poverty and elections

… This is what has been largely missing in the campaign for the 2013 elections—a serious debate on desirable strategies for achieving national prosperity.

We have been treated to endless mantras about free public education, stable jobs, lower prices, lower taxes, etc.

I have yet to hear anyone talk about the need for frugality and sharing—in the light of our limited resources and the scandalous disparities in wealth and income that divide our people.

Everyone seems to accept the primacy of economic growth as a national goal, with little regard for the environmental consequences.

Everyone seems to concede that the ultimate goal of every Filipino is to earn as much money as possible to be able to satisfy desires that the market itself incessantly creates.

We talk of the need to radically change our way of life. Elections should be the occasion for discussing what exactly needs changing, why, and how we can all take part in the effort.

~ Randy David


    • jojie

      fsjose says: “P-Noy belongs to the oligarchy which, with its barnacled, feudal attitudes, is the greatest obstacle to this nation’s progress.” I agree, but as he suggest that Pinoy like his father, Ninoy, will take steps to dismantle the hold of the oligarch, this bold action necessarily becomes a communist inspired aspiration and a target of military harashment as well as raising the alarming red flag of Anti-western colonialism and anti-feudalism. An advocacy which the powerful power elite and clergy are allergic to. Like all the previous presidents, he cannot be a traitor to his privilege class. therefore, a wishful thinking only the armchair romanticist of class war will fall in love with.

  1. “A tough nut to crack” by Ernesto Pernia http://www.bworldonline.com/content.php?section=Opinion&title=A-tough-nut-to-crack&id=69716

    … We need to delve into the underlying causes of poverty besides its more proximate reasons. “Development progeria” is a plausible theory advanced by economists, foremost of whom is National Scientist and UP School of Economics professor Raul V. Fabella. Progeria syndrome is a rare genetic disease characterized by early aging or abnormal development.

    The metaphor applies to the Philippine economy’s defying the normal progression, exemplified by the mature economies, from agriculture to manufacturing and then to services. Our country instead pole-vaulted from an underdeveloped agriculture to the service sector, largely skipping the manufacturing phase. A fatal policy-induced mistake as agriculture and manufacturing are the key sectors for generating jobs and domestic goods besides exports. Of course, it did not help that our politically turbulent 1980s deterred FDIs — from Japan in particular — while our neighbors were going to town riding on the investment and export waves.

    Compounding the error — strangely unsaid in various explanations of poverty — was the early death in the late 1970s of the government’s family planning (FP) program in deference to the wishes of the Catholic hierarchy. A program that ironically was off to a promising start and was in fact a model emulated by other Asian countries.

    Enviably, our neighbors — Thailand, Malaysia, and Indonesia — largely avoided both major errors.

    Thus, what we have are a lethargic agriculture, anemic manufacturing, and a bloated service sector prematurely accounting for roughly half of GDP. Worse still, the dominant service sector is made up of either the financial services and BPOs that require tertiary school graduates or the unstable and low-productivity informal sector, the refuge of the poor and the less schooled.

    Meanwhile, overseas labor migration continues unabated resulting in brisk remittances that fuel robust consumption spending, much of it on imported goods, although admittedly some funds also go to children’s schooling. Our research reveals that remittances directly benefit the richer households more than the poorer ones, with the income effect rising monotonically from under 20% for the bottom quintile to 35% for the top quintile. Which suggests that remittances exacerbate inequality more than alleviating absolute poverty.

    No wonder why our income inequality (Gini coefficient of 0.45; 0 = perfect equality to 1 = perfect inequality) is the highest in ASEAN, as just recently reported by ADB (Development Asia, April 2013).

    Our study finds that the higher the inequality the more muted is the effect of economic growth in terms of poverty reduction. For instance, the growth elasticity of poverty is just above 0.5 for the Philippines compared with 0.7 for Indonesia, and closer to 1.0 for Vietnam. These imply that, say, a 10% increase in overall per capita GDP raises the per capita income or expenditure of the poorest by just over 5.0% in the Philippines, 7.0% in Indonesia, and close to 10% in Vietnam. This partly explains why our relatively high GDP growth rates in some years have hardly dented poverty. Moreover, other studies show that high inequality, to begin with, tempers economic growth itself. In short, inequality is bad for both economic growth and poverty reduction.

    Another reason why our poverty incidence remains high is the fact that population growth rate of the poor is much faster than the overall average. To illustrate, the poorest 20% are growing at roughly 1.6 times the national norm and 2.7% the richest quintile. Strangely again, officials and politicians seem mum about this obvious factor, as though it’s mortal sin!

    Clearly, after defenestrating the FP program in the late 1970s, the inordinate delay of the RH law (further “SQAed” ill-advisedly by the Supreme Court) has been a foolish mistake for a country that’s long been bewitched, bothered – and internationally embarrassed – by its chronic poverty. Politicians’ stance on the RH law should be a major election issue.

    In sum, what matters to poverty reduction is not so much the rate (quantity) of economic growth as the quality of such growth as defined by the sources of growth – agriculture and manufacturing vis-á-vis services, as well as investment vis-á-vis consumption — which are key to creating employment. In addition, an integral complement is population management with RH services that capacitate the poor to have the number and spacing of children they want and can provide for. These services are also a logical and necessary complement to and reinforcement of the CCT program.

    A credit rating upgrade is welcome news, indeed, but it merely reflects the health of the country’s financial sector — understandably the core interest of international rating agencies — not the real economy itself. To deal with our employment, inequality and poverty problems, we need to reform the pillars of the real economy. One hopes that increased capital flows will be directed to remedying infrastructure and industrial deficiencies precisely to strengthen the real economic fundamentals.

  2. jojie

    The concluding paragraph is correct. Only the rich will benefit to this credit upgrade. Given the inequitable economic structure and social class of our our national economy, it is only the financial services sector controlled by private elite that will be benefited and not the basic agriculture and manufacturing growth so vital to real economic development that may be funded from increased foreign capital investment flows generated by a good credit upgrade.

  3. ricelander

    Good thing about this administration is we finally put to test the popular notion that our poverty is due to corruption, corruption, corruption and nothing much else. Finally we are talking about investment, capital formation, how jobs are created and so on. Finally we are taking a closer look at the oligarchy, which own most of the blame, but has so far been successful in diverting attention by stoking people’s rage at every issue of corruption.