Poverty as business’ enemy

“Mining is not the enemy. Poverty is.” This was how Manuel V. Pangilinan concluded his speech titled “How can mining work for the Philippines?” in the Conference on Mining’s Impact on the Philippine Economy and Ecology last March 2 in Makati.

It is a pleasure to see a giant private mining company committing itself to the fight against poverty as one of its corporate objectives.  A commitment that comes from a highly respected businessman stirs hopes that his company will fight poverty in a businesslike way, i.e. with specific targets, and a timetable, for poverty reduction in the area/s where it expects to have an impact.

To me, fighting poverty in a businesslike way means: (a) having adopted some definition of poverty (or more than one, since poverty has multiple dimensions), (b) having a quantitative assessment of present-day poverty in the relevant area/s, (c) having a scientific model, or a logical theory, of how the business operations affect poverty, (d) making numerical projections as to how much the business operations will reduce poverty in the short, medium and long term, and (e) having access to a reliable system for periodically quantifying the fulfillment of the antipoverty program.

The baseline assessment (b) is something a company could do internally or outsource. The evaluation system (e), on the other hand, should be operated independently of the company, since credibility on this touchy issue is quite important.

I think it is possible for a business company to arrive at a system for regularly evaluating poverty on the basis of a long-term research arrangement with one or more academic institutes, situated close to the area/s potentially affected by the mining operations, and with good reputations for scientific excellence, fairness, and integrity.

Naturally, the mining company (or a group of them, to exploit economies in research) would be expected to contribute substantially to the costs of the system. Businesses that identify poverty as their enemy should help in tracking its movements.

Actually, I’ve never seen a private business do poverty-targeting before. Normally, fighting poverty is just add-on rhetoric for a private company, rather than a serious objective for which its owners hold management accountable.

Official poverty statistics won’t help much. Business shouldn’t imagine that existing government data are handy. “Mining has the highest poverty incidence of any sector in the country,” said Christian Monsod in his conference speech titled “Mining is a social justice issue.”

He cited 49 percent as the poverty incidence in mining. (I suppose that refers to households with mining as primary source of income; in short, mining is a poor man’s occupation. I wonder how attractive are Philex’s wages for its miners.)  Mining is “the only sector where poverty incidence increased between 1988 [and] 2009,” Monsod said.

With official poverty data being available up to provincial levels, Monsod was able to cite high poverty percentages in the mining-intensive areas of Caraga (47), Zamboanga Peninsula (43), and Bicol (45), the national average percentage being 26. The source of his citation of 53-percent poverty in the municipality of Bataraza in Palawan, “where Rio Tuba has been operating for 30 years,” is an occasional small-area survey of the government in 2003.

Those statistics pertain to general areas, rather than specific mining-project sites and adjacent communities. Having the properly specific figures isn’t feasible unless the mining companies had been tracking poverty all along according to the principles I outlined above.

To me, inadequate timing is the biggest problem preventing the official statistics from being useful for fighting poverty. The official figures are done three years apart, and delivered more than one year late.  That’s much too seldom, and much too slow.

Serious antipoverty programs, whether public or private, deserve data that are at least annual, and are delivered not more than six months after the reference year. For data frequency that is semestral, then the delivery should be not more than three months after the reference semester.

The latest official poverty figures refer to the year 2009, or three years ago already; they became available only in February 2011.  The next set of official figures will deal with 2012, and will be reported only in February 2014. The next report after that will only be in February 2017. Can a private sector manager tolerate lackadaisical accounting that does financial statements only once every three years, and delivers them one year late?

National poverty was officially flat over the last three reference years (2003, 2006 and 2009), despite the significant growth in per capita income.  Therefore a mere “arangkada” or growth acceleration will not help the poor unless the structure of economic growth is changed from that of the past decade. It was much earlier, back in the 1990s and the 1980s, that economic growth had some (not much, but a little) impact on poverty reduction.

Poverty is only one of the enemies that businessmen face, together with the rest of society. They should help in the application of science to cast a brighter light on these many battlefields.

* * *

I join my Inquirer colleagues in paying tribute to Isagani M. Yambot, and in offering condolences to his family.  My being an Inquirer columnist is thanks to Gani. I shall remember him for fairness, sincerity, and decency

* * *

Contact SWS: www.sws.org.ph or [email protected].