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Tag: Emmanuel S. de Dios
A curious mix of relief and trepidation (plus exasperation over the lack of transport) has attended the dialing down of Metro Manila’s lockdown from “modified enhanced” to now only a “general” community quarantine. While most people are obviously pleased with the chance to return to work, a feeling of unease still hovers over them owing to the health risks they must face in their simple desire to earn a living.
The current pandemic has tested the resilience of almost all the country’s institutions -- and found them wanting. Not least affected has been the country’s education system. The prolonged suspension of classes, the abrupt ending of instruction, and the schools’ make-do closures of the school year effectively stopped learning dead in its tracks. While interrupted education may seem a side issue in the face of the more existential threats to life and livelihood, its long-term consequences for the nation’s future cannot be ignored.
THE WORLD is facing its biggest public health crisis in a century. Managing this crisis via a lockdown requires an intentional contraction of the economy of unprecedented proportions. This deliberate and unavoidable drawdown in market activity will put businesses at risk of destruction, with hundreds of thousands of Filipinos likely to lose their sources of livelihood. Many households will be plunged into poverty. Without assistance, those who are already poor will find themselves at the literal threshold of life and death as they battle both the virus that is ravaging their health and well-being, and the economic hardship that will almost certainly exact a social -- if not physical -- death. Even those who are currently economically stable risk joining the ranks of the vulnerable.
One of the bright spots of the economy under Duterte is said to be the rise in the investment ratio. In the last three years (2017-2019), the average proportion of investment to GDP approached 30%. Compare this with the previous six-year period (2011-2016) when the same ratio averaged 22%.
A new year is typically the time to turn a new leaf -- but maybe not before past accounts have been settled. While the administration has earned plaudits from some quarters for the economy’s performance under its watch (which, to be honest, could have been better), nagging questions continue regarding the social, civil, and human cost accompanying that success. Was it a vital component, even “a necessary evil” in the words of one economic manager? Or was it a purely incidental and gratuitous -- and lethal -- diversion? In other words, would the economy and society have prospered anyway without a mounting pile of bodies (more than 7,000 drug suspects to date)?
Felix Mendelssohn invented the genre Songs Without Words (Lieder ohne Worte), short instrumental pieces that were almost singable but contained no lyrics. Mendelssohn objected to a friend’s attempt to “put words” to them, since for him the meaning of the pieces was already crystal clear. He was right. In fact, a good deal of the power of classical music is that -- like abstract paintings -- the listener is left free to impute her own meaning to the piece.
The recent alarm over falling rice prices after import-quotas were replaced by tariffs points up a larger problem that will increasingly confront Philippine society -- the conflict between the interests of a growing middle class and poorer minorities. On the one hand, the historic measure produced its intended effect: it has lowered rice prices, bringing relief to the large, mostly urban rice-consuming public. (After the avoidable fiasco of 2018, inflation is now a record low of 1.7%.) On the other hand, the same measure has wreaked havoc on the livelihood of rice farmers and landless farm workers, who count as some of the poorest Filipinos. To be sure, the government purports to ameliorate the damage. But the one-time loan it offers to rice farmers is obviously not enough to facilitate the permanent shift -- in crops, technologies, mindsets, and occupations -- that the new trade-regime imposes.
Aside from its share of the global market, the second portent of China’s inevitable rise is the rapid growth of its science and technology (S&T) capabilities. To be sure, China’s S&T is still nowhere as established or prestigious as that of the US or Europe. As proof: there has still been only one entirely home-grown Mainland Chinese Nobel Prize-winner in science -- Tu Youyou, a female scientist who established scientifically the effectiveness of a traditional cure for malaria. Significant and helpful but hardly the stuff of cutting-edge innovation.
THE last task undertaken by the famous economist John Maynard Keynes was to secure a huge bilateral loan (around $50 billion in today’s terms) from the US to help a bankrupt Britain after World War II. The war had devastated the British economy, which until then was still adapted to wartime production, and the loan was badly needed to procure capital equipment and consumer goods and to maintain British military presence throughout its still-vast empire. The strain of the negotiations -- the Americans driving a shockingly hard-nosed bargain -- contributed to the untimely death of an already-ailing Keynes even before he had turned 63.
We are so accustomed to using “growth” to refer to aggregate economic expansion that we forget it is really just a metaphor. It cannot be found in Adam Smith, who spoke instead of the “progress of opulence,” nor a century later even in Marshall who still used “progress” to mean the antithesis of poverty. Keynes used “growth” to denote increases in wealth or population -- a proper application to stock-concepts. Harrod may have been among the first to apply the term to the proportionate increase in aggregate income, perhaps illegitimately stretching the metaphor to cover a flow-concept as well. These days, of course, “economic growth” refers almost automatically to increases in measured income.
Observers have begun to worry that the country’s widening current-account deficits will sooner or later become a problem for continued growth. Between 2003 and 2015 the country ran a succession of surpluses but finally slipped into deficit beginning 2016 under the Duterte administration. Last year’s deficit exceeded all forecasts, coming in at 2.4% of GDP. On merchandise trade alone the deficit was close to 15% of GDP, a historically unprecedented figure.