RESPECTED personalities, both from business as well as the church, have fulminated against the EVAT, a devilish instrument that will eliminate the middle class and threaten the existence of the poor.
The EVAT-generated price increases will make life even more miserable for consumers while pushing many businesses, already faltering, to the brink, bringing on lay-offs and bankruptcies. It will be like the Asian economic crisis of 1997, whose effects are still felt.
Fulminations we have a lot of. It is the alternative programs that we are waiting for to solve the budget and current accounts deficits.
***
In the Sept. 26 issue of the
International Herald Tribune, William Pesek Jr., in an article with the head "Brazil offers a lesson for Manila," presents a solution: Fiscal discipline.
Writing from Sao Paulo, Pesek notes the disgraceful parallels between Brazil and the Philippines: Corruption, widespread poverty, big debts (Brazil is the biggest debtor among developing countries), and both presidents fighting for political life.
Fiscal austerity, Brazil’s saving grace, helps investors overlook political scandals. Pesek notes that Brazil’s President Luiz Ignacio Lula da Silva is "holding on to the country’s target for a budget surplus, excluding interest payments, equivalent to 4.5 percent of GDP this year and next."
***
There are frequent calls for belt-tightening, but nothing is done about things like the
R3.5-billion government phone bills (thanks to uncontrolled cellphone use), billions in unauthorized expenses in government offices, the oversized bureaucracy topped by an ever-expanding corps of undersecretaries and assistant secretaries. Up to the end of the Marcos dictatorship, the government payroll was no more than R25 billion per annum.
Public works projects continue to operate under a thick cloud of suspicion of overpricing, some say as much as 40 percent.
A tight hold on the purse strings in return for corruption? Sounds great.
