Federalism will not solve the economic problems of the Philippines

Proponents of Federalism wants to carve distinct territories based on ethnicities as a prescription to economic underdevelopment. These people are so into political economic theories that they mistake the solution to economic problems as always answerable by politics. They see the political structure as flawed and therefore, it affects local or regional economies so much that it spurs or institutionalize poverty.

Let us not be mistaken--politics is all about the distribution of power. Economics is an analytical tool in determining the distribution of resources. Power is a way of controlling resources. By creating a structure on how to distribute power equally, it may lead to a symmetrical control of resources.

Is this how we see things? Poverty, which is being used by Federalists as their reason for pushing a change in the system, is a result of many things, one of which is access to resources. Many Filipinos do not have full access to state resources not because their regional governments do not have the resources, no. The reason is myriad, but the most simplistic and most observable reason is the lack or scarcity (or you could say the paucity) of structure that disallows or impedes the flow of resources from the top of the economic chain to the lowest or base.

Our economic system is designed to benefit only a fraction of the population in a particular territory. Blame the existing governmental system for that? Yes, you will and no you don't.

Yes, because government is supposed to create the opportunities for poor people to gain enough resources to correct the monumental inequalities. No, because it is not solely the responsibility of governments why our economic system is created solely for the benefit of the few-- it is the very nature of the economic system itself that is inherently flawed that perpetuates control or domination of resources by a moneyed few over the resources-scrapped majority.

Federalists hope to use government resources in equalizing economic opportunities, a strategy which have worked in several other countries. They think that by creating federated regions, they will then lead to a re-engineering of existing regional economies and therefore, expand economic opportunities available in that territory solely for the benefit of its citizens.

Let's analyze why several provinces in this archipelago is economically rich or stable and why others are not. Let us do so because we want to get an answer to the question of economic underdevelopment which spurs poverty among the people.

Why is it that the island of Luzon is richer than the Visayas? The simplistic answer lies on the way capital flows and behaves. Luzon is a contiguous area. Provinces are interlinked, and therefore, under the very same economic system which is capitalism.

Luzon is geographically greater in size than the Visayas, therefore, there are more lands to convert into productive sites than in the Visayas. Land is a precious commodity in the Philippines. It is also a form or source of capital. Since Luzon is far bigger than the Visayas, there are plenty of lands to exploit and generate capital. Besides this, Luzon has more than enough suitable places for investments. Some areas are not disaster-prone and surely not places where you find typhoons often disrupting economic activities.

Since the area is wide and provinces are just nearby, it is very easy for capital to flow with ease to almost all areas of the island wide economic system. Let's not forget that the basic principle of capitalism is the expansion of capital---the more disperse capital is, the greater economic opportunities.

Now, we ask---inspite of Luzon being wealthier than the Visayas, why is it that poverty remains high in both areas--Luzon and the Visayas? Again, the answer lies in the control of capital. Who controls the capital in Luzon? Capital is very much concentrated in the hands of the elites. There are two kinds of elites--economic and bureaucratic or elites that dabble in politics while immerse in economic activities.

For one to monopolize capital, you need to gain control of the very structures which allow or dictate capital flows. How do you do it? By controlling the banking industry, the distribution networks and managing regulatory agencies.

This allows us then to discuss on the interplay of politics with capitalism. Look at the political elites of Luzon and most of them or nearly ALL of them are engaged in economic activities. They are not just your governors, your legislators, your mayors and city councilors--they are your landlords, your bankers, your legal consultants, your traders and your suppliers.

In the case of Batanes for example, the governor there is the one who owns the ship that ferries goods from Cagayan to the islands. She controls the very lifeline that allows the Batans to live in peace. With the government safely in her hands, she then controls the flow of capital in that place and of course, she benefits from it more than those who are not in control.

We then ask--by federalizing our regions, do we then dismantle the traditional economic structures that exists now that are actually contributing to poverty? No. When we federalize, we don't change the economic system but only the political structure. Are there provisions in the proposed Federalism proposal that disallows the economic elites from dabbling into politics? There is none.

When we change the politics of an area, do we also change how capital is being distributed? No, we don't. What we will be doing is change how power is being distributed. When we change how power is distributed, do we then change the economic lot of impoverished Filipinos in these federated regions? No we don't. Why? Because in the first place, these poor Filipinos do not have access to the source of capital which is land. How do they gain access in the first place when they don't have the financial resources to get and develop land?

What we are proposing is expand or disperse further power so that other economic elites who are what we call "outside the colambo" may gain access to the political organs of power. By increasing the numbers of those involved in the political policies of this country, you then increase the political playground, hence, increasing even the possibility of more engagements and more conflicts.

If our problem is economic, is it not logical to solve it thru economic reforms or even the abolition of the present economic system and replace it with a better one?

The problem is, again, the control of capital. Who has the monopoly of capital in this country? Very few. What do we need for us to grow as a nation? We need to create the right environment for capitalism to thrive or if really this economic system is not for us and is it is causing or exacerbating the gap between those who have and those who have not, then, let's replace it with a better one.

Proposal

Weaponize the state--make it the people's hammer. The state is the only weapon which the people have right now that is the one equipped and ready to fight these monopoly capitalists and defeat them in their own game.

Smash the monopoly and free up capital. Make capital public until such time that the people's living standards have been improved. It is by then that we allow more freedom in terms of concentration of capital.

A part of the solution is planning with the aim of empowering the state by transforming it into a player for economic activities.

First off, enact a land use bill. Finance research. Identify areas which will allow foreign capital or investment to flow into. Identify which areas are for manufacturing, residential, industrial and which are sources of agricultural products and natural minerals.

Afterwards, let's invest on infrastructure. Develop the roads. Ensure mobility. Link every single place up thru telecommunications and provisions of utilities like adequate power supply and water.

Promote these areas. Those who are centers of resources, build infrastructures that will allow resources to directly reach its intended markets. Supply chain management is key here. Logistics as well.

Those who are centers for manufacturing and industrial, aid local companies in bringing in technologies and resources in the cheapest way possible. Link industrial with non-industrial areas so that we create symmetry and more growth.

Afterwards, prepare our human resource. First thing, reform the lands. Allocate public lands to public housing. Ensure that all productive forces or labor have their own houses. Sell affordable houses. Those who cannot afford to buy one, loosen housing loan requirements. Make it extremely affordable for a Filipino family to get one house.

Link residential areas with industrial or centers of commerce by improving transportation infrastructure. Regulate the volume of private cars and promote the growth of public transport. Implement an effective traffic management system.

Collect all taxes. Ensure regulatory compliance of firms. Collected taxes must be allocated to the right projects. Eliminate or regulate corruption by limiting human intervention. Red tapes should be cut.

Make an example of those who will join the bureaucracy just so they can use the public treasury as their public sources of personal income. Stricter penalties and punishments for corrupt government officials and their civilian cohorts. Include graft and corruption among those crimes worthy of the death penalty.

Our state security forces, especially the civilian police force should be trained well enough to fight off criminality. Implement a Patriotic police culture within the PNP.

For our military, improve our military culture and ensure that these military men think and serve as our praetorian guards instead of encouraging them to indulge in political pursuits.

Inculcate a culture of meritocracy in all aspects of Filipino life. Reward those who follow the law and mete harsh punishment to those who don't. Make heroes out of scientists, those who academically excel, and those who strive for excellence in their chosen fields of endeavor. Tell their stories, Include their names in elementary and high school books. Enrich the literature with their heroic and patriotic pursuits.

Make opportunities equal in the eyes of both employers and employees.