A majority counts

I’ve been having an argument with a fellow economist who thinks Gloria Macapagal-Arroyo did just great as president. The trouble is that he belongs to a very small minority who thinks so. Overwhelmingly, the rest decry her performance.

I know being a majority doesn’t necessarily make you right, but it does give reason to ponder why you do if you disagree with that majority, and whether that’s sufficient justification to maintain your position—or rethink it.

The President says she’s unpopular because of the tough reforms she has done. I’ve asked many times for a list of those reforms, and I’m still waiting. Mind you, some things have been achieved, that’s inevitable if you’ve been in power a decade. The question is were they enough to justify being proud about it. Ro-Ro, Conditional Cash Transfers, value-added tax to 12 percent—these were good decisions, but still need more work on them. And there are undoubtedly a few others, but the scale of these is not enough and they are overshadowed by the larger number of failures.

Looking at every comparative measure the Philippines ranks lower today than it did in 2001.

And surely if she’d actually done the tough but unpopular things to improve the lot of the people that she claims to have done, after nine years and six months you’d expect to see some improvement in the lot of the people.

Not only has their situation not improved, it worsened. I base this on the one thing that matters most: standard of living. Are the poor better off today or not?

They are not. No matter which numbers you look at, there are more poor Filipinos today than there were in 2000. Government statistics say the number of poor Filipinos increased to 27.6 million in 2006 from 25.5 million in 2000, or 2.1 million more. And that’s government numbers. A more believable Social Weather Stations (SWS) says 45.6 million versus 43.2 million, or 2.4 million more. Whichever number you believe, both say the same thing: More Filipinos are poor.

Related to that is GDP/capita in inflation-adjusted terms (you must adjust to the same period to get a true comparison). In 2000 GDP/capita was P43,687; in 2009 it was P83,155. Adjusted to 2000 prices, the GDP/capita in 2009 becomes P52,388. Not much of an improvement after 9 years, I think you’ll agree. Also, the GINI factor was 0.460 in 2003; it was 0.458 three years later (latest official data). Clearly, there’s no measurable improvement. The wealth has not been spread around well.

The government crows that it has 37 quarters of uninterrupted growth, but there’s nothing to crow about especially when we compare ourselves with other countries—the true comparison to make. Average GDP per capita growth of three percent is the slowest among the major Asian economies. RP also ranks 105th out of 182 countries in the UNDP Human Development Index. We’ve gone down from 77th in 1997 to 84th in 2003. It’s definitely getting worse.

And related to all that is jobs. The priority is to give jobs to the poor, so they can get out of poverty. Government hand-outs are definitely not the way to go. They can be no more than a short-term solution to a crisis situation. Jobs give people a lifetime of decent living. So one of President Aquino’s highest priorities—no, his highest priority— must be to create the environment for businesses to flourish and jobs to be created—in massive numbers. We want parents back here with their families too, not stuck overseas. With a job you can afford to feed your family, send your children to school, pay to go to a doctor. All the things government strives to do directly now it need no longer do. Business will do it.

That’s something Arroyo said she recognized yet, despite that, failed to do. As the numbers show.

The October 2009 Labor Force Survey of the National Statistics Office puts unemployment at 7.1 percent or 2.7 million Filipinos. But if the old definition is maintained, as is only fair in a comparison, the number of jobless Filipinos rises to 4.2 million from 3.5 million in 2000, which translates to some 700,000 more without work today. Which, of course, directly relates to poverty.

SWS determined that about 30 percent of the country’s labor force were unemployed. That’s 11.5 million versus 10.7 percent or 3.4 million from the SWS survey conducted in 2000. That’s a huge deterioration.

So forget the duplicitous re-definition, more people were unemployed in 2009 than in 2000, and certainly far more were under-employed. And that doesn’t count the 8.5 M forced to flee overseas because they couldn’t get a decent job here.

So in the two most important aspects of life, having a job and not being poor, the situation is worse at the end of Arroyo’s rule than at the beginning.

Another majority that should cause you to think is education. The Philippines has a 10-year system virtually everywhere else has 12. There must be a good reason. And there is. The amount of knowledge a child needs to prosper (note that word: “prosper” not “survive”) in today’s modern world needs more time to be effectively absorbed.

Now this gives a problem for the poor, they can’t afford to keep their children in school for 12 years; 30 to 40 percent of them can’t even keep them through 6 years of primary school. They need them at home to help make a living.

Well, an Arroyo initiative that actually worked was Conditional Cash Transfers. You get money to support your kid in school provided the child goes to school. That money should be sufficient to fully support the child, maybe even a little for the family.

An educated child gets a job, or at least has a far better change of doing so. And once they have a job they don’t need a Conditional Cash Transfer. The government can spend the money on everything else we need.

So properly educate the kids, provide jobs and watch the Philippines take off. –Peter Wallace, Manila Standard Today