Some progress in Daang Matuwid

DEMAND AND SUPPLY

Some progress in Daang Matuwid

By Boo Chanco

I am dreaming of the day when international institutions will honestly say that our country is finally rising to the reform challenge. That is exactly what the World Bank recently said about Indonesia. According to the World Bank, Indonesia is walking the talk.

Doing Business in Indonesia 2012 of the World Bank finds all 14 cities previously measured in Doing Business in Indonesia 2010 have improved business registration processes over the last two years, while 10 out of 14 cities expedited the approval of construction permits. During his keynote address on the launching of the report, the Indonesian Minister of State Ministry for Administrative Reforms talked about the cities moving from “comfort zone” to “competitive zone”.

Indeed, the results are encouraging. “Joint reform efforts by the national and local governments have reduced the average time to start a business and deal with construction permits by more than 25 percent since 2010… in the area of starting a business, improvements reduced the start up time by 70 percent—from 151 days in 2005 to 45 days in 2011—and the number of procedures from 12 to 8…”

Some years ago, the problems of Indonesia were not that different from ours. They threw out a dictatorship, floundered along with inept successors until the current President Susilo Bambang Yudhoyono was elected.

In his first term he concentrated on his own Daang Matuwid campaign. Many were frustrated at the slow progress of the anti corruption drive and its impact on the economy. But the Indonesians kept faith and re-elected him. Today, it seems like it is making a difference even if the battle against corruption is still far from being a big success. Incremental victories matter!

Here is how Reuters saw it on the night Yudhoyono won a second term: “A decade ago, Indonesia was the sick man of Asia. After 32 years of rule by Suharto, who oversaw a system of entrenched corruption and nepotism, it stood on the brink of political, social, and financial collapse. Yudhoyono’s government has since brought political stability, peace and the best economic performance in a decade.

“Today, some see Indonesia on another brink: of economic take-off and joining the emerging ‘BRIC’ economies of Brazil, Russia, India and China. Nevertheless, the world’s most-populous Muslim nation is hardly problem-free: corruption is widespread, infrastructure is in dire need of an overhaul and millions live in poverty.”

Doesn’t that sound like a perfect description of the Philippines, also often described as the sick man of Asia? By focusing on corruption Yudhoyono was able to bring back investor confidence in Indonesia to justify their current country branding: Remarkable Indonesia.

Given its demographics, Indonesia is the next most important emerging nation in Asia after China and India. There are reports that some amount of backsliding has happened lately but hopefully, not enough to tarnish what Yudhoyono has accomplished by way of reforming governance in Indonesia.

I see the same thing happening with P-Noy and our country. Even as many of us remain cynical of his Daang Matuwid, it has rekindled investor confidence in our country. The stock market is showing it, the increase in investor interest is showing it too. At the very least, we have re-emerged in the radar screens of investors. It is up to us now to make sure P-Noy and his cabinet deliver on the promise so that investors really come and create jobs here.

I am not about to say that P-Noy’s Daang Matuwid is as matuwid as we want it to be. The President still has a serious blind side to the damage his close friends can inflict on him and his mission. I think of it as Daang medyo Matuwid. Regardless of the damage from his kabarkada, the good news is, there are a number of officials who are taking him seriously on the challenge.

Let me relate a story I heard from different sources about how the reinsurance costs of GSIS have been cut by anywhere from 30 to 40 percent. That indicates how much the crooks in the past are making on this business… and it is big business.

For background, all government assets are required to be insured by the GSIS. Some assets are just too big for GSIS to take sole risk so these assets, like those of the power grid, are reinsured for which a premium in fairly large amounts are paid. During the Marcos era, a company called Integral Factors owned by Roberto Benedicto cornered this business. With EDSA 1, the business was somewhat opened up but the crookedness apparently remained.

When Transco was privatized during Ate Glue’s watch the high cost of GSIS reinsurance eventually became a concern. The Grid assets are still government owned and only the operations and maintenance were effectively privatized so it was mandatory to course reinsurance through GSIS.

Of course the private sector business group on top of National Grid knew how much they were being screwed by the reinsurance costs being charged by GSIS. They confirmed their suspicions when P-Noy took over with his Daang Matuwid. All of a sudden their reinsurance costs dropped significantly… to the level of what it should be. That should help bring down power costs to us consumes too.

The thing is, this administration keeps good stories like this as top secrets when telling these accomplishments, even if still work-in-progress helps build confidence in P-Noy and his program of good governance. I am told that they want to build cases against those responsible for ripping off power consumers. Maybe so, but for someone who has been in the information business all my professional life, I see no conflict in being open with good stories and going after the crooks too at the same time.

In fact, I think the President himself should appeal to the private sector entities that may have been forced to cooperate with the crooks in the past administration to now cooperate in building the cases before cases are brought up against them too. Given the magnitudes of the amounts, this is plunder plain and simple. This GSIS experience proves P-Noy is right: it is possible to reconfigure the road into something more straight and narrow.

One other good thing that could happen with early reporting of good stories like this is to preclude the possibility that the present officials of GSIS or any government agency for that matter, from straying. It takes very little for those with less than solid moral grounding to get comfortable with the crooked practices. As they say… weather weather lang. But with early public disclosure, they will have to keep up with the high standards set.

I am sure there are other very encouraging stories buried in the bureaucracy that ought to be told. Instead we get stories of a P-Noy confidant enjoying a $6,000/night Macau villa and trying to get away with it by saying it is industry practice. I am hopeful that P-Noy will improve on his mother’s clean record by going after even close aides who have strayed from his straight and narrow path.

Indeed, those who say P-Noy’s obsessive focus on his Daang Matuwid is being done at the expense of the economy’s development are all misguided. Daang Matuwid is the bedrock of an economy that will bounce and take advantage of opportunities as they arise. As President Yudhoyono proved in Indonesia, investors will positively respond to a strong anti-corruption campaign.

I guess we all just have to be reassured every now and then that some progress is being achieved and that the battle against corruption is going well. No one expects P-Noy to deliver a corruption free government to his successor but if he succeeds in laying the groundwork, the Daang Matuwid will be there way beyond 2016.

Lawyers

Lawyer Sonny Pulgar sent this one about lawyers.

To help someone before they commit a crime means you are their accomplice.

To help someone after they commit a crime means you are their lawyer.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco