Reflecting on Italy's transmogrification during the opening decades of the early-20th century, Antonio Gramsci lamented how the "old world is dying, and the new world struggles to be born."
It was not until the middle of the 20th century that Italy began to reconstitute its foundations and embark on an economic miracle (Anderson 2014). In many ways, the Philippines is caught in the same interregnum. Three decades after the downfall of the Marcos dictatorship, the Filipino people are once again telegraphing their demand for real, meaningful "change" through the ballot box.
Fed up with vacuous slogans and broken promises from mainstream candidates, a large plurality (38.5 percent) of the electorate has elected Rodrigo Dutetre -- the firebrand mayor of Davao City, and a self-described "socialist" -- as the next president of the Republic of the Philippines.
The vice-presidential race, which unlike the American system is separately contested, is yet to be settled. But many expect Leni Robredo -- a social democratic provincial legislator, and widow of one of the most celebrated statesmen in Philippine history, Jesse Robredo -- to narrowly defeat Ferdinand "Bong Bong" Marcos Jr., the sole son of the late dictator. Recognizing that this is perhaps the last chance for the Marcoses to wrest back control of the Malacanang, Ferdinand Jr. has openly cast doubt on the credibility of the election process.
As this author forecasted, the race boiled down to the "iron fist" Duterte-Marcos tandem vs. the "straight path" Roxas-Robredo tandem, with Duterte and Robredo favoured to win the race. Nevertheless, the very fact that the Marcoses have come this close to power says a lot about the Southeast Asian country's fatigue with the current establishment -- and a simmering yearning for strongman leaders in "outside the box" candidates like Duterte and Marcos.
The old order -- a cacique democracy, undergirded by 'managed competition' among liberal oligarchs -- is withering away. But it is far from certain whether the Philippines is on the cusp of salvation or instead diving straight into abyss.
For now, however, the Filipino people are celebrating one of their most credible and peaceful presidential elections in recent memory. Underscoring popular excitement about electing a new breed of leaders, voter turnout was the highest on record. For the first time in history the incoming number one and two in the Philippine state are -- or openly claim to be -- persons with left-leaning convictions.
Long-time leftist activists such as Risa Hontiveros have, upon third attempt, made it to the quasi-aristocratic Philippine senate. The Philippines seems to be following a similar pattern among its distant cousins in Latin America. To the delight of many, president-elect Duterte, who is assembling a cabinet filled with seasoned officials, has signaled his willingness to transform into a more statesmanlike leader of hundred million souls.
Duterte has begun to disown many of his controversial statements, and is beginning to translate his 'bumper sticker' campaign proposals into, hopefully, more tangible and realistic policies. He has promised to create an inclusive government patterned after that of Canadian Prime Minister Justin Trudeau's. The incoming president will have to quickly transition from a 'loose canon' candidate into a dignified and reassuring head of state. He is no longer a provincial mayor, but instead the incoming captain of one of the world's most promising emerging markets and a frontline state in the emerging superpower clash in the Western Pacific.
The Duterte Phenomenon
Duterte, affectionately known as "Mayor Digong", is no Donald Trump. Unlike the New Yorker real estate mogul, Duterte is not a fictitious product of 'reality show' hits. Duterte boasts more than two decades of experience in public office, having turned -- through 'iron fist' -- a Hobbesian Davao City into of the safest and most prosperous places in the Philippines. He has also a long record in advancing the rights of gender minorities and pushing for progressive programs in local government.
Duterte is no ordinary politician. He is what can be described as a 'meta-candidate', one who changes the very conception of and expectations from a presidential candidate. In some ways, he singlehandedly changed the rules of the game. Throughout the campaign period, he crossed one redline after the other, and yet he managed to build a massive nationwide following. He reminded his opponents that presidency is a matter of life and death, of going to the distance, of risking it all.
Yet, he also reminded his opponents that the president could also be an ordinary person, a sinner, and a struggling student who barely passed his courses -- an extraordinarily "ordinary" Filipino. Politics is a game of connecting to the audience, of establishing affinity with the electorate. Arguably no one has done it better than Duterte in the last elections. No wonder then, Duterte has never lost a single election in his life.
But how did he become the 16th president of the Philippines? Especially when one considers how only few months back, many dismissed him as a loose canon, a political outsider with no realistic chance at the highest office in the country. No less than Duterte himself at some point considered withdrawing from the race. After all, the field was just too tight and competitive for him.
He confronted establishment goliaths like Vice President Jojomar Binay, who boasted a nationwide network of patronage linkages. He also faced a stiff challenge in the Wharton-trained interior secretary Mar Roxas, who was expected to leverage the formidable machinery of the ruling party.
His fiercest competition, however, was Grace Poe, an American-educated senator, who combined a sleek reformist platform with a potent populist appeal, thanks to her (foster) parents, the late Fernando Poe and Susan Roces, who are considered as celebrity royalties. Dutere was, in the words of Filipino sociologist Randy David, "until very recently an outsider to national politics whom very few thoughtful Filipinos took seriously." But this apparent weakness would turn out to be his strongest weapon in the race.
Duterte's astonishing success was the product of three factors. First and foremost, it was perfect timing. Dutere was the beneficiary of an emerging zeitgeist of 'grievance politics' in the Philippines, and throughout the democratic world. Most of the electorate were just sick and tired of empty promises by mainstream politicians. With much of the population mired in crushing poverty, only a select few truly enjoyed the fruits of political freedom brought about by the downfall of the Marcos dictatorship.
This engendered a 'cacique democracy fatigue' among a growing numbers of Filipinos. The Philippines fell into what can be called "strongman syndrome", the simplistic belief that only tough-talking leaders can address complex 21st century challenges.
Despite rapid economic growth in recent years, the Philippines still suffers from one of the highest rates of unemployment and poverty in Asia -- an uber-dynamic region that hosts nine out of thirteen economic miracles in modern times. Strongman candidates like Duterte and Marcos Jr. were in a particularly favorable position to present themselves as single-minded, decisive leaders who could bring about overnight solutions to the country's perennial predicaments.
Secondly, he was the beneficiary of the mistakes of his opponents, some of whom carried their own skeletons in the closet. On one hand, the populist Binay, who could also boast his own 'Makati model' of success, was racked by corruption scandals. On his part, Roxas, the anointed successor of President Benigno Aquino, largely ended up defending the incumbent's (mixed) track record rather than promoting himself. In short, Roxas became a referendum on Aquino -- a huge mistake in an era of grievance politics.
When it comes to Poe, who was the leading candidate throughout much of the campaign period, she suffered from 'guilt by association'. More than her legal battled on question of eligibility, what hurt the former American citizen the most was her association with oligarchs and a convicted plunderer. Towards the end of the race, Dutere was in a strong position to portray all his opponents as incompetent, crook or puppet of the oligarchy.
Finally, Duterte launched an impressive campaign, anchored by a social media blitzkrieg, which presented the mayor as an uncompromising, independent and 'authentic' statesman, who could turn the Philippines into a safe and prosperous place. As a candidate from the margins, he promised more political autnomy and fiscal resources to peripheral regions of Visayas and Mindanao. No wonder then, he ended up dominating the race in southern island of Mindanao and vote-rich central islands of Visayas.
It must also be said, and this is extremely crucial, that Duterte's strategy would have been too risky if the Philippines had a runoff election, where candidates are expected to garner the support of majority of the voters. The fact that the reformist vote was split between Poe and Roxas was a great source of help to Duterte (and even Binay, who climbed to the top of the polls early this year).
Duterte's off-the-cuff rhetoric, however, was enough to get the support of a plurality of disillusioned voters who saw in him the promise of radical change -- and were willing to turn a blind eye to his plethora of imperfections. In the Philippines' single-round, first-past-the-post system, that was just enough to make him the president.
When it comes to foreign policy, Duterte is, on the surface, a diplomatic-disaster-in-the-making. Some senior diplomats have asked me whether I think Duterte can oversee East Asia Summit and other major gathering next year, when the Philippines becomes the chairman of the Association of Southeast Asian Nations (ASEAN). After all, shortly after his despicable "rape joke" that was followed by global condemnation, Duterte went so far as to tell ambassadors of America and Australia to "shut their mouths".
A more careful look, however, reveals a largely pragmatic statesman, who discerns the vicissitudes of high-stakes geopolitics. Yes, he has indeed made Trump-style statements like his ludicrous suggestion to drive a jet ski and plant flag on contested land features in the South China Sea. But that was more of Duterte-the-entertainer, who tried to play to the crowd and project a tough image before a broadly anti-China citizenry.
What is more consistent in his statements is his professed willingness to launch direct dialogue with Beijing and, if necessary, negotiate a joint development agreement across contested waters to avoid direct war. At one point, he said if China will "build [the Philippines] a train around Mindanao, build [the Philippines] train from Manila to Bicol . . . build [the Philippines] a train [going to] Batangas, for the six years that I'll be president, I'll shut up [on the sovereignty disputes]."
It is broadly expected that Duterte will adopt - similar to the Arroyo administration (2001-2010) -- an equilateral-balancing strategy towards China and America and not side with one power against the other. In fact, Duterte is expected to appoint former Arroyo administration officials such as Gibo Teodoro and General Hermogenes Esperon in his presidential cabinet.
This means he will most likely dispense with Aquino administration's counter-balancing strategy against China. But, despite his affiliation with leftist groups, it is unlikely that he will downgrade relations with America, a powerful ally that is extremely popular among the security establishment and intelligentsia. Though one can expect him to bargain for more American military assistance to the Philippines and not readily open more Philippine bases to Washington under the Enhanced Defense Cooperation Agreement (EDCA).
According to the Council on Foreign Relations, America's Foreign Military Financing (FMF) to the Philippines is actually lower than 2010, and dwarfed by Washington's military support to allies in the (oil-rich) Middle East and (wealthy) Europe. America has also equivocated on whether its mutual defense treaty with the Philippines covers the latter's claims in the South China Sea.
Duterte is deeply aware of the limits of American commitment, thus expect him to explore more constructive relations with China. He will cooperate with each great power on areas of common interest, whether it is infrastructure development (with China) or counter-terrorism (with America).
The Duterte administration, however, will be remiss to over-read its mandate. He actually won only 3 out of 18 regions in the Philippines. Six out of ten voters chose Duterte's rivals. So clearly he doesn't have a carte blanche, though markets and the civil society, for now, are giving him the benefit of the doubt.
But if he dares to introduce a seismic shift in the Philippines' domestic political landscape -- by tinkering with democratic institutions -- or dramatically reconfigure its foreign policy -- by severing ties with America and bandwagoning with China -- expect his legions of critics, including the outgoing president, to mobilize for his departure. Yet, one could bet that Duterte will likely be wise enough to properly assess the coordinates of peaceful yet meaningfu change.
You may check the author's pre-elections essays, Part I ("The End of Philippine Democracy?"), Part II ("The Folly of Philippines' Autocratic Nostalgia"), and Part III ("Philippines at a Crossroads") here.
Follow Richard Javad Heydarian on Twitter: www.twitter.com/Richeydarian
The Philippine economy has grown by about 5 percent a year on average over the last ten years, significantly higher than in the previous two decades. Yet the number of people living below the poverty line has actually increased. What does the administration of President Benigno “Nonoy” Aquino III —now in office for nearly two years—need to do to be able to maintain rapid economic growth while making it more inclusive?
On the eve of the bilateral strategic dialogue between the Philippines and United States on April 30, Bert Hofman, Chief Economist for the East Asia and Pacific Region at the World Bank, John Nye, Frederic Bastiat Chair in Political Economy at the Mercatus Center at George Mason University, and Steven Rood, Country Representative for the Philippines and Pacific Island Nations at the Asia Foundation, joined Carnegie’s Vikram Nehru to discuss the economic and political prospects and challenges facing the Philippines.
A System Designed Against Development
Lagging growth has its roots in regulations and distortions that drive a wedge between the productive and unproductive sectors of the economy, largely to the benefit of elites, Nye argued.
- Structural Problems: The roots of underdevelopment lie in the underlying structure of the Philippines’ economy, which is mostly rural, agricultural, and suffers from low productivity, Nye said. He added that China, the greatest developmental success story in recent decades, owes much of its growth to the migration of rural workers from the rural inland to highly productive coastal regions.
- Regulations: Commercial, regulatory, and labor market distortions have prevented a similar transition from taking place in the Philippines, Nye argued. High minimum wages and “regularization” policies that prevent companies from firing employees apply only to the formal commercial sector, hobbling its growth. The result has been two classes of workers—the privileged few who can enjoy the benefits of these regulations in the modern sector and the vast majority with low productivity jobs in the informal and agricultural sectors.
- Land Reforms: While the government has transferred land to poor Filipinos, the recipients are prohibited from selling their land or buying additional land, explained Nye. As a result, most beneficiaries resell their land to agricultural elites through shadowy arrangements, further entrenching inequality.
- “Legalism” Not the Answer: Additional laws and regulations would do little to solve the paradox of the Philippine government, which does both too much and too little to promote growth, concluded Nye. Instead, policymakers should identify which rules are productive and crucial to development and jettison those that are not.
Reason for Optimism
The fact that the proportion of the Filipino population living in poverty has remained steady over 30 years is cause for concern, Hofman said. Given the surge in population during that period, the absolute number of Filipinos living on roughly $1.25 per day has increased dramatically. Hofman identified several reasons for persistent underdevelopment, as well as reasons for optimism.
- Uneven Growth and Job Creation: Too little growth has occurred in the modern sectors, and the growth that has occurred in manufacturing has been capital-intensive, producing relatively few jobs. At the same time, the low-quality education received by many workers excludes them from accessing higher-paying jobs.
- Political Risk Deters Investment: Foreign investors are worried by the volatile and unpredictable shifts in national politics. A history of mass protests, coupled with the Supreme Court’s frequent revisions and reversals of laws, have created a climate of uncertainty.
- Momentous Reforms a Positive Sign: However, the current Aquino administration has undertaken major reforms in state enterprise governance, public finance management, and social programs. These reforms have created a stronger basis for inclusive growth.
- Targeting Poverty: One successful program is the conditional cash transfer (CCT) program, which has harnessed powerful incentives to reduce poverty and is slated for expansion. The Department of Social Welfare, which administers the CCT, is one of the cleanest government agencies in the Philippines, Hofman added.
- China and the Region: Rising real wages in China are encouraging a shift away from labor-intensive manufacturing, creating an opportunity for its poorer Southeast Asian neighbors to fill the gap. If the Philippines can make itself into an attractive destination for foreign investment, its growth could accelerate significantly.
Political Leadership a Catalyst for Reform
In contrast to some of his predecessors, President Aquino has been a driving force behind controversial but necessary structural and anti-corruption reforms, Rood said. Sustained high-level commitment suggests that these reforms may actually have a chance to reach fruition, he added.
- Public Support: President Aquino has enormous political capital from his popular support, Rood observed. Approval ratings have held steady at 46 percent, compared to roughly 32 to 35 percent in the Ramos and Estrada eras.
- Empowering Voters: The CCT programs have had the added benefit of freeing poorer voters from the influence of local officials and elites, Rood added. Similarly, the Aquino administration has accelerated grants of property titles to urban residents, giving citizens greater land security.
- Mixed Results on Peace Process: The Aquino administration has succeeded in gaining the trust of some of the country’s insurgent groups, like the Islamic Liberation Front in Mindanao, but at the same time, it has seen the peace process with others, like the communist New People’s Army, stall.
- Anti-corruption Efforts: Most controversially, the Aquino government has launched high-profile prosecutions of members of the Arroyo administration—including former President Arroyo herself, Rood said. After encountering repeated efforts to obstruct anti-corruption efforts by members of the Supreme Court, the Aquino government proceeded with prosecution of the Chief Justice as well.
- Beyond the Election Cycle: With midterm elections coming up in 2013, foreign observers will have to look beyond the fanfare of the election media coverage to monitor the progress of “below-the-radar” structural reforms, Rood stressed.
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The Carnegie Asia Program in Beijing and Washington provides clear and precise analysis to policy makers on the complex economic, security, and political developments in the Asia-Pacific region.
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The Carnegie International Economics Program monitors and analyzes short- and long-term trends in the global economy, including macroeconomic developments, trade, commodities, and capital flows, drawing out their policy implications. The current focus of the program is the global financial crisis and its related policy issues. The program also examines the ramifications of the rising weight of developing countries in the global economy among other areas of research.