Difficult to see a winner in the Philippine elections

Benigno Aquino is leading in the count for the nation's presidency, but the job he has ahead of him if he is voted in will make it hard to celebrate his victory.

MANILA // The tragedy of the Philippines is that the country has probably elected the best candidate to be president. The government is saddled with a record deficit plugged only by the wages of the estimated 1 million Filipinos who go abroad to seek work every year, joining the millions who have already left.

A quarter of the nation's up to 100 million people go hungry at least one day every three months as officials steal millions of dollars meant for roads and irrigation. So the country voted for a man whose only qualification for the job is that his mother ousted Ferdinand Marcos two decades ago. Benigno "Noynoy'' Aquino, the son of Corazon Aquino, was yesterday cruising for a landslide in the May 10 elections with almost 80 per cent of precincts counted.

But Mr Aquino's victory may have more to do with what he is not. He is not the second-placed candidate Joseph Estrada, 73, the former president who was jailed for life for "plunder" in 2007, only to be pardoned by the departing president Gloria Arroyo. He is not Mrs Arroyo, who has faced down attempts to impeach her for alleged graft and voting fraud in her 2004 re-election. Nor is he Manual Villar, the property tycoon accused of using his influence as the leader of the Senate to divert a highway through his developments, and who is running third in the current elections.

It was not supposed to be like this. When Mr Aquino was born in 1960, the Philippines was among the richest countries in Asia. Only Japan, China and India had bigger economies, according to data from the World Bank. Hong Kong Chinese would work as maids, raising Filipino children. By 1966, a year after Mr Marcos was first elected, the Asian Development Bank set up in Manila. But then the Philippines began its long decline, slipping behind Singapore, then Malaysia and Thailand, and most recently Indonesia in terms of average wealth adjusted for living costs.

The plunder of the Marcos years certainly played its part but there are other factors Mr Aquino needs to address to reverse the rot. First, there's population. Fifty years ago the Philippines had 28 million people; Thailand about the same. Today, the Philippines has 30 million more mouths to feed than Thailand. The nation's population explosion is a double-edged sword for any government: a source of strength when the economy creates jobs; a time bomb when it fails.

The Philippines' GDP growth stacks up well against Thailand's but fails to account for the burden of a faster growing population. Official figures on unemployment also mask a deeper problem. The headline number of 7.3 per cent fails to capture "hidden unemployment". Only about 60 per cent of the working population is actually employed, with a large number of those engaged in menial jobs. Decades of corruption have meant the country has eroded its capital, with insufficient spending on power stations, roads and ports needed to compete for foreign investment.

The Philippines draws in less than a quarter of the foreign direct investment that goes to Indonesia, Thailand or Malaysia. That is in spite of its much-vaunted English-speaking population, large domestic market and untapped mineral resources. Under-investment has also crippled agriculture, turning an occasional exporter of rice in the Marcos years into the world's biggest importer. And that's in spite of being home to the International Rice Research Institute.

More than 60 per cent of the population depends on farming for its livelihood, making agriculture an urgent priority for fixing. Farmers must carry their rice long distances to find buyers, with as much as 15 per cent of the crop lost between farm and consumer. Funds budgeted to fix irrigation and improve storage, milling and transport have vanished. Faced with these challenges, and with no money in the kitty, what hope of change can we expect from Mr Aquino, or any of the country's political elite?

Foreign investors tend to roll their eyes when asked why they keep faith with the country, arguing that as nothing ever changes, it's business as usual. The problem with long-term decline is that, as Niall Ferguson recently wrote in the journal Foreign Affairs, collapses, when they come, come rapidly and usually from some unseen source. [e-mail]