00:00:01 Intro jingle
Welcome to the People Power Politics Podcast, brought to you by CEDAR, the Center for Elections, Democracy, accountability and representation at the University of Birmingham.
00:00:14 Petra Alderman
Hi, my name is Petra Alderman, and I am a research fellow at CEDAR. It is my great pleasure to be your host for this episode. Our guest today is Professor John Sidel. John is Sir Patrick Gillam Chair in International and Comparative politics and Director of the Saw Swee Hock Southeast Asian Centre at the London School of Economics and Political Science. He is a specialist in Southeast Asia and has conducted extensive research in Indonesia and the Philippines on a range of topics, including local power, subnational authoritarianism, the political role of Islam, reform advocacy campaigns and coalitions. Welcome to the podcast, John.
00:00:50 John Sidel
Many thanks, Petra. Pleasure to be here.
00:00:52 Petra Alderman
John, I know that obviously we talked about all these many different and exciting research topics and things that you've been working on over the years, but I know that more recently you've started also working on the political economy of transport, telecommunications and infrastructure, particularly in the context of the Philippines. So what’s taken you into this research direction? What was the maybe originally impetus that got you really interested in these topics and themes?
00:01:19 John Sidel
Yeah, I mean there there may be and I could talk about this later, there may be routes back in the late 80s and early 90s when I was studying the Philippines looking at local politics in the country at that time. But really my interest in the politics and the political economy of transport and infrastructure and telecommunications began in around 2012, when I started doing work for the Asia Foundation. I started returning to the Philippines twice a year, except during the pandemic and every year I would, I would go to the Philippines. I'm still doing this twice a year.
00:01:53 John Sidel
And observe and involve myself as a kind of strategic advisor and analyst on this program in which they support a range of reform, advocacy campaigns and early on they were involved in supporting an effort to improve participatory elements, the transparency, the accountability but also really the participatory elements of provincial road planning. And so I, I spent some time in provinces where that was an ongoing activity and that was interesting, but I think it was more around 2016/2017 when I was asked to take a look at the transport reforms that they were beginning to get involved in in Greater Metro Manila that I really got excited and I should mention, cause you're a a Leeds graduate, that when I was in Manila and around 2016/2017, I met all of these young people who were part of this generation of transport experts.
00:02:52 John Sidel
Or, as they sometimes call themselves transport geeks and, you know, a really knowledgeable about all sorts of things like parking and bus rapid transit systems and things like that. And I was never as a kid, you know, very interested in transport. I didn't play with trains, anything like that, or planes. I never, you know, as a young man was interested in fast cars or anything like that.
00:03:16 John Sidel
So this it didn't resonate with me, but I could see that there was all this excitement and expertise among this cohort of young people who had a variety of ideas about how to improve the transport system when clearly transportation was a major issue, a major political issue that, you know arguably may have decided the 2016 presidential elections in some ways. And so, people I knew were involved in pushing for government investment in the Clark International Airport in Pampanga as a supplement to the existing NAIA airport and then these transport sort of geeks, transport reform advocacy experts and and campaigners, they had a an incredible agenda of, you know, they they knew what needed to be done. You needed a bus rapid transit system. You needed to transform road transport in particular, you needed to push forward on rail links within and beyond Metro Manila.
00:04:12 John Sidel
But also they were pushing for bike lanes and thanks to the the pandemic or due to the pandemic, this became possible given the conditions of the pandemic. So I was really drawn into this through activists whom I was studying and working with, you know, and analyzing what they're doing on a range of issues like motorcycle taxis, different kinds of bus schemes, and all sorts of things like that. And then similarly through the Asia Foundation, I came to know people who were similarly interested in promoting reforms in telecommunications, most notably by opening up the the market to and and deregulating telecommunications to allow Internet service provision through satellite technology. So it's really been the activism and the achievements of these reform advocacy campaigners that sparked my interest.
00:05:05 Petra Alderman
That sounds brilliant and before we delve a bit deeper into these questions and we start talking a bit more about the politics and how this how the reform actually can materialize and happen. I was wondering, could you maybe give us a bit of a flavour of how bad when we let’s say talk about the transportation issue, how bad it really is in the Philippines? You know, somebody who's done research in parts of Southeast Asia, particularly in Thailand, you know you have the kind of typical metropolitan issues in cities like Bangkok, where the traffic can get really insane. There could be like 3-hour long queues during rush hour, so completely gridlocked city. So is this a similar experience that you have from Manila and you know what's difference maybe between these metropolitan issues and you mentioned before that you went to the provinces, I mean the issues are slightly different between the two.
00:05:53 John Sidel
Yeah. So in terms of Metro Manila, like Bangkok and and other major metropolis in in Southeast Asia, for domestic reasons, but we could also talk about the broader, you know, global and geopolitical reasons, the transport systems have been automobile centric systems. And so with rapid sustained economic growth, let's say in the Philippines for more than a decade, you've seen GDP growth per annum of 6%. So that's meant a process of what transport experts call automotivization. So, with every passing year, there are three hundred, four hundred thousand new vehicles, new cars on the roads, and in the Philippines people have belatedly moved into motorcycle purchasing and and riding as well, more popular in in Bangkok previously.
00:06:40 John Sidel
But that just means that a transport system that's so heavily based on the automobile, it's just inefficient. It's unfair to people who can't afford the automobile, but because it crowds out other forms of transport. But it means these governments across Southeast Asia haven't really invested in mass transit systems in a public transportation infrastructure.
00:07:00 John Sidel
And so by default, private provision has prevailed and and the automobile has has been king. And that's only worsened with prosperity, with rising incomes and, of course, there’re schemes to purchase a car and then become, you know, if not an Uber driver, then a local equivalent of an Uber driver and become addicted to, you know, your car by spending all of your time paying off the mortgage, as it were on your automobile. So, so, that's the, that's the really the root of it as well as there being, you know, certain forms of oligopoly in the transport sector as there are in, in, in many contexts. But of course in the Philippines with it's very oligarchical form of democracy and heavily cartelized form of, you know domestic economic structure, whether it's inter-island shipping or buses in Manila or otherwise, that there is that kind of problem. And of course there there are forms of corruption in terms of franchising which don't help but, but I think that helps to explain the urban metropolitan you know gridlock that you experience, and which is very costly economically, socially, every which way. Environmentally, it's terrible, of course.
00:08:07 John Sidel
In the provinces, what I think is notable is in terms of infrastructure, which I haven't said much about yet, there's a long and familiar history as in some other countries, of politics being intertwined with construction, road construction and construction companies being owned by or otherwise linked to local politicians, something you'd be familiar with from Thailand, of course, you know, as as has been well studied and there's that dimension to it. There also has been a a pattern of, you know, sort of provincial bus companies, inter-island shipping as well. And provincial bus comes was something I was very interested in when I was looking at local politics in the in the late 80s and early 90s, it seemed like some of the politicians I was studying, they had bus companies. In one case it was a a bus company that was notorious for reckless driving, very fast driving and in fact killing people on the roads. And if they didn't kill them, they allegedly would, if they wounded them, they'd back up and make sure they finished the job so they wouldn't have to pay the the hospital bills for the the victims.
00:09:08 John Sidel
But interestingly, these sorts of very local in some cases just, you know, one town bus monopoly really over time, over the past few decades seemed to have been superseded by a process of kind of agglomeration and economies of scale. So, you have some massive bus companies that really dominate the Visayas and Mindanao. One in particular, that's just, in a sense, transcended the realm of local politics. So that's kind of interesting to me, and I haven't properly studied that, but I think it's, it's interesting. But, you know, in terms of construction, I... I remember I... I was in a a small town in, I think it was Bohol, an island province in the Visayas. And was, you know, investigating how the determination of where road upgrading projects should be allocated, and you know, lo and behold, big surprise, the Mayor's chicken farm, you know, gets the best road paved all the way up to his chicken farm. Who would have imagined that? So those sorts of things are are very much there, somewhat predictably.
00:10:08 Petra Alderman
And I think it's very fascinating. I'm glad that you sort of brought up the connection to local politics and also as as an electoral issues, these things actually do matter for people on the ground locally. And it was a a really bizarre experience, but during the past election in Thailand, we went to one of the sort of villages in the provinces, and there's been a long term kind of battle between one of the local politicians who was trying to win a seat in this constituency, and it was a party that dominated this constituency for many, many decades and he's been trying over time to actually, you know, win this seat. But the bizarre thing was that you could actually see this battle play out in the real world in a sense that before the village, a road, a normal road stopped and after that there was just nothing going in there, so you could see a real kind of tangible politics play out in a space and I find it extremely fascinating. And I wonder, I mean, you've already started outlining some of the key political issues that are there and you mentioned the the local bosses and the oligarchic structure, but what are the kind of key defining dynamics? I mean, do they have shared dynamics, all these different spaces or does each have something quite unique when you look at the telecommunications, the transport and maybe the construction?
00:11:26 John Sidel
Yeah, good. Very good question, but hard to answer. The clear commonality that you see from the local level on upwards at at at a very general level is the the possibility and the prevalence of one or another form of monopoly or oligopoly. It's arguably the case that in any political system there are natural tendencies towards monopoly or oligopoly in certain sectors of the economy, most you know, notably here, transport, but you know, we can see today across the world that you know, you think you have a a free market and it'll... it'll result in endlessly free competition. But look at Google, you know, as an example of how that... that it doesn't go out that way, or indeed you know who makes aircrafts. There are basically two companies. Shipbuilding is another thing. But in any event it's quite clear that in different spheres of transport infrastructure and telecommunications, there are, you know, small numbers of players. So for example if you look at the major toll roads coming out of Metro Manila and and expanding across Luzon, there are three or four major companies with some subcontracting and partnerships that dominate that, you know, likewise with the public utilities.
00:12:39 John Sidel
With telecommunications, there's been a duopoly for many years now, two companies that control telecommunications and have, you know, very little interest historically in expanding to areas of the country they don't think would be profitable for their networks and you know, happy to maintain a duopoly in ways that involve state capture. So, you know that there's there's the element of the market and of control of a market, a dominant share, but there's also, you know, a degree of penetration and control over the agencies of the state that are supposed to be regulating that sector that you would see on a local level with the mayor, who has, let's say, the mayor owns the one Cock Fighting Arena has has a dominant position in construction and in agricultural processing, or you know, whatever the Mayor's family, it is up to the local state agencies that might regulate those industries, those sectors, are going to be, you know, in the hands of allies and minions and flunkies of of the mayor, the mayor's family.
00:13:39 John Sidel
So the the regulation will be weak, and at the national level, you know, the National Telecommunications Commission, for example, is, you know, notoriously captured by the the telecommunications duopoly. You know, there are all sorts of stories about all the birthday parties and the buffet lunches and the cars in the parking lot and and so forth. And... and just more more simply, if you look at recent secretaries and undersecretaries and commissioners, who are they? Former lawyers for one of the two telecommunications companies or indeed the Executive secretary of former President Duterte was, you know, a former lawyer for one of the telecommunications companies. Things like that, that that are are really familiar from the local level as well.
00:14:21 John Sidel
So I think there's that kind of dimension and it and it also goes sort of up and down the food chain in different ways. So, to give you an example, if you want to look at buses in Metro Manila, you could say, well, it's kind of obscure exactly how this bus cartel operates, and people really don't know, and it partly it's the function of this government agency, the LTFRB, which is the land transport and franchising regulatory body, which doesn't do any regulating but offers franchises but in terms of who really owns these bus franchises and how they really operate, that's anyone's guess in terms of how it really operates. And they're even among the experts, very different accounts of this. So you know there there's a bus monopoly or not monopoly as a sort of has been a kind of cartel like set of arrangements or problematic in terms of restrictions on its competition.
00:15:14 John Sidel
The owners, they own these lines, but they then pass on the risk to their bus drivers in what's known as the the boundary system. They will get, you know, a sort of fixed fee and they they will, they will not pay wages to their bus drivers. They will then tell the bus drivers well, you you will only get to keep any money you earn on top of this amount. So it's as if they're renting out the bus to the bus driver and the bus driver then has to pay them a fixed amount and then the bus driver has to work hard to linger on the curbside to to get more and more customers. So that's that's another familiar element of passing on the risk downwards and the responsibility and how you treat your your labor force.
00:15:55 John Sidel
But if you look all the way down the food chain, like to give you an example, several years ago the government decided there should be major bus terminals, two major bus terminals for entry points into the city, and they forced all the buses to go to these bus terminals and leave their passengers, who then ideally would be available for intermodal transport to get on a a light transit line or to to get in a Jeep and so forth. But who owns these terminals? It's a big real estate play because there's lots of retail and their fees collected from, you know, the buses and the Jeeps coming into these terminals. And then if you don't want to bring your bus, these terminals cause, at least for starters, they weren't convenient. You wanna leave passengers somewhere else, you know you pay somebody off.
00:16:40 John Sidel
You pay a policeman, you pay a local official. And I remember I... I interviewed a guy who owned a something halfway between a Jeep and a bus, what's called a UV express route, and and he detailed like, 10 or 12 different people, he was paying off every day. And so that they're just so sort of from top to bottom. You have a layering of different kinds of what economists or political economists call, you know, rents that are being paid off, either extortion payments extracted by different regulatory bodies, the police and local authorities, and so forth, or the kinds of rents that those who have a monopoly enjoy above a market price because they're not really subject to market, subjected to market pressures.
00:17:21 John Sidel
So it's a whole sector where it's not quite a market that's operating and there's lots of politics and it's very complicated and intricate, kind of interesting in in a, in a kind of geeky kind of way.
00:17:33 Petra Alderman
No, but it really does sound very fascinating, and I think it's part of like trying to as you as you explain, the sort of the complex web of interlinking power relations that you try to somehow untangle to really figure out what is happening and why is it happening in in particular way. But I'd like to go back a little bit. We were talking about the national level and the local level and how you know at the local level and national level, you have these groups and ol... oligopolies, but you also mentioned that at the local level it started off maybe from more localized groups, but these have merged together into something bigger and I was wondering, I mean, is it something that's being driven from the bottom up? So let's say these individual groups or like local fiefdoms in the in in these areas of transport or infrastructure joining hands together or is that something that's coming from the outside? Or from the sort of higher levels like the national or international level, like where is the incentive coming?
00:18:32 John Sidel
I mean, I think there, there are a variety of different drivers of change in transport. One is the pressures of automotivization. The... the more cars on the road, the more pressure there is on the government to do something to offer alternatives. So belatedly, the government in a country that never had a serious, you know, sort of railroad network to get going on that within beyond Metro Manila and even a subway, so there's that, you know, in recognition of the gross inefficiencies, the all the costs that come with the the traffic gridlock, there's also, you know from the market there. There are new kinds of opportunity. You know, thanks to the miracle of the Internet you have, you know the equivalent of you know, Uber, Uber taxis and the sort of platform based, what are they called TMV's, these sorts of network-based operations, kind of like Uber, you know, Grab and so forth, Ankas and and it’s the new competitors.
00:19:27 John Sidel
So I think there's technology and opportunity that that then pushes the the boundaries. And you know government has been investing in rail and then you have you know for example these new major projects for new airports, the just real limitations and problems with the Ninoy Aquino International Airport, NAIA as it's known, have nudged different kinds of investors to explore other airport options so you have Clark International Airport in Pampanga. And again there's politics there because people in Pampanga like former President Gloria Macapagal Arroyo, who is a big supporter of Duterte in his election campaign in 2016, she's based in Pampanga and all people linked to her and in that province we're keen to have governments pump priming and, you know, pushing for use of that airport in in a variety of ways. There's been a big kind of long going debate about what to do with NAIA, the established airport.
00:20:25 John Sidel
There is a plan for an airport in Cavite, South of Metro Manila and that's still in the works, but it's not clear, you know, there's been interesting changes in involvement in that in terms of the investors, and then the San Miguel Corporation just on its own steam decided to buy a huge amount of land in the province of Bulacan, North but also West of Pampanga, North... North of Metro Manila and to just unilaterally decide on its own team, its own team to build an airport there and to get permission for all sorts of road links and so forth. And and that's one of the the sort of handful of major corporations that's heavily involved in major infrastructure projects. So they have the capital to do that.
00:21:00 John Sidel
So you know there's it's coming from the private sector seeing opportunity at different levels of the food chain and new technology that comes in. But it's also the government. It's one of the most important things that Southeast Asian governments have to manage. With prosperity comes transport issues and problems and how you manage those is in some ways a determinant of how the public perceives you and you know your electoral survival and success.
00:21:24 Petra Alderman
Exactly. And as you mentioned before, a lot of these things can play a major role in the decisions of the electorate, especially in those urban spaces, if you are commuting and you're stuck every day in like 3-hour long traffic jam, it's gonna be a big issue that you want your your government to address. So it is definitely really important. But then when we sort of map, these spaces are so extremely complex and dominated, maybe by extremely small number of really powerful groups, then where does this space for reform, or you know, for these enthusiastic and... and transport geeks, as you sort of mentioned at the beginnings as the motivation that brought you into this research, you know, is there really a space for them? How does a positive change happen in these spaces where you have so many powerful players that with you know, links to private sector, the government, you know, local power networks? How does this even happen?
00:22:16 John Sidel
In transport and maybe this is true for some other sectors, you know you can see that with economic growth and urbanization that by the the end of the twenty teens, these transport geeks are thick on the count these graduates of the Institute for Transport Studies at Leeds, there are dozens and dozens of them, because anyone who's engaged in any kind of private sector, you know, real estate development scheme and any... any city government across Metro Manila needs people who know what they're doing. And so, you know, you have these people thick on the ground and they knew before the pandemic what needed to be done, you know.
00:22:58 John Sidel
We really need bike lanes. Maybe more importantly, we need a bus rapid transit system and we need, you know, simultaneously the the rationalization of the bus system. And we simultaneously need the rail system to to be pushing forward. So they they know these things. But politically, as you say, like what is it that that gives them the chance to move forward? And I think there are different things. One is the conjuncture of the pandemic which you know in terms of bike lanes meant that well, it was a a safe way to get to work for doctors and nurses and other key workers or essential workers at the time. So in the short term that, you know, it was an obvious imperative and there was also just a a sort of bigger plan in terms of the, in rationalizing the buses given that traffic just stopped and there was like no traffic on the roads. So the possibility of doing something different emerged and the necessity of doing something different also emerged because you you needed to have sort of socially distanced public transport run by the government, subsidized by the government, and regularized in a way that would prevent public transport from becoming a a super spreader of the virus.
00:24:06 John Sidel
So there was timing, but I think more generally what you find in terms of these kinds of economic reforms that are are basically about, you know, deregulation and liberalization in some measure, but also that some measure of of government investment. I think you you do have the reality that all of these major business interests that are so concentrated and diversified as these conglomerates have interests across a range of sectors, they're heavily invested in economic growth. They're heavily invested in, you know, more Filipinos eating more ice cream, drinking more beer, you know, buying more cars, going to their shopping malls consuming more electricity and water and all the things that these oligopolists are selling to them at, you know, not quite market prices.
00:24:54 John Sidel
So they want prosperity, they want more consumers, they want more and more and more. And to that extent they can recognize that the Philippines needs to remain competitive as a site for a range of different kinds of economic activities and employment possibilities, they they're invested in the prosperity of their Filipinos and and the same to go back to your earlier interesting question about the, you know, local and national government, it used to be that you could imagine a, a, a sort of forested municipality where you don't care about the people, you just want to log the trees or let's say a sugar plantation zone, where you just wanna get the sugar out the sugar cane out, get it processed, and make your money and you don't care about the people who work for you, but what begins to happen if the major source of export revenue and livelihood and profit is BPOs, call centers, business processing, outsourcing, you know, sort of outlets, then you need to make sure that your locality doesn't just have roads, but the the roads that your construction companies built actually work, that the schools are producing graduates who speak good enough English that people want to hire them for these call centers and so forth.
00:26:05 John Sidel
And that otherwise that your town is a an attractive investment for, I don't know, residential subdivisions, for schools, for private investment. And so there is a kind of addiction that these companies have to growth and that's you know there is some trickle down in that regard. And so for example amidst the pandemic and its early aftermath of economic uncertainty and a downturn in investment, the Philippine Congress passed, and the president signed, a law which dramatically revised and reduced restrictions on foreign investment in key sectors, and it did so in a way that previously had been deemed to be impossible because the telecommunications duopoly the inter-island shipping cartel, the fill in the blank, all of these different local oligarchs, as some would call them, have been nervous about opening the floodgates to foreign investment that would then perhaps reduce their lock hold on market shares in one way or another through one or another form of of shift in... in... in these markets in these sectors.
00:27:06 Petra Alderman
I'm glad you mentioned that because that was going to be my next question because you already hinted at some kind of this geopolitical dimension to the issue previously and obviously you know China would be the obvious country to talk about in, in some sense because of the Belt and Road initiative, and it's been, you know, trying to invest into a lot of infrastructural projects within Southeast Asia with various levels of success.
00:27:29 Petra Alderman
But I'm kind of wondering, you know, what is currently the involvement of the China and maybe some other foreign actors and what kind of impact does that have on the established, maybe political structures? I mean you mentioned that that there was potentially some kind of lobbying against this opening up from these oligarchs or oligopolies within these systems, but is that influencing some of these power relations? Or is it just kind of feeding into or spotting nicely into these existing structures?
00:27:56 John Sidel
And that's a a great question and I think there's a lot that's really interesting that's happening at that level that isn't getting too much attention, and that merits, you know, closer investigation and, you know, analysis. And here it's worth, you know, providing a little bit of historical backdrop and noting that although the Philippines was an American colony and there was, you know, an early interest in investment in American cars, and a kind of American style orientation towards the automobile, it really from at least if not the 60s and the 70s onwards, the Philippines, like much of Southeast Asia has really been dominated by Japan in terms of its transport infrastructure system.
00:28:48 John Sidel
And you know, this was something that the United States self-consciously, deliberately encouraged. If you go back to George Cannon's strategic documents about, you know, fighting communism and spreading the American way across the Asia Pacific region, you know, there was the idea that Japan should be reconnected to its greater Green East Asian co-prosperity sphere with China closed after 1949. This meant Southeast Asia. And so you see these war reparation agreements from the 1950s reestablishing Japanese businesses in Southeast Asia. And in terms of transport, you know it evolved in the Philippines as elsewhere, that overwhelmingly the cars and the motorcycles that people buy year on year, hundreds of thousands of them every year are Japanese. And it's also the case, perhaps not, you know, not coincidentally, that the major kind of source of advice, consulting, oversight and financing for the transport systems of Southeast Asia and the Philippines, at least Japanese, JICA. So you know the whole transport system in Metro Manila and the the provinces around it, the so-called color bar zone that was schemed up in already in the late 80s, early 90s came from JICA.
00:30:00 John Sidel
So there's a there's a heavy Japanese footprint on the transport system and that extends to rail links. So when belatedly, it's acknowledged that, well, oh, we're two automobile centric where we are in effect buying too many Japanese cars, and you know too too heavily invested in that. Then you know, we should build some some rail links within the city within Metro Manila and beyond. Lo and behold, who is it that lends the money and does a lot of the building of these train links? And who actually supplies the the actual train carriages? But Japan, Japanese companies. So Japan, you know, is is is a major player and a major winner from the Philippines transport infrastructure system.
00:30:47 John Sidel
And I think this is true across so much of Southeast Asia. So I think that's an important backdrop. And here in the UK, I think it's just amazing to me how nobody in this country seems to be interested in Japan aware of Japan's significance. It's as if people in this country have some kind of deep-seated insecurity that in all the the uncomfortable similarities between Japan and the United Kingdom make them look away from anything about the significance of Japan and the world. Japan is important to, you know, keep in mind.
00:31:12 John Sidel
And As for China, if you look back in the the period of Gloria Macapagal Arroyo's presidency from 2001 to 2010, you can see two major efforts on the part of China, two major initiatives on the part of China or two major deals between the Philippine government and Chinese state owned and state linked companies that really portended potentially dramatic shift in this regard. One was a N rail project connecting Metro Manila to northern provinces and the other was the National Broadband Network with what's it called ZT E or ZTE, the one of the two, alongside Huawei, Major Chinese owned telecommunications companies that has close links to the state.
00:32:02 John Sidel
And in both cases, the corruption that was revealed in the awarding of these contracts and the, you know, the problems with their implementation and so forth led to their termination at great cost. The Philippine government in the case of the North Rail project. So in both cases, this sort of ended of brief flirtation experimentation with, you know, incorporation into this broader, if not Belt and Road initiative then a sort of expanding Chinese transport, telecommunications infrastructure network. And and so that kind of ground to a halt after Gloria Macapagal Arroyo's presidency, and she's then succeeded by Benigno Aquino junior, who's much more, you know, suspicious of China.
00:32:44 John Sidel
Perhaps there's a partisan political dimension to that as well, and and he famously, you know, is much more tough minded when it comes to the West Philippine Sea or the South China Sea dispute, but it but it it plays out, you know, in the sense that you know the review of contracts over the supply of certain train carriages and things like that. So that really nips in the bud a kind of movement towards Chinese involvement in, in, in the Philippines at scale. On the other hand, what does persist, and it it is worth noting, although I'm not sure given my limited technical expertise, how much one should genuinely be alarmed or impressed by this, but Huawei is still, you know, a dominant provider of the the kind of software for Philippine, the the telecoms, telecommunications duopoly. You know, if you actually look at what they're they're providing their actual infrastructure, they have the licenses, they have the franchise, they control this because they... you need to go to Congress to get a new franchise. They've got the duopoly. But in terms of what they're actually selling, how they're how their systems actually work, it's heavily reliant on Huawei.
00:33:53 John Sidel
Whatever that might mean. And so if you think of what happens under Duterte and then under now, under Marcos, I think under Duterte, despite the the reputation that he developed as, you know, a close ally of China or as someone trying to push for a shift from close relations with the US to closer relations on China. The record is much more mixed than that. So in in terms of transport infrastructure, whatever flirtations there were with China in terms of transport deals, infrastructure deals, the only things that have not even been signed but have been sort of put out there as as projects that are being studied rather than you know actually implemented are pretty unimportant in all likelihood unprofitable.
00:34:45 John Sidel
Whereas Japan has continued to be the dominant source of financing in in part through the Manila based Asian Development Bank, the ADB, which upped its lending to the Philippines dramatically under Duterte. So there's a lot of Japanese investment that persists and expands under Duterte in transport. The one thing that happened under Duterte that does open the door further to Chinese investment is in telecommunications, because Duterte came in and talked to a sort of tough game about the telecommunications duopoly and said, you know, enough having these two companies dominate, we need a third major player and when in 2018, late 2018, they opened up to a third major player, lo and behold, who who won the government's franchise to be the third major telecommunications provider but a joint venture between a businessman from Davao City, closely associated with... with Duterte, and China Telecom and the rumors were that Duterte had promised Li Keqiang, the Chinese Prime Minister at the time, that he would make this possible. So there is now more of a, you know, footprint, more of a presence of Chinese investment in different forms in telecommunications.
00:36:01 John Sidel
But then what interestingly happened over the past few years is much more, and what's ongoing now is actually of an opening towards the United States in telecommunication, and much more restrictive of further Chinese investment. So you see the passage of a new law that amends what used to be called the the Public Service Act, it’s still there, but it's it's an old act dating back from the 1930s, and that opens certain sectors to foreign investment far beyond what previously had been allowed, but built into that is a very interesting and important restriction, which is, you know, foreign companies can invest to this or that extent across these different sectors, but not if it's critical infrastructure and if these foreign companies are state owned or have, you know, close ties to the state.
00:36:53 John Sidel
So it, it's just, you know, red flashing lights, saying not, you know, these can't be Chinese companies. And so that opening to foreign investment in these key infrastructural strategic sectors has been in, in a sense sort of blocked off to Chinese companies. You know, you see this, for example, there was a the the project in Cavite for a new airport. There were initially Chinese investors with a consortium of of Major Filipino in some cases Filipino Chinese tycoons and that didn't get the permission. There was a, you know, South Korean shipping yard in Subic Bay that went bankrupt, a South Korean firm. And you know, Chinese shipbuilding firms. Ohh, we'll take that over. Nope, not allowed. So those sorts of things not happening, and then meanwhile, American companies are coming in. There was a an executive order that loosened up previous restrictions that that made it hard for, you know, a satellite-based Internet provision to move in because you need a franchise. And since that time, you've seen Elon Musk's Starlink come in.
00:37:52 John Sidel
And other companies. But Starlink is very closely aligned with the US government, with NASA in particular. So you know that and these undersea submarine cables linking the West Coast of the United States, the Philippines, in terms of the Internet, you know, really continue to hold the Philippines within an American dominated global information order, including the Internet.
00:38:14 Petra Alderman
This is absolutely fascinating now, and I wish we had more time to to talk more about these things, but I'm very happy that we've managed to at least sort of sketch out some of these complexities and some of these really important and interesting questions in relations to political power, not just national, but also local and international and how it plays out in the areas of telecommunications, infrastructure and transport. I mean, it's something that we are dealing with every day ourselves, but we rarely, as you said, think about it in such a great depth. So thank you, John. This has been absolutely fascinating talk and I hope we'll get an opportunity to do maybe another podcast in the future and see how your research evolves.
00:38:54 John Sidel
My pleasure.
00:38:55 Petra Alderman
Thank you, John, for joining the People, Power, Politics podcast and for talking to us about these fascinating macro and micro level political developments in the Philippines in the context of these three spaces, so the infrastructure, telecommunications and construction. I'm Petra Alderman research fellow at CEDAR and the host of this People, Power, Politics podcast episode. I have been talking today to Professor John Sidel, Sir Patrick Gillam Chair in International and Comparative Politics, and Director of the Saw Swee Hock Southeast Asian Centre at the London School of Economics and Political Science.
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