When I'm asked to peer into my crystal ball, I'm not encouraged by what I see. I see Philippine democracy on a track, going downhill, on wheels speeding toward the precipice.

One wheel may be a changing attitude of the Philippine elite. I believe the Erap presidency was an eye-opener to the elite. It showed that it was possible for someone outside its control to capture the presidency. As the senate vote on the impeachment trial also showed, even the country's other institutions are escaping its grasp.

This wasn't meant to be so. If money determined the outcome of elections, whoever captured the presidency and other high national posts must, of necessity, be beholden to the elite, which finances the candidates.

But Erap proved otherwise. Wealth being generated from illegal activities (jueteng, narcotics, kidnapping, etc.) has gotten so big that it's possible for somebody who's isn't beholden to the traditional elite to be elected to the highest post in the land and other highly influential posts for that matter.

Because of globalization too, the elite's interests have become more fragmented. It's not possible for the elite to unite behind one or two candidates, thereby allowing somebody outside its control to win.

Worse, Erap waged a class war against the elite. Not only did Erap put the elite's property rights in jeopardy, but he also threatened its elimination by using his masa followers.

Money can no longer insulate the elite from the country's problems. In fact, the elite's families have been the targets of kidnappings and drugs, which in turn finance threats to their rule.

Democracy and elections then serve the interests of the elite only when they allow for peaceful competition among different factions of the elite and a more predictable environment for property rights. But after Erap and the rise of "dark" forces, this may no longer be true.

The second wheel may be the military's growing frustration about the ability of our institutions to deal with the threats to the country, both criminal and socio-economic. Colonel Victor Corpus' views, moderate by some standards I'm told, about corruption in the senate, the judiciary, and some sections of the media, are reflective of the military.

What will happen if, despite all their efforts, somebody whom they believe to have ties with the criminal underground becomes president or vice-president? Will the military stand idly by? Not likely, especially with the military's newfound alliance with the Church and civil society groups.

The third wheel is the country's deteriorating social and economic condition. It's no exaggeration to say that the country is a social volcano. Poverty incidence as a percentage of the population rose from 36.8 percent in 1997 to 40 percent in 2000. In other words, 2 out of every 5 Filipinos remain poor. In the rural areas, 1 out of 2 families are living in poverty.
Income inequality hasn't improved from 1997 to 2000. In fact, it worsened from 1994 to 1997. The top ten percent of income earners still earn about 24 times more than the lowest ten percent.

On top of our acute income inequality and growing poverty incidence, former Socio-economic Planning Secretary Cayetano Paderanga Jr. has noted a growing trend of "jobless growth" in the past several quarters. Growth in GDP isn't being matched by a corresponding increase in employment. This doesn't bode well for a third of our workforce who are either unemployed or underemployed.

The fourth wheel is the continued failure of our institutions in the eyes of our people. The senate, which disgraced itself during the impeachment trials, has further lost credibility during the hearings investigating charges against one of its members. The highest court lost luster too when it was revealed that an alleged drug lord was able to socialize among its members.

In my view, reforms for economic growth and good governance are being checkmated, either by the narrow interests who were anti-Erap but not pro-reform, or by the courts. We have a society that's not moving forward in the face of growing external and internal threats, paralyzed by the checks and balance inherent in democracy.

There are two other ominous developments: One is that the region's democracies are failing to substantially address their economic problems. Japan has stagnated and will continue its decline as its population ages. Even now democratic Taiwan is faltering. So are democratic Thailand and Indonesia.

The one economy that continues to grow vigorously and bucking the trend is authoritarian China. It is growing bigger and faster than anybody else. It is sucking up investments more than twice the rest of the region combined. The Chinese juggernaut is sure to trample many traditional manufacturing industries in the region.

Either China becomes democratic or the rest of the region may have to revert to an authoritarian model to cope with China.

The other ominous development is the clamor for charter change. It's an indicator that the country is in deep crisis. The last time we had a constitutional convention was in 1971, when the country similarly faced grave political and economic crises. We all know what happened next, with Marcos declaring his "new society" and imposing one man rule.

Something's got to give. The stresses on the country's fragile democracy are building up. Let's pray to God there's a happy ending for the Filipino people.

But Check out today's entry at Philippine Commentary...

Manila Standard
by Calixto V. Chikiamco

The Philippines is ranked No. 1 worldwide as a source of skills in information technology, according to The Meta Group, a US-based research organization.

The Philippines ranked ahead of other countries like India and Malaysia in terms of supply of knowledge jobs and workers.
President Estrada bared this piece of good news in the opening ceremonies of the Global Information Infrastructure Commission-Asian Regional Conference last Thursday.

But to what do we owe this piece of good news?

This developing country would not have been able to churn out an increasing supply of knowledge workers if it were not for the commercialized education sector.

The fact is that had not a number of for-profit schools, like AMA, STI, and other commercialized tertiary institutions sprouted and expanded in the past decade to fill in the demand for IT (information technology) workers, the Philippines would not have attained its No. 1 ranking.

State tertiary institutions such as the University of the Philippines and PUP and elite Catholic universities such as Ateneo and La Salle simply do not produce enough IT graduates. Not only do they lack the facilities to accommodate more students, but that their tuition fees or entrance requirements are out of reach for the children of the vast lower middle class.

Sure, computer schools like AMA and STI do not have the sports teams, gym facilities, or even liberal arts courses that Ateneo, La Salle, and UP computer students enjoy. But they do the job. They supply the skills to students at a fraction of the tuition of the top schools. Many children of lower middle class and working class families, who otherwise would not have been able to afford to send their children to La Salle or UST, are still able to get tickets to the booming IT sector, thanks to commercialized private education.

(Onel de Guzman, the alleged ILOVE YOU virus author and dropout from AMA Computer College, has reportedly been hired by a multinational company.)

Different schools have been established to cater to the different needs and capacities of customers, which is what one would expect to happen in a free market for education. They range from universities to specialized computer schools and institutes with various fees, facilities and programs. The end result has been a rich and varied supply of IT knowledge workers in demand by the rest of the world.

If government deserves any credit, it is for deregulating education and removing tuition fee caps after the Marcos regime. The statist Marcos regime regulated and capped tuition fee increases as a sop to the restive student population. The unintended result was deteriorating school facilities, poor teacher salaries (leading many to work as household help or contract workers abroad), and poor quality of graduates. Deregulation of education allowed the establishment of many schools at different price points.

So, our commercialized tertiary educational school system is a hero, and not a villain as portrayed by leftists. Our for-profit tertiary educational system is satisfying customer needs. Nobody is being forced to enroll in them. In fact, because there are many types of schools at different price points, a student can move to a different school if his present school increases tuition not to his liking.

The for-profit private sector must also be credited for innovations in the supply of IT education even in the primary and secondary levels. A number of private sector suppliers are entrepreneur-operators who enter into BOO (build-own-operate) and BOT (build-own-transfer) arrangements with private schools who don't have their own computer facilities or faculty. Such BOT arrangements must also be encouraged in our public school system.

One problem, however, in the commercialized education market is the existence of diploma mills. These are schools who
don't even have computer labs or qualified faculty but hand out IT degree diplomas.

Government has every right to close them down, or prescribed minimum standards for schools to qualify as a diploma-granting institution. Many unsuspecting parents, who don't have the time or resources to investigate these diploma mills, are their victims.

However, the best solution to this problem is for government to rate the schools and to publish these ratings. What is government good for, if not to reduce the search and investigation costs of poor parents by rating these schools and producing a public good which is information? In other words, since private rating agencies are not yet in existence, government should do a service to its citizens by continually investigating and rating schools, publishing the results as widely as possible, and letting its citizen-customers make the choice.

The Internet could also be a powerful medium to winnow out diploma mills. Government or a foundation could sponsor an electronic bulletin board on the Net and let students and parents post their comments about the school. This is how eBay and other electronic exchanges efficiently function - letting customers themselves say how satisfied or dissatisfied they are about a particular service or seller. In this way, sellers or suppliers adapt quickly and become better, or risk being boycotted in the marketplace.

The government must learn from the success of the commercialized tertiary education market and seriously consider abolishing the public primary and secondary school system and converting to a system of school vouchers. Government is also better off abolishing most state universities and colleges, which are nothing more than glorified high schools, and budgeting the money for a voucher system. As in the IT sector, the private market would be more efficient at producing the graduates.

Profit is normally considered a dirty word. But there is no better testament to the social returns of profit than the fact that the Philippines is now No. 1 in the supply of skilled IT workers.

By Calixto V. Chikiamco
Does poverty breed terrorism?

The kind view is that it does. Young men, who might otherwise not turn to terrorism as a career, are forced by material poverty to become terrorists. The strategy, therefore, under this view, is to combat terrorism by improving living conditions and widening the opportunities for the youth. “Drain the swamp” so to speak by focusing on economic development.

The September 11 terrorist attacks against the United States should put this view to rest. More important, the recent discovery of an Al Qaeda terrorist network in prosperous Singapore should be a shock to those who see poverty breeding terrorism.

To recall, 15 members of a suspected Al Qaeda terrorist cell planning attacks on foreign embassies, US troops, and multinational corporations in Singapore were recently arrested by Singaporean authorities. The discovery of a video clip in Afghanistan showing terrorists how to hide bombs in bicycles provided the intelligence that led to the existence of the Islamic terrorist network in tightly controlled Singapore.

Two of the arrested suspects had even served in the Singaporean armed forces. One was a technician working for the government.

Clearly, the Singaporean terrorists weren’t illiterate, impoverished peasants who had no choice but to embrace terrorism. Indeed, history tells us that poverty doesn’t breed terrorism; an ideology that justifies the slaughter of the innocents does.
The most wanted terrorist of them all - Osama bin Ladin - is a Saudi multimillionaire born to a billionaire construction magnate. The head of the group that executed the World Trade Center and Pentagon attacks is Muhammad Atta, the son of a prosperous lawyer in Cairo. Some of his cohorts were graduates of a technical university in West Germany.

If poverty breeds terrorism, then Africa, with many of the poorest countries on earth, should be a hotbed of terrorism. But it’s not.
The fact is that even prosperous countries breed terrorists. The US produced a Timothy McVeigh, a former soldier executed for his principal role in the Oklahoma bombings. Japan has the Aum Shin Rikyo cult, which engineered the sarin gas attack in a Tokyo subway in 1995. The cult’s members are young, educated professionals who revere Chizuo Matsumoto, the cult’s charismatic leader.

Many of the September 11 terrorists came, not from impoverished Yemen or Sudan, but prosperous oil-rich Saudi Arabia.
It would therefore be naïve to believe that a strategy of economic development alone would stamp out terrorism. We should bear this in mind as we fight terrorism at home. While it’s true that the Abu Sayyaf operates in a region that’s been badly neglected economically, it won’t be enough to pour development aid to combat terrorism. A Marshall Plan for Mindanao may be justified for other reasons, but it isn’t the cure.

What we do know is that ideology plays a big part in breeding terrorists. A worldview that rationalizes the sacrifice of innocent lives produces terrorists. Timothy McVeigh believed that government was so evil that bombing a government complex with innocent people as victims was justified. To Osama bin Ladin, the Islamic faith justifies jihad against the US.
A distorted sense of values plus access to weapons of terror - bombs, anthrax, missiles - produces terrorists capable of real harm.
Education, therefore, should play a big part in the country’s war on terrorism. The propagation of moderate, peaceful Islam to combat the extremist views of the faith by bin Ladin’s followers should be as much a component of the war against terrorism as combat troops.

However, there will always be people who will fall outside the mainstream. Society is just too large and complex so that deviant groups flourish even under the most watchful government eyes. Singapore, a tiny, tightly controlled island of million people, hosted homegrown terrorists to that nation’s surprise.

The existence of a terrorist network in Singapore seems to suggest that governments in the region can’t underestimate Al Qaeda and other terrorists. There’s a real need to heighten anti-terrorist intelligence and security measures. Had the terrorists succeeded in their plans in Singapore, it would have threatened the security of this tiny island and caused shock waves in the region.

Economic growth then won’t be enough to fight terrorism. In the long term, the solution would be education; but in the short term, the fight against terrorism requires a police-military approach. A police-military approach imposes on society significant costs, particularly to civil liberties, but given the determination and ideology of terrorists, it would seem that Asian societies have no choice.