‘The widow’s offering’

‘The problem with solving the [economy] is it involves painful choices. And people reward politicians who say they are worried about [it] much more than politicians willing to [take specific actions]. All of us would prefer what [suits us].’ That’s the gist of an editorial about the US economy.

And some Bible reading Americans reacted with a quote: “Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents. Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.” And wealthy Americans responded: ‘For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you [Pres Obama] allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled . . . ‘

We’re not the US, with a GDP per capita of $46,000 (or $14.26 trillion GDP), against our $3,300 (or $161 billion GDP). But they have a deficit of $1.345 trillion that is unsustainable and must be cut ‘from the 2030 budget . . . when the boomers start to weigh heavily on the budget’.

We also have a deficit issue: given revenues of $23.56 billion against expenditures of $29.82 billion (2009). But we’re a developing nation (while the US is fully developed with more limited options) and thus have plenty of room to grow, but require tons of investment. And which is what developing Vietnam is doing with gross investments of 42.5% of GDP against our 14.3%, or why Thailand is growing faster than we are with investments at 24.4% of GDP.

Government and industry are the drivers of investments, and both are able to tap foreign sources. And that is where our problem starts? By design (or by law) and by actuations (including oligarchy and insidious corruption?) we have driven them away and starved foreign sourcing? Hopefully President Aguino turns this around? And beyond that his other big challenge is to overcome bureaucracy – which in the case of the US translates to wrongheadedness and incompetence? What about us? We can’t start with less than a positive, confident outlook – and Pacquiao is our model – given our meager GDP and massive poverty? The writer talks about his Eastern European friends: they tossed the past and want to make their own destiny – and their model is a Fortune 500 – and the writer’s role is to show them how that cloth is woven.

What about our biggest investors – San Miguel, PLDT, Ayala, and Meralco, among others? What state-of-the-art or contemporary products and services have they developed and are global leaders? Investments are meant to generate products and services that drive a country’s revenues or GDP. And in a globalized economy – and at the higher-end of the value chain – that means from the global market? With the exception of Ayala these major enterprises have had different owners owing principally to the oligarchic nature of our economy and culture? Thus we won’t have an Apple that can be the biggest technology company and soon even bigger than industrial behemoth Mobil Exxon? Translation: we value deference to hierarchy instead of nurturing creativity and dynamism? And PLDT, San Miguel and Meralco, among others, represent our respect for hierarchy, i.e., conglomerates if not monopolies? It’s too bad so sad – because respect was meant for elders, not the way we are living it? Or where is the coherence?

Who will give until it hurts? Who will reform and restructure our feeble economic model? The ADB is not omnipotent but is articulating something fundamental: that investment in technology and manufacturing generates far greater multiplier effect – and that BPOs and OFWs don’t make for a 21^st century economic model? And that holds if indeed we want to address poverty – not to preserve the status quo or our hierarchical culture?