Philippines: Snatching defeat from the jaws of victory
Threats to the Arroyo regime in the Philippines raise worries about the quality of likely successors.
It was all starting to look too good to be true for the Philippines. With a controversial yet vital increase in value-added tax all but approved, the senate's corruption-tainted pork barrel reduced by half and a highly successful start to the 2005 government debt funding campaign, people began to whisper the hitherto unspeakable. Asia's perennial underachiever, it seemed, might just manage to climb out of the financial hole that it has dug for itself.
The markets rewarded the efforts of president Gloria Macapagal Arroyo and her administration. Spreads on government debt tightened, the peso rose strongly and the stock market soared to levels not seen since before the Asian financial crisis.
However, the Philippines has long flattered to deceive and all of the hard-won progress since Arroyo's election in 2004 has turned out to be too good to be true. Arroyo is mired in a political crisis involving electoral fraud and alleged corruption that might yet claim her own political career. Already it has involved 10 members of her administration resigning in protest, and Arroyo is rapidly losing the credibility of Filipinosand the patience of the international financial community.
The most depressing prospect is that there is no-one eligible to replace Arroyo that has any greater credibility or talent: the political system that encourages dynastic family squabbling and crony politics makes certain of that.