Is the shift to federalism timely, relevant and necessary? Monsod says No.

Rappler photo

Rappler photo

Text of Christian S. Monsod’s speech at the
Global Autonomy, Governance and Federalism Forum
Dusit Thani Hotel, October 20, 2016. 

Since it was approved by a majority vote of 76% in a national plebiscite in 1987, there have been six previous attempts to change the present Constitution. The articulated purpose of all of them is the same – to improve the lives of the poor. They all failed – two were stopped by the Supreme Court, four were withdrawn – because the articulated purposes were perceived as mere smokescreeen to serve personal agendas – more power and/or more money for themselves.

(1) Is the shift to federalism timely, relevant and necessary? My answer is NO.

(2) What are the problems and reforms that federalism can address?

A foreign observer familiar with our country describes the last elections as the first time that the periphery occupied the center. The high plurality vote for Duterte represents the three challenges to his administration during the election campaign.

First are the everyday concerns of ordinary people namely, – criminality, the drug problem, the traffic problem, the red tape in delivering public services, corruption;

The second challenge is peace in Bangsamoro and with the National Democratic Front.

The third challenge is development.

The question: is federalism necessary to accomplish these challenges?

President Duterte says that our problems of governance on these challenges are mainly caused by “imperial Manila” with its central control of powers and resources that have stood in the way of development of the rest of the country, to the detriment of the poor. Hence, the solution of federalism. He is in a rush to implement it in two years through a constituent assembly by which time he says he is willing to step down, with his legacy in place.

But he has also talked about shifting to a parliamentary system, changing the limitations on foreign ownership, the need for martial powers to address lawlessless, and special powers to address the traffic problem. His moves are not those of someone who is thinking of stepping down soon

On these everyday concerns, the Duterte administration is perceived as hitting the ground running in addressing the drug and criminality problems. His high approval rating spills over to the issue of extra-judicial killings, where the overriding question is: is it state policy? As of today, more people appear willing to give the President the benefit of the doubt, as they did of Marcos at the start of martial law.

My farmers idolize the President because he has been consistently pro-poor in his policy pronouncements on agrarian reform and the environment. Moreover, the PNP acted quickly on the recent murder of our farmer leader in Coron, Palawan and requests for police protection of farmers from harassments. This is good news. The administration of justice is the most serious problem in our country today in which the frontliners are the police.

What is clear is that these everyday concerns can be addressed with the powers of a central government under the present Constitution. In fact, there is no better example than Davao City where, we are told, it took a a strong leader with political will to get the job done, the EJKs notwithstanding. . Those who voted for Duterte appear to want him to do at a national scale what he accomplished in Davao City.

The second challenge is peace. Do we need federalism to pass a new Bangsamoro Basic Bill (BBL)? Or to forge a peace agreement with the NDF? I don’t think so.

The Constitution already provides for the creation of ARMM and the NDF has not taken a hard line on charter change. The President has said that the BBL takes precedence to federalism and should be a model for others. Since the President is familiar with the political terrain at the ground, personally knows the key figures both in Bangsamoro and the NDF, and he has a supermajority in the Congress, he will likely succeed on achieving peace on both fronts.

That leaves us with the challenge of development.

The main problems in our country today are mass poverty and inequality. Thirty years after EDSA and the promise of a new social order, we still have mass poverty and the highest inequality in our part of the world.The social reform programs are underperforming and the social divides have not changed.

This is a failure of development, which is defined as a sustained high growth rate plus equitable distribution. In other words, we have failed in human development which is “the process that widens the range of people’s choices to lead a long and healthy life, to be educated and knowlegedable and to enjoy a decent standard of living. It includes political freedom, guaranteed human rights and self-respect”. (UNDP 1990:10). And we have failed the worst in Muslim Mindanao.

I believe that we have failed not because of the Constitution, but because we have not fully implemented it, especially the provisions on social justice, the heart of the Constitution, and on local autonomy. The Constitution is not the problem, it is part of the solution. The choice is not between federalism and continued mass poverty and inequality. This is a false dilemma.

We are, in fact, told that a number of factors account for our laggardness, but foremost are flawed policies and weak institutions that are rooted in a feudalistic system that has been impervious to change for generations and, of course, corruption.
Federalism invokes the principle of subsidiarity – that power must be devolved to as close to the people as possible, which:

(a) empowers and motivates local communities;
(b) generates more accountability of local officials;
(c) hastens development with competition among the regions.

The problem with the subsidiarity argument is its inductive reasoning. – it is based on the probabilities of a good result at each stage of the chain of reasoning that will lead to the desirable ultimate objective.

In our case, there are LGUs dominated by political dynasties, landed elites or warlords. It does not necessarily follow that the greater powers given to the LGUs will end up with an empowered people. On the contrary, it can result in a misuse or hijacking of the powers and resources by the existing power holders.

The Local Government Code (LGC) although considered a landmark legislation, has turned out to be inadequate on devolution and many of its provisions are not being implemented fully or correctly.

In this regard, there are acknowledged fiscal experts such as Prof. Rosario Manasan and former Finance Usec. Milwida Guevara with instructive insights. They point out that amendments to the LGC and other laws and reforms to give real powers to administatively capable LGUs, whether on education, health, infrastructure, raising their own funds, and resources etc, will enable them to achieve meaningful economic development, without need of federalization.

Manasan cites how many NGAs (national government agencies) make use of Section 17 (f) of the LGC and EO 53 on augmentation to justify their continuous involvement in the delivery of devolved services. Expenditures weighed down by overlapping and unclear assignment of functions across various levels of government result in a waste of resources. And many LGUs are not yet capable of fiscal independence and still need to improve their administrative capabilities.

Manasan also cites the three national consultations in Luzon, Visayas and Mindanao in 2014-2015 that resulted in a consensus on some 30 amendments to the fiscal provisions of the LGC covering seven functional areas
Former Finance USEC Milwida Guevara has a study of the fiscal capability of regions. Assuming 13 administrative regions and based on the 2014 regional GDPs and an estimated minimum expenditure of P91b, only three (3) regions are financially viable, namely, National Capital Region (NCR), Central Luzon and Calabarzon.

There are also big differences among regions on the existence of a strong civil society, especially in poor areas, which can stand up to the political dynasties with the power and money to dominate not only the politics but also the economy and the media of these areas. Hence, the absence as well of strong opposition political parties in these areas.

Federalism advocates claim that federalism fosters competition resulting in better governance and faster development. How can weak regions compete in an uneven playing field in infrastructure, in human capital, in the quality of local administration?

And the economic zones that will likely proliferate in the regions are not the answer either. The Philippine Human Development Report 2012/2013 points out that human development is about the welfare of people, not the development of places. The nature of economic development is uneven. It is not about bringing jobs to people but closing the distance between the people and the jobs by giving people the capabiity and mobility to choose where to go.

There are many ideas like these which are consistent with inclusive sustainable development without federalization but they appear to be outside the radar screen of the government.

I think there is unanimity that federalism reflects the characteristics of its context and every federated country is a hybrid of some kind. We also know that the unitary vs federal choice is about the vertical distribution of powers and the presidential vs parliamentary choice is about the horizontal distribution of powers. Absent more information on the Duterte “federalism”, we can only cite some lessons learned of some countries on federalism:

first, the process proposed for us is a decision from above when experience suggests that a process that is voluntary and incremental from below has better chances of success, like Spain.

second, since federalism reflects the history, socio-political, economic and cultural characteristics of its context and there are existing inequalities, it tends to serve the interest of existing dominant groups in the federated states;

third, a federalized state need not be democratic like Russia;

fourth, the process of federalization is complex, needs a long transition period and is essentially asymmetric like Canada’s “special reality”. The Duterte proposal seems to envisage an immediate symmetrical process regardless of local conditions and capabilities, with the hope that an “equalization fund” from the wealthier regions would help the poor regions until they are competitive. That may be an over-optimistic assumption.

fifth, federalization may not lead just to unifying communities but to their unraveling because self-determination has its domino effect, such as the existence of minorities within a minority.

sixth, federalism works best when flexible to changing circumstances. But a constitutional shift that not only devolves but also recognizes the sovereignty of the federated regions means that it cannot be changed solely by popular vote and makes the shift virtually irreversible.

seventh, many of the people support federalism even if they don’t know much about it or for that matter about the Constitution itself (only 27% know it).

Would they support federalism if it severs their connection to the President because his power of general supervision over LGUs stops at the Regional Governor? And they do not even vote for president in a parliamentary system? Even a parliamentary system with a President but with a federal system, would have the same limitation on executive power. For lack of time, I will reserve my opinions on ownership limitations on foreign investment, parliamentary system, curbing political dynasties, political party development and electoral reforms for the open forum.

To summarize, I believe that the shift to a federal system is a leap of faith that it will somehow work. That means that we will be taking a big risk that federalism will strengthen the political dynasties, landed elites and warlords and will result in the removal or weakening of the provisions on social justice and human development.

What if our assumptions are wrong about the inevitability of a good version of federalism? What if federalism results instead in regional political kingdoms?

Federalism is a slippery-slope and is virtually irreversible. Instead, why don’t we take the path of a purposive implementation of the Constitution to address the twin problems of poverty and inequality? Given the depth of these twin problems, the social reform programs should remain in a strong central government because of the need for massive funding that the poor states cannot afford and the need for uniformity. Otherwise, there might be major differences among regions to the detriment of the poor. But there must be full decentralization and devolution of powers and resources on government services and for local development, which is consistent with the mandate of local autonomy in the Constitution, simply by amending the Local Government Code and other laws like the mining law, and enacting corrective legislation..

I believe that President Duterte’s heart is for the poor and he is good at addressing the everyday concerns of the people. But critical thinking on strategies, policies and programs for development is not exactly his expertise. Yet he is in a hurry to make far-reaching structural changes in the Constitution by exploiting his high approval rating and asking the people to trust him totally on its urgency and scope – the full range of which he has not even disclosed. This is dangerous demagoguery. And raises the question: is federalism also a trojan horse for other agenda?

It is time for us to think more deeply about our future.

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