABILITY TO GOVERN OURSELVES.  OUR COUNTRY HAS BEEN CLEANSED BY ITS RECENT CONSTITUTIONAL ORDEAL AND LEADERSHIP CRISIS.

I INVITE YOU TO TAKE A SECOND LOOK AT PHILIPPINE PROSPECTS.  TO YOU ALL, I SAY:  GET ON THE GROUND FLOOR OF A RESTORATION OF ECONOMIC GROWTH IN THE PHILIPPINES -- A STRATEGIC COUNTRY AT THE GATEWAY OF EAST ASIA -- CERTAIN TO BE THE CENTER OF THE ECONOMIC ACTION IN THIS NEW CENTURY!

THANK YOU AND MABUHAY (BEST WISHES)!