The Aquino (P-Noy) administration calls its economic governance approach “ inclusive growth “ – nobody will be left behind as the economy is made to grow. Media and some economists dub it as Aquinomics but it is adopted from the World Bank and the Asian Development Bank’s development concept with the same name. A few years ago, these two international banks came up with “inclusive growth” after its previous poverty alleviation strategies sank into the quicksand of Third World or South’s poverty and debt.
Since last year, “inclusive growth“ has been presented as the governing idea of P-Noy’s Philippine Development Plan ( 2011-16 ) or PDP, and the National Government’s Budget for years 2012 and 2013. It should be recalled that right after P-Noy won the presidential election of 2010, the Joint Foreign Chambers of Commerce of the Philippines led by the American Chamber of Commerce of the Philippines (AmCham) recommended a volume-thick development plan, titled “Arangkada“, to the new president. But with a few changes and adjustments, P-Noy’s PDP looks almost like a copy-paste version of “Arangkada”.
In summary, this concept of “inclusive growth” calls for rapid economic growth that will be broadly shared by all sectors of Philippine society – which explains the word inclusive. It focuses on productive employment rather than direct income redistribution which World Bank and ADB experts say can only lead to sub-optimal or below optimal outcomes. But expanded budgets and financing for education and health are also included to reduce the exclusion of the marginalized population from accessing to economic growth. This should also cover safety nets for the lowest 10 percent or something of the population – the so-called poorest of the poor—who can no longer be expected to catch up with the rest. Of course, the usual mantra of levelling the playing field for investments is to be found in all explanations of the concept. (ADB 2020 Strategy, and World Bank papers, 2009).
P-Noy’s rendition puts more accent on anti-corruption. Excepting this, Aquinomics is no different from the Arroyonomics of previous years. Under Arroyo, the Philippines’ gross national product (GNP) and gross domestic product (GDP) registered growth, large and new infrastructures were built, state budgets for education and health were raised, and the safety net conditional cash transfer program (CCT) was started. But still, the majority of our people were complaining of hard times. As of 2009, 26 percent were poor and 10 percent experienced hunger among our people (NSCB, 2009) while 51 percent considered themselves poor and 40 percent said they experienced hunger (SWS, 2009).
Nothing speaks more of exclusion than the 9 million Filipinos who already went abroad in search of better jobs and a better life. Majority of them are women, most of whom took jobs as domestic helpers and caregivers – taking care of other’s children while leaving theirs to the care of others – and took on the risks of abuse and job and sexual exploitation.
There lies the problem with “inclusive growth“? Why is there so much exclusion still? The answer lies in what this concept excludes. It rules out not only direct income redistribution which should correct regressive taxation and also requires state intervention to increase the social and economic claims of the working people and redress the double burden of productive and reproductive labor on women.
More importantly, it ignores asset or more precisely, property redistribution which alone can right the so many wrongs embedded in our economic and social structures. Our statistics alone speak volumes of these inequalities. The major branches of our industry, agriculture and services are monopolies or oligopolies of domestic and/or multinational corporations. (PIDS discussion paper, 2008; ADB Working Paper, 2004). The limited land reform law of 1988 and extended in 2009 has been stalled, to all intents and purposes, since 2001. This should correct the high inequality of agricultural land ownership for decades: 30% owning the 80 percent of total agricultural land. The top 1 percent of Filipino families get a share ranging from 30 to 38 percent of total family income. (comparative FIES data, 1985- 2009, SWS by Tomas Africa, 2011).
FDC believes in the importance and necessity of economic growth. We have always called for rebuilding and expanding our industries, agriculture and services on the basis of our homegrown skills and resources and the fruits of mutually beneficial regional and international trade. But if the fruits of growth are to be enjoyed equally by all citizens of our country, it must go side by side with both asset/property and income redistribution.
Pre-SONA announcements from Malacañang always make mention of “inclusive growth “ as an abiding theme of P-Noy’s SONA on July 23.
FDC has five questions to P-Noy:
First, what are you going to do with the large monopolies and oligopolies which own and control almost all the major branches of our industry, agriculture and services? They extract super-profits, dictate high mark-ups to consuming public, depress wages and denies entry into business and competition from other investors and entrepreneurs, mostly medium and small.
Second, how can you ensure and uphold public welfare and citizen stakes and participation in the economy when the neo-liberal policy which you affirm calls for the complete dismantling of the state sector of the economy and stunts the growth of the social sector like cooperatives and community enterprises?
Sectors of the economy which are invested with public character and should remain public like power, water, transport, fuel, and communications are now wholly privatized. Profits have thus taken welfare as the main driver of these utilities. Rural electric cooperatives are being harassed to give in to corporatization to allow entry of monopolies which would gobble them up in the end. FDC has opposed this because it believes that State and social sectors must be developed as public economic institutions where the citizens can become full participants and exact their legitimate share from their stakes and labor.
Third, how can you expect to generate economic growth with productive employment for all if your PDP 2011-16 does not have an industrial plan to build industries on the basis of our homegrown skills and resources and with productive forward and backward linkages with our agriculture, fishery and other domestic production?
How do you expect to promote agricultural production and the entire rural economy without a decisive push for land reform and without clear integration with industrial development? How can we have rice and food self-sufficiency if there is no solid commitment to land use for food security and subsidy and other infrastructural and credit support for our small farmers and rural producers?
For two decades, growth has drifted away from industry and agriculture to services like the business process outsourcing companies (BPOs) whose clientele are mainly abroad and large shopping malls which sell largely imported items to buyers whose money come from overseas labor and service sector workers. We have become an economy with a weak industry and a weak agriculture with a growing but disjointed or unintegrated service sector.
As a result, employment growth at 2.9 percent annually, 2001-2010 had lagged behind GDP growth at 4.7 percent annually, 2001-2010. (NSCB, 2010)
For historical, political and economic reasons, cheap labor and contractualization have become embedded in the economy. Correlation between wage rise and productivity growth has been negative. (IMF Working Paper 2012, section on 19 country cross-country analysis covering 1996-2009). Also embedded in the economy is the double burden carried by women: unequal relations in both production work and inside households, including the burden of making both ends meet if social services fail. Rural family women labor in the farms are largely unpaid.
Fourth, how can the government ever expect to catch up with its promise of providing adequate, affordable and quality education, health and housing for all, especially the working people, if it does not abandon the neo-liberal bias of abdicating more and more the planning, development, control and regulation of these vital social services to the private sector?
Thus, we see the great contrast between deteriorating public schools and improving but expensive exclusive and private schools, between substandard public hospitals where citizens pay for medicines and laboratory fees and quality but very expensive private hospitals, and between erratic and poorly budget public housing programs and upscale, high-end condominium housing.
Forcible demolition and relocation to areas far from jobs, livelihood and regular social services have long been the plight of the landless and homeless in the urban areas, with women, children and the elderly suffering more.
And fifth, how can we ever proceed with economic growth and development without integrating these both on the long- and short-run with the demands of adaptation to and mitigation of the damaging effects of environmental destruction and climate change?
From 2009 to 2011, the yearly total cost of damage on crops, livelihood, properties and public works amounted to P 180 billion (Climate Change Commission, 2012). The Philippines now ranks among the top 3 most vulnerable countries to climate change destruction. Yet, P-Noy’s administration has not yet manifested the seriousness that is required to construct a long-term plan to redesign our industries, farming systems and services, even our human settlements program to integrate it with environmental renewal and the adaptation and mitigation requirements for climate change.
Sustainable development – the integration of development and environmental renewal and climate justice while ensuring intergenerational equity and equal rights among nations, classes and gender – is the principle that was established by member states of the United Nations in 1992 at the Earth Summit at Rio. The Philippine government is a signatory to this treaty and yet it is so wanting in compliance with its intent and provisions.
The P-Noy administration must be more aggressive in demanding reparations from the big industrialized and colonial powers led by the United States for the devastation they wrought on our country’s environment and the globe’s climate. It must join the global front to demand observance of the principle of “common but differentiated responsibility” enunciated by the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol in carbon emission cuts and financing climate adaptation and mitigation throughout the globe. It must reject all notions and schemes that will conjure nature as capital and will profit from mankind’s efforts to arrest climate change and environmental destruction. It must demand that the World Bank and similar institutions be prevented from having anything to do with the Green Climate Fund and other instrumentalities of global climate finance.
These are the questions we expect P-Noy to acknowledge and answer. We are fed up with all the previous SONAs’ “business as usual“ statistics with nominal changes and populist rah-rah signifying nothing. We are fed up with PASIKAT that only ends up in PASAKIT for our people.
Equitable, Sustainable Development! Not Inclusive Growth! Dismantle Neo-liberalism! Rebuild our National Economy!