Over series of rounds of discussions, forums and debates about federalism, it came to me that the urgency of federalising can be condensed into twelve (6) basic reasons; there are many other reasons, of course. These reasons span from geo-politics, history, economics, and effective governance. Let me share these to you.
First reason, we are archipelagic. Basically, our connectivity is through waters. Any land trip ends up with a shore. Administrative concerns need be flown out or send through seas in order to reach the decision-makers, and this is costly on the part of public servants and on the part of the citizens needing urgently the services. Archipelagic countries like Malaysia and United Kingdom follow federal system. The negeris of Malaysia and the countries of United Kingdom like England, Scotland, Wales and Northern Ireland all exercise exclusive over their territories. Philippines can boost its attractiveness for investment when regions exercise full autonomy in a federal setup. Services and governmental policies are made more relevant and efficient. A country like ours is better off under federalism than in unitary.
Second, Philippines maintains heterogeneous culture expressing varied demands of their government. The best government which understands the unique service demands of its culturally-varied citizens is a federal government. The culture, language, tradition and history have all implications on the views and relationship with a government; these are best understood by a proximate government, a federal government.
Third, federalism will address monopoly control over wealth of the country. Given two tiers of government exercising exclusive and competent powers, monopoly powers are reduced. As monopoly powers are reduced, a space for competition gets larger where the small and micro establishments can play along, develop technology and create an entrepreneurial ecosystem.
Fourth, commodity prices will be based on effective wages. Any petition to increase regional wages will just be inflationary in a unitary system. Wages will always be sticky which means it will take a little longer for any increase, and if there one, it will be very small and can barely improve living conditions. This is the natural occurrence in unitary. In addition, price speculation is effectively done in a unitary setup which punishes the ordinary household due to very long value chain. A long value chain creates wedge between levels of production line; lower segment of production receives lower pays. Federalism tempers household income, labor and productivity to the capacity to purchase commodities. Price levels will be adjusted to the ability of the people which will also increase market participation of the public, a good way to re-distribute wealth.
Fifth, federalism will redistribute wealth. The dismal state of poverty in the country is a result of having a very large and highly disproportionate sharing of wealth to population. Only 3% of the country’s population owns 94% of wealth. Federalism will address the burgeoning gap between rich and poor through massive re-orientation of power. The re-orientation improves the welfare of the poor found at the farthest places of the country, opportunity seeks them. Resources of the government will be shared all across the country through the two layers of government. The income lower echelons can move up through the income strata creating new middle-income groups. The improvement of income status is through use of talents and endowments in a competitive nature thereby increasing the size of the knowledge-driven economy. Meanwhile, while this unfolds, a dramatic way of changing the wealth condition is through in-situs taxation. This is the principle which dictates that the payment for value is done in places these are made, in a unitary government; corporate taxes are ρáíd at places where the corporate headquarters are found; federalism can effectively benefit from corporate taxes.
Sixth, federalism will de-congest development to the benefit of all. The design for development in a unitary setup is dictated from the center and is based on the population and land size. In effect, the small, faraway places can only hope for meager help from the center. In federalism, a catch up-fund is allotted to poor places in order to radically improve the conditions of the countryside and catch-up with the centers. The state governments receive bigger share. There is also no proof that the poor regions will continue to be poor, while rich will continue to be rich. The principle of solidarity and subsidiarity in federalism follows dictum of “give based on ability and receive according to needs” which means that poor regions will receive higher catch-up funds known as equalization fund than other regions which are already rich. Infrastructures will first be given attention, then with the fortification of institutional arrangements, and finally, economic development. In all of these phases, the people of the immediate vicinity will benefit from these improvements. For one, it will discourage massive diaspora, and prevent brain drains from places. The trouble with brain drain which has hampered the ability of the regions to improve is readily addressed by federalism.
Credits to:Adrian Tamayo
First reason, we are archipelagic. Basically, our connectivity is through waters. Any land trip ends up with a shore. Administrative concerns need be flown out or send through seas in order to reach the decision-makers, and this is costly on the part of public servants and on the part of the citizens needing urgently the services. Archipelagic countries like Malaysia and United Kingdom follow federal system. The negeris of Malaysia and the countries of United Kingdom like England, Scotland, Wales and Northern Ireland all exercise exclusive over their territories. Philippines can boost its attractiveness for investment when regions exercise full autonomy in a federal setup. Services and governmental policies are made more relevant and efficient. A country like ours is better off under federalism than in unitary.
Second, Philippines maintains heterogeneous culture expressing varied demands of their government. The best government which understands the unique service demands of its culturally-varied citizens is a federal government. The culture, language, tradition and history have all implications on the views and relationship with a government; these are best understood by a proximate government, a federal government.
Third, federalism will address monopoly control over wealth of the country. Given two tiers of government exercising exclusive and competent powers, monopoly powers are reduced. As monopoly powers are reduced, a space for competition gets larger where the small and micro establishments can play along, develop technology and create an entrepreneurial ecosystem.
Fourth, commodity prices will be based on effective wages. Any petition to increase regional wages will just be inflationary in a unitary system. Wages will always be sticky which means it will take a little longer for any increase, and if there one, it will be very small and can barely improve living conditions. This is the natural occurrence in unitary. In addition, price speculation is effectively done in a unitary setup which punishes the ordinary household due to very long value chain. A long value chain creates wedge between levels of production line; lower segment of production receives lower pays. Federalism tempers household income, labor and productivity to the capacity to purchase commodities. Price levels will be adjusted to the ability of the people which will also increase market participation of the public, a good way to re-distribute wealth.
Fifth, federalism will redistribute wealth. The dismal state of poverty in the country is a result of having a very large and highly disproportionate sharing of wealth to population. Only 3% of the country’s population owns 94% of wealth. Federalism will address the burgeoning gap between rich and poor through massive re-orientation of power. The re-orientation improves the welfare of the poor found at the farthest places of the country, opportunity seeks them. Resources of the government will be shared all across the country through the two layers of government. The income lower echelons can move up through the income strata creating new middle-income groups. The improvement of income status is through use of talents and endowments in a competitive nature thereby increasing the size of the knowledge-driven economy. Meanwhile, while this unfolds, a dramatic way of changing the wealth condition is through in-situs taxation. This is the principle which dictates that the payment for value is done in places these are made, in a unitary government; corporate taxes are ρáíd at places where the corporate headquarters are found; federalism can effectively benefit from corporate taxes.
Sixth, federalism will de-congest development to the benefit of all. The design for development in a unitary setup is dictated from the center and is based on the population and land size. In effect, the small, faraway places can only hope for meager help from the center. In federalism, a catch up-fund is allotted to poor places in order to radically improve the conditions of the countryside and catch-up with the centers. The state governments receive bigger share. There is also no proof that the poor regions will continue to be poor, while rich will continue to be rich. The principle of solidarity and subsidiarity in federalism follows dictum of “give based on ability and receive according to needs” which means that poor regions will receive higher catch-up funds known as equalization fund than other regions which are already rich. Infrastructures will first be given attention, then with the fortification of institutional arrangements, and finally, economic development. In all of these phases, the people of the immediate vicinity will benefit from these improvements. For one, it will discourage massive diaspora, and prevent brain drains from places. The trouble with brain drain which has hampered the ability of the regions to improve is readily addressed by federalism.
Credits to:Adrian Tamayo