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5 February 2001

An old elite is back in the saddle

The toppling of a corrupt Filipino president was not a victory for "people power"

By John Elliott

She was an unlikely nemesis – a four-foot-something, attractive Asian lady who told the nation in a 1997 Valentine’s Day message: “I treasure true love. I want you to be part of my dream.”

In fact, this American-educated former economics professor and senior Filipino politician played a central role in the downfall of President Joseph Estrada, succeeding him in the job that he had held for two and a half years. Other women – Estrada’s harem of wives and mistresses – also played a role in his downfall, as did his incessant drinking and gambling, plus the way he allowed businessmen and gambling cronies to line their pockets.

Without Gloria Macapagal Arroyo, a young-looking 53-year-old, Estrada might still be president. Arroyo gave the Filipino establishment the confidence to oust Estrada because, under the country’s constitution, the vice-president automatically takes on the top job – and Gloria (as she is popularly known) was the crowd-pleasing vice-president. Arroyo’s elevation was welcomed around the world as a victory for “people power”; yet her appointment was neither democratic nor constitutional. As Lee Kuan Yew, Singapore’s elder statesman, pointed out, the Philippines’ constitutional requirement of a vote in the Senate had been ignored.

“People power” has a special ring in the Philippines because of the genuine people’s movement that brought down Ferdinand Marcos, the former president and one of Estrada’s mentors, in 1986. But it was not “people power”, any more than it was constitutional democracy, that started the ball rolling against Estrada: it was Luis “Chavil” Singson, a corrupt provincial governor, local “warlord” and national power-broker, who announced last October that he had helped the president take $10m in illegal gambling kickbacks and leakages from tobacco taxes.

This “old friend” was persuaded (by whatever means) to go public with his allegations by opposition politicians and the Philippines’ old establishment – which brings us back to Arroyo. She comes from an important political family, the Macapagals, which has the sort of business connections that are inevitable in a country where the lot of the 75 million-strong population is controlled by an oligarchic business-political elite. The same goes for her husband, Mike Arroyo, a lawyer. Her father was president from 1961-65, and gained a reputation as a committed, though only partially successful, economic reformer. Her elder sister, Cielo Macapagal Salgado, has twice been a regional vice-governor and is a director of the Philippine National Bank.

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The first hint that Estrada, who had been elected in May 1998 with a record majority, might be ousted came in November 1999, when a Texas-based political risk consultancy called Stratfor put an article on the internet. This forecast that he was “unlikely to complete his six-year term”.

That report was immediately picked up in Manila, where the press ran headlines such as “the president’s days are numbered” – sparking rumours of an imminent military coup. Stratfor specialises in news analysis and geopolitical forecasting and is owned by Strategic Forecasting Inc and Stratfor Systems of Austin, Texas, which does private political and business risk consulting for government and corporate clients. It started as a think-tank affiliated to Louisiana State University, made its name on the net as a reliable source of information during the Kosovo crisis, and now produces daily worldwide analysis of varying reliability, mostly culled from secondary sources. None of this proves any official American association with an anti-Estrada plot – but in the past couple of weeks, the consultancy did forecast that Arroyo’s presidency will strengthen ties with the US.

Estrada had played into his opponents’ hands by continuing his playboy lifestyle, gambling with cronies into the early hours, and failing to get to grips with the country’s failing economy – the fiscal deficit is growing and growth is down to between 2 and 3 per cent, at a time when most other regional economies are recovering from the late-1990s Asian financial crisis with growth rates of more than 5 per cent.

The allegations against him estimated sums of up to $60m in ill-gotten wealth. In addition to the gambling kickbacks, they included interfering with a securities scam investigation, insider dealing and diverting church charity funds.

Such stories were doing the rounds when Singson’s gambling kickback revelations were made public on 9 October. A month later, impeachment proceedings started against Estrada and, in late December, a banker claimed she had witnessed Estrada trying to open a $10m secret bank account under an assumed name.

By this time, Estrada’s fate was virtually sealed because the “people power” street protests were reaching a crescendo. They were organised by an unlikely alliance of businessmen, old soldiers, the left and other dissidents, led by the former presidents Fidel Ramos and Cory Aquino (with whom Arroyo has close links), plus Cardinal Jaime Sin, who wields extensive power in this devoutly Catholic country. Bomb blasts in Manila at the end of December added to the sense of crisis. The final crunch was the resignation of cabinet ministers and a decision by the army chief, Diomedio Villaneuva, to withdraw his support.

Arroyo’s instincts will be to push economic reforms, which will please the markets – stock prices rose by 30 per cent within a few days of her taking power. In her inauguration speech, however, Arroyo recognised that she would also need to tackle social and economic inequalities – but to do so, she will have to attack her own privileged oligarchy.

That is why many of the poor still think that they were better off with Estrada – his corruption did them no more damage than the elite’s manipulation of political and economic power has done for generations.

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