CIAO DATE: 06/2004
May 2004
The outcome of national elections in the Philippines on May 10 is still to be determined. For the past three years, President Gloria Macapagal-Arroyo has governed as an appointed head of state in the wake of President Joseph Estrada's forced resignation on corruption charges. Her administration inherited a country in crisis, and it began the critical process of economic stabilization and growth. Economic indicators in the past two years have shown modest progress. In this interim period, the Philippines has been a steadfast ally of the United States in the war against terrorism. These fragile gains could be imperiled if the Philippines does not complete the electoral process in an expeditious and credible manner. Whatever the outcome of the polls, the winner will have little time to lose in addressing a number of short- and long-term problems in the Philippines.
Although the upswing in recent economic indicators is encouraging, the Philippines faces serious challenges on several fronts: long-term economic viability and social stability; competitiveness in the global economy; internal security; and ability to defend against growing transnational threats. Meeting these challenges will require a major effort on the part of the government, political and economic elites, the business community, the nongovernmental sector, and the Philippines' major international partners, including the United States. For the new president and the legislature, these six years will be decisive. During this time, it is crucial that the Philippines accomplish three major tasks. The new administration must move quickly to avert a fiscal crisis and to halt the influx of foreign extremists and the radicalization of Philippine Muslims that threatens to turn the southern province of Mindanao into a terrorist hub. In addition, the administration must make significant progress on improving governance and curbing widespread corruption.
This Council Special Report, sponsored by the Center for Preventive Action (CPA) of the Council on Foreign Relations, examines these three challenges, focusing on the underlying conditions that have brought the Philippines to the brink of multiple crises while considering steps to address them. The Philippines is not failing, but it is flailing. The most serious problems facing it today are some of the oldest: profound discrepancies in income and economic development within the country; endemic graft; and a minority population that has never been fully integrated into the broader society and economy. Some more recent problems, such as a daunting budget deficit, are equally difficult.
These problems cannot be resolved overnight, but a strong, clear national plan can improve both the fiscal and security situations in the short term. Moreover, it can give the Philippines needed traction in three broad areas. First, it can increase the confidence of Filipinos in their leaders' ability to govern. Second, it can strengthen the country's appeal as an international investment site. Lastly, it can improve economic and social conditions among the Philippine Muslim population and undercut the appeal of foreign and indigenous extremists.
The United States and the Philippines have had a close and special relationship since the Philippines achieved independence in 1946. The U.S. devoted substantial attention to the country during the Cold War and for some years after the "People's Power" revolution of 1986 ousted President Ferdinand Marcos. However, with the end of the Cold War and the closure of Clark Air Base and Subic Bay Naval Station, U.S. interest in the Philippines waned. It revived with the war on terrorism, but that interest is narrow. The United States needs to broaden and deepen its attention to the Philippines.
Resource link: Challenges for a Post-Election Philippines [PDF] - 199K