* This is my article last Saturday in thelobbyist.biz.
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The Senatorial and local elections last Monday, May 13,
2013, was fought by candidates and political parties on various issues and battle
grounds, foremost of which was the economy. While the administration trumpeted the
fast GDP growth in 2012 and the recent ratings upgrade to investment status by
Fitch and then by S&P, the opposition contended that such growth remains
elitist and many poor people remain wondering where the growth and the jobs
are.
From a cursory review of certain macroeconomic figures
taken from The Economist, the following can be summarized:
One, economic growth of the biggest economies in North
America and Europe remain non-impressive if not anemic. While the US and Canada
are expected to grow 2+ percent this year and the next (1.7 percent in 2013 for
Canada), their unemployment rate remains high at more than seven percent as of
March 2013.
Two, the Euro area maintains its low growth, even
contraction this year for Italy, Greece, Netherlands and Spain. Unemployment
rate for Greece and Spain remains very high at 26 to 27 percent, something that
is unthinkable for many Asian economies.
Three, Asia will retain their generally bullish outlook
to be led by huge population economies China, India, Indonesia, Philippines and
Vietnam. Their unemployment rates though are at medium rates of 4 to 9.9
percent. Inflation rates are projected to remain mild at only two to six
percent, except in Vietnam and India that are seen to reach up to 10 percent.
Source: The Economist, May
4th 2013.
An “inclusive growth” that used to be called “broad-based
growth”, of more equitable distribution of growth, income and assets, is the
main demand coming from more sectors and players in the economy. Which simply
means that people want more jobs, good paying jobs and benefits. Then people will
be able to move up the wage levels
through time.
These are modest and understandable demand. A rising and
growing economy like the Philippines as shown in the above table should be able
to generally comply with these modest expectations. Such job creation need not
come from big corporations or the government and its many agencies and offices.
More importantly, job creation can come from the people themselves through
micro- and small entrepreneurship, medium-sized enterprises with backward and
forward linkages with the micro and small enterprises.
Local governments that require the preliminary business
permits, taxes and fees, to be topped by business permits, taxes and fees by
certain national government agencies (BIR, DTI, SSS, SEC, etc.) should become
more considerate of such micro and small entrepreneurs.
Most of the campaign promises of the local and national
politicians were focused on fighting corruption and having good governance. It
seems that only very few of them proposed to reduce the arbitrary power of
those in government to grant business permits and licenses.
Promises of more welfare and subsidies, like universal
healthcare, universal education from elementary to college levels, universal
housing and relocation, were sure attention grabbing for the voters. But such
promises are not new, they have been promised by earlier politicians many
decades ago. And high expectations often lead to high disappointment.
There are limits to what the government can provide
because it is heavily indebted in the first place. A big portion of the total
annual budget, about P1 out of P5, goes to interest payment alone. The public
debt stock is rising by around P400 billion a year, mostly due to domestic
borrowings.
Source: Bureau of
Treasury, Department of Finance
The counting of the election result, even if it was
automated, remains slow. This does not seem to be consistent with ensuring credible
results. Credibility of the result is the most important consideration of an
election, more than the victory of the administration or the opposition.
Credible elections, credible justice system and enforcement of rules will
produce more long-term positive effect for the economy and the people.
Now that the political and electoral battles are over, it
is time to go back to plain economics – how to create more jobs, how to expand
more goods and services, so that people can stand on their own in uplifting
their own lives without depending too much on the politicians and the
government.
Things are generally not so good at the global economy. The
Eurozone for instance, nine of its 17 member-countries are now in recession;
the average unemployment rate in the Eurozone was a high 11.4 percent in 2012,
and is projected to rise further to 12.2 percent this year. Greece and Spain
are in worse shape with unemployment rate of nearly 27 percent.
Many investors and traders abroad are hoping that the
Philippine economy can provide them the proper economic environment to put
their money and talent here, both in the short- and long-term. Let us not
frustrate them in their basic expectation. The poor here badly need more jobs,
better pay, more goods and services produced in our own soil.
See also:Election Watch 4: Senatoriables on Healthcare, March 08, 2013
Election Watch 5: Sin Tax Law, Hospital Over-regulation and Senatoriables, May 07, 2013
Election Watch 6: On Political Dynasty, May 11, 2013
Election 7: My Candidates for Senators, May 12, 2013
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