People's Domain

[Opinion] Modernization is inevitable

The Iloilo City Council has allowed the private sector, primarily the Megaworld to establish a transport hub and operate a premium Point-to-Point (P2P)bus transport services from its township in Mandurriao to the major airport terminals in Caticlan, Kalibo, Roxas, and the Iloilo International Airport in Cabatuan town.

As anticipated, taxi and jeepney transport groups expressed opposition on this new addition to transport services in spite being aware of government’s Public Utility Vehicle Modernization Program (PUVMP).

The Dept. of Transportation (DOTr) introduced the ambitious modernization program in 2017. I call it ambitious because based from my judgement, the national government was ill-prepared for the roll-out of the long-term program. It was made evident in the numerous road safety fora that I have attended wherein the program was presented by agency officials.

Among the major issue is the transition period for public transport groups considering a phase-out of old units and an introduction of mid-size buses that are Euro 4 fuel compliant. But a more important factor in the transition is the issue of readiness in general of the public transport sector to connect to the program and adopt the change.

Ten years ago, the concept of modernization has emerged among the discussions related on the urbanization of Iloilo City in the next 5 years or from 2010 to 2015. Leaders of transport and labor groups were among selected participants in a focus group discussion facilitated by one of the university from Manila.

Having recognized modernization as inevitable, I raised some issues on the preparedness of the public transport sector to comply with the prerequisites as a step which will allow them to seize the opportunity at the first instance that government will offer a modernization package.

I shared with the local transport groups that these ideas is something that they must not take lightly. Focus group discussions is part of a structured research process which will conclude with an analysis and recommendations. Hence, they need to discuss it with the grassroots associations in order for them to develop a long term programmatic approach and prepare for engagement with government and other sectors.

Initially, the requirements is for transport groups to consolidate membership and collectivized and register as a cooperative. It was also required of them that they assess the financial resources from which they hold in order to address the needed capital requirement. These requirements demanded unity among the ranks for the next phase necessitates a strong organizational and financial backing.

Fast forward to 2017, DOTr introduced the program and implemented its initial phase both with private and public sector participation. The commuters realized that the modernization of public transport is possible and that it is beneficial for them. It served its purpose of providing comfort and convenience in spite of cost that comes with it.

Obviously, groups who were not ready for modernization felt the pressure of competition and they panicked. On the other hand, groups who were prepared and became a cooperative are now enjoying public support. The competition will for sure intensify as the next phases of the modernization program will be operationalized.

Modernization is like a race and there will be winners and losers. Winners will now enjoy the opportunity and gather its benefits while losers will continue to raise opposition and resist the effort with the end view that the preservation of the status quo will ensure their survival.

I take an opposite view from those who are opposed to modernization using the perspective of creative destruction and by means of a more realistic view that modernization of transport services have never reached the blueprint of public transport groups. Through the years, the attitude of transport groups were more like a beneficiary from progress rather than proactive players for progress.

What went wrong with the groups who are opposed to transport modernization?

First, most of the groups do not possess a collective mindset to modernize. Like an old dilapidated jeepney running on the road, their leaders lack the ability to rally their members and unite them behind the idea. Hence, they failed to organize their associations into one solid cooperative.

Organizing the transport association or federation into a cooperative is a requirement for modernization for it establishes legitimacy, a vital element which will allow them to access financing or grants, either from government banks or other funding agencies, who are supportive of the modernization program.

A cooperative establishes the needed regulatory and accountability mechanism which is vital in monitoring the management and financial soundness of the organization who is operating transport services as an enterprise. The cooperative economy is not a new model. It has been adopted and proven functional in the public transport sector in various countries in Europe, Japan, Vietnam, and Thailand.

Transportation is a facility that stimulate the day-to-day economic activity by bringing people and goods from one place to the other. To become a cooperative provides a logical direction for the public transport sector, because, whether we like it or not, they play a critical role in the economy.

If there are groups who are now formed as a transport cooperative, what prevented others from becoming one?

Another point why transport groups expressed opposition to modernization is the factor of financial capital. They argue that capital is inadequate and that they do not have the ability to raise the needed requirement imposed by the government in order to modernize services.

This is the second point – deficient financial base for capital. I don’t believe much on this reason. The lack of the mindset by the public transport groups to modernize resulted also on the low prioritization of resources to improve the quality of services. It is safe to say that they lack prioritization, because they hold financial resources almost on a daily basis.

If this is considered a weakness, then collectivizing will boost their legitimacy, integrity and marketability for financing support.

The individual members of transport groups may be considered as a poor in our society, but as an organization, and as a sector of our society in general, transport federations is not a marginalized organization. They operate enterprises like carinderia, kapehan, jeepney repairs, selling of jeepney parts, document facilitation for franchise applications, renewal of annual registration, and even informal micro-finance lending for its members.

Their enterprise ventures may appear informal, but nevertheless it is an (economic) activity that provide them the financial flexibility to spend for the activities or augment budget deficits of the organization.

They may not be filthy rich or affluent, but they are not poor in a sense that they have a collective control on money (economic power). Their economic power is translated into an influence (political power) on our leaders and the sectors that also thrive because of their economic activity.

Probably it will be helpful for the group to prioritize resources for investment geared towards improvement of services instead of unloading all of their income on a year-end event with a lavish Christmas Party. Why can’t they channel their resources on efforts that will strengthen their organization and modernize? Why can’t they strategize on how to grab the opportunity offered by modernization as a way out of poverty among individual members?

Third point, poor attitude and neglect for self-regulation. Transport groups cries foul when government enforces new policies which aims to improve regulation on their operations. But they do not exercise self-regulation among their ranks to ensure that they do not cause inconvenience or abuse the privilege extended on them by the government in the form of franchise and certificate of public convenience.

Take for instance the case of taxi services at the Iloilo International Airport under the Association of Taxi Operators in Panay (ATOP). Taxi drivers has regularly violate the use of automated meters and they instead impose overcharged tariffs by making an excuse that they are plying outside the route and that airport authorities are charging them with an extra fee upon entry at the airport.

On the other hand, your head will spin if you start to enumerate the issues regarding jeepney operations in the city under the supervision of various transport groups. Assessing the attitude of their members on the road will make you realize that government’s modernization program also requires values reconstruction, re-regulation of policies, and retooling of jeepney operators and drivers so that the public can benefit from modernization of transport services.

There is nobody to blame regarding the lack of readiness by some of the transport groups to modernize but themselves, if not their leaders.

Transport groups have to be mindful that the wave of modernization brings creative destruction. Modernization is not only shaped by the introduction of new technology; it is coupled by ideas that encourage new ways of managing it. Hence, modernization will unfold no matter the resistance.

Inventions of new technology, innovations, financial capital and human resource are among factors that drive modernization. The multi-component nature of modernization makes it realizable in the long run considering that its application is not highly dependent on a single sector.

Authors Daron Acemoglu and James A. Robinsons in the book: Why Nations Fail has expounded on the concept called creative destructionfrom economist Joseph Schumpeter.

Schumpeter said that “economic growth and technological change are accompanied by creative destruction, a process which the old is replaced by the new. New sectors attract resources away from the old ones. New firms take business away from established ones. New technologies make existing skills and machines obsolete.”

“The process of economic growth and the inclusive institutions upon which it is based,” added Schumpeter, “create losers as well as winners in the political arena and in the economic marketplace.”

“Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions,” Schumpeter emphasized.

“Growth thus moves forward,” according to Acemoglu and Robinsons, “only if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded.”

If your transport group finds delight on the old by resisting the new, then the commuters do not deserve losers whose aim is to preserve their economic privileges at the expense of public interest and convenience.

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