Moneymen awards

DIE HARD III

Herman Tiu Laurel

10/15/2012

Are readers more impressed now with the Department of Finance secretary with this headline last Sunday: "Purisima gets global award for 'unforgiving' campaign vs tax evasion" coming from Euromoney magazine, a publication for international bankers and money-men. Anything described as "global" should be impressive, with dramatic emphasis on "unforgiving campaign" against pernicious "tax evasion" even. If I hadn't an inkling of Euromoney's awards record I too would be very impressed with Purisima's accolades, but I remember Euromoney in 1995 awarding Bobby de Ocampo "Best Finance Minister" who was caught clueless during the 1997 Asian Financial Crisis which saw a 40 percent plunge in the peso. Today, Euromoney shows its checkered ratings, awarding Barclays Bank "Best Investment Bank" despite its central role in the "biggest banking scam ever" of the Libor scandal.

A few months ago we wrote in this column about "Lie-bor and our labors," on how the banks concentrated in the City of London (a one-square mile where the world's major banks are located) regularly manipulated global interest rates that invariably steal the value of the hard works of nations like our overseas Filipino workers. The Libor rate is used to set the price of around £223 trillion of lending and derivatives. Barclays was at the center of the Libor (London Inter-Bank Offered Rate) scandal and its chairman, CEO and COO were forced to resign because of the scandal. Yet Euromoney has just given not only one award as I mentioned above, but two more for Excellence 2012 including the "Best Global Debt" and "Best Global Flow House." Apparently, the Euromoney board sees the world, money and people differently from the rest of us ordinary folks, and fraudsters are heroes so long as they earn money for the banks.

The "prestigious magazine" Euromoney lauds Purisima for unleashing "an unforgiving strategy to combat tax evasion and maximize revenue from corporates without introducing any new taxes or reforms." Jus to show the ironies: the VAT on toll fees were deemed by the DoF as an "old tax" despite being imposed only now in the time of Purisima. Seventy percent of the economy is really the underground economy, which technically all consists of tax evaders. Euromoney adds, "Purisima has worked closely with President Aquino to champion the idea that 'good governance is good economics.' Bankers in the country say he has stuck to his guns, and the country is reaping the rewards." Like sticking to increasing Philippines debt despite the Philippines' GIR (gross international reserves) at $ 83 billion enjoys $20-billion surplus over the $ 63-billion foreign debt and P 1.7 trillion in SDA (special deposit account) lying idle costing taxpayers four-percent interest. The country's reward is annual $ 200-billion debt payments.

Special praise for Purisima was also heaped for his campaign to raise "sin" taxes on domestic tobacco and cigarette products to the same level as foreign and luxury brands. This campaign has been masked by appeals to "health" but the underlying objective is really to price local tobacco and cigarettes out of the market in favor of foreign and luxury brands, at the same time favoring foreign tobacco and cigarette companies again that would find an expanded market for the inevitably and massively cheaper smuggled tobacco products they can bring in. Purisima was informed of the award while in Tokyo for the International Monetary Fund-World Bank meetings, and put on a show of modesty saying "I'd like to especially recognize Internal Revenue Commissioner Kim Henares … as well as Budget Secretary Butch Abad," both of whom are key allies in the "sin tax" campaign to favor foreign tobacco producers.

Tax collector Purisima is the idol of the bankers and money men, but he's a bane on the taxpaying people. Mark Twain asks: "What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin." Of course, we recall that wonderful song from the Beatles: "Let me tell you how it will be; There's one for you, nineteen for me; 'Cause I'm the taxman, yeah, I'm the taxman/ Should five per cent appear too small; Be thankful I don't take it all; 'Cause I'm the taxman, yeah I'm the taxman/ If you drive a car, I'll tax the street, If you try to sit, I'll tax your seat./ If you get too cold I'll tax the heat, If you take a walk, I'll tax your feet./Don't ask me what I want it for/ If you don't want to pay some more; 'Cause I'm the taxman, yeah, I'm the taxman/ Now my advice for those who die, Declare the pennies on your eyes, 'Cause I'm the taxman, yeah, I'm the taxman/ And you're working for no one but me."

(Watch Destiny Cable GNN's HTL edition channel 8, Saturdays, 8:15 to 9 p.m., replay 11:15 p.m. and Sunday, and on www.gnntv-asia.com: this week "People's Power Struggle"; tune to 1098AM radio Tuesday to Friday 5 to 6 p.m. http://newkatipunan.blogspot.com)

Democracy and Dynasties

PEOPLE'S STRUGGLE

Herman Tiu Laurel

10/15-21/2012

dy·nas·ty (dn-st) : n. pl. dy·nas·ties 1. A succession of rulers from the same family or line; 2. A family or group that maintains power for several generations: a political dynasty controlling the state. (FreeOnLine dictionary)

THE GOOD: The Lees form a political dynasty in Singapore, Hsien Loong the son took over from patriarch Lee Kwan Yew after a brief transition with Goh, while Mrs. Lee tended to the economic and financial affairs of the State. Despite the enviable success of the small country they managed to become a global powerhouse, there are Singapore critics of the Lee dynasty. Between the Good and the Bad are the controversial dynasties, such as Sukarnos in Indonesia, Tanakas in Japan, Kennedys in the U.S. Shinawatras in Thailand, Marcoses in the Philippines. The Bad and Ugly: a long list can be cited, from the controversial three generation rule of the Bush family in the U.S. marked by charges of war-for-profit to the most crude, retarded and oppressive Duvalier dynasty in Haiti.

Dynasties in electoral democracies are alternately called "democratic dynasties" to distinguish from the non-electoral dynasties. China has its modern form of the ancient dynasties, but instead of names like Shi, Tang or Qing dynasty there is the CPC dynasty (Communist Party of China) and its third generation inheritors today. "Princelings" of the revolutionary leadership led by Mao Tse Tung and the Five Immortals today rule China. A prime example of a democratic dynasty is the Gandhi-Nehru dynasty in India which controls the ruling party of India, the Congress Party which is now into its fourth generation. Democratic dynasties must also be distinguished from the outright feudal forms of dynasties as are prevalent in U.S.-British backed Middle Eastern states such as Saudi Arabia of the Saud Family, Kuwait, Qatar, Bahrain, etc.

Antis, Pros and apathy
Democratic dynasty controversies abound in the world. Critics come mainly from the intelligentsia, the educated middle classes of the respective societies, agitating to contain such dynasties. Favoring undisturbed continuance of democratic dynasties are mainly the democratic dynasties themselves and/or the political parties they lead. Rural folks generally are apathetic to the issue. We can glean these impressions from observing Philippine society itself, but a statistical study is reported in an article Ronald U. Mendoza of the Asian Institute of Management, published in March of 2012 months before the current controversy over dynasties since the latest filing of certificates of candidacies in October that revealed a resurgence of political dynasties in Philippine politics.

Mendoza writes: "In varying degrees, political dynasties can exist in any democracy … Legislators and parliamentarians with dynastic links range from 6% in the United States to as high as 37–40% in the Philippines and Mexico. In the case of the Philippines, if we also consider familial links to local government units, the figure reaches an amazing 70%. Roughly 80% of the youngest legislators in the Philippines also hail from dynastic political families." Dynasty-ism is, based on this finding of Mendoza, actually the dominant mode of politics in the Philippines. It must be perceived as a real problem since the 1987 Constitutional Commission wrote into the basic law a ban on political dynasties.

Dynasties stonewall Constitution
Article II, Section 26 of the 1987 Constitution states: "The State shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law.", but the legislature is dominated by members of political, democratic dynasties. Thus, for twenty-five years the political dynasty ban has languished as a mere principle. Backlash to the political dynasty trend grew as unprecedented two-member presence of families emerged in the Senate, with the Cayetanos, for example, and the 2013 senatorial saw prospects of two Enriles sitting in the Senate, two Estrada, while the scion of Angara also looms, the Aquinos field presidential nephew Bam Aquino, and the Singsons apportion provincial governorship and a congressional seat amongst its scions (including a convicted drug user). This trend is all over the country. The Constitutional anti-dynasty ban is doomed to oblivion as political dynasties in the legislature seem bound to grow in numbers and strength.

Democratic Ideals
The ideal of democracy is that of limiting concentration of political power and distribution of the exercise of such power to as many participating citizens as possible. The English Magna Carta of 1215 is seen as the root of modern democracy. The Magna Carta set out rules for rulers written by those to be governed, limiting the powers of rulers and guaranteeing liberties and rights to those governed. These rights later included the right to stand for election to office. Since that time, the modern democratic ideal has been to limit the powers of rulers and expand the powers of the citizenry and the right to be elected to participate in legislation and governance.

Does political dynasty-ism in the Philippines work against the democratic deals? It definitely does, here's one instance: as scions of political families monopolize the political party drafts at the expense, say of affirmative action to include Muslim senatorial candidates. The Philippine senate has not had a Muslim senator for several terms now. This in turn has destabilized our national government because of the absence of Muslim representation. If the ban on political dynasties is now enabled in law several seats would be left free that would allow political parties to consider other potential candidates and ensure more diversity in the composition of the Senate. The same can be true in the Lower House where dozens of seats would be freed for non-dynastic candidates to run for, and fill.

Pork Dynasties
A ban on political dynasties would also help in preventing the growing concentration of the "pork barrel" funds in many levels of governance, in the hands of fewer and fewer political families. A congressman gets P 70-million in pork annually or P 210-million in a three-year term, each senator is entitled to P 200-million in the same every year amounting to P 1.2-Billion in a six year term. Just imagine the amounts political families can accumulate if they have two or more scions in the Senate or the House, plus more in the national and local executive branches. Pork barrels are becoming standard privilege in local governments too, a Quezon City councilor gets P 42-Million annually in "pork". It must be noted that there was no "pork barrel" under Marcos, cory Aquino introduced that to Philippine politics.

The pork barrel of politicians is "rent-seeking", earned for producing no real goods or service, and only for holding a position. This is an important, if not more important, as the constitutional issue of political dynasties ban. The pork barrel is the stinking, rotten lure for the opportunistic to spend and win elections and control political positions; it distorts at the very onset the entire political and democratic electoral intention and process. Political dynasty-ism multiplies its ugly head if the pork barrel did not exist or were outlawed and corruption would be nipped in the bud. Jawant Singh, former Indian finance minister, on corruption: "The 'dynasticism' that has taken such a firm grip on much of Indian politics plays a large role in fostering corruption. … Preserving hereditary privileges invariably means that rules and governmental processes get bent, if not made wholly subservient to dynastic concerns…."

Dynasto-saurs and voters
India, grappling with the issue of the Nehru-Gandhi dynasty, is rich in studies of this issue. In "Dynasty and Democracy: Of Families, Modernization and Legitimacy" leading political columnist Karan Thapar writes: "First, political children have to win elections to get into the system…Second, for their party to survive dynastic leadership has to inspire voters or survive the long period of drought when the response is adverse…The advantage a dynasty confers on a political party could be substantial. Immediate recognition, mass appeal, a certain savoir-faire and a capacity to cement a party, bind its factions, resolve differences and provide a coherent central command-like control. Elected leaders, who can be challenged, often cannot deliver as much."

Contrarily, British writers Heather MacRobie write in "Dangers of 'dynastical democracy'… The negative effects of 'democratic dynasties' are obvious: a fossilisation of the elite decays democracy as well as social and economic mobility, fostering 'rent-seeking' behavior … But political discourse can deteriorate as names become more important than issues. …" My last word: voters choice are limited by Philippine political dynasties' monopolization of the party and political nominations. Voters are pre-empted from having a broader choice of candidates. Society has the right and the power to regulate the power wielders and the political process, the ban on political dynasties is an exercise of that but that constitutional provision, which is among this nation's democratic ideals, is doomed to sat upon until death by suffocation by the Dynasto-saurs in the Senate and Congress.

(Watch Destiny Cable GNN's HTL edition channel 8, Saturdays, 8:15 to 9 p.m., replay 11:15 p.m. and Sunday, and onwww.gnntv-asia.com: this week "People's Power Struggle"; tune to 1098AM radio Tues. To Fri. 5 to 6pmhttp://newkatipunan.blogspot.com)