* This is my article in BusinessWorld last November 15, 2018.
“Something terribly wrong with a program that grows ever
larger even when prosperity for everyone else is increasing. We should measure
welfare’s success by how many people leave welfare, not by how many are added.”
— Ronald Reagan, 40th US President
Among the economic phenomena that I am skeptical about is
the continued high poverty incidence of the Philippines. I often go to
provinces especially in rice farming villages and among the things I notice is
that the poor hardly ride animals or bicycles anymore, they ride motorcycles,
electric bikes, or buses and vans. Farmers hardly use cows and carabaos to till
the farms, they use hand tractors or big tractors. The poor now communicate via
e-mails and social media, not slow mails or smoke signal.
I suspect that there is some corruption in the design and
measurement of poverty because there is big public money involved in high
poverty: multi-billion pesos of continuing loans with WB-ADB; big budget yearly
for welfare agencies like DSWD, DepEd, CHEd, DoH; big pork barrel (explicit and
implicit) for legislators, national and local governments; big projects for
consultants and academics; even big indirect funding for NGOs.
From ADB’s Key Indicators for Asia and the Pacific (KI)
2018, here are some data on poverty (see Table 1).
See that the Philippines has higher poverty incidence
than Cambodia, Indonesia and Vietnam, and nearly similar as India and Laos?
There are several possible proxies for poverty, like low
access to formal credit markets like bank accounts, low access to modern
telecoms and the web. From four selected factors, they belie the high poverty
incidence data of the Philippines: Cambodia, Laos, Myanmar and Vietnam (CLMV)
people have lower access to formal credit markets, LTE mobile and Internet
access. India and Indonesia have lower access to LTE network, mobile phones,
Internet access, etc. (see Table 2).
Reagan was right. Any serious, honest and successful
welfare, anti-poverty programs by government should result in a decline in the
number of the poor and state-dependent, subsidy-seeking people.
What we often have are either dishonest, unsuccessful
welfare and anti-poverty programs so that the current poverty incidence is
similar to those three decades ago and will remain so two decades from now. Or
the programs somehow were successful but implementers, lenders and consultants
have invented new schemes so that revised definitions and measurements of
poverty always lead to high poverty incidence.
So government invents new taxes and fees, or raise
existing taxes and fees, to finance new programs and bureaucracies to “fight
poverty” endlessly.
If there is more honesty in reducing poverty, the budget
for welfarism, the number of bureaucracies and politicians, the rates of taxes
and fees, should flatline and even decline through time. This is hardly
happening.
Here is an old anecdote about poverty:
Politician: Thank God for poverty, it provides my
political platform.
Consultant: Thank God for poverty, my occupation is to
study it.
ODA lender: Thank God for poverty, we endlessly lend
money for it.
Poor: I feel so appreciated, thank God.
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See also:
BWorld 264, Energy by legislation promotes corruption, November 14, 2018
BWorld 265, Integrated PPP vs Hybrid PPP: The case of Kaliwa Dam, November 15, 2018
BWorld 266, Inflation, GDP and Duterte, November 16, 2018
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