Zoom out, then zoom in – for perspective

How do we overcome Juan de la Cruz’ “sabog” instincts?

Boo Chanco writes that child malnutrition is perhaps the most crucial crisis we must do something about quickly. Consider these articles: (1) World Bank: Philippines has one of the “widest” wealth gaps in East Asia; WB website; (2) FAQs about the Pantawid Pamilyang Pilipino Program (4Ps). The program aims to break the cycle of poverty by keeping children aged 0-18 healthy and in school so that they can have a better future; World Bank; (3) Proposed Loan; Republic of the Philippines: Expanded Social Assistance Project; ADB website; (4) Problems with 4Ps. The Pantawid Pamilyang Pilipino Program, or 4Ps, is meant to help families deal with extreme poverty, but abused by millions of families or individuals; (5) What if P44-B smuggling loot spent for our children; (6) “Bansot.”

In other words, the above articles confirm what is common knowledge. And it becomes more tangible when we see how much our neighbors have left us in the dust.

For example, our neighbors dwarf our income (2021) per person: (a) Thailand = 211%; (b) Vietnam = 131%; (c) Malaysia = 325%.

Says the World Bank, “The conditional cash transfer (CCT) program locally known as Pantawid Pamilya Pilipino Program, or 4Ps, is a government program that provides conditional cash grants to the poorest of the poor in the Philippines. The program aims to break the cycle of poverty by keeping children aged 0-18 healthy and in school to have a better future.

“The program is implemented by the Department of Social Welfare and Development, with the Department of Health, the Department of Education, and the National Economic and Development Authority as partners.

“Households receive cash grants if children stay in school, get regular health check-ups, monitor their growth, and receive vaccines. Pregnant women must get pre-natal care, with their births attended to by professional health workers. Parents or guardians must participate in monthly community-based Family Development Sessions to learn about positive child discipline, disaster preparedness, and women’s rights.

While ADB has this to say: “The National Economic and Development Authority (NEDA) attributed the increase in the income of the poorest 30% to, among other things, the implementation and expansion of the government’s social assistance programs, especially the 4Ps.

“The annual budget for the 4Ps grew from $422.31 million in 2011 to $1.77 billion in 2019. The target beneficiary households increased from 2.30 million to 4.25 million.

“Despite the steady economic performance between 2012–2019, levels of poverty and inequality in the Philippines remain high. Approximately 14.2 million people live just above the line and are vulnerable to falling into poverty. Employment shocks can cause vulnerability (e.g., seasonality of employment, job loss, and decline in wages); health shocks (e.g., serious illness, death of a breadwinner, catastrophic health expenses, and unwanted pregnancies); price shocks (e.g., food price spikes); and natural hazards that result in the loss of life, assets, and livelihoods.

“The consumption-based Gini coefficient is higher in the Philippines (0.40 in 2015) than in Thailand (0.38 in 2013) and Viet Nam (0.35 in 2014). The COVID-19 pandemic is worsening these different types of shocks and the underlying levels of inequality further. An estimated 5.5 million Filipinos will fall into poverty, increasing from 16.6% in 2018 to 20.7% in 2020.”

The bottom line: Juan de la Cruz makes a mere portion of his counterpart in Thailand and Vietnam, for example, and unsurprisingly, quickly succumbs to employment, health, and price shocks.

Not even the much-touted 4Ps can address the hunger, malnutrition, and poverty of Juan de la Cruz. What if we spend the P44-B smuggling loot for children per the above article, that’s less than half the P100-B we spent in 2021 or $2-B.

Should we then come down to earth and say it in the vernacular? Our focus on poverty to the tune of $2-B is “panakip butas”? [See above; East Asia’s “widest” wealth gaps.] Wasn’t the OFW phenomenon supposed to be a stop-gap? And so was the “call center” industry that we were to move up the value chain?

Aren’t the World Bank and ADB being tactful; what they want to say is that the challenge of Juan de la Cruz is way over our heads.

Let’s hold it right there.

Freedom, democracy, and the free market can’t flourish in a caste system. Neither can they in an autocratic, socialistic system – and that is why the blog often relates the story of my Eastern European friends.

“You must commit to transparency – or I am out the door.” It was to drive home the point that freedom, democracy, and free enterprise are not about rules but principles.

Of course, to be principled is not a walk in the park. There is no free lunch. And that was the message.

Zoom in, then zoom out – for perspective.

How do we overcome Juan de la Cruz’ “sabog” instincts?

Recall Yoda, that “focus” isn’t one-dimensional, but three: “inner,” “other,” and “outer.”

Disclosure: I shared the following note with several people.

Recall the distinctions between “drivers” and “enablers.” 

“Logistics” are enablers. The drivers are the priority farm products that lend themselves to economies of scale. That there is a big market that we can penetrate and generate enormous revenues and healthy margins especially given scale, productivity, competitiveness, and profitability.

Our think tanks must figure out which farm products we must prioritize. Not every farm product is a priority.

And our tycoons can bug the think tanks to do just that if they have no expertise. And Axelum is a great benchmark.

It is suitable for our tycoons to “spot” opportunities like logistics, but they have enough resources to “create” opportunities.

For example, Ramon Ang must push the TMCC initiative, and if that is not playing out, he must look at other industries that will accelerate the drive to raise exports to $200 billion.

And he can push the think tanks to redesign TRAIN and CREATE and attract the right technology and investors. 

Or, again, he can push his people to do that precisely. The Pearl River Delta Economic Zone and the Samsung-Vietnam partnership are great replicable models.

The big picture is industrialization. To flesh it up, we need $200 billion in exports. TMCC plus whatever and Axelum plus whatever are good starting points and platforms.

Zoom out, then zoom in – for perspective.

We are in on a sprint in our race to the bottom.

We nurture and perpetuate “privilege and entitlement.” Our caste system and instincts make us value the “trivial many” instead of the “vital few.” And that brings us farther away from and, of course, in our journey from poverty to prosperity. Our economists must know better. Pareto is the earliest known econometric model.

In other words, we know that tinkering with the Constitution is perilous. Have we asked ourselves what it takes to model TRAIN and CREATE, our latest investment incentive scheme, after the Pearl River Delta Economic Zone or the Samsung-Vietnam partnership?

If we see the Constitution as sacred, how could that apply to the work of BOI and our economic managers, as in TRAIN and CREATE?

The BOI came about in 1967, almost half a century ago, yet we have the least FDI among the neighbors. Einstein called that insanity, i.e., we’re spending $2-B in the war on poverty when it won’t cover our income per capita shortfall.

It is beyond bringing out the best in Juan de la Cruz, and it’s called national pride.

Zoom in, then zoom out.

We want to industrialize. That’s what it means to traverse the journey from poverty to prosperity that our neighbors did. And if that is the focus, we can fine-tune it by establishing an export target of $200 billion. And we have the BOI and think tanks and tycoons to determine how to get us to the number rapidly.

Eminent economist Ciel Habito has raised our challenge regarding the shortfall in exports.

Forget about “What’s in it for me/us?” Let’s learn about the imperative of personal responsibility in pursuing the common good.

We need to traverse the journey from poverty to prosperity rapidly. It is not mysterious. Our neighbors did it one after the other.

Zoom in, then zoom out.

Gising bayan!