The
international and domestic implications of Duterte’s win
Having
generated a maelstrom of controversy during his campaign, Rodrigo Duterte has
analysts scrambling to understand what his presidency will mean for the
Philippines and the region, writes Imelda Deinla.
Even
before he took the top job, newly-elected President of the Philippines, Rodrigo
Roa Duterte, gained international notoriety for his crass joke about the rape
of an Australian nun and crude insults against the Pope, the United States and
Singapore during his campaign sorties.
Many
analysts are concerned that a Duterte presidency will lead the country towards
economic perdition by damaging its relations with key economic and political
allies, and tarnish the Philippines’ international image. Worse, they are
alarmed that Duterte’s bellicose personality will further escalate tension with
China over the South China Sea dispute.
Initial
fears over a possible Duterte presidency soon dissipated after he won by a
large margin. The stock market greeted his victory enthusiastically, posting a
nine per cent jump, while the Philippine peso rose against other currencies in
Asia.
Having
articulated little of his economic and governance platform during the campaign,
there is lingering doubt over what a Duterte presidency will mean for the
country and its foreign relations. What will Philippine foreign policy be under
Duterte? How will Duterte, a former mayor of Davao City and a public
prosecutor, provide leadership in navigating the often complex and delicate process
of international diplomacy? And how will his administration deal with China,
and work with its neighbours in ASEAN?
Domestic
policies are shaped by both domestic and international interests. Good
leadership is needed to manage competing claims and steer a common vision that
serves broader goals and interests. The election discourse clearly underlined a
popular demand for inclusive growth where many ordinary Filipinos expressed
their frustration over the elites’ privileges in reaping economic benefits. It
brought to the fore the need for a fair and effective legal system, the
delivery of public services by competent and apolitical bureaucracies, a safe
and secure environment, and a level playing field for economic opportunities.
Foreign
relations did not get as much attention as domestic concerns in the campaign.
However, business unease over Duterte’s remarks on the US, Australia and China
reflects that sustaining economic growth depends on favourable external
relations. These include the economy’s need for a sustained inflow of foreign
investments, and for overseas employment for Filipinos and their dollar
remittances. Enhancing regional cooperation and maintaining security and
stability is essential in increasing investment and trade flows that will in
turn generate domestic growth and jobs.
Duterte’s
newly released 8-point Economic Agenda, and early pronouncements on increased
diplomacy with China and a state visit to Indonesia, point to a measured
approach to intertwined domestic and international issues. If this is the case,
it will sustain macroeconomic policies and governance reforms that stimulated
growth and generated foreign investor confidence under the Aquino
administration.
The
difference with the Duterte administration is the commitment to accelerate
long-promised reforms, and allow the majority and marginal sectors to benefit
from economic growth. Priority measures will accelerate infrastructure growth,
enhance economic competition by addressing structural barriers of monopolies
and concentration, create a more competitive business environment, and improve
the ease of doing business. These are programs that were started by the past
administration but have lagged or been constrained by political rent-seeking
and corruption. The bungled attempt by Telstra in the Philippines to invest in
telecommunications was largely blamed on a ‘duopoly’ in this sector, and a weak
competition and regulatory regime. Duterte’s transition team has promised a
more transparent administration, and have vowed to implement freedom of
information in the executive department and tackle issues of unfair playing
fields and corruption in government. A Davao Job Fair is planned for recruiting
the best and brightest to fill over 400 top jobs in the bureaucracy.
Duterte’s
economic agenda makes big promises, putting constitutional amendment as a top
priority by proposing a shift from the current presidential-unitary system of
government to a parliamentary-federal system and proposing a review of
nationalist restrictions on foreign ownership that have so far only benefitted
the entrenched elites in the country.
At the
micro level, the economic program will address problems in land administration
and management, where disputes over land have been one of the major causes of
conflict and violence. Moreover, a progressive tax system and expansion of the
conditional cash transfer system are aimed at facilitating a ‘trickle-down’ of
wealth to the poor and marginalized sector.
Strengthening
regional cooperation and fostering stronger relations with neighbours seem to
be high on Duterte’s agenda, as evidenced by the announcement of a state visit
to Indonesia.
ASEAN
should also be a priority for the new President; the Philippines will assume
the Chair of the organisation in 2017. It is an opportunity to enhance trade
relations under the umbrella of the ASEAN economic community which, in recent
years, have influenced governance and regulatory strategy in the Philippines
such as reforms in customs administration and trade facilitation.
The
Philippines is not a key player in intra-regional trade but has good prospects
for benefitting from possible freedom of movement of skilled labour given its
vast supply of educated and English-speaking professionals. A revitalisation of
the BIMP-EAGA, an ASEAN initiative in which Duterte and Davao have played a
major role since the 1990s, is expected to be injected with more vigour as the
new President is known to support economic initiatives that would stimulate
development in Mindanao.
It is
also good time to seek greater cooperation from ASEAN to strengthen its
position on the South China Sea issue. However, it is not yet clear what
Duterte means by ‘more diplomacy’ except by stating the need ‘to talk’ with
China. Duterte will have to manage this carefully, given that the Philippines
had also strengthened ties with the United States under the Aquino presidency
to counter China’s growing aggressiveness in the disputed area.
There are
high expectations of the Duterte administration on both the domestic and
international fronts although it is too early in the day to judge whether he
can meet these. But his ‘can-do’ and ‘problem-solving’ attitude has captivated
a broad spectrum of Filipinos and President Rody, as he wants to be called, may
well just surprise the critics.
Imelda
Deinla
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