Growth on its own is not the ‘royal road’ to the MDGs – the link between the two is distribution. The key is setting in train a political process that will lead governments and the private sector to distribute the assets, opportunities and benefits of growth more fairly, supporting human development outcomes and in turn, the achievement of the MDGs.

- ODI Briefing Paper on Economic Growth and the MDGs 

With all the talk of GDP growth rates in the news recently I think it’s important to bring up one key point: Growth matters for shit if it’s not inclusive and does not reduce poverty. If our focus is on growth for the sake of growth then the economic future of the Philippines will look little different from the last 25 years (or especially, the last nine years under GMA).

In a developing nation such as ours high GDP rates have been fool’s gold since most of the benefits have only circulated among a select slice of the economic spectrum. Our recent economic history is a classic case of the rich getting richer, while the poor stagnate. Sure, high GDP rates bring in hot money and foreign investment, but where exactly do the benefits of that accrue? Industries like call centers may bring jobs into the country, and help combat unemployment, but where exactly is the labor pool for that drawn? If anything, the recent rhetoric about inclusive growth is welcome; only so long as the structural inefficiencies that prevent it are addressed.

Economic discussions centered on achieving MDGs (which are all about reducing poverty and social development) has been fixed on creating inclusive and deep GDP growth. The fact is our growth has not necessarily achieved any large-scale reduction in poverty rates (which by the way, occurred with the lowest GDP growth rate in a few years). Poverty reduction has stagnated, with only small percentage points in terms of ‘self-rated’ poverty showing any improvement. But when we look at measures, such as the number of impoverished at the national line, the numbers show little change. According to World Bank numbers the poverty headcount ration in 2000 was 33%, in 2003 24.9%, in 2006 26.4%, and in 2009 26.5% (the latest).

Not encouraging.

doctorswithoutborders:

Funding for global health is susceptible to global economic conditions and political choices. In light of the UN Millennium Development Goals Summit this week, MSF is highlighting the urgent need for reliable, predictable and sustainable funding for global health innovation and access.

The lack of available funding for healthcare in the Philippines is one of the chief roadblocks to fixing the industry.

The infrastructure is antiquated, with most hospitals at a minimum two decades old, along with the equipment in use. There are as well serious issues in terms of government oversight; the devolution from a national to an LGU based healthcare system was poorly handled.

Compared to our neighbors as well we fall behind in things like beds per thousand people, primary care facilities and so on. And existing government facilities are poorly staffed and poorly supplied.

There is hope in public private partnerships and if government can rationalize the healthcare system and its oversight. Namely, bring the national oversight inline with LGU operations and funding.

The one thing we do have is a deep pool of available medical talent. Yet they cannot find any jobs.

Yikes.

All the MDG stuff I’ve been posting on is making me depressed.

“The population above the poverty threshold is declining as a result of low capacities to cope with the effects of shocks leading to more transient poor,” he said.

He cited climate change as the major factor posing threat to reducing poverty.

“Periodic disasters increase the vulnerability of poor Filipinos, thus derailing our efforts to reduce poverty and achieve the MDGs.”

I call BS. The Philippine has long been one of the leading countries for natural disaster occurrence, this is nothing new. Though, there is no doubt that climate change has had an affect in terms of frequency and strength.

But, our government seriously lags behind in processes and procedures geared towards disaster response and mitigation. That is part in parcel with why the poor are so negatively affected by natural disasters; there are no mitigation, first response or even basic organizational structures in place. Further, our failing infrastructure definitely contributes in urban areas to the disasters. In rural areas, infrastructure is non-existent for mitigation and first response.

To lay the blame for our failures to achieve the MDGs in most part on climate change is a cop-out, plain and simple. It ignores a host of serious systemic issues, from endemic corruption, misguided macro and microeconomic policies, lax or non-existent government oversight in social development programs, poor healthcare systems, a failing education system and so on. Those are more to blame than ‘climate change’. Though, blaming climate change is a more worthy soundbite internationally.

Additionally, it again puts the onus on the international community at large for the failings here. It dovetails quite nicely with the attempts over the last few years for the Philippines to get reparations from the developed world because of climate change.

Again, I am not diminishing climate change or its affect on the Philippines. But to blame it for our failures in terms of the MDGs is just…well…kind of ignorant. You could argue that this makes growing food more difficult. Yet, we have done little to actually address the issues in the agricultural industry. Our major food producing regions are in typhoon prone areas; yet we have done little over the last twenty odd years to diversify out of those areas and rebuild agriculture in more protected zones, such as Mindanao. The typhoons continue to impact us in drastic ways because we have done little in decades to actually mitigate their affect.

Oh and those areas that Paderanga cited where we are close to achieving them? We were just as close or closer in all hard goals in 2000. That’s a statistical sleight of hand, just like blaming climate change. We should be asking how we’re doing in primary school enrolment numbers. There we’ve fallen.

I am happy to hear that the Aquino administration is using the MDGs as a guiding light in the medium term eco plan. By the way, GMA did the exact same thing with her economic plans.

But I am very much concerned with them putting the onus of our failures on ‘climate change’. That ignores a whole host of systemic issues that we can address; and it seems as well to be future proofing from criticisms in a few years. “It was all beyond our control! We had typhoons!”

There are externalities that come into play. Our failures to provide adequate education and reduce extreme poverty and hunger are drive predominately by internal failures.

Though, that doesn’t make quite as fun of a soundbite.

To get on my economics and social development soapbox for a second (just a second, promise).

As the ODI points out there is most definitely a connection between growth and MDGs. WIthout growth, we can’t achieve them. And yes there is an intersection between growth and poverty alleviation. It can’t all be handouts and social programs, if real substantive economic uplifting is envisioned. Development requires more than that. It demands interconnected and rationalized policies. Which are implemented properly of course.

Yet the problem is, especially over the last 10 years, growth has not been inclusive and broad. Quite the contrary in fact. Growth in economy has been felt in only very limited subsections; little of it has actually trickled down. This is a function of certain systemic inefficiencies, as well as misguided growth-focused economic measures. Focusing solely on pumping GDP numbers is a recipe for disaster for developing economies such as ours.

Growth then must be inclusive and government policies enacted must take this into account; ie addressing system inefficiencies and flaws. We haven’t done it yet. Which is really why the GDP growth that has been touted has had little effect on poverty. In essence, little effect on our attempting to achieve the MDGs.

The Overseas Development Institute had a round table back in June tackling this issue. They released ten propositions geared towards linking growth, government policies and development measures to achieving the MDGs. Well worth the read:

1. The MDGs need to contribute to transformative change, and while the immediate 2015 targets are important, we need to support change that is economically, politically and socially sustainable and tackles the underlying causes of poverty. 
2. We have not done well enough on either equity or economic growth. To achieve the MDGs, an accelerated and transformative process of redistributive and inclusive growth is urgently needed. 
3. High initial levels of inequality are a poor foundation for both growth and poverty reduction. 
4. The structure of growth is important, not just the rate.
5. Employment matters, but decent work even more so, and needs to be backed by effective and large-scale social protection policies, and trade issues, including trade capacity building, are critical. 
6. Gender inequality is a key part of the story, and transformative growth processes need to tackle the challenges women face in terms of care, employment and lack of opportunities. 
7. Growth does not automatically lead to progress on the non-income MDGs and therefore social policies – including education, health and social protection – are central and must not be sidelined. 
8. Transformative change requires developed country governments and institutions to put their own houses in order in terms of trade policies, financial stability, climate change, green growth and other issues that are often beyond the control of individual low-income countries. 
9. Transformative change requires national governments of low-income countries to make interconnected, strategic and coherent decisions on policy areas once seen as discrete, such as industry, trade, migration, taxation, agriculture, social protection and basic services (even if their room for manoeuvre is limited). 
10. Policy solutions need to be home-grown and be reinforced by a political settlement and social dialogue that ensures they address not only the needs of society’s ‘winners’, but those who are, for whatever reason, society’s ‘losers’.

And then for fun. Think of the nature of the government’s growth policies for the last decade. They have been touting growth, growth, growth. GDP! GDP! GDP! It’s a mantra with them. A sleight of hand designed to blind with positive numbers, while ignoring the slide in extreme poverty the majority Filipinos find themselves in.

Any wonder we have had a delinked relationship between growth and poverty levels?

A couple of things caught my eye this morning. But, too little time to do full posts on ‘em all. So, yeah condensed? Maybe.

First, we have Imelda Marcos representing the Philippines in the Millennium Development Goals UN Summit, and even further chairing the House committee on the MDGs. Which, well, if you are familiar at all with the poverty situation during the Marcos Regime is a twitch-worthy type development. When it comes to the sheer mismatch of record vs. end-goal of the MDGs this ranks at the top.

Followed very closely by GMA speaking on behalf of the Philippines about the MDGs:

Former President and now Pampanga Rep. Gloria Macapagal-Arroyo would attend the fifth conference of the Clinton Global Initiative (CGI) and speak before a gathering of women leaders on the United Nation’s Millennium Development Goals (MDGs) in two separate events in New York, her spokeswoman disclosed yesterday.

There are certain areas that GMA gets credit for during her administration. The pursuit of the Millennium Development Goals is not one of them. The Philippine lost ground, ground we cannot make up, during those nine years. While I understand she was invited, her credentials in this area of almost as bare as those of Marcos.

The MDGs are something I am passionately in support of; have been for years. The failure of the GMA administration to make any headway is the basis for most of my critiques. And we cannot forget that the embarrassing state of extreme poverty (and the systemic corruption that drives its existence) expanded during the Marcos era.

And these are the people representing the Philippines. I have heard nary a word out of the Aquino administration on the MDGs. And he should be speaking on them; they strike at the heart of the ills that face the Philippines.

On travel and such, the more the COA releases information the more we realize the serious leakages that were occurring during the last administration. While taken in isolation these leakages may seem small, but when viewed in conjunction with one another we get a picture of how the government wastes money.

Another example comes with foreign trips:

President Benigno “Noynoy” Aquino is spending P25 million of taxpayers’ money for his 7-day working visit to the United States next week, Executive Secretary Paquito Ochoa Jr. said Friday…

Official records, meanwhile, showed more than P76 million was spent for a presidential [GMA] working visit to New York and Washington D.C. from July 29 to August 5, 2009. Planes fares for those who joined the working visit, which were priced lower then, cost the taxpayers P6.2 million.

One difference I enjoyed? Aquino will be staying at the Sofitel, while GMA stayed in the Waldorf-Astoria. And the sad thing is, this is the official COA report. The real stories of expenses and on-goings during GMA’s foreign trips are far worse than many (except those who went) can imagine.

And finally, on the continuing Global Asiatique mess:

The Home Development Mutual Fund (Pag-Ibig Fund) has not released a centavo to the P6-billion Xevera Subic housing project of Globe Asiatique Realty Holdings Corp. in Zambales because the firm met delays in preparing requirements, a report from the office of Vice President Jejomar Binay showed.

As with the Maguindanao Trial, the GOCCS hearings and the Hostage Report (which I hope we get to see…you know right around when the Chinese do, though I can sort of understand from a diplomatic view why they are sharing it on a government to government level first) this investigation is aptly demonstrating another of the serious flaws and lack of oversight and controls in our systems.

GA was effectively able to exploit the system (through corruption and legal loopholes) to fund their projects. They did this by manufacturing loan applications, creating false sales and even ghost buyers. Yikes.

GA built their ‘empire’ on public money and public lands. While those who are supposed to be trustees in the House Development and Pag-Ibig Funds benefited.

I hope this one goes to trial as well.

ellobofilipino:

Just a few more points to add to this sir.

Yes, we do have the Indigenous People’s Rights Act (IPRA) which actually was crafted as a law which would protect the rights of the Lumads against the interests of corporations. The law grants the indigenous groups in the country, the power to decide for their interests and to protect what they have had since the time of their forebears.

It is of course, not without any problems. I have heard of several instances in Northern Mindanao and Caraga where the native chief is sometimes co-opted by a multi-national corporation to facilitate the intrusion of moneyed interest into protected land. The same I think also happens here in Luzon. Thanks to some friends in the Legal Rights and Natural Resources Center - Kasama sa Kalikasan (LRC-KSK), I am still aware of what is happening in the IP communities in Mindanao though I am no longer as often there as I used to be.

Yep, @oxfamgb does fine work with the farmers in the Philippines. They have always been supportive of the networks which call for agrarian reform. They also work closely with the people I used to collaborate with on issues regarding the re-distribution of land in the country. I must admit though, I have yet to see that report which you mentioned. I think it would be a fascinating read!

And yes sir, the reason why over the past few years the problematic cycle of agrarian reform in the country has persisted is due to the lack of support services available to farmer-beneficiaries after they are awarded their lands.

The government has failed to provide the means by which the farmer may be able to produce the crops that are expected to come from the patch of land given. Added to this is the problem farmers face when trying to secure a loan from credit institutions, which often refuse them for fear that they may not be able to pay their debt.

Without any help from the government and credit institutions, the farmers have no choice but to sell, or at least pawn their land to whoever is willing to buy or offer money. This is the flaw of the old agrarian reform program which the new law hopes to correct. The result of the new law and policies though remain to be seen since the new program was only signed into law August of last year.

I must say though, I still need to hear something from President Aquino on agrarian reform. For a country which lives on rice, it is imperative that he say his piece on the security of the livelihood which places food on our tables. Unless if he wants to go on importing rice from Vietnam and Thailand.

Thank you for clarifying on the IPRA. The case I was familiar with was the Luzon one, but I do now remember hearing about the Mindanao case as well.

Unfortunately, this is a pretty common occurrence, noh? Even further, I remember certain issues with regards to the land grants that were given to them! As in, some tribes were either not given land in size that adequately reflected their ancestral claims or were shifted to entirely new areas.

The tribal situation is an especially thorny one indeed. How do you protect their ancestral rights, ensure that they are connected to the Philippines, do not feel marginalized, provide economic opportunities (and not as tourist oddities), all the while ensuring that their indigenous culture and society is protected and supported?

One of the chief complaints I have heard from the tribes is that they do not feel a part of the Philippine discourse at large, nor do they feel like their voices or concerns are being heard or addressed.

Back to agrarian reform, I particularly like that Oxfam report! You can download a softcopy of it here. The Philippines is included as part of a larger study of 10 countries and their agricultural sectors. They correctly point out:

Of course, the table does not capture the full range of experiences of different countries (in the Philippines, for example, 2/3 of the country’’s poor work in agriculture, but overall it contributes little to GDP and employs around 37% of the working population55) or the full significance of agriculture in relation to food security, equality and environmental preservation.

It is the point we keep hammering in policy meetings and yet the government continues to turn a blind policy and program eye; except for some token projects here and there. The GMA administration at the end touted all of these so-called infrastructure projects which were nothing more than thinly veiled crony capitalism. Yeah sure they developed the RoRo (for which the Aboitiz were very very happy) yet transport to get to the ports was ignored, not to mention support to grow produce that could be shipped and sold.

One aspect we have not really touched on is the asset polarization that has taken place over the last 10-15 years. That, as you well point out, is a part of the failure and flaws of the agrarian reform law. I think you will find the section in the Oxfam report on “Land Rights” interesting as well.

And I agree completely with you. All I’ve heard from the Aquino administration so far are some broad statements concerning cutting out middlemen and improving infrastructure. They’re rapidly approaching the 100 day window and we have yet to see concrete plans concerning addressing agriculture. They have made some decent strides in other areas, but this is one that, as we’ve pointed out, improvement in will affect a broad swath of the Philippine socio-economic spectrum and improve rural/urban poverty, as well as rebalance the growth equation.

Yeah, call center jobs are whoopty-do but they only benefit a small segment of the population: college graduates.

Part of the problem is definitely the lack of capital support:

In the Philippines, access to basic agricultural support services dropped dramatically: the share of agricultural loans in total loans, for example, decreased from 9.2% in 1980 to 3.3% in 2006.94

And this accelerated post-2000. All of this actually feeds into the whole Millennium Development Goals issue that we’ve been pushing for so long. Reduction in poverty will not occur in urbanized areas. Absolutely not. It will occur in the rural areas. If the Aquino government is serious about achieving, or at least getting as close as possible to achieving, the MDGs they must focus on agriculture; especially with regards to extreme poverty.

Anything else is really just populist pandering.

I’ve been highly critical in the past of the continued fixation on GDP growth as the means to alleviate poverty. What with our structural inefficiencies it just doesn’t work. Focusing solely on the macro-economic aspects of the managing economy and growth has not yielded results. One of the most egregious, in terms of commentary, has been Alex Magno in pushing this idea. Though today he balanced a bit, he fails again to link the runaway budget deficit to the misguided policies and rampant corruption (crony capitalism at its worst) of the previous administration.

The fact is that growing the GDP through government expenditures does not poverty alleviation make. There has to be a bridge between the two. Further, according to reports, 10-15% of our growth has been linked to OFW remittances. So, very little of the so-touted GDP growth has actually been linked to real organic growth. The fact is, unless there are policies in place to ensure distributive growth, the poor will be left behind. Which is exactly the situation we have seen over the last 10 years here. For all of the 37 months of straight (though tempered compared to our neighbors) growth, the percentage of impoverished has neither plateaued or decreased. Instead we’ve seen a growth in extreme poverty and hunger, both in terms of percentages and real numbers.

There remains a fallacy that the only way to help the impoverished is through handouts and dole-outs. This does not work. Instead we have to look at the ‘poor’ as partners in poverty alleviation. This means encouraging micro-enterprises and enhanced conditional cash transfers. It means providing them with specific training and capital access (in the case of agriculture). Don’t forget that the majority of the poor are rural farmers and artisanal fisherfolk. Targeting programs that enable them to improve their circumstances, not necessarily just give them money, is the truest way to actually reducing the number of poor and actually empowering them.

These points concerning wrong-sighted economic policies vis-a-vis poverty alleviation were recently touched on by the ODI:

The structure of growth is important, not just the rate. 

What seemed to be a problem with the GMA administration was an incoherent (as in de-linked) economic policy. There was very little harmonization (something that Aquino did mention in brief in his speech) between domestic and international trade and economic policies. This resulted then in what we have seen in the country today. In the ODI’s talk on the MDGs and economic policy, they very well could have been analyzing the Philippines and its failures.

Transformative change requires national governments of low-income countries to make interconnected, strategic and coherent decisions on policy areas once seen as discrete, such as industry, trade, migration, taxation, agriculture, social protection and basic services (even if their room for manoeuvre is limited). 

Ultimately, this will be the challenge of the Aquino administration: How to effectively bridge the gap between growth oriented macro-economic policies and on the ground, grassroots social and poverty alleviation programs.

They are not mutually exclusive at all. The key is, figuring out how to make them mutually inclusive.