LIBERALISM: MORE POVERTY & CORRUPTION

Prof. Erle Frayne D. Argonza
University of the Philippines

Good afternoon, fellows!

The Liberal Party in the Philippines has been bandying lately the good governance agenda. Philosophically bankrupt, the dogmatists of the party could at best parrot the verbiage of university academics who, in reductionist fashion, associated the development problems of the country to bad governance.

Poverty had alarmingly risen from 25% in 2001 to 32% today, as per government statistics. This came at a time when the economy doubled, GDP-wise, and the country had been dubbed as an ‘emerging market’. Can poverty be factored solely to bad governance, as liberal quacks now claim?

Whether the so-called ‘think-tank’ of the Liberal Party or LP possesses the comprehensive grasp of the country’s problems is doubtful. A ‘think-tank’ that is theoretically bankrupt could at best be a coterie of mediocre dudes whose sense of originality in problem-solving engagements is nil.

There surely were episodes in our economic history when poverty expanded. We can concretely site the following periods: 1983-1996, when poverty incidence rose from 35% in ’83 (Marcos era) to 49% in ’89 (Cory Aquino era) to a 60% peak in ’95 (Ramos Era); and, after a period of radical drop, moved up again in 2001 through 2009, from 25% (‘01)to 28% (’04) to 32% (‘09).

The 32% poverty incidence may not even be accurate. As Prof. Cielito Habito (Ateneo University) sited in his newspaper column, the figure could be a high 35%. My own intuitive assessment is that the figure could be much higher at around 45%.

Those high-poverty episodes were actually periods when the country was under the IMF programs’ tutelage. They were times when liberal policy reforms were radically implemented in the country, to note: liberalization, privatization, deregulation, tax reforms, reduced budgets for social services, currency devaluation, wage freeze, and increased utility prices.

Not only did we witness the expansion of poverty during the same episodes, we also saw the rise of corruption. Weak regulatory frameworks at a time of rising total budgets redound to liberalizing graft as well, resulting to larger largesse for bureaucrats & legislators (returns from pork barrel allocations).

Let’s take the case of trade liberalization. As soon as tariff reforms were implemented in full during the Ramos Era, a whopping P300 Billion+ worth of import duties were wiped out, thus reducing revenues so drastically. With nil safety nets in implementation, the tariff reform saw millions of affected small planters, fishers, craftsmen, and farm workers experience large-scale income drops, thus instantly leading to larger poverty incidence.

As commitments to tariff reforms are now binding upon our state, based on signed treaties (ASEAN, WTO), regulatory frameworks for executing projects remain weak. This bad situation ensures the perpetuation of the take of bureaucrats on projects, from the past 10% ‘s.o.p.’ circa 1980s, to the gargantuan 40% today and higher rate tomorrow. E.g. a road project worth P1 Billion will be priced/budgeted at P1.4 Billion, with P400 Million allowance for the grafters (they call it ‘for the boys’).

Note that during the periods of extensive liberal reforms, Hacienda Luisita escaped agrarian reform’s surgical operations. Of course, the regulatory and executory frameworks of the agrarian reform law were so weak, so much that President Aquino’s family estate was accorded special treatment that it enjoys till these days.

Ipso facto, liberal reforms practically destroyed the already weak regulatory frame that we Filipinos have struggled so hard to build since the time of the 1st presidency yet (Aguinaldo, 1898-1900). Curbing poverty and graft, which indeed go together, requires draconian tactics of state interventionism or dirigism, not liberalism.

It is all too easy a kindergarten stuff to forecast that under a liberal regime, poverty will swell to higher incidence (beyond 40%). As budgets and projects increase, so will graft move up, probably eating as much as 60% of total appropriations at certain junctures.

The ‘walang korupsyon’ (no corruption) flaunted by the liberal quacks is nothing but empty propaganda. Bereft of creative approaches to diminishing corruption, the ‘walang korupsyon’ line merely re-echoes an age-old line of traditional politicians or trapos desperate to gain electoral victories by duping a gullible electorate.

‘Walang korupsyon’ isn’t even liberal nor populist a line, but hyper-conservative. Conservatism serves the interests of Big Business, Big Landlords, Big Church (biggest landlord in the Philippines), and foreign capital.

We are therefore not surprised that the leaders and groups representing Big Business, Big Landlords, Big Church (Jesuits, Opus Dei, bishops), and foreign capital have openly supported Noynoy Aquino & the Liberal Party.

The LP of the Philippines now appears more as a copycat of the fascistic Liberal Democratic Party of Japan. Don’t ever be surprised that both parties are good friends within the Liberal International league.

A liberal regime will most likely be saddled with enormous graft and poverty problems that, within a couple of years of its incumbency, patriotic soldiers and populist groups would alternately shake it down to rubbles. A veteran of civil society campaigns myself, I would most likely be marching the streets again to oppose moralist pretenders who are in fact greedy crocodiles.

Liberalism doesn’t represent the interest of the nation and people, and should be rejected in the coming polls and the next ones to come.

[Philippines, 13 April 2010. Prof. Erle Argonza is an economist, sociologist, and international consultant. He’s a member of the very prestigious Eastern Regional Organization for Public Administration or EROPA. See: http://erleargonza.blogspot.com; http://unladtau.wordpress.com, http://erlefraynebrightworld.wordpress.com.]

POVERTY: PHILIPPINES‘ ACHILLES HEEL

Erle Frayne D. Argonza

Poverty is the Achilles’ heel of the Philippine state, and will be so for at least two (2) more decades. Amid the appreciable growth the economy has sustained so far, with the national economy doubling in just eight (8) years during the incumbency of president Gloria Arroyo, poverty remains very high.

If we go by the yardsticks of the United Nations Development Program (UNDP) and the World Bank, the Philippines has been performing fairly well on wealth production as a whole, so much that the country graduated to a middle income status by the turn of the century. No more a poor economy by world standards, yet the country’s poverty increased from 28% in 2001 (when Arroyo took over the presidency) to 33% today (per latest government statistics).

Paradoxical, come to think of it, that while the economy has been growing and had moved to middle income status, more people have become poorer. Tough, very tough, is the task of mining for the ‘gini in the bottle’ that would reduce poverty considerably to a negligible 5% or less, a level that is easily manageable and where state and communities can simply decide to fully subsidize the remaining poor.

Whether the Philippines can meet the UN’s Millenium Development Goal of cutting poverty by half in 2015 seems much clearer now to social forecasters: the dream is elusive and unattainable. Not even if the economy will double again from mid-2009 to 2015 which is a most likely development.

The Philippines’ poorest happens to be the rural populations, notably the fisherfolk sector where malnutrition runs the highest rate (2/3 of children/families). Rural population is now down to 34% or 1/3 of the population, while the urban peoples comprise 66% or 2/3. Urban to rural poverty ratio is 1:2.5, meaning that for every 1 poor person in the cities & towns, there’s an equivalent of 2.5 persons in the countrysides.

The message is clear to the next government (formed by the new president after the May polls this year) that the attack zone on poverty should be the rural population. Both antipoverty and anti-hunger programs should be initiated at very high levels in the countryside to be able to bring down total poverty by a large degree.

Failure to solve rural poverty in the long run redounds to perpetuating insurgency. Even if the present insurgent groups would concur peace pacts with the state, new insurgent groups will emerge again in the foreseeable future should the rural folks remain paupers.

Urbanization is now moving up, and with its growing eminence has come the rise of new cities. Citification has seen the incomes of communities treble by leaps and bounds, thus permitting the same communities to spend on infrastructures and social development.

Left to themselves, without massive migrations from rural folks, the cities can accumulate enormous income surpluses to solve unemployment, poverty, and malnutrition (both hunger and obesity). Philanthropic groups consequently rise from civil society and market players, and boost surplus production for solving poverty.

However, such is not the case even as the migration of the poor from the countryside to the cities continues in steady waves. So this brings us all back to the challenge of solving poverty right at the backyards where the poorest are most concentrated. This means that the food producers shouldn’t be left out in the development game, even as rural development should be brought to its next level.

Goal-wise, the realistic target is to reduce poverty from 33% in 2009 to 25% by 2015, or an average of 1.33% reduction per annum. Means-wise, an appreciable mix of good governance, right socio-economic policies, and strengthening of institutions would do a long way to bring down poverty altogether in the short run.

Urban population will grow to 70% around 2015, while rural population will go down further to 30%. With lower rural populations to manage by then, there is no more reason for government not to be able to do something to solve poverty. And we say government, because the increase in poverty largely came from governance-related factors such as poor absorptive capacity (to handle large budgets), inefficiency, graft, poor inter-governmental coordination, and low political will to pursue audacious solutions to daunting problems.

In 1989, this analyst wrote an article “Prospects of Poverty Alleviation in the 1990s,” a piece that I delivered as a symposium lecture at the University of the East (Prof. Randy David was also a speaker). At that time, poverty was a high of 49%, while urban to rural poverty was 1:2.1.

Since 1989, we have seen poverty reduced from 49% to its present level of 33% (a 5% increase since 2001 though), although rural poverty moved up paradoxically during the same period. Poverty reduction is not really impossible, as evidenced by the huge reduction across a 20-year period. Bringing it down further to 25% by 2015 is a doable target.

So let us see how the nation will fair under the next government of the republic (after May polls), when we see a new set of political leaders and cabinet members installed to power. As I’ve mentioned in earlier articles, my standpoint is that a nationalist coalition, such as what the present candidate Sen. Manny Villar, is most equipped with policy paradigm and tools to deal with the Achilles heel of pauperism, aside from the competence and visionary acumen of the noblesse senator.

By nationalist, I mean that of moving towards a regulated market and fair trade, with high propensity for ‘physical economy’ policies. We can no more return to the days of liberalization policies that saw the economy crash down in ’83-’85, stagnate for a time and grow again before hitting the next recession in ’97, and finally move up to middle income status only after a turtle pace struggle taking three (3) decades.

Liberalism and its propensity to be pro-Big Business and Big Landlord is a big no in our fight against poverty, whether in the Philippines and other nations of the globe. In my country, nationalism is the antidote paradigm and social technology watershed to reverse decades of liberal policies and solution to poverty. I’ve been echoing this theme since my teenage years yet, and remains steadily anchored on it.

[Philippines, 20 March 2010]

RURAL POVERTY ALLEVIATION VIA WATER RESOURCES

Bro. Erle Frayne Argonza

Good day!

How do water resources alleviate rural poverty? What methods of intervention can be cited, and how did such intervention schemes impact on poverty alleviation? Could corruption have served as a facet of such intervention programs in developing economies?

Below is a study regarding approaches to rural poverty alleviation in Asia.

[11August 2008, Quezon City, MetroManila]
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Approaches to rural poverty alleviation in developing Asia: role of water resourcesAuthors: Lipton,M.Produced by: Poverty Research Unit, Sussex (2008)

Focusing on water resources and irrigation, this paper documents a talk by Michael Lipton exploring approaches to poverty alleviation in developing Asia. The talk discusses the findings of a recent paper 'Pro-poor intervention strategies in irrigated agriculture in Asia: poverty in irrigated agriculture - realities, issues, and options with guidelines'. It looks at a number of topical issues such as irrigation in relation to access and global poverty, irrigation corruption, and sustainability.

The study discussed rests upon household surveys in 2001-2 in 26 major and medium canal irrigation systems (and adjoining rainfed areas) in India, Pakistan, Bangladesh, China, Indonesia and Vietnam. The surveys showed that in the rainfed areas, crop yields are typically half those in the adjoining irrigated areas, and that the landless in irrigated areas enjoy 'much higher' wage-rates and employment. Hence typically poverty incidence is 20-30 per cent higher in rainfed than adjoining canal-irrigated settings.

The speaker notes, however, that there are big differences, among and within systems, in irrigation's efficiency, equity, and thus poverty impact. He asks, what determines the cost-effectiveness of irrigation as a sustainable remedy for poverty (a) in irrigated areas, (b) by spreading to new areas?

Key points include:

• whether management of water for farming is pro-poor depends on its sustainable impact on growth, stability and distribution of consumption, and of other indicators of well-being
• the study gives strong evidence that more equal distribution of land and irrigation is not only pro-poor but also efficient
• changes in incentives and institutions alone can bring rapid progress in solving most major problems of Asian canal irrigation, improving its economic efficiency and poverty impact
• the main disincentive for aid to irrigation has been the growing doubt about side-effects: on health, on uncompensated land loss from new works (especially among indigenous populations), and on environmental sustainability
• we need to look at the results of this project to examine the causes of collapse in irrigation investment, and about cost-effective, pro-poor ways to remedy that collapse
  
• Available online at: http://www.eldis.org/cf/rdr/?doc=38021&em=310708&sub=enviro

PEOPLE, PROTECTED AREAS, GLOBAL CHANGE

Bro. Erle Frayne Argonza

There were so many areas across countries that were declared as ‘protected areas’ in the past years. In my own country, the Philippines, no less than a separate bureau was created to focus on the matter of protected areas.

It is now time to evaluate the impact of the various intervention efforts focusing on protected areas and how they mitigate ecological problems for people.

Below is an example of a cross-national study that focuses precisely on protected areas.

[10 August 2008, Quezon City, MetroManila. Thanks to eldis.org database news.]

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People, protected areas and global change: participatory conservation in Latin America, Africa, Asia and EuropeAuthors: Galvin,M.; Haller,T.Produced by: NCCR North South (2008)

This document compares findings from in-depth research on protected area (PA) management in Latin America Africa, Asia and Europe. It describes how PAs have been managed over the last 50-100 years and considers the ecological, social and economic benefits brought by enhanced participation.

The case studies presented in the book are from Bolivia, Argentina, Peru, Tanzania, Madagascar, Cameroon, Ethiopia, Switzerland, Indonesia, Nepal, and Vietnam. These individual studies look at the problems people face and at environmental issues from a variety of angles, including governance and institutions, different actors' interests and strategies, livelihoods and natural resources, and economic and political contexts.

The authors highlight lessons learnt, best practices, and potentials for mitigation of negative impacts with respect to conservation of landscapes and biodiversity. It is argued that relations between PAs and local people are difficult because perspectives on nature, natural resources and conservation are closely interlinked with restrictions and competition in land and resource use, as well as other rights.

The case studies highlight that the understanding of participation also varies greatly in all cases, as does the role of development.The basic lessons learnt from the literature and case studies are summarised as follows:

although most of the PAs studied are participatory in their formal structure, this does not translate into economic benefits for local people
power issues and issues of ideology are used strategically by all actors in order to structure governance and the underlying institutions for their own gain for local actors political gains may be an incentive to strategically subscribe to conservation goals, especially if they have ownership of the decision-making process.

Available online at: http://www.eldis.org/cf/rdr/?doc=38428&em=310708&sub=enviro

ENERGY & ECOSYSTEM RESILIENCE

Bro. Erle Frayne Argonza

Climate change is reshaping human engagements the world over. In Africa, observations have already been made before regarding vulnerabilities to climate change and related attendant ecological concerns.

Below is a report regarding energy interventions that could re-adjust the livelihood/economic engagements of peoples of Africa.

[09 August 2008, Quezon City, MetroManila. Thanks to eldis.org database news.]

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A preliminary assessment of energy and ecosystem resilience in ten African countriesAuthors: Connor,H.; Mqadi,L.; Mukheibir,P.Produced by: HELIO International (2007)

Africa is vulnerable to climate change on two fronts: firstly, because of existing vulnerabilities and secondly, due to capacity limitations for disaster mitigation and inability to adapt to climate change. There is an urgent need to ensure that activities centring on adaptation to climate change and sustainable energy development are increased and maintained so as to generate sustainable livelihoods.This paper is a preliminary attempt to identify points of vulnerability as they relate to climate change-related events and sketch out what changes are needed - both politically and programmatically - to increase resilience. It explores the current state of vulnerability and details potential for adaptation. Results are presented summarising the key vulnerabilities for eight sub-Saharan countries: Burkina Faso, Democratic Republic of Congo, Mali, Nigeria, Senegal, South Africa, Tanzania and Uganda.

It is argued that energy development for Africa in a changing climate will require greater emphasis on small-scale, decentralised and diversified supply and increased distribution to households and enterprises alike. A diversified and distributed energy mix is identified as the best insurance policy against climate change. However, it is argued that adaptation of energy policies and systems is only part of the solution; building up the resiliency of local populations and energy systems is equally important.
Key priorities identified for policy are:

harness the value of indigenous knowledge to plan and achieve resilience
mobilise adequate and stable financial resources
mainstream adaptation and resilience in the development process
develop policies to institutionalise and mobilise "social capital"

The authors conclude that, despite the obstacles facing Africa, hope is not lost. They identify a number of positive characteristics upon which successful programmes can and should be built, including:
culturally, Africa has strong social networks, which serve an important function in educating communities, disseminating information and serving as substitutes for collateral in micro-loans as primary collectors and users of biomass and water, women are well-placed to monitor and manage resources, spur innovation on adaptive techniques and experiment with new management approaches Africa's decades-long experience coping with poverty that may be its strongest resource. By its collective survival, the region has shown itself to be adaptive and resilient despite enormous obstacles.

Available online at: http://www.eldis.org/cf/rdr/?doc=38442&em=310708&sub=enviro