They say elections are won and lost over the state of the economy and the mind-set of wage earners. Since the Philippine economy has been in stagnation for the last three decades over several administrations, it can instead be said that elections in the country are won and lost over someone dying and the mind-set of the mourners. Just think: Ninoy dying and then Cory winning the 1986 election; Cory dying and Noynoy possibly winning the 2010 election. A second Aquino presidency seems to be in the stars. As such, supporters of the most popular presidential candidate couldn’t care less if future President Noynoy Aquino will institute any radical changes to boost the economy.
Despite the recent financial crisis that hit some major countries really hard, the state of the Philippine economy is not bad but it’s not great either. I say not bad after having just read that Greece declared bankruptcy in the aftermath of an overspending spree. But then Greece hosted an Olympics. The Philippines, in contrast, could not even spend its way out of a power shortage. Consider then how the Philippines has the third-highest rate of remittances from overseas workers in the world. This source of income is not sustainable and highly dependent on other nations’ economic conditions. Filipinos are not captains of their own economic destiny. This needs to change.
A Noynoy Aquino presidency will not by any stretch of the imagination see overseas contract workers packing their bags and coming home. Noynoy’s economic “vision” and non-platform are indicative of how things will continue the way they are. If our population keeps ballooning (as it probably will under a prayerful administration) things can only turn for the worse.
When people lose their jobs, they lose their capacity to buy goods and consume. Usually, it is the luxury items that get snubbed first. Then people go for the cheap on the essential products. Once people forego buying goods, factories start closing shop and more people lose their jobs. This situation is called — what else? — a financial crisis. If you happen to be a victim of a financial crisis, you will have to forego going to Starbucks, skip the latté, and make do with Nescafe Blend 45. Eventually, Starbucks might have to close their shops if this condition is prolonged. There goes the enthusiasm of your investors. Bye bye to much-needed capital.
Perhaps the reason why the Philippines is able to avoid bankruptcy is because we really don’t produce a lot of goods for domestic consumption and we don’t really export much beyond low-value commodities. This means that there aren’t a lot of factories that have to close their shop to begin with. What we do export is manpower. We have no shortage of manpower and fortunately (for now) our manpower is needed in many parts of the world. The downside is that working overseas has many draw-backs. Aside from our society producing an entire generation of children with absentee parents, the income generated overseas does not guarantee a rise in savings rates among its recipients, much less promote or develop businesses in the country.
Even if presidential aspirant Noynoy Aquino together with his party-mates shout at the top of their lungs that they will ensure economic transformation, they cannot perform miracles and create jobs out of thin air. Noynoy cannot force companies to hire those who are unemployed if there is no job vacancy. He needs long-term solutions to create sustainable employment.
The role of the government
In Noynoy’s so-called economic vision and platform, whoever wrote it stated that:
We will encourage free and fair competition in a level playing field. One not need be a crony in order to succeed in the field of business. More importantly, government will not compete with business. Nor will government use its regulatory powers to extort, intimidate and harass.
Quite simply easier said than done especially since, as they also acknowledged in the same vision statement:
There is a widespread perception that success in the business milieu can almost be directly correlated to your closeness to the powers-that-be. Because of this, some players in the industry are forced to focus their activities on maintaining relationships in order to retain the favors that they receive in exchange for cultivating that relationship. This has fostered the wrong kind of competitiveness.
How does he plan to change this perception to begin with? Does our culture encourage healthy competition at all? How does he propose to overhaul the systematic abuse of power when the Liberal Party itself cannot even be counted on to play fair during the election time? Their connection with media empire, ABS-CBN for one, ensures that Edsa 1 memories are played on TV at the height of the campaign period.
To answer the problem highlighted above, the Liberal Party should practice what they preach by being more transparent and open to criticism. They should address doubts about Noynoy Aquino’s credibility and suggestions of incompetence by participating in more debates and public forums instead of merely indulging in the usual meet and greet parades. His photo ops are increasingly becoming identical, making it harder and harder to tell them apart.
The government’s role in paving the way for businesses to thrive is to invest more on infrastructure like transportation, energy and communication, especially the country’s broadband network. This will lay the groundwork for businesses to grow and be more efficient. We are yet to see from Noynoy how he is going to implement any plans on working with the private sector “by bringing forth an agreed public infrastructure program, based on a cohesive plan that optimizes the value of the entire network.” Where is that cohesive plan? If he wants it to be transparent, we want to see it now before the election.
Noynoy’s economic vision and platform also did not mention how he plans to invite more foreign investors. There’s not much in there in terms of how he plans to make the Philippine business environment more lucrative to foreign businesses than it is now.
The role of private enterprise
If you eliminate the problem of distrust in industry, you open more doors for entrepreneurs who want to put up a business. When there are more businesses being started, there will be more job vacancies. This means that there will be more opportunity for the jobless to find employment.
New companies are the key to job growth. There are a lot of mom-and-pop businesses that do not bother to register themselves because they do not want to deal with red tape in government agencies. Since these businesses have to operate underground, they cannot hire people openly or let their business grow. In the long run, the government also loses income from these mom-and-pop businesses that are not properly registered. Examples of these are financial services that provide micro-financing or what they call “five-six lenders” to small businesses.
Even if the Philippine government injects money into the economy to stimulate spending, stimulus packages are only designed to bring back consumer confidence and to delay the onset of a financial meltdown. However, if the factories or the businesses that closed down during a financial crisis are not replaced by new ones, the unemployed will remain unemployed — until they find a job overseas. An so the circle of the unsustainable solution keeps turning.
The role of education (A prequel to creating jobs and businesses)
As embarrassing as it is to admit, I only recently realized that there is only one sure way to create jobs for the economy and that is innovation. The question is, are Filipinos innovative? Before anyone jumps up and down and says that a Filipino invented florescent lighting, let me just cut down that claim to size by highlighting that it was proven to be a hoax.
We have a lot of intelligent people but we have a culture that does not encourage being different. We seem to frown upon people who come across as original. One can conclude that this prevents us from being more creative. We do thrive in the service industries like hospitality, nursing and being part of a crew ship but there aren’t a lot of us who are encouraged to be inventors or creators of new and ground-breaking products that will contribute to making humanity’s existence a lot easier. Who will be our Steve Jobs or Bill Gates?
The government needs to provide incentives to students in the field of science and engineering. More government funds should be allocated to training people in technology and development. There should also be a program that will encourage our graduates in these fields to stick around and spend serious time working on the country’s infrastructure. We all know the biggest problem of all is the brain drain. At the moment, our graduates have no incentive for staying in the country because they can get more recognition, appreciation, and bigger monetary rewards abroad. It does not help that we have a presidential candidate who seems to disdain the thinking voters who ask the hard questions about his platform. This situation further discourages people from being more competitive and motivated to excel.
So, if anyone of you gets a chance to talk to Noynoy Aquino about the economy, please ask him how he intends to create an environment that will encourage more entrepreneurs and, more importantly, an environment where we will see more ordinary citizens become innovators. This is the only way we can sustain job creation in the long term.
It is too bad our elections are won and lost over someone dying and the mind-set of the mourners instead of the state of the economy and the mind-set of wage earners. Hopefully, the actual Election Day will see us prove to ourselves and the world that we can be different.