A few weeks ago, the Asian Institute of Management’s Rizalino S. Navarro Center for Competitiveness organized a conference called “AIM for Change.” It was borne out of growing concern in the business community that the country is growing less competitive than its regional peers. There’s a sense that the country has fallen adrift and become rudderless, even before the current Middle East crisis started.
The numbers show it. Gross domestic product, foreign direct investments, the stock market, and other key indicators are all on a downtrend. Global competitiveness reports show no marked improvement in our rankings. The World Bank’s B-Ready Report on ease of doing business indicates we have adequate laws compared to other countries, but seriously lag in implementation. We land in the bottom 20 percent of world tables in terms of implementation.
At the heart of the problem is governance. The country is drowning in red tape, bureaucracy, and the absence of ease-of-doing-business reforms. Processes remain analog and paper-based even as much of the world has moved digital. Permits and licenses take longer to obtain than elsewhere. Rules are not consistently enforced and have become difficult to predict, causing hesitation, deferred decisions, and an overall loss of trust in government.
What are the business community and investors looking for?
Transparency and predictability. Rules must be clearly spelled out and open from the beginning so that all procedures are known from the start. This leads to predictability in the time, forms, and fees required to obtain the permits needed to operate a business. Predictability is probably one of the most important factors investors weigh before making investment decisions.
Accountability. People want to see which offices and departments are in charge of approving or disapproving applications. This lets citizens and investors follow up and credit—or call out—the offices that fail to act on requests.
Consistency. Without consistent application of rules and regulations, people lose faith and trust in an office. Arbitrary decision-making by government offices opens the door to graft and corruption.
Digital processes. People are tired of the paper-driven, bureaucratic procedures we still go through for most government services, which often require citizens to show physical documents to establish identity or legitimacy. We should design more digital processes for government services, licenses, and permits, and adopt a digital business identification system so that paper documents are no longer needed. Standardization of forms and better system integration will let applicants trace their applications through the system.
Justice. At the end of the day, there is a yearning for justice and the rule of law. The elephant in the room is corruption. From the fertilizer scam (Department of Agriculture), the personal protective equipment/Pharmally scam (Department of Health), and the laptop scam (Department of Education), to the more recent flood control scam (Department of Public Works and Highways), one thing is clear. No one has been brought to justice, though massive amounts of public money have been stolen. Justice has been promised to the public, but few charges have been brought against those at the top of this food chain of corruption. It is discouraging for the common citizen and honest taxpayer to see their hard-earned taxes get stolen without justice brought against the perpetrators.
Recent developments in the Senate offer an even dimmer view of governance. The sudden appearance of a long-absent senator, a vote to change Senate leadership, a staged shootout, and the disappearance of a wanted senator before a warrant of arrest could be served were among the strange events of the past two weeks—all as an impeachment complaint was transmitted to the Senate and as the blue ribbon committee report on the flood control scam remained unreleased.
Some senators are playing games to protect themselves and their principals, delaying the release of the blue ribbon committee report and reshuffling leadership and committee chairmanships to suit their political agenda without a thought given to the common good.
When our very own lawmakers are the ones charged with massive corruption scandals and crimes against humanity and escape justice, that is a surefire recipe for the rule of law to erode and for chaos to set in. Trust and confidence in the economy will be lost. When that happens, it is ultimately those at the bottom of the economic pyramid who will suffer the most and bear the greatest impact.
GUILLERMO M. LUZ
Chairman, Liveable Cities Philippines
Chair of the advisory board of the Rizalino S. Navarro Center for Competitiveness.
