January 2004 97th Issue

Thailand firing on all cylinders

The best performing stock market in Asia this year is Thailand. In CLSA’s “Out and About” newsletter, author Jim Walker thinks it might well be the best performer next year as well. Foreign investors have been net sellers since May but the locals have been lapping up any unwanted stock. Apart from India it is probably the only country in the region with solid domestic participation in the market. But why? Jim Walker went “Out & About” in Thailand recently to investigate further the Thaksinomics phenomenon. He concludes that the government is succeeding where others have failed because of its focus on domestic economic conditions and producing policies that facilitate growth. Many thought Thailand's growth peaked out in 2002. They have been proven wrong this year. It will accelerate further in 2004.

When Thaksin Shinawatra came to power in a landslide election victory in January 2000 he had many detractors. A businessman turned politician, inexperienced in the ways of government, nationalistic and populist policies: almost four years later these supposed weaknesses have turned out to be strengths. Thaksinomics has transformed Thailand from a moribund, directionless, depressed-psychologically and financially-economy into the most vibrant country in Asean. Not only can you feel the vibrancy on the streets of Bangkok and Pattaya but you can hear that confidence from government officials.
What is the secret? If one phrase were to sum up the philosophy of the Thaksin government it would be "concentrate on the basics". The focus of government policy has been about stimulating domestic demand. Not through grandiose projects and flawed public spending programmes but through channeling credit and support to the backbone of the Thai economy- the rural and SME sectors. The "Btlm per village" scheme, initially seen as a vote buying exercise by the establishment in Bangkok and chunks of the foreign media, was about addressing a real need: the provision of credit to Thailand's grass roots (and it is credit, the village scheme monies are repayable loans). This particular fuel was added to the fire just as commodity prices began to rise in some of Thailand's key raw material sectors. It has had a galvanizing effect. Consumption has been the backbone of Thai growth for the last two years. As Figure 1 shows, Thailand has vied all year with China for the mantle of "most bullish consumer" in our In the Bag reports. The lines and bars represent the ‘net' score of our ten consumption indicators for each country, each one assigned a rating of + 1, - 1 or zero depending on whether the indicator trends are bullish, bearish or neutral. Compared with the average for Asia as a whole these two countries are streets ahead but their consumption trends are just reflective of policies that have facilitated domestic growth and job creation.

In the fiscal year just finished ( 30 September 2003 ). Thailand achieved a budget surplus (Figure 2). This surplus is three years ahead of schedule and not, as in past years, due to the government failing to meet its spending targets but because of the buoyancy of revenues. More amazingly still, it was the contribution of the rural areas that made the surplus possible. Rural tax collection were up 18 % YoY in FY03. Urban tax collections rose only 11 % YoY - still good but not a patch on the countryside. According to our sources, 50 % of all tax revenue came from the countryside.
This is another reflection of Dr. Thaksin's back-to-basics approach. The rural areas,along with small and medium sized enterprises, have been past of the informal sector in Thailand. Thaksinomics has as a cornerstone of its approach the de Soto principle: legitimize the informal economy and not only do you enliven dead capital through granting property right and then allowing these to be used as collateral in the banking syatem but you increase the tax base. (Last week's public discussions about the legalizing of prostitution are another step along the path of reducing the greyness in the grey economy. Within two years we should also expect Thailand to have legalised gambling-Genting Highlands watch out!) By giving farmers access to credit and by channeling funds through the SME Development Bank an increasing proportion of the Thai economy is being brought into the formal sector.
The next major initiative in the that respect is about to be launched. Land Title Deeds for rural dwellers will be granted over the next six months. A legacy of the absolute mounar chy system in Thailand is the proliferation of " conditional entitlement " to land. These are essentially titles to land but are subject to lengthy court procedures if the title is to be fully established. The government is setting up a clearing house that will bypass the court system and truncate the process. The deeds granted will be bankable and are intended to create a "landed person" class. They will also be liquid and allow landed people to borrow and undertake investment that will enhance the "agricultural lifestyle" ie, raise income levels. Eighteen financial institutions have already signed up to support the plan. The deeds do not entitle the owner to turn the land ibto industrial use or fields of condominiums. But this new policy initiative exemplifies Thaksinomics at work: first, cutting through the bureaucratic tangle that has been a defining characteristic of Thailand for decades and, second, empowering the individual.

Short-circuiting the bureaucracy is an important feature of government policy. A decade ago government spending programmes and infrastructure development policies were a joke, The executive branch of government was weak as a result of ever-shifting coalitions. This gave great scope to the bureaucracy to stall and interfere will policy andprojects. In the early 1990s there was great concern about Thailand's water supply (after a few years of poor rainfall). We thought then that water provision might be a limiting factor on industrial development. We visited Bangkok to talk to the government and the ministry in charge of water development about the problem and also about plans to build a new reservoir in the center of the country. The bottom-line? Sixteen ministries' approval was required to process the reservoir project. Needless to say, it still hasn't been built (although the need for it has since diminished).
When we met with a vice minister in the Ministry of Energy two weeks ago we were surprised in his confidence that the new oil pipeline proposed for southern Thailand
(the much heralded Landbridge) would go ahead. Moreover, the development of a new Asian oil products exchange is also being advanced quickly. But it then came to light that the vice-minister was an ex-PTT executive. He knew exactly what changes in regulations were required to make the product exchange a viable project for Thailand. Thaksin's CEO-style of government is being extended into the ministries and bureaucracy. Public spending plans have to be taken seriously now.

Concentrate on the basics and economic growth will take care of itself. We at CLSA have never been proponents of the export-led growth strategy so beloved of the World Bank and many Asian governments. That does not mean to say that we are against exports, only that exporting activity should flow naturally from a country's comparative advantage. Any doubts that this will happen are dispelled by Thailand's experience in the last two years. Figure 3 shows the divergent export experience of consumption-driven Thailand and export-fixated Malaysia since January 2002. Over this period the baht has appreciated by more than 10 %. The ringgit, as has been the case since September 1998, has been fixed to the depreciating dollar. Thailand's commodity products have helped its performance but Malaysia too is rich in natural resources. There are many lessons to be learnt from this chart but the most important is that when domestic economic conditions are appropriate exports follow as a matter of course. Policies aimed at attracting FDI and transplanting industries that bear little relation to domestic resource endowments are ultimately doomed to failure. A feature of the Thaksin administration has been its ambivalence towards attracting foreign investment. Ironically, in the recent AT Kearney survey of global FDI flows, Thailand has jumped to 16 in the world from 20 in 2002.
Going forward Thaksin's vision for Thailand is clear: to create an integrated Indochina market (plus Yunnan province in China) with Thailand as its hub. The plan is ambitious yet simple and suited to available human resources in the country. Highway projects are underway that will link Yunnan to Laem Chabang, Bangkok', container port. China and Thailand are jointly financing the link through Laos ( a connecting highway already exists through Myanmar but it is of poor quality ). Another project will link Bangkok to Phnom Penh and, ultimately, the plan is to connect directly with India through Myanmar and Bangladesh. Boable? Ten years ago, no way. Today, no doubt.
But this is a decade long project, what about the immediate future? It looks good too. Figure 4 shows three indicators of investment trends in Thailand; the private investment index, capital goods import and business confidence. Two of them signal a growing willingness among Thai entrepreneurs to accelerate business spending although confidence is steady rather than brimming. Slowly entrepreneurs are realizing that the current economic expansion is for real and that it is much more sustainable than in previous cycles. We forecast 8.1 % GDP growth in 2004 led by investment spending. Thailand is a country firing on all cylinders for the first time since the Asian crisis.

. . . and a very good time was had by all . . .

December 3rd saw the first of what we hope will be many such performances staged in the Colonial Hall at the Sofitel Central Hotel.
London Theatre Productions travelled from UK to enthral the audience with Willy Russell’s “Educating Rita”, which was in itself an education for some of the Thai people present, who had never seen such a stage production. Actress Dagmar Doring who played Rita carried the Liverpool accent for the whole play brilliantly.
Pictured left to right: Mr Bernd Schneider Sofitel GM, Dagmar Doring, (Rita), Ben Dudley (Frank), and Marc Cherrier Sofitel RM

Mice Marketing

Travel Operators and writers from Europe inspected Dusit Resort and Polo Club, during their educational trip to Thailand to explore new locations for MICE markets. They were welcomed by the hotel’s executives, Panit Boonyaratvej (standing left) and Poonsri Aptagama (standing right) at the hotel’s lobby.

The Polo Bar at Dusit Resort and Polo Club proudly presents it’s Thailand Top Bartender, Aree Kodchasarn. She won the Thai Hotels Association sponsored competition, shaking her winning concoction “Rung A Roon”.
Rung a roon, means “Light of Dawn”. It is a combination of vodka, triple sec, melon liqueur and tropical juices. Get a taste of this winning cocktail while relaxing with the music in the warm atmosphere each night at the Polo Bar.
For further information call 032 520 009, ext 2071. email: polo@dusit.com or check the website: www.dusit.com

Headstone Riders Motorcycle Club

In October of this year plans went forward to form Hua Hin’s first ever, official motorcycle club. the idea was the brain child of founders Pick (a local policeman) and Bob (of the Easyriders Biker Bar on the canal road). The two presidents feel that it is important to let the local community know that the club, which is comprised of both Thai and Farang members, has not only been set up for the purposes of having fun and drinking hard, but also to put something back into the community by raising money for local charities as well as organising local events for all motocycle enthusiasts.
So, if in the near future you see a bunch of unruly guys roaring into or through town don’t be alarmed, they are just some local boys on their way to yet another party.
Questions or inquires concerning the Head stone Riders Motor cycle Club may be directed to our e-mail address: Headstoneriders@hotmail.com

ASIA TIMES online www.atimes.com

US edged out as China woos Indonesia

By Keith Andrew Bettinger

WASHINGTON - The unilateralism and anti-terror policies of the United States are increasingly damaging its relations with the largest Muslim nation in the world, Indonesia, where many view the "war on terror" as anti-Islam. Meanwhile, China is quietly moving closer to the archipelago.
Many observers have suggested that Indonesia, as a moderate Muslim nation, could play a greater role in US-led actions by providing peacekeepers to operations associated with the "war on terror", thereby adding legitimacy and decreasing the casualties in situations such as postwar Iraq. However, US policies are causing domestic difficulties for moderate Muslim states. This, coupled with the rise of China and improving relations between that country and Indonesia, could be a harbinger of a new regional power and an alternative to the US-led global order.
From an Indonesian perspective, China has always posed the most serious threat to regional security. This stems from the perception that Beijing supported the failed coup by the Indonesian Communist Party in 1965, an allegation it has always denied. When the Suharto regime came to power, one of its first actions was to sever relations with China. During this time Indonesia's wealthy Chinese minority suffered attacks, scapegoating, and an official persecution of its heritage, including the outlawing of Chinese characters.
Although the relationship has been bumpy since Indonesian independence, the situation has improved since ties were normalized in 1990. The 1999 election of president Abdurrahman Wahid ushered in a new era of cooperation; Wahid declared that Indonesia-China relations were a priority and made China the destination for his first official trip abroad. In 2000, a memorandum of understanding was signed in the fields of politics, economics, science and tourism, and in 2001 Indonesia became an officially sanctioned tourist destination for Chinese vacationers. The current Indonesian president, Megawati Sukarnoputri, has furthered the relationship, pledging to improve military links with Russia and China.
China seems to be employing a coherent strategy to improve ties with Indonesia. In the past, China suffered from a lack of vision in its relations with neighbors. This is in part due to its ambiguous position during the Cold War. It is also owing to the inward focus that China had for so long. Yang Jinn, counselor for the political section of the Chinese embassy in Washington, says relations between the two nations were rough in the beginning because China's foreign policy was driven by ideological considerations. However, Deng Xiaoping brought about a new pragmatism in 1979. Since the 1980s China has focused on more ad hoc, symbiotic relations. Now, "China seeks multi-layered and multifaceted relations with its neighbors", Jinn said. "The priority concern for the Chinese government is economic development for our people, so we need a stable environment and good neighborly relations and partnerships."
Thus far, Indonesia's interest in China has been limited to trade and economic issues. Indonesia has been reluctant to take initiatives outside the Association of Southeast Asian Nations (ASEAN). However, trade between the two nations has grown sharply, quadrupling from US$2 billion in 1992 to $8 billion a decade later.
There is still room for growth, though, and both nations have something to bring to the table that makes them natural partners. With a dynamic, growing economy, China expects its energy needs to increase dramatically in the future. Indonesia's massive reserves of liquefied natural gas in West Papua could help supply China's increasing needs. Indonesia has won some supply contracts, but lost a massive tender to Australia in 2001 and is looking for more business with China.
On the other hand, China's businesses are looking outward for investment opportunities, following the advice of former president Jiang Zemin to "go out". Deals have already been reached between Chinese and Indonesian firms in the fields of telecommunications and electric-power plants. Although Western investors have known for years that Indonesia has enormous growth potential, lack of infrastructure has hampered foreign direct investment.
The deals with China bring with them huge investments in infrastructure, which should improve Jakarta's prospects for the future. The Indonesian government, severely short of cash, is beginning to push this sort of private investment in infrastructure. Chinese operators have an advantage over their Western counterparts in that they have experience in the creation of telecom networks under developing-country constraints.
These increasing economic ties will inevitably lead to a greater political understanding between the two nations, decreasing regional suspicion of China and increasing its latitude in endeavors abroad. According to Marvin Ott of the National War College, "China's natural strategic ambition is to look south to a region of opportunity." Ott called China's approach to Indonesia over the past five years "a thing of beauty".
All of this means that the US stands to lose its influence in the region. "Since Vietnam, Southeast Asia has been off the map for the US strategic community," Ott said. Whereas the US has traditionally focused on global-oriented strategies, beginning with containment during the Cold War and now the "war on terror", China's ad hoc approach holds more appeal to many nations. In contrast to the apparent US view of developing nations as pawns in a geopolitical chess match, China's approach has economic benefits that a shaky government can take to its people.
In addition, there is a certain degree of political quid pro quo in bilateral relations. Jinn says China supports Indonesia's efforts to safeguard its sovereignty, as well as its campaign against "internal terror". This is very significant to Indonesia, which faces separatist challenges from Aceh and West Papua. In return, Indonesia has always held a "one China" policy, and in 2001 refused a request for an official visit by Taiwan's head of state. "Our integration is only starting," Jinn said.
China's status as a developing nation is an advantage in its relations with nations such as Indonesia, because China's level of development is on par with nations in ASEAN, making it easier to identify areas of potential partnership.

US policy, on the other hand, seems to be moving in the opposite direction. Washington has called for Beijing to revalue its currency to alleviate its trade deficit with China. This stance is drawing flak from ASEAN nations, including Indonesia, whose trade surpluses with China would be damaged by a stronger yuan. The US has been criticized for not doing enough for developing countries, creating a vacuum that China will eventually fill.
China is also seen to be more accommodating than the US. This is especially apparent in the area of human rights. Whereas Washington is especially vigilant on issues such as labor standards and human trafficking, China hasn't signed on to any international human rights protocols or agreements. While it is US law to issue annual reports on the progress of other nations, and Washington routinely threatens sanctions for perceived offenders, China has more of a "don't ask, don't tell" approach.
Lanxin Xiang, Henry Kissinger professor for international relations at the Library of Congress, says China's relations are guided by a philosophy of mutual prosperity, "get rich together" cooperation in which a rising tide lifts all boats, rather than a zero-sum game realpolitik perspective. The US has made Southeast Asia a second front in the "war on terror", and President George W Bush recently declared that nations not sharing the US commitment to democracy are no longer friends. China understands that Indonesia and ASEAN pose no strategic threat, and is seeking to build bridges regardless of political philosophies.
"The US should 'de-mustify' its relations with other countries," said James Castle, an American who has been doing business in Indonesia for years and is widely regarded as an expert on the Indonesian economy. "Other countries get tired of hearing the US say 'You must deregulate'. China doesn't say those things."
Castle also suggested that Western firms are starting to lose out on deals in Asia because they are bogged down by their dependence on contracts and rules. Asian firms, he said, are more flexible and are not crippled by a lack of clarity inherent in some business deals. They are more willing to accept risk. Castle said that Indonesia's slow pace of reform scares off many US businesses, whereas more nimble firms from China and Japan are winning big. "US business will be sidelined for the next five years in Indonesia."
What happens in the future remains to be seen. Indonesia has elections coming up in 2004, and China has a new president, Hu Jintao. However, some things are certain. China wants to be a great power, and seems to be seeking a sphere of influence in Southeast Asia. It needs resources, markets and partners. Its externally oriented policy will continue to put it into conflict with US strategic interests, which will continue to stress security and "Western values", causing backlashes within developing nations.
In pursuing better relations with its neighbors, China has placed itself in a good position vis-a-vis the US. It has a more active diplomacy, and is reinventing itself as an alternative to the US. China is becoming the nation of multilateralism. It is taking a greater role in the United Nations, and is sponsoring regional initiatives such as the Shanghai Cooperation Organization and ASEAN+3. It advocates cooperative solutions to problems such as the North Korean nuclear crisis.
China wants to open economies for mutual benefit with other nations. In an age where wealthy nations are constantly criticized for unfair trading practices and closing their markets, China is an alternative. Whereas Western nations such as the US often link economic concessions to political conditions, China has no such conditions.
Indonesia, with its massive population and clear challenges, will have to make a several choices. Will the future bring increasing cooperation with the US, which entails domestic unrest over US policies in the Middle East, or will Indonesia instead focus on economic development, seeking partnerships with nations that can improve the living standards of its people. Will Indonesia seek to counterbalance China, or rather join the camp of the giant to the north?
While the US seems content to pursue policies that alienate its allies, China is seeking to cultivate new friendships. It is perhaps indicative of the new China that in its recent foray into space, its first astronaut carried with him two flags: one the familiar red and yellow national banner, the other the blue and white of the United Nations.
Keith Andrew Bettinger has a master's degree in international affairs from George Washington Universtiy with concentration in Asian studies.

(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

Philippines: Between democracy and disaster

By Marco Garrido

MANILA - Not without the faintest grimace did Filipinos receive US President George W Bush's fulsome praise of Philippine democracy. Bush hailed "the first democratic nation in Asia" as an inspiration, "a light to all of Asia and beyond", when he addressed the Philippine Congress last month. And not without irony did Filipinos mark his words - "All of you in this chamber are the protectors of Philippine democracy" - which, had Bush been more canny, might have been an admonishment as much as it was a commendation.
But if it was, it went unheeded. No sooner had the Great White Father conferred his benediction than the institutions of Philippine democracy returned to feasting on themselves. Bush's visit had interrupted one scandal, a congressional assault on the executive, and was swiftly followed by another, a congressional assault on the judiciary. The target in the first case was the non-person Jose Pidal; the target in the second is an equally unlikely figure, a man whose integrity was heretofore considered unimpeachable, Chief Justice Hilario Davide.
Malice intended
Now Davide finds himself the subject of an impeachment complaint that seems all politics and no substance. Accused mainly of "technical malversion", diverting a portion of the Judicial Development Fund (JDF) allotted to judicial employees to Supreme Court appurtenances (cars, expensive chairs, summer-session cottages), the charges against Davide have distended to include "malfeasance", "breach of public trust", and "thoughtless extravagance". The complaint has prospered despite having been railroaded through the House, despite the Commission on Audit having already found the funds to have been properly used, and despite a constitutional prohibition against impeaching the same official twice within a year (the first complaint against Davide had been filed by former president Joseph Estrada for the chief justice's "illegal participation" in the swearing-in of current President Gloria Macapagal-Arroyo). The complaint has prospered, despite the law and normative procedure, because of politics.
Its sponsors and most of the 87 representatives constituting the one-third of the House needed to lodge the complaint hail from the political opposition. In particular, they hail from businessman Danding Cojuangco's Nationalist People's Coalition (NPC). And Cojuangco, it would seem, has an ax to grind with the chief justice.
Under Davide's watch, the Supreme Court declared public the funds Cojuangco had used to buy P100 million worth of shares in the San Miguel Corp. In a separate decision, the court voided a lucrative land-development contract that Cojuangco's business partner had been positioned to control. There are, of course, other reasons to explain opposition ire against Davide, although none figure so centrally as his inauguration of the Arroyo presidency.
Evidence of conspiracy aside, what matters in this case, as in the Jose Pidal case, is that a political grudge is being pursued with the veneer of legality - that is, under the pretense of being the legitimate work of a democratic institution. This is law being used as a force of disorder, in order to undermine the rule of law.
A transplanted democracy
President Bush's acclaim of Philippine democracy cannot help but be a sly pat on the United States' back as well. It was the Americans, after all, who, during their administration of the Philippines (1899-1946), established its democratic institutions after the image of their own democracy. On Philippine soil, however, these institutions took on a distinctly Filipino character, one not always consonant with democratic ideals.
Ironically, the introduction of a US Congress-style bicameral legislature led to the consolidation of a national oligarchy. Sociologist Benedict Anderson points out that a Philippine Congress "proved perfectly adaptable to the ambitions and social geography of a mestizo nouveau riche", a class fostered under Spanish colonial rule. Through their interactions in Congress, these caciques, who heretofore controlled only their respective local political fiefdoms, now enjoyed national-level exposure and access. Consciousness of themselves as a ruling class deepened. At the same time, by helping themselves to the opportunities at their fingertips, they defined their relationship to the state. The character of post-independence cacique democracy is revealed by the liberties it allowed itself: the manipulation of exchange rates, the sale of monopolistic licenses, huge defaulted central-bank loans, a sprawl of pork-barrel legislation, and an enormous, ineffectual bureaucracy that doubled as a family employment agency. The effects of cacique parasitism soon became apparent as the Philippine state slid into decrepitude; Anderson notes: "from being the most 'advanced' capitalist society in Southeast Asia in the 1950s, [the Philippines became] the most depressed and indigent in the 1980s".
Only sustained US aid, investment and support held the enfeebled state together. Political scientist Paul Hutchcroft writes that "the Philippine status as an ex-colony and post-colonial client of the United States ensured the survival of the central state ... wrapping it in a cocoon that insulated it both from the need to guard against external threat and (because of a steady flow of external resources) from the need to develop a self-sustaining economy". Hence, the marriage of American electoralism to Spanish caciquism enabled oligarchy-building at the expense of state-building.
Between democracy and disaster
The complaint against Davide demonstrates that Philippine democracy still lacks the backbone of a state strong enough to regulate its rambunctiousness. For the past three weeks, the House and the Supreme Court have been at loggerheads over the constitutionality of impeaching Davide. One would think the constitution is self-evident on the matter, and, were it not for lawyers, it is: it explicitly prohibits the initiation of impeachment proceedings against public officials twice within a year. Pro-impeachment lawyers have muddled the waters, however, by questioning the meaning of the words "initiated" and "proceedings".
In no time at all, a political witchhunt has become a turf war, with each side brandishing the constitution. Last week, the Supreme Court issued a status quo order blocking the transmittal of the impeachment complaint to the Senate until its constitutionality had been resolved (by - who else? - the Supreme Court). Congress chafed under the injunction, countering that impeachment proceedings fall under its purview. The court went ahead anyway, and early this week found the impeachment complaint unconstitutional. Thankfully, Congress voted to junk the complaint, although most of its initial supporters from the NPC remained stalwart in their position. They lamented their defeat as a breach of the constitution. Representative Jacinto Paras remarked ominously: "The people will have to resort to other measures to effect a regime change."
Paras may have been more prescient than he intended. All this legal wrangling is missing the point. This is more than a legal question; it is a moral one. The fact that an impeachment complaint without solid legal basis got to the point it did - to the point, very nearly, of real destabilization - suggests that laws can be scuttled or twisted to serve malicious designs. Given the law's promiscuity, then, how authoritative can it really be? True, the House ultimately respected the Supreme Court's decision, and thus, one could say, upheld the rule of law, but had the pro-impeachment forces greater moral support, it is not unimaginable that they would have imposed their will despite the law - and legalized their move after the fact. One need not even imagine it; one need only recall the events that installed Arroyo as president in 2001. This is, no doubt, precisely what has tortured the opposition's imagination.
This sense, that laws lack sufficient moral authority, is nowhere more clearly expressed than in each side's resort to drumming moral support from that fourth and most authoritative branch of Philippine government: the masses. People power has been mobilized both for and against the impeachment. They even have their colors: red for impeachment, black against. The massing of a crowd in black in front of the Supreme Court days after the impeachment complaint was made known proved irresistible even for President Arroyo, who discarded her neutrality to come out in support of Davide - and perhaps to cash in on the cachet of his support.
Furthermore, the excitement over the issue has been so frenzied and unreflective that a largely fabricated grievance has become more real. Court employees have been on the cusp of staging a mass walkout since the controversy began but have wavered because, according to Jojo Guerrero, president of the Alliance of Court Employees Associations of the Philippines, "We are still asking ourselves: Are we just being used or are we really not getting enough of the JDF?"
While shows of people power curry moral weight for one side or the other, they displace it from exactly where it should inhere: the law. Resorting to extra-legal rah-rah squads undermines the authority of democracy's legitimate conflict-resolution mechanism and licenses the politics of perpetual crisis.
The Davide case well illustrates political scientist David Apter's observation that "the moral basis of politics determines the meaning of legitimate authority". It would seem that it takes more than just the right institutions to found a civil democratic polity. A social consensus effectively defining normative behavior is essential as well.
The opportunity to build this consensus is what the American colonial regime denied Filipinos by building their institutions for them and calling it democracy. Democracy cannot be given. Nothing spares a nation the tasks and tumult involved in building its state, which, ultimately, is held together more by the process of state-building than by the institutions that have been built up. This process endows its institutions with authority. This is the very process that the Philippines is now undergoing as it walks the tightrope between democracy and disaster. George W Bush, overweening in his eagerness to plant democracy in Iraq, would do well to consider not just the light but the shadows cast by the first democratic nation in Asia.
(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

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