It seems “kuro-kuro” goes beyond our confines after foreigners jumped into the fray and gave their two cents about what ails PHL economy? It was like watching a Pacquiao match to read how we Pinoys reacted to a foreigner expressing concerns about a bubble. Still, when all is said and done, despite being the fastest growing economy in Asia, save China, Philippine poverty reduction remains elusive? Not surprisingly, while many of us vehemently disagreed that “our economic growth is a bubble in disguise” [7 reasons why PH economic growth is not a bubble in disguise, Philippine Daily Inquirer, 3rd Dec 2013], there is agreement that “POVERTY reduction in the Philippines has remained slow despite the country’s economic success in the past few years.” [Government: Poverty reduction slow, threatens MDGs, Business Mirror, 9th Dec 2013]
Bubble or no bubble, we remain a poor country? And why is that?
“Poverty is a complex problem that needs a comprehensive, multipronged, multisectoral solution involving many stakeholders. It is a daunting challenge, to say the least, but this is one we are determined to meet head on . . . [T]he country’s growth is not sufficient to reduce poverty . . . It’s a difficult problem but it is quite clear that the problem is inequality, that’s the problem.”
“Other economists agreed and said the slow progress made by the country in reducing poverty is rooted in the lack of decent jobs by millions . . . [T]he slow progress in reducing poverty would likely cause the Philippines to fall short of its commitment to halve poverty by 2015 . . . To improve poverty, job generation is key. To generate more jobs, investments are key. Also, public provisioning of goods and services have to be efficiently targeted . . . [T]he government must strive to increase available jobs [which] could usher in inclusive growth and reduce poverty in the country. Efforts to curb corruption and inefficiency must also be put in place . . .The NSCB said among the reasons the pace of progress in terms of reducing poverty has been slow is that there were seven major natural disasters that hit the country between 2009 and 2012, which cost the economy some P96.25 billion.” [ibid.]
“Where did the economy’s growth so far this year come from? Where have we done better, and where have we done worse? Is our economy’s growth still too dependent on consumption spending fueled by remittances from overseas? Or is investment becoming a more important source of demand to induce greater production? And finally, was the growth inclusive, that is, did it have wide participation and benefits among Filipinos, especially those with less in life?” [Cielito F. Habito, Latest economics ups and downs, Philippine Daily Inquirer, 9th Dec 2013]
“Has growth been inclusive? The fastest-growing sectors (translation: those where incomes are growing fastest), with growth rates exceeding 15 percent, have consistently been financial services (banks and insurance) and real estate, renting and business activities (which includes business process outsourcing). At the other extreme is agriculture, on which the bulk of our rural population, and on which the jobs of an estimated two-thirds of our workers depend directly or indirectly; here, outputs and incomes shrank. That should be clue enough.”
The litany of our challenges thus goes: how do we address inequality; how do we create millions of decent jobs; how do we curb corruption and inefficiency; how do we attract more investments; how do we make public provisioning of goods and services more efficient and targeted; how do we mitigate the impact of natural disasters; and should we focus on agriculture where the bulk of rural population is and on which two-thirds of our workers depend directly or indirectly?
But what is “the end in view”? Where do we want to be? It is not the input but the output or the outcome that will determine if we are where we should be? But first things first; our average income (or GDP per person) is a mere fraction compared to developed economies. And closer to home, benchmarking against Malaysia or Thailand should in fact explain why we remain poor? These neighbors opened their economies to foreign investments and technology and thus have, like wealthier Singapore, generated competitive products and services to dominate regional trade – and raised their average income several fold compared to PHL.
But we have very little appreciation, if it is not altogether nil, of the power of competitive products, including those derived from agribusiness? Yet what economists call the “multiplier effect of investment” could largely be traced to competitive products and the support industries they spawned – and thus forming the network of an ecosystem. In other words, because competitive products win in the marketplace, they nurture and sustain the broader economy.
For decades we were in denial, patting ourselves on the back given our inward-directed consumption economy that was in fact driven by OFW remittances and more recently augmented by BPOs. The reality: we were suffering from our own “Dutch disease” – i.e., we had our head stuck in the sand?
If “Pinoy abilidad” means taking our eye away from the ball – and indulging in “kuro-kuro" – indeed PHL poverty shall define who we are? And so while agriculture accounts for a big chunk of our population, for example, and where poverty is most pronounced, our real challenge is to focus on generating marketable – spelled competitive – products because producing commodity-type, basic produce does not give us competitive advantage. Every other country does that. And didn't we assume land reform was the be-all and end-all? And it also applies to manufacturing: to simply say we must revive manufacturing doesn't cut it! [And why a consistent theme of this blog is “thinking.” The educational system taught the world linear thinking yet the challenges we face in the real world demand critical-thinking skills, for example.]
But it gets worse given our track record? Didn't we set a very ambitious tourism goal because it was a natural, a no-brainier – that it would create millions of jobs – yet we could not get our ducks (i.e., infrastructure) in a row? Because we could not muster the political will . . . It's the interest of a few rich people against an entire nation, to paraphrase the slotting problem at NAIA? [And if we were a nation where the rule of law resides, that would be criminal? Or why JPMorgan had to cough out $13 billion?] And it extends to our inability to address the restrictive economic provisions of the Constitution; the neglect of basic infrastructure, including power; bypassing industrialization, etc. “Argue less, accomplish more . . . We have a glut of problems to tackle . . . Stop bickering and roll up your sleeves. Don't let the perfect be the enemy of the good . . .” [Pope Francis, The People's Pope, Time magazine, 11th Dec 2013]
There is a season for everything, to paraphrase a biblical passage; and the plight of Juan de la Cruz demands more than indulging in “kuro-kuro”?
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