Stop looking at US as model

This refers to the article titled “Philippines has lower jobless rate than US” (Inquirer, 3/16/12), which stated that the “Philippines enjoys a lower unemployment rate than the United States, which registered at 8.3 percent in January, according to Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. … He attributed this to the character of our economy, which is different from those of developed nations.” Moreover, it cited Paderanga as saying that “Our problem, however, is that many of the employed are working in the informal sector, where the income levels are really quite low. We would like to produce more work in the formal sector.” Furthermore, it stated that “Paderanga said earlier this month that the improved performance of the labor market in 2011 bolsters the optimism for a better economy this year.” Please allow me to comment on the matter.

In order to better understand what Secretary Paderanga is saying about the present and future scenario of employment vis-à-vis the Philippine economy and to be able to make pragmatic recommendations on what should really be done, I think it is also better to compare the country’s three interrelated economic indicators (unemployment rate, poverty incidence and labor force by occupation) with those in the neighboring countries of Indonesia and Vietnam, which are also agricultural and middle-income countries, vulnerable to global recession, earthquakes and climate change; and endowed with certain similar important marine natural resources (e.g., fossil fuels and fish).

The details on these indicators can be gleaned from the CIA World Factbook via the Internet. It shows that, firstly, the Philippines has the highest unemployment rate of 7.2 percent in 2011 as against Indonesia’s 6.7 and Vietnam’s 4.1;  secondly, the Philippines has the highest poverty incidence of 32.9 percent in 2009 (corrected as 26.5 percent by the National Statistical Coordination Board) as against Indonesia’s 13.3 in 2010 and Vietnam’s 10.6 in 2010; and thirdly, the Philippines’ labor force in agriculture represents only 33 percent of the total labor force as against Indonesia’s 38.3 and Vietnam’s 53.9. The compared data on the three indicators suggest that it is only by increasing the investment and employment in the agricultural sector that the Philippines can expect a significant reduction in its unemployment rate and poverty incidence, and make possible its transformation from being a net importing country to net exporting economy.

In order not to be left behind by our neighbors, there is a need for reform-minded political and economic leaders of the country—under an Aquino administration which is in the thick of its fight against corruption—to change their mindset that looks at the United States as reference in all aspects of life to a mindset that looks at our neighboring countries for models of success.

—EDMUNDO ENDEREZ,

eenderez@gmail.com