Why are we poor?

In the Philippines, even the past is unpredictable. Each administration has its own version of history, often diametrically opposed to each other’s.

Ignorance is partly at fault. More than three decades after the fall of the Marcos dictatorship, our basic education curricula are yet to catch up with pre-established facts and peer-reviewed studies. And there is, of course, the element of revisionist acrobatics by self-serving “scholars” and academic populists who often find more love on social media than respect in high-quality publications.

But knowing too little is even more dangerous than ignorance. Case in point are the well-meaning yet underinformed folk who claim to have discovered the magical solution for all our national troubles based on some tourist visit to or impressionistic study of our more successful neighbors or, at times, of totally incomparable nations across the oceans.

In the past, it used to be “walang ganito sa States” (there is no such thing in the [United] States). Now it’s mostly “walang ganito sa Singapore” (there is no such thing in Singapore) amid the recent upsurge in “Singapore envy.”

There are also other well-meaning people who claim that everything was fine and dandy during the past reformist administration. To them, if not for some populist sabotage in the last elections, the country was supposedly on a glide path to progressive transformation. They see President Duterte as “trouble in paradise.”

Perhaps the fundamental reason why our country can’t coalesce around a shared collective memory is the shared frustration with the persistent state of crushing poverty, haunting injustice, and overall underperformance of the Philippines. In response, we either create imaginary “golden ages” under previous leaders, especially dictators, or blame the latest ex-president for all our national tragedies. It’s a defense mechanism that helps dent the psychic wound of collective frustration and individual humiliation.

A more healthy way to reconcile ourselves to the past, however, is to have a better understanding of what can make our country a truly successful nation.

Technically speaking, the Philippines is no longer a “poor country.” Our per capita income is almost “upper-middle-income” level. Back in 2013, the World Bank actually described the Philippines as Asia’s “rising tiger” economy. Our middle classes are as large as the population of Australia and Malaysia.

Our fundamental national tragedy is instead the absence of inclusive development, thus the double-digit underemployment among our adults and double-digit malnutrition among children.

Structural inequality in the Philippines, however, is itself the symptom of a deeper crisis. Other highly unequal countries—best measured in terms of Gini coefficient scores—such as Argentina and the United States have managed to achieve collective success throughout the decades.

So, is it corruption? But that fails to explain why other countries also with high levels of corruption—best measured through corruption perception indexes—such as China, Thailand, Malaysia, or Vietnam have achieved economic success.

Is it the “form” or “system” of government? That also fails to explain why extremely divergent regimes from communist Vietnam to liberal democratic Taiwan (with a dominant president) and New Zealand (with a dominant prime minister) have been similarly successful, especially during the COVID-19 pandemic. Is it our “damaged culture,” as journalists such as James Fallows have argued? But that simplistic argument also fails to appreciate the fact that the same Philippines was the second wealthiest nation in East Asia in the mid-20th century, when even the likes of South Korea and Taiwan were extremely poor.

In fact, if there is anything that history teaches us, it is that “culture” is malleable, and that no nation is either fallible or immune to success, hence the cyclical rise and fall of empires.

At the heart of our national dilemma, and chronic corruption and inequality, is the perennial absence of capable and autonomous state institutions that can discipline the rapacious oligarchy and consistently implement effective trade and industrial policies for national development.

Ours is a country where the 40 richest families have gobbled up three-fourths of economic growth, while at least 70 percent of our elected offices tend to be dominated by political dynasties. Unless something is done about this scandalously high levels of wealth and power concentration, millions of ordinary Filipinos will continue to struggle with crushing poverty.

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