Two wheels and a flat | Inquirer Opinion
No Free Lunch

Two wheels and a flat

/ 04:06 AM February 02, 2021

Within the space of a year, our economy moved from being at the front of the pack of our comparable neighbors, to being at the tail end. Somehow, we squandered the hard-won head start we already enjoyed on the economic front, and now find ourselves having to run double-time to keep abreast of our neighbors.

We only need to apply my simple PiTiK test (Presyo-Trabaho-Kita) to see how badly we compare now. Our prices rose the most in 2020 (by an average of 2.6 percent) among the Asean-5—against 2.1 percent in Indonesia, -0.3 percent (yes, falling prices) in Singapore, and -1.2 percent in Malaysia and Thailand. Our unemployment rate (10.2 percent) was more than double that of our peers, with rates of 4.8, 4.4, 3.4, and 1.8 percent in Indonesia, Singapore, Malaysia, and Thailand, respectively. And as announced last week, our economy shrank by 9.5 percent last year, against expected milder full-year contractions of 6 percent for Malaysia and Thailand, 5.8 percent for Singapore, and 2 percent for Indonesia. Even agriculture, which defied the recession at the worst of the lockdowns, reversed fortunes and joined industry and services in decline at last year’s homestretch, battered by typhoons and the African swine fever that has decimated an estimated third of our swine population.


Even so, I’d still maintain that agriculture and its related industries is one of two wheels on which our economy could roll as we move forward through the ongoing pandemic. There are four reasons why I believe so. First, unlike industry, agriculture is prevalent across all regions of the country (except the National Capital Region, although there is limited and growing farming activity there, too). Second, our farm productivity is on the rise again after years of stagnation and decline, as more open trade appears to have had the desired effect of inducing government and producers to pursue improved competitiveness more seriously. Third, the Department of Agriculture is now moving in the right direction under a more technocratic leadership, after years of populist political leaders at its helm. Fourth, agriculture could strongly interlink with the rest of the economy, including those industries and sectors most slowed by the pandemic. Manufacturing could draw strength from agriculture through greater and wider processing and value-adding of farm products. Similarly, services could link to agriculture as already seen in growing agri-tourism, and in application of digital technology to broaden and strengthen the farm value chains, to the benefit of the farmers. The latter has had the benefit of drawing young people back to farming, as opportunities in the “digitalization” of agriculture and agribusiness make it more exciting for millennials and Gen Z to immerse themselves in and create wealth in the farms.

This leads me to the other wheel our economy will roll with: the digital economy, which we all saw thrive through the pandemic, and will thrive on as the Fourth Industrial Revolution (aka Industry 4.0) unfolds. We’ve all experienced how being confined to home has made us far more dependent on e-commerce (think Shopee, Lazada, and more), online entertainment (think Netflix, YouTube, others), online meetings (think Zoom, Webex, Microsoft Teams, and so on), and for our children, online learning. COVID-19 simply sped up what many believed to be the natural and inevitable direction of business and the economy well before the pandemic hit. Artificial intelligence, the internet of things, and blockchain usher in completely new ways of producing, processing, marketing, transporting, buying, and consuming products and services.


If we are to be ready for all this, government has to be at the forefront. Woefully, I’ve recently encountered government agencies whose various clearances and permits stand in the way of opening much-needed small businesses, still forcing us to come to their offices even in these dangerous times to file paper forms and documents—when all these could already be done online.

We have two important wheels our economy could run forward on, but such dinosaurs in government are holding us back with a flat tire.


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TAGS: African swine fever, agriculture, economy, Food production
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