Will Marcos Jr. be a genie or snake oil merchant?
I had a recent conversation with a friend who had aspirations of becoming a lawyer in our youth. While still in college, he dabbled in business as a hobby, and it led him to one successful venture after another, until he was making multiple times what lawyers of his generation were making. He decided to give up on his dream, went on to build a hugely lucrative business, and had lawyers in his employ instead.
My friend supplies promotional services to big commercial institutions. When our country’s economy grounded to a halt because of the pandemic, the chain reaction of downturns seriously affected my friend’s business. Even with the recent change of administration and the easing up of health restrictions, my friend intimates that he does not yet see a shift in business confidence because companies have been holding up on investments, and foreign investments have not been coming in.
Because he’s not optimistic on when private business will get back on its feet, my friend is shifting his focus to doing business with the government. Indeed, the government is the only entity that keeps on spending, and even aims at spending more, during times of economic crisis. I wonder what portion of our recent economic growth is due to government spending, but I wouldn’t be surprised if a lot of businesses that are flourishing are somewhat connected, directly or indirectly, to a project financed by public funds.
Another point made by my friend that intrigued me was that our country is poised to attain the status of an upper middle-income country in a few years. If not for the pandemic, we would have supposedly reached middle-income status, and that we would have done so, regardless of who won the presidency.
My friend’s observations mirror the declaration of President Marcos Jr. during his New York trip that the Philippines is poised to become an upper middle-income economy in a few years.
The World Bank defines upper middle-income economies as those with gross national income (GNI) of $4,096 to $12,695. In 2021, our country posted a $3,640 GNI per capita, qualifying it as a lower middle-income economy. The Marcos Jr. administration economic managers expect that our average per capita income may reach the upper middle-income threshold by 2024.
The view that we are on the verge of becoming an upper middle-income economy comes from the perspective of an observer perched on top of the economic totem pole. It’s not shared by people on the ground. In a second quarter of Social Weather Stations 2022 survey, a combined total of 79 percent of Filipinos feel poor (48 percent) and borderline poor (31 percent). Only 21 percent of those surveyed feel “not poor.”
Given that only 21 percent of our people feel “not poor,” it seems to be the case that the portion of the income of “not poor” people in excess of $3,640 are hypothetically added to the income of the 79 percent who feel poor or borderline poor, giving us a fictional picture that our people’s lives are on the verge of attaining the quality of life enjoyed by people in upper middle-income economies.
Mr. Marcos must resist the temptation of solely viewing the economy while perched on a mountaintop. He must temper the bird’s eye view pictures of the economy by proactively seeking out the sentiments of people on the ground. Given the president’s wealthy background, the affluent friends who surround him, and the kind of economic managers he gets advice from, for his own sake and for the country’s sake, he needs constant and heavy doses of street-level immersion.
In the couple of times that he visited disaster-stricken provinces, he chose to view the destruction from a helicopter or airplane. It was a blunder because he passed up on the chance to be on the ground and talk to those who lost loved ones and property, and in the process, imbue himself with empathy, sense of urgency, and all the qualities that leaders need to become effective rulers. He will never acquire these qualities by merely reading cold statistics.
Mr. Marcos must personally witness what kind of lives his people live, if he is to become the genie who will grant their wish of a better life. Otherwise, he will yet be another snake oil merchant added to our long list of leaders who have broken people’s hearts.
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