Can we act?

Like It Is
Can we act?
By Peter Wallace

We are not alone. I’ve excerpted this from the November 5th Economist, abbreviated. Think the Philippines and jeepneys in lieu of “taxis” as the South Africans call them. Here goes –

“Ask any middle-class South African what are his country’s worst scourges and taxis (it’s a 16-seat mini-bus like our jeepneys) will almost certainly come in the top four, along with violent crime, HIV/AIDS and corruption.” (We don’t have the levels of HIV/AIDS prevalence, but we certainly have the other two). It goes on! “It is cheap, friendly, convenient and performs a vital service in countries with meager public transport systems. But it is often lethal—for both passengers and other road users.”

South Africa has 150,000 taxis, carrying some 15 million passengers a day. Often dented and overloaded, they have no timetables of formal stops but swerve at high speed in and out of traffic, carving up other drivers, running through red lights and mowing down pedestrians in their rush to pick up passengers on the kerb. Competition is fierce and drivers’ pay is usually a cut of the day’s takings. They are a law unto themselves and the police generally seem to turn a blind eye.

South Africa has one of the world’s highest road accident rates, with around 14,000 deaths a year. (In the Philippines it’s 6,000) Minibus taxis were involved in almost 200 crashes a day, twice the rate of other passenger vehicles. Owners tend to cut costs by skimping on repairs (oh yes). Many drivers are unlicensed.

Well South Africa seems to be doing, or at least trying to do something about it. “In the past, the police have seemed to ignore taxi-drivers’ lawlessness. But in a bid to stop the carnage, the transport minister, Sbu Ndebele, recently ordered a crackdown on all road offenders. In the past 11 months, more than 14m vehicles have been stopped and checked, 6m fines issued, 20,000 drunk drivers arrested, and more than 50,000 defective vehicles taken off the roads, most of them buses and taxis. In September alone, some 1,500 lawbreaking public-transport drivers were arrested. Mr. Ndebele has called for reckless drivers who cause death to be charged with murder.”

Here’s a task Transportation Secretary Manuel Roxas II can take up, we certainly need it. I’d include buses in the crackdown. Secretary Roxas let’s actually police the tricyles, jeepneys and buses to follow the law and act responsibly. How about mandatory training courses on road discipline and courtesy? I’ll happily be a lecturer. The key message: “Think of others”.

Then there’s our near neighbors, just look at what’s being said there (article from Bloomberg, with some editing).

“Indonesia’s efforts to reduce subsidies and cut corruption are faltering, threatening to undermine a stock market that’s already underperforming the Asian benchmark. (the Indonesian stock market fell 12% over the past 5 months, the Philippines -7% vs. the Asian average of -12%)

The backpedaling may hamper a revival in growth that has put Indonesia’s credit rating one step away from investment grade (as is the Philippines). At the same time, the government is fighting inflation, which has almost doubled in the past year (not our problem this one).

President Susilo Bambang Yudhoyono has delayed the removal of fuel subsidies, while parliament has yet to mandate land sales to improve road and railway development (our ROW difficulties). In May 2010, Yudhoyono lost a finance minister viewed as the public face of the drive to improve governance, and the nation’s anti-graft unit operated without a permanent leader for more than a year. (it took 10 months for the Aquino administration to get rid of former Ombudsman Merceditas Gutierrez)

It’s going to be critical for the government to move quickly and aggressively on inflation to satisfy people who are frustrated by local government corruption that they see with their own eyes and they hear about on the Internet,”

An index of Indonesia’s dollar-denominated government bonds compiled by HSBC Holdings Plc has declined 0.13 percent this year, while the company’s gauge of Asian dollar-denominated government debt has risen 1.1 percent. The country’s performance is the third-worst AFTER THE PHILIPPINES AND PAKISTAN, HSBC’s data show.

The country needs better tax collection and less graft (Oh yes) to bolster its case for joining India and China as an investment grade borrower once again, Fitch Ratings said in raising Indonesia’s BB+ sovereign debt outlook to positive in February. (the Philippines’ debt rating was upgraded to BB+ from BB, within a notch of investment grade).

Standard & Poor’s, which boosted Indonesia to BB+ this month with a positive outlook, says infrastructure shortfalls, legal uncertainties, corruption and labor market rigidities remain key obstacles to achieving higher growth. (sounds familiar?)

The continued emphasis on Indonesia’s potential is valid but the delivery on the ground has fallen short. Investors are willing to give them the benefit of the doubt but I’m not sure how long that will last. The sheen will start to come off. (Well the sheen hasn’t even started here)

During Yudhoyono’s first five-year term, only 125 kilometers of toll roads were built, compared with China’s 4,719 kilometers of expressways in 2009 alone. (the Philippines racked up a miserable 40 kms—just the NLEX 8.1 km segment and SLEX rehabilitation, nothing else, nothing new) Indonesia’s target is to build 20,000 kilometers of roads by 2014 (the Philippine goal is 6,300 kilometers of new roads by 2012).

Everyone is following the government’s efforts to realize its commitment to law enforcement and to eradicate corruption, said Julian Aldrin Pasha, a presidential spokesman. “Of course, it will take time to ensure all the process goes well.” Infrastructure development is vital to supporting the economy and there has been some progress, he said (well there’s been no progress here).

Still, some foreign investors are judging that the nation’s potential outweighs obstacles. The benchmark Jakarta stock index reached a record in 2010, and $16.8 billion of foreign direct investment flowed into the world’s fourth-most populous country ($1.7 billion trickled into RP last year, a miserable $805 for the first 7 months of this year. This really needs presidential attention).

Yudhoyono, 61, has been credited with helping to bring political stability to Indonesia, contributing to faster growth. He is targeting an annual average expansion of 6.6 percent through the remainder of his presidency, ending 2014. (Aquino, 51, too, has given that stability and is predicting an annual GDP growth of 8% We don’t agree, 4 % to 5% is about what it will do, with a stretch to 6% possible if all goes well).

Yudhoyono began his second term in October 2009 vowing to target the bribery and extortion that deter foreign investment. The same month, police arrested two deputy chairmen of the Corruption Eradication Commission, for abusing their powers, charges they denied.

Anti-graft groups accused the police of doctoring the case to weaken the agency, whose record of sending governors, legislators and other state officials to jail during Yudhoyono’s first term helped improve investor perception of the level of corruption in Indonesia. Prosecutors dropped the case in December 2009. (Well they’ve got Arroyo, for now. But who else?)

Indonesia is now already very transparent but the quality of information disclosed should be improved. “The predictability of the policy-making process is becoming very important” (that predictability is essential here, but so far is missing).

Now, before I’m impeached, let me state quite openly, I’ve plagiarized all this. But doesn’t it so mirror the Philippines. And highlight just how important it is that the leader acts.

Everyone has problems, what you do about them is what matters. This is what makes the difference. Let’s see action.