The Philippine Online Chronicles

Second part of PH economy in 2011: Flawed development plan. Continued from Part 1

Labor export

Whether or not these industries could help generate a million jobs a year remains to be seen, but as it is, the target is too modest for the promised economic growth under the PDP to be inclusive. Job scarcity has been at its worst since the past decade, mitigated only by the growing export of overseas Filipino workers (OFWs). In 10 months this year, the country has been deploying 4,441 OFWs every day, higher than last year’s 4,214.

And as if an implied admission of the absence of a comprehensive program for domestic job creation, the PDP endorsed labor export as a policy, defining employment generation as “all forms of employment… whether at home or abroad.” On top of mitigating the jobs crisis, labor export, said the PDP, has also become a steady source of foreign exchange and capital, and help fuel domestic consumption. These are the supposed “benefits” of labor export that the Aquino administration is unwilling to forego and instead pursue through strong domestic job creation. But aside from the incalculable social dimension of forced labor migration, labor export is also anti-development in the long run as the domestic economy is deprived of invaluable human resources.

Justified by its stated goal of creating jobs, the PDP is explicit in its intent to promote the interest of corporations. At the same time, it is silent on the quality of jobs that it intends to produce or in particular, how the rights and welfare of workers will be safeguarded and advanced. Due to the single-minded purpose of the PDP to attract more foreign investment to generate jobs, it is likely that the ongoing assault on workers’ rights to job security, to unionize, and to receive wages that allow for decent living, among others will continue and worsen. Under the PDP, tripartite councils shall be strengthened to ensure “industrial peace”, often a euphemism for subverting workers’ resistance, instead of the government assuming a more proactive role in defending the rights and welfare of wage earners.

Infra for profits

As envisioned in the PDP, infrastructure development will serve the overall goals of inclusive growth and poverty reduction in two major ways – first, as a priority area for private investment and as a producer of jobs; and second, as support to economic sectors and as a provider of equitable services, including housing, health, and education. At the heart of government’s efforts to accelerate infrastructure development is the PPP scheme, thus ignoring the decades of harmful experience under privatization. PPP first became a national policy through the structural reforms imposed by the International Monetary Fund (IMF) and the World Bank in the late 1980s during the first Aquino administration.

The case of privatized water and power infrastructure is most telling; private investors are assured of profits through over-generous and anomalous incentives and even bailouts, which exacerbated the fiscal burden of government. User fees have also gone up excessively to the great detriment of consumers especially because the target of privatization has been the basic infrastructure like utilities. These are the sorts of problems that the PDP will aggravate with its avowed promotion of PPP. Under Aquino, the fees at the country’s toll roads have already hugely increased while similarly exorbitant fare hikes face commuters of the LRT and MRT.

Meanwhile, the administration is also proposing specific amendments to the Build-Operate-Transfer (BOT) Law or Republic Act (RA) 6957 (as amended by RA 7718) to set the legal basis of the so-called regulatory risk guarantee. The said guarantee will oblige government to shoulder the “losses” of a PPP investor in case a local court, regulator, or Congress stopped it from imposing a questioned user fee. These issues easily offset whatever economic gains the country gets from additional and improved infrastructure. Worse, even the supposed economic gains are suspect. Due to the flawed neoliberal framework of the PDP, infrastructure development will merely serve the narrow profit agenda of foreign business and their local partners instead of helping lay down the foundation for genuine national industrialization.

Dole and smokescreen

Finally, the PDP has also set “social development” among its agenda, and will “focus on ensuring an enabling policy environment for inclusive growth (and) poverty reduction.” One of the main strategies to meet the social development component of the PDP is the provision of CCT to the poor.

Under Aquino, the scope of the CCT has been expanded tremendously and the program that Arroyo started with just several thousand beneficiaries in 2007 now intends to cover 4.3 million households by end of the PDP. For 2012 alone, the CCT program targets 3 million households with a proposed budget of P39.5 billion (from just P10 billion in 2010). This massive expansion in scope and budget is not backed by any thorough assessment on whether the program has actually contributed to sustained poverty reduction, not to mention that it is funded by $805 million in growing foreign debt that has long been debilitating the economy and depriving the poor of much needed social services.

As it is, even the target of 4.3 million households is still just a fraction of the ever growing population crippled by joblessness or lack of livelihood amid ever rising cost of living – social ills that ironically are being aggravated by the same globalization policies of the PDP. With the absence of programs that can produce long-term, productive jobs, and address the structural roots of poverty such as implementing genuine land reform and dismantling the neocolonial economy in favor of national industrialization, the CCT at best, could only provide temporary dole to a small portion of the poor. For Aquino, the CCT’s best purpose is to smokescreen the failed neoliberal policies of past Philippine development plans in order to justify the present. Meanwhile, questions on the CCT program have also been raised recently by the Commission on Audit (COA), which found out that cash allowances had been provided to families who are not qualified beneficiaries.

To be continued.

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