Sunday, December 28, 2014

On Economy and Politics: Let's make things right to win the future

By:  Rafael Alunan III
Reposted from his FB notes dated Dec. 28, 2014

Our macroeconomy ended on a high note.  Business growth was sustained despite the effects of man-made and natural disasters in 2013.  According to the Oxford Business Group in its December 26, 2014 on-line report:

Economic growth surpassed government targets well before the end of 2014.  It was driven by strong foreign direct investment (FDI), overseas remittances and expansion in real estate, business process outsourcing (BPO) and mining sectors. The World Bank estimates GDP growth of 6.4% in 2014 and 6.7% in 2015, vis-a-vis 7.25% in 2013, due to weak government consumption and a decline in infrastructure spending. The IMF and investment analysts see growth around or below the 6% mark in 2015.”

But here’s the rub. In its 2011 report entitled “Family Income Distribution in the Philippines from 1985 to 2009″ the Social Weather Stations (SWS) cited that high income AB classes account for only 1% of total population, which, according to the CIA Fact Book estimates to be 1.077-million as of July 2014.  That 1% translates to around 1.08-million privileged Filipinos.  9% of total population, or the middle class, belong to Class C, or approximately 9.7-million people.

 Six (6) out of every 10 Filipinos, or 60% of total population, or approximately 64.6-million Filipinos belong to Class D, or the“masa”. The poorest segment, Class E, also comprises a big chunk - around 30% of Filipinos – undoubtedly confirming that poverty remains prevalent in the Philippines.  The numbers indicate that a wide gap continues to divide the rich and the poor, and that trickle down economics is exactly that, which never reduced poverty.

90% of the population live just above, along and below the poverty line. They’re perennially short of cash to make both ends meet, or for savings and investments. Quality of life falls short of the mark – in housing, health and education; job security, food, water and electricity services; or combinations thereof.  Limited opportunities handicap them for employment or entrepreneurship, hence the diaspora. Inclusivity is the simplest answer but this has not gained traction.

There’s more data that the Philippines has remained an oligarchy. Carmen Pedrosa’s column in a national daily cites the following sources:
  • De La Salle University Dean Julio Teehankee reports that 178 family dynasties rule 73 of the 80 provinces.
  • Bobby Tuazon, Policy Studies Director of the Center for People Empowerment in Governance, reports that 21 of 24 seats in the Senate fall under the control of political families; while in the House of Representatives, 80% of 229 seats are dominated by dynasties.
  • A 2014 study by Ronald Mendoza, AIM Policy Center Director, shows 75% of members of Congress and 80% of governors and mayors belong to political dynasties.
  • Forbes magazine lists the 40 richest billionaires in the Philippines as having combined assets of $34 billion.
  • A 2012 study by the World Bank shows 25.2% of Filipinos living below the poverty line of $1.25 a day, while the CIA’s was higher at 26.5%.
Earlier this year, Pope Francis condemned the “economy of exclusion” as he called for “worldwide ethical mobilization” citing the indispensable cooperation between the private sector and civil society” as ways to combat poverty. He urged the U.N. to promote development goals that attack the root causes of poverty and hunger; protect the environment; and ensure dignified labor for all. He articulates the issues that people around the world think and talk about such as economic justice, income disparities and poverty.

Robert Christian wrote in Time magazine that Pope Francis’ tweet about inequality is the wake up call we all need. “It challenges us to fully recognize the equality of all and create conditions that reflect a total commitment to human dignity.  There is a common root to most (or perhaps all) grave forms of social injustice: the rejection of human equality and the influence of this rejection on human relationships and institutions.”

“Human persons are fundamentally equal in their worth and dignity. A person’s worth is not dependent on their lineage, how they fit in some utopian scheme, how much they produce or consume, their autonomy or independence, or their race, intelligence, age, religion, ethnicity, gender, sexual orientation, or socioeconomic status. Human worth is innate and cannot be forfeited. And it is equal in each person.”

That means to me that people who wield political, economic and information power should seek innovative ways and means for ensuring that every person has access to those needs that are necessary for human flourishing. The elite need to open their eyes to the gravity of the threat economic inequality and injustice poses to human dignity and the common good.

A Princeton study on “who really rules” says that American democracy no longer exists.  Researchers Martin Gilens and Benjamin I. Page argue that America's political system has slowly transformed from a democracy into an oligarchy in the past few decades, “rich, well-connected individuals on the political scene now steer the direction of the country, regardless of, or even against the will of the majority of voters.”

Like in the Philippines, access to opportunities and resources are cornered by the best, at the expense of the rest, resulting in income inequality, a widening gap between the haves and have-nots, and social conflict.  John F. Kennedy warned about this in his inaugural speech half a century ago. Pope Francis is shaking the tree today. Business groups like the Management Association of the Philippines are championing inclusivity as the antidote to the widening inequality gap and the key to reducing poverty.

We're chained to slavish conditions where most of the benefits of political power and economic growth are cornered by the 1% while most of the costs of bad governance and bad performance are borne by the rest of society. In a country where 90+% are supposedly Christian, nowhere are actual conditions reflective of our faith and Jesus Christ's teachings for mankind to love one another. We have behaved badly, failing to care, share and dare for each other, because we've placed self-interest above the common good.

2015 promises to be another banner year with superb opportunities for inclusivity.  The country’s one percent must function as real elite by acting beyond their vested interests to lift the nation higher and higher, with the long-term goal of leaving no one behind – all for one, one for all! 

Creating new wealth, enlarging the economic pie, and equitable distribution of the benefits is the way to go. It’s time we take our country back from bad behavior, make things right and fight with all our might for the future of succeeding generations.

God bless us all in 2015!

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