Business Matters
Maintaining momentum
By Edilberto C. de JesusPhilippine Daily Inquirer
The year 2012 was a good year, government officials, academics, and business executives, both foreign and Filipino, agreed. Objective indicators sustained the consensus view.
Merchandise exports of $48 billion last year appeared on the verge of breaching the $51.4-billion record of 2010. GDP grew 6.5 percent in the last nine months and could inch toward 7 percent for the full year; on the last trading day of the year, the Philippine Stock Exchange Index posted a 30-percent increase, its fourth year of sustained growth.
But 2012 was also a bad year, as the Philippines shared in Asia’s 83 natural disasters that affected 64.5 million people and cost the region $15.1 billion and 3,000 casualties. The UN Office for Disaster Risk Reduction (UNISDR) estimated that Asia accounted for 74 percent of affected people, a third of the economic toll, and over half the world’s disaster deaths.
In the first 10 months of the year, the Philippines endured 16 natural calamities, second to China, which weathered 18 disasters. Since the December typhoons, “Pablo” and “Quinta,” missed inclusion in the list, the Philippines may have tied China in the full-year tally. UNISDR’s Asia head Jerry Velasquez noted: “Risk is growing faster than wealth is being created” (Tarra Quismundo, Inquirer, 12/27/12, Page A13).
The risk-wealth calculus should be considered in context: The people who generally gain the most ground from record economic performance and the people who generally suffer the biggest losses from natural disasters belong to two different communities.
Calamities strike communities on the economic margins most severely; poverty forces them to live in the areas most vulnerable to disasters. When the economy booms, there are trickle-down benefits, but the biggest rewards would tend to flow toward those with the economic resources to begin with.
We are all hoping that the forward momentum can be maintained, and there are good reasons to encourage optimism. The Aquino administration and its campaign for good governance continue to enjoy the confidence of the people. The country’s financial managers expect that the new “sin taxes” will bring a credit upgrade, which will promote greater investments in the Philippines, apart from additional revenues averaging P44 billion a year over the first five years.
We are also hoping that nature will spare us from more costly calamities. But 2013 is also an election year. While campaign spending will infuse more cash to prime the economy, casualties from electoral violence have often turned elections into manmade disasters. Recall the partisan killings in the past, and, in particular, the Ampatuan massacre in Maguindanao in 2010.
Beyond the politically triggered violence that often accompanies electoral exercises, there is also the concern about their impact on governance. Recall the decision of then President Gloria Arroyo to abort the Department of Education’s Bridge Program in 2004, weeks before its implementation. Designed to add one year to the basic education cycle, the Bridge would have already four cohorts of secondary students and eased the transition to K to 12.
Election results can also lead to disasters. It’s not surprising that Aquino’s New Year wish is the election of the right leaders who will keep the economy on the path of growth. Analysts contend that the economy could have done even better in 2012 and can grow much faster in 2013 with more effective governance from committed leaders. But delays in addressing anticorruption and policy issues can stall economic growth.
Business has its own wish list of issues that require urgent attention: progress on upgrading the transport and communications infrastructure; assurances on the availability and reasonable cost of power; settling revenue-sharing disputes between government and investors; aligning national laws and local government regulations; completing the implementation of educational reforms.
In an election year, politicians tend to avoid the discussion of contentious policy issues or raise these for political points, not for their resolution. The electorate needs the information to keep politicians focused on, and accountable for, the work of governance and to give voters a basis for choosing among the contending candidates. Academic policy centers and the media can help provide this information.
Hopefully, talk shows will not simply give politicians more air time for their propaganda, but will compel them to disclose and defend their policy choices. Even negative political advertisements will help, if they are factually anchored on substantive policy issues and if those who pay for these ads are required to identify themselves and explicitly express approval for the personal attacks on rival candidates.
Unlike natural disasters, elections tend to provide a windfall to marginalized communities, which are easier targets for vote-buying. It is easy to condemn the poor who sell their votes. It is tougher to persuade them that their votes can make a difference: a difference, not just in GDP figures, but in the quality of their lives. This is the task for those who still believe in democracy and in elections.
Edilberto C. de Jesus is professor emeritus at the Asian Institute of Management. E-mail: edejesu@yahoo.com.
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Tags: Business Matters , Calamities , economy , GDP , opinion , Stocks
