Friday, May 3, 2013

Delusional talk

Speaking before the general commencement exercises of the University of the Philippines for its Class of 2013, Senator Edgardo Angara, also a former president of the university, told the graduates that they belong to the middle class that “is emerging as a potent force in the Philippines’ social transformation.” Angara compared the young graduates to the ilustrados of the Spanish colonial period who spearheaded the failed reform movement for a more equitable role of Filipinos in the political and economic life of the colony.  

Of course, it’s a historical myth to liken the middle class to the ilustrados of the 1800s. These ilustrados represented the highest class in the Philippine social system at that time. Together with the lower class called the taos, both the ilustrados and the taos comprised the entire social spectrum. There was no middle ground during the Spanish colonial times, either one belonged to the rich upper class or the poor lower class. 

Filipino ilustrados in Madrid during the Spanish colonial period. Photo courtesy
 of Wikipedia Commons. Click link to view Protest Action at UP Graduation 2013,
The taos were peasants and were in greater number, while the ilustrados or caciques as they were sometimes called were large landowners or persons of influence. They were small in number, well-educated and cultured, thus they comprised the ruling class. Dante Simbulan called this class the principalia which was the origin of the present-day oligarchic elite in the Philippines.
The concept of the middle class is a latter-day phenomenon although it was historically referred to in the past as the bourgeoisie that was responsible for the success of the French and American revolutions. In contrast, the socialist revolutions in Russia and China were not led by the bourgeoisie although their leaders were intellectuals from this class who forged ranks with the masses of workers and peasants. While today’s liberation movements, like the wars in Algeria and Vietnam and in other parts of the world could also be considered revolutions in the popular sense, they are not necessarily bourgeois in nature and origin. The recent Arab Spring in Tunisia, Egypt and Libya were hastened by street demonstrations of disgruntled youth, students and ordinary citizens, not by the middle class.
Perhaps, Senator Angara was talking tongue in cheek when he graciously described the UP Class of 2013 as part of the new middle class that could be harnessed in the social transformation of the Philippines. The reference to “social transformation” seems an obvious attempt to dissociate it from the 1896 Revolution, a radical and an armed struggle that took over the reform movement.
In talking about “a strong middle class as the backbone of civil society,” Senator Angara refers to this class as “the voice of reason that moderates vested interests, the force of change that compels societies to invest in their own future.” This sounds like a line lifted from the political platforms of American political parties which both stress the vital importance of the middle class in responsible political governance and in promoting economic growth.
Senator Angara’s middle class, however, is about as American as apple pie: a comfortable standard of living, significant economic security, considerable work autonomy, and with a college education that helps to sustain themselves. But the American middle class is not the same middle class we find in other economies or cultures, especially those which are poorer or backward. So, all this talk about creating the middle class patterned after the American model is only as aspirational as a fairy-tale dream.  
Philippines' poverty map. Graphic courtesy of Emil Mercado, Click
link to view NCSB: Poverty
Incidence Almost Unchanged.
This is like the kind of surprise President Noynoy Aquino elicited when reality strikes you on the face. To the president’s chagrin, his own bureaucrats, the National Statistical Coordination Board (NSCB), reported that the poverty incidence in the Philippines stood at 27.9 percent in the first semester of 2012, practically unchanged from the same period in 2009, which was 28.6 percent, and in 2006 which was 28.8 percent. They must be referring to old population data, not 2012, the president could only gripe. President Aquino must be wondering as to what happened to the high credit ratings the Standard & Poor, Fitch Ratings, and Moody’s Analytics recently gave the Philippines, which all pointed to a robust economic growth in 2014. Or to the president’s much-ballyhooed Conditional Cash Transfer (CCT) program which he was hoping would rescue the poor from their misery.
Is it a paradox that poverty in the Philippines continues despite high expectations of economic growth?
There is really no paradox. According to the Asian Development Bank (ADB), a liberal economic institution, “the benefits of strong economic growth have not spilled over to the people because they still cannot find a job.” The country’s rate of unemployment stood at 7.1 percent in January 2013, with a further 20.9 percent underemployed or those working fewer than 40 hours a week. About 41.8 percent of the underemployed are in the farming sector. Norio Usui, ADB senior country economist, said that the government must solve the problem of jobless growth if it hoped to reduce poverty.
This also means that only the rich and the educated have benefited from growth the economy is experiencing and not the poor and uneducated, which also explains why there is a pervasive income inequality between the haves and the have-nots.
Similarly, President Aquino’s flagship anti-poverty initiative, the CCT Program wasn’t also enough to significantly mitigate income inequality in the first semester of 2012. Because the CCT budget accounted for only 25 percent of the amount needed to eradicate poverty, the NCSB said. Besides, with the corrupt nature of pork barrel politics, it is highly likely that the money could have been shifted around instead of spending it for the alleviation of the targeted poor.
The model of economic growth that the present government adopted depended on increased levels of consumption, strong remittances from the country’s large overseas workforce, and the outsourcing industry which the Philippines is currently number one in the world. Half or even more of the UP 2013 graduating class, the new members of the middle class as Senator Angara would like to call them, will probably join the growing outsourcing industry which employs highly educated workers, if they don’t migrate to work or settle overseas.
The Philippines has a weak industrial base compared to the other economies in the region. Without durable industrialization, highly educated college graduates or even high school graduates will not be able to get jobs. Their only choice is either to become underemployed as call-centre workers or go overseas as part of the contingent of the country’s cheap exploitable labour.
National industrialization is one of the key issues that the National Democratic Front, the umbrella group for communist organizations, has been insisting to be on the peace negotiations table with the government panel. Edwin Lacierda, President Aquino’s spokesperson, said the problem with the NDF is it continues to use ideas that had become passé, such as “national industrialization,” which makes negotiations for peace impossible.
“National industrialization? I mean, we’ve moved on. They seemed to have not moved on. So how does one talk in a present setting with people who are still in the ’50s or in the ’60s perspective?” Lacierda asked.
Perhaps, President Aquino and the staff that surrounds and protects him, including our politicians like Senator Angara, should go on a retreat for some serious soul-searching. The country will never be able to gain a significant headway in attempting to solve its economic and social problems if our elected leaders and their coterie of experts continue to ignore realities that their own bureaucrats and other respected institutions have objectively identified.
It is not enough that the country is favourably regarded by international credit rating agencies. High ratings are not the true measure of a country’s economic performance if the growth in the economy does not trickle down to the benefit of the greater majority of the population. The outsourcing industry is not a real industrial boon that would spur an increase in jobs, beyond the minimal expansion in consumption patterns of those employed in this sector.
Senator Angara in his speech before the UP Class of 2013 called on the new graduates to take advantage of a nascent Asian regional economy that would allow the Philippines “to finance our own growth from our people’s own savings, without having to levy new taxes or borrow from other nations’ savings. We can build schools and hospitals, roads and bridges from our own pockets—investments for the people, by the people.” This is the rising middle class, he said.
Talk is really cheap, especially if it is not reflective of reality, historical and present, and the actual choices the people must confront. It’s probably time for our leaders in government not just to think outside the box, but perhaps by going beyond and away from their traditional mindsets.

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