Wednesday, May 26, 2010

President Aquino’s problem

The biggest problem of President Noynoy Aquino is not his addiction to smoking, which he cannot quit. It is not the budget deficit, which is massive. It is not corruption in government, which is also massive.

His administration has two major problems. Massive unemployment. And massive poverty.
Aquino will probably be portrayed by his image makers as the People’s President. The mass circulation Philippine Daily Inquirer has already started calling him that. Not only that, he is supposed to be the President guided by Divine Providence.

Well, considering how massive Aquino’s problems are, he will need a lot of prayers to solve them. But even better, he must work hard, really hard. He must forgo his habits of the past—leading a life of leisure and ease, just like an haciendero’s son. In 12 years in Congress, nine as congressman and three as senator, he didn’t produce a single law to his name.

This time, however, President Aquino must deliver—deliver real fast.

The unemployment rate stands at 7.4 percent, equivalent to 2.9 million people. The underemployment is even higher, at 19.1 percent—equivalent to 7.6 million people. So 10.5 million people are either looking for work or if they have work, they work only six hours a day or less.

Assuming those jobless and partially employed have families, then you have in effect up to 58 million Filipinos dissatisfied, economically. There are 5.5 persons per family.

The 58 million is equivalent to 59 percent of the estimated 2010 population of 98 million.

No wonder, Aquino was elected by only 42 percent of the population. The 58 percent are either jobless, partially employed and family members of these two groups of hapless people.

One of the fallacies peddled during the just concluded election is that if no one is corrupt, there is no poverty. “Kung walang corrupt, walang mahirap,” said Noynoy Aquino, now our next president.

Well, it is not true, all the time.

But first, poverty remains massive and pervasive in the Philippines. Chronic poverty stands at 21 percent of the population. Poverty incidence is 27.5 percent as of 2006. Corruption is blamed for such high poverty occurrence. Perhaps, President Aquino should look at other factors.

Another fallacy is that you need foreign investments to jump-start the economy to create jobs and thus help reduce poverty. The truth is the Philippines does not need FDI.

“The country needs little foreign capital since we are a net lender to the world of almost P530 billion annually for the past three years,” estimates Albay Gov. Joey Salceda, a classmate of Aquino in college and a topnotch analyst.

Among the most corrupt countries are the richest economies. The United States, for instance, can be very corrupt. Like during the time of George Bush 2nd. Look at their Senate and their Congress. Their pork barrel allocations are worse than the pork barrel of our senators and congressmen. Look at their state governors. The US is the single richest country on earth in terms of size of its economy—$15 trillion. Yet, they have corruption. In fact, fraudulent elections and political corruption were invented in Tammany Hall, New York.

China is another rich country. Its economy is about $4.9 trillion. You cannot say there is no corruption in China. EU is even richer than the US with a $16 trillion economy. You cannot say there is no corruption in such countries as like Italy or Greece—which is why there is not a run on the European currencies.

There is corruption in Malaysia as well as in Japan and Russia. These are rich countries.

Everywhere there is one-party rule, there is corruption because there is no opposition to check the ruling party, which becomes abusive and helps itself with the national treasury.

To us, therefore, the way to raising revenues and investments is not to focus on corruption. The focus should be on tapping the vast savings pool of the Filipino.

It is said that up to 40 percent of the national government budget goes to kickbacks or corruption. But running after this 40 percent is like squeezing blood out of a turnip. Because the 40 percent is so ingrained in the system you paralyze government if you insist on collecting it.

In the ARMM, for example, up to 98 percent of its budget goes to personnel services—the funding of unnecessary personnel many of whom are friends and relatives of the ruling clan. Can you then say 98 percent of the ARMM budget goes to corruption? Now, does the Filipino have money? Yes. Joey Salceda estimates the national savings rate at 30 percent of GDP. Assuming per capita income of $2,000 multiplied by 95 million people, we have a $190-billion economy. Multiply that by P46 and you have a P8.7-trillion economy. A third of that is P2.62 trillion.
The Manila Times BY TONY LOPEZ

No comments:

Post a Comment