BWorld 27, The rich getting richer, the poor getting middle class

* This is my article in BusinessWorld last November 19, 2015.

There are plenty of papers circulating and arguing that the increased integration of the Philippines into the regional and global economy will result in the rich getting richer and the poor getting poorer. How true is this statement?

Has the Philippines’ membership in the Asia-Pacific Economic Cooperation (APEC) improved the lives of its ordinary citizens?

Without going through the long and technical procedures in typical academic papers, this paper will check certain data and parameters to see if the above statement is true or not.

Four sets of data in two tables will be used: (a) infant and toddler mortality rate, (b) life expectancy, (c) unemployment rate, and (d) mobile phones and Web connectivity.

Here is the simple process: If people are getting poorer, or the degree of poverty today remains the same as a decade ago, then (a) there will be more or the same rates of infant and toddler deaths, (b) life expectancy remains the same as people in different age brackets die at the same rate as a decade ago, and so on. (See Table 1) 

From these numbers, the verdict is that the health and safety of Filipinos is improving, not worsening, over the past one and a half decades. There are fewer deaths among newly-born infants and toddlers; and Filipinos are living longer, meaning there are fewer deaths per age bracket on average. Those are the good news.

The bad news is that Philippine records are lower than those of its neighbors in East Asia except in Cambodia, Laos, and Myanmar. And this is where most of the pessimistic and critical comments are coming from: they emphasize the higher ratio of infant and toddler deaths in the Philippines compared to its neighbors and are silent or deliberately hiding the fact the good news mentioned above.

We now verify the same question with another set of data. (See Table 2)

If it’s true that unemployment and poverty rates in the Philippines are so high -- people quoting data from IBON Foundation and the Social Weather Stations surveys indicating a 25% joblessness rate -- then people would be so poor as to stop buying mobile phones and forego access to the Web. Is this happening?

Again, to the disappointment of the pessimists, the answer is No, on two counts. (1) No, the unemployment rate in the Philippines based on International Labor Organization and internationally-recognized official definitions is not 25% or 20% or 15%, but less than 7%. And (2) No, poverty is not worsening because millions of Filipinos can now afford to buy mobile phones and pay for Internet subscription, things that are far from the usual “basic needs” of humanity which are food, clothing, and shelter.

Overall, data for the Philippines and other Southeast Asian and East Asian economies that are members or non-members of APEC point to the fact that the rich are getting richer, and the poor are not getting poorer, but moving into the middle class.

Freeing markets on health care, entrepreneurship, telecommunications and many other sectors will allow the poor to have better access to information, from better ways to do rice, chicken and fish farming, to building stronger houses, shops and buildings.

Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers, Inc. and a Fellow of the South East Asia Network for Development (SEANET).

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See also:
BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015 
BWorld 24, Traffic and Newton's 3 laws of motion, November 12, 2015 
BWorld 25, Feed in tariff means expensive electricity, November 14, 2015 
BWorld 26, IPRI 2015 in APEC economies, November 19, 2015

Inequality 26, Pew survey result on support for free market, July 27, 2015 

Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015 

Inequality 28, IBON and sensational analysis, November 19, 2012

BWorld 26, IPRI 2015 in APEC economies

* This is my column in BusinessWorld last Monday, November 16, 2015.

KUALA LUMPUR -- The protection of property rights and promulgation of the rule of law are the cornerstones of peace and order in society. When such property rights are removed and unprotected, society can quickly degenerate into chaos and disorder. For instance, your house or car is also somebody else’s house and car, and he/she can take and occupy it anytime, anywhere.

Measuring property rights protection across many countries has been done by the Property Rights Alliance (PRA), a network of 74 independent, nongovernment, and market-oriented think tanks from 57 countries around the world and is based in Washington, D.C.

PRA produces the International Property Rights Index (IPRI) annual reports, which is a measurement of how governments in the countries covered promulgate the rule of law and protect property rights, public and private, physical and non-physical or intellectual.

The IPRI 2015 Report is launched today here at Park Royal Hotel in the capital city of Malaysia. The event is jointly sponsored by the PRA and the South East Asia Network for Development, which is a regional project of the Institute for Democracy and Economic Affairs in Malaysia.

The event’s theme is “Protection of Property Rights, Economic Growth, and the TPP.” The Trans-Pacific Partnership (TPP) is included in the theme because of its recent approval by the original 12 member-countries including Malaysia. TPP of course will not be implemented unless each member-country ratifies the agreement.

IPRI is derived by getting the score (one to 10, 10 being the highest) of each country covered in three major areas:

1 Legal and Political Environment (LP), which includes judicial independence, rule of law, control of corruption and political stability;

2 Physical Property Rights (PPR), which includes registration and protection of physical properties, and access to loans; and

3 Intellectual Property Rights (IPR), which includes protection of IPRs, in particular patents and copyrights.

As a result, countries with high scores in two or all three of these areas will have a high IPRI score and global rank.

In the 2015 Report, the top 10 from 1st to 10th places are: Finland, Norway, New Zealand, Luxembourg, Singapore, Switzerland, Sweden, Japan, Canada, and Netherlands.

For this piece, the focus will be on Asia-Pacific Economic Cooperation (APEC) member-countries that are covered in the IPRI annual reports. Only 19 countries are in this table because Brunei was not included in the IPRI 2014 and 2015 Reports while Papua New Guinea was never included in all IPRI reports, past and present. (See Table)

APEC countries that were not included in the 2014 Report because of some incomplete data were given this observation in that report:

1 Philippines: Between 2010 and 2014, the Philippines IPRI score increased by +2.9%. In 2014 IPRI increased by +0.2 due to slight increases in all components. LP increased by +0.2 points due to all four of its items increasing in 2014. In particular, item Political Stability improved by +22.7% between 2013 and 2014.

2 South Korea: Over the 2010-2014 period of analysis, the South Korea IPRI score fluctuated around the value of 6.3. PPR data is missing from the analysis completely and IPR is missing for 2010 and 2011... In general, the overall IPRI value for South Korea is good and stable.

The Philippines’ jump in global rank from 77th in 2013 to 65th in 2015 is somehow impressive despite the flat score of 5.1 and 5.0, respectively. The reason for the big jump is because many countries have suffered significant decline in their scores from 2014 to 2015.

Within the Association of Southeast Asian Nations-6 that are also APEC members and covered in this annual report, there is a mixture of results over the years. The bad news is that (a) the gap in overall score between high-ranked Singapore and low-ranked Vietnam was very wide, with the average score of the former almost twice that of the latter; (b) Thailand and Vietnam suffered significant declines in scores and global rank, both falling by at least 19 notches in ranking from 2014 to 2015; and (c) Indonesia global rank also fell significantly from 59th in 2014 to 70th in 2015.

The good news is that Singapore and Malaysia have managed to retain their high scores and global ranking.

The results of this annual study should prod the governments of the Philippines and other East Asian economies to remember the main function, the raison d’être or reason for existence, of governments: to enforce the rule of law, the protection of the citizens’ right to life (against aggressors), right to private property (against thieves and destroyers of properties), and right to liberty (against bullies and despots).

There is a positive relationship between economic development and economic freedom, and the strength of property rights protection. Civil society leaders should keep reminding governments of this reality, and dissuade the latter from enacting and implementing various programs that directly or indirectly erode the respect of private property. 

Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers, Inc., which is one of the 74 think tank-members of PRA. He is also a SEANET Fellow.

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See also:
BWorld 22, WESM, PEMC and search for competitive electricity prices, November 05, 2015 
BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015 
BWorld 24, Traffic and Newton's 3 laws of motion, November 12, 2015 
BWorld 25, Feed in tariff means expensive electricity, November 14, 2015

Inequality 26, Pew survey result on support for free market, July 27, 2015 
Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015

Business 360-27, Public health in Asia

* This is my article for July 2015 issue of the business magazine in Kathmandu, produced monthly by Media 9.

The state of public health in Asia

We often hear complaints and  litanies about how our lives are deteriorating and how our health condition is getting more “critical.” Are there solid basis for these statements aside from the subjective observations and emotional sentiment attached to them?

Let us check some health data and see how valid or invalid those observations are. The Asian Development Bank (ADB) has a good compilation of social and economic data spanning for two decades or more, so  we can see a trend of improvement or deterioration of the social  and  economic lives of Asians. 

Below, mortality or rate of death among the young, infants and children below five years old.

There have been drastic improvements in the health condition  of young Asians. Mortality rate for both infants and under five years old in just 22 years were slashed by half in India and Pakistan, and by one-third in Nepal, Bhutan and Bangladesh. A great achievement.

The same trend of drastic reduction in mortality rate for the young is observed in South East Asian countries. In the case of developed economies like Singapore, S. Korea and Japan, the already low  figures have further gone down.

In the past, tuberculosis (TB) was a major killer infectious disease in many countries in  the developing  world. Drugs and treatment against various bacteria that cause and spread the disease were not so developed, and the system of isolation for infected people and proper hygiene for the rest were also  not well-developed.

Consistent with the trend and  data in the above table, death rates from tuberculosis have also significantly gone down after 22 years, slashed by half in Nepal, Pakistan  and  India. Bhutan made very significant progress here. Sri Lanka has an excellent record, comparable to the developed Asian economies like Singapore and Japan.

The same trend is observed among South East Asian countries. Cambodia showed good improvement but its death rate from this disease remains very high, 3x that of Nepal, India and Vietnam.

So if less people are dying, that means the average life span of Asians as well as other people in the world is rising, right?

The numbers below confirm this. Many countries in South Asia showed significant improvement here, life span rose by an  average of 14 years after 22 years. For the people in South East Asia, the increase in life span has increased by an  average of five years. But in the case of Laos, Cambodia and Myanmar, the harsh dictatorship and even genocide they experienced meant very low life span in the 1970s, 80s up to 1990. Diseases plus political murders have cut short the lives of millions of people there until the 80s.

The three tables and sets of data above have shown  that the pessimistic and emotional view that “our lives are deteriorating, public health is in critical condition” has no basis. Our lives are improving, we are living healthier and longer. And that means we now have longer productive years. Instead of dying at age of late 50s or early 60s, many people now remain productive even in their late 60s or 70s, are able to enjoy the company of their grand children much longer.

While some sectors will give high credit to government investments in public health, they sometimes  fail to notice or mention the role of healthcare competition among private healthcare providers – hospitals, clinics, drugstores, drug manufacturers, physicians, pharmacists, nurses and other health professionals.

Governments in Asia and other parts of the world should recognize the role of healthcare competition among private players and professionals. The goal is longer life span for  the people, few people dying from infectious diseases, and not more government hospitals per se.

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See also:

Business 360--23: Electricity and Development, March 07, 2015 

Business 360-24: Reducing Construction and Electricity Permits, April 08, 2015 

Business 360-25, Economic Liberalization and GDP Expansion, June 23, 2015 

Business 360--26, Nepal earthquake and lessons from it, July 13, 2015

UHC 26: Public and Private Spending on Health, January 31, 2015 

UHC 27: Paranoia on Healthcare Corporatization and Privatization, April 06, 2015 

UHC 28: Health Pessimism Despite Improving Public Health, April 20, 2015

Childcare 7: Reducing Child Mortality

Two weeks ago, there was another good news in the health front from The Economist blog, that "Africa is experiencing some of the biggest falls in child mortality ever seen."

http://www.economist.com/blogs/graphicdetail/2012/05/daily-chart-12

Good news from Africa

May 18th 2012, 16:10 by The Economist online

CHILD mortality in Africa has plummeted, belying the continent’s “hopeless” reputation. The chart below shows the change over the most recent five years in the number of deaths of children under five per 1,000 live births. It does so in 20 countries which have had demographic and health surveys (detailed surveys of living standards) since 2005. Sixteen of the 20 have seen falls, but the more impressive finding is the size of the decline in 12: more than the 4.4% annual fall needed for the world to achieve its millennium development goal of cutting by two-thirds the child-mortality rate between 1990 and 2015. The top performers, Senegal and Rwanda, now have rates the same as India. It took India 25 years to reduce its rate from around 120 child deaths per 1,000 births to 72 now. It took Rwanda and Senegal only about five years. Michael Clemens of the Centre for Global Development, a think-tank in Washington, DC, calls this “the biggest, best story in development”.

This is indeed good news. Make modern science and economic growth move to reduce child mortality and when those children become productive adults, they themselves will contribute to further improvement in modern science, economic growth and public health, especially in the area of infectious, non-communicable and tropical diseases.

Meanwhile, the World Health Assembly (WHA), a gathering of the Secretaries or Ministers of Health of WHO member-countries, has prioritized global vaccination.

http://www.who.int/immunization/newsroom/global_vaccine_action_plan/en/index.html
World Health Assembly endorses the Global Vaccine Action Plan and World Immunization Week

25 MAY 2012 - Ministers of Health from 194 countries at the 65th World Health Assembly endorsed the Global Vaccine Action Plan (GVAP), a roadmap to prevent millions of deaths by 2020 through more equitable access to vaccines for people in all communities. In addition, Member States also designate the last week of April as World Immunization Week.

Thirty-eight speakers including country delegates, partners such as UNICEF and GAVI Alliance and civil society organizations took the floor in massive support of the GVAP....

I will just add that such global action is not and cannot be limited to government efforts alone. There are many civil society organizations (CSOs) like health NGOs, international civic groups like the tens of thousands of Rotary Clubs under Rotary International (RI), church groups, private charity foundations like the Bill and Melinda Gates Foundation, many others.

Take for instance RI's  "End Polio Now" campaign. The Gates Foundation will donate $355 million over a number of years to RI (about a third of it I think, has been released) and the latter matched it with a counterpart fund of $200 million. There is only one goal for this large mobilization of private resources and donation: to help end polio worldwide.

I also noted a vaccination project for children 4-6 years old by some Rotary Clubs three years ago,  Childcare 2: Rotary DTP Vaccination, May 24, 2009.

While espousing free market solutions to many public health problems, I recognize there is a role for government (hence, I am no anarchist in public health policy) in dealing especially with infectious, pediatric diseases.
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See also:
Childcare 4: Treatment and Vaccines for Children's Diseases, February 28, 2012
Childcare 5: The 162 to 52 Summit, April 11, 2012
Childcare 6: On Vaccine Self-Sufficiency Project (VSSP), April 27, 2012 
Socialized Healthcare 4: On Health for All, May 02, 2012
Socialized Healthcare 5: Alterrnative Views on Universal Healthcare, May 23, 2012