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Defining the New Normal: Solidarity and structural change for a post-COVID-19 economy

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By Marjorie Muyrong and Jerik Cruz

WHAT SHOULD our COVID-19 “new normal” look like? As economic stimulus bills for the pandemic are now being debated in Congress, questions on how the Philippine economy will be transformed in the coming months are asked. The shape of the country’s long-term development goals, as expressed in AmBisyon Natin 2040, is also uncertain.

These discussions should not be left only to policymakers. In the same spirit of bayanihan, all Filipinos have a role to play in defining this new normal for their communities and sectors. And we must also keep in mind that envisioning a post-COVID-19 future need not be an exercise in fear — but of solidarity in addressing long-running imbalances in the economy.

THE HEALTH IMPERATIVE
There is no doubt that community quarantines have succeeded in buying time for hospitals to meet the first surge in COVID-19 patients. According to Dr. Jarylle Chu, a training fellow at Makati Medical Center, “The next challenge is to pool funds for the future acquisition of the vaccine and to organize a fast country-wide vaccination plan early on.”

Yet in a real sense, COVID-19 has laid bare the vulnerabilities of the Philippine health system. As a country with one of the lowest per capita health expenditures among the ASEAN-5, addressing the pandemic in the long term demands that we not only pour resources for mass testing, treatment, and vaccines; for expanding production for COVID-19-related supplies in the garments and pharmaceuticals sectors; but that we also invest to enhance the effectiveness and accessibility of our public health services.

There is ample indication that such a “COVID-19 Keynesianism” strategy can also be a pillar of a long-term recovery plan. Our estimates using Input-Output analysis suggest that investing P1 billion in the health sector can support as many as 16,000 jobs. The same amount can also catalyze up to 7,000 jobs in the pharmaceuticals sector, or 19,000 jobs in the garments sector.

SUPPORT MSME ‘RETROFITTING’
With government’s social amelioration efforts still facing serial hurdles, numerous small business owners have stepped in to assist their workers, even when that means depleting their cash reserves.

“Fight to stay in business… Keep yourself and the company afloat so that you can continue to help others,” advises one business owner in Metro Manila. Indeed, we hear many anecdotes of entrepreneurs retrofitting their business, oftentimes by leveraging digital innovations, to keep themselves liquid and continue paying their employees.

But to support these efforts, assistance must not be limited to wage subsidies and “bounce back” loans; it should also include support to ensure these repurposing initiatives’ sustainability. Beyond capital and training support, investments to strengthen the country’s logistics and digital infrastructure, especially outside of Metro Manila, can expand opportunities for continued business operations during the pandemic.

REBALANCING TOWARDS AGRICULTURE
COVID-19 makes a revival of agriculture a national imperative — not only to maintain food supply in a disrupted trade environment, but to rebalance the Philippines’ Manila-centric economy, and to absorb displaced workers. In fact, in our Input-Output analyses, we find that agricultural sectors consistently have the most promising job-creating prospects, led by the “other crops” (23,500 jobs per P1-billion investment), “fisheries” (20,050), “sugar” (18,800), “corn” (14,670), and “coconut” (14,300) subsectors.

But the challenge will not be resolved simply by calling people to farm again. “Ang sinusulong nila ngayon, Balik Probinsya Program. Magbabalik-probinsya ka nga, pero pagdating naman doon sa probinsya, wala namang kabuhayan doon,” explains Gary Perlado of the Rice Watch Action Network (“The proposal they have now is the Balik Probinsya Program. But if people go back to the provinces, there are no jobs there”). Due to decades of neglect and misgovernance, farming and fisheries have been linked with high poverty levels nationwide.

And the sector has again been a victim of recent lockdown policies. Vegetable farmers, to take one example, have reportedly been unable to access needed farm inputs and sell their goods, because of restrictions that have been imposed during community quarantines. This has worsened their indebtedness.

Reinvigorating agriculture amidst the COVID-19 pandemic will require a dedicated public investment program on top of other policy changes. For example, investments are sorely needed in improving rural infrastructure; facilitating a shift to higher-productivity agribusiness; enhancing marketing and distribution systems; and addressing other long-standing problems in the rural economy, such as access to land and credit. These are hardly new issues, though the pandemic has made resolving them all the more pressing.

Even as COVID-19 hangs over us, Filipinos must confront the new normal, not only with clarity of mind, but also with solidarity. Despite its toll, the pandemic offers us an opportunity to reimagine the contours of our economies, communities, and workplaces, and to respond decisively to structural infirmities within them.

The spirit of bayanihan has been well and alive in donation drives for food aid and COVID-19 supplies — can it also be channeled to efforts to reorient our economy in a more resilient and inclusive direction?

As Dr. Jarylle Chu reminds us, “The real front-liners here are the people in the community.”

 

Marjorie Muyrong is a PhD Sociology student at La Trobe University. Jerik Cruz is an incoming PhD student at the Massachusetts Institute of Technology and a fellow of Action for Economic Reforms. Both are affiliated with the Ateneo de Manila University’s Department of Economics.





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