The Covid-19 pandemic is giving countries around the world a golden opportunity to correct the social and economic “discontents” that aimless and unregulated globalization has generated—environmental degradation and ozone-busting GHG emissions, labor precarity and informality, overt and covert wars for resources and markets, and social and economic inequality that is a direct outcome of trickle-down neoliberal growth economics. These “discontents” are amply documented by scores of development economists led by Joseph Stiglitz, former Chief Economist of the World Bank, and Robert Reid, former US Labor Secretary.
Even the International Monetary Fund, seen by many CSOs as the world’s devil incarnate, has been writing lately about globalization “discontents”, describing them as “macro-critical” concerns that should guide the IMF in its lending operations. In a recent IMF dialogue with the CSOs, Chang Yong Rhee, IMF Asia Director, told the CSOs that IMF today is not like its “IMF parent” of the 1980s nor of its “IMF grandparent” of the 1960s. But what is the IMF’s alternative development policy in these pandemic times? More lending to bail out the big private corporations? More lending in support of big-ticket projects that ignore the urgent needs of the poor and the vulnerables? More lending that traps developing countries into Sisyphus-like debt-servicing situation?
But back to the pandemic, how should governments make their respective economies resilient and robust in these uncertain times? The answer of those pushing for the UN SDG agenda (zero hunger, zero poverty, etc. by 2030) is for UN member-states to intensify efforts to address in a coherent, integrated and sustained manner the five Ps of development: People, Planet, Prosperity, Peace and Partnership. Jeffrey Sachs, the chief ideologue of the UN’s SDG development framework, has been moving increasingly toward the left, berating America for its misplaced “exceptionalism” and criminal negativism toward climate change mitigation. Sachs, now aligned with Keynesian economics, is even conducting courses on “post-capitalist order,” courses on how the world should get out of the neoliberal laissez faire development framework.
Can our own DOF and Neda, after citing Keyne’s famous criticism on the penchant of some economists to focus on imaginary long-term growth, prepare to overhaul the existing neoliberal development framework based on the triple structural adjustment programs: trade and investment liberalization, deregulation of various areas of the economy, and privatization of government corporations, assets and services? Can they focus on the critical issues raised by the UN SDG program, which include the following questions: how to eliminate widespread poverty and hunger, how to address the needs of the poorest and most vulnerable, how to assert the rights and dignity of all (especially of women and the disadvantaged sectors), how to heal and secure the planet, how to take decisive action on climate change, and how to promote peaceful and inclusive social arrangement? And can these questions be answered in the context of today’s Covid-19 reality?
As it is, the pandemic is compounding an already multifaceted planetary crisis buffeted by environmental crisis, huge economic divides between the 99 percent and the 1 percent of society, and socio-political conflicts everywhere. Covid-19 has revealed a broken public health system in both developed and developing countries.
At the country level, the multi-sided planetary crisis is illustrated by what is happening in the Philippines: health-care crisis, surge in joblessness and hunger in society’s laylayan, fragile environment, precarious employment and uncertain economic future amid a crumbling neoliberal economic order.
So what can be done? The quick answer: the policy-makers should consider the Covid-19 crisis as an opportunity to do some rebalancing in the development framework that the government has been adhering to. They include the following:
First, there is a need to rebuild the public sector’s capacity to deliver the public services needed by the people, foremost among which are health care and social protection in these pandemic times. As we wrote in an earlier column, the Covid-19 pandemic has reaffirmed—in all continents—the central role of the State in emergency survival situations. Rebuilding the public sector capacity includes the building up of the public distribution system for the delivery of essential goods, such as relief materials for the displaced and vulnerables. It is time that we put a stop to the mindless obsession by some policy-makers on making privatization and foreign investment liberalization as the end-all and be-all of growth promotion.
Two, there is a need to shift government attention and spending away from big-ticket infra projects in favor of an alternative build-build-build infra development in support of poor communities (urban, rural, peri-urban, upland, coastal poor communities). The possible BBB projects for the poor are numerous, e.g., better housing projects for all, multipurpose community centers, fortification systems against disasters, community health centers, and so on. And the multiplier impact is enormous: stable and productive communities. But one necessary proviso should be in place: full engagement of the poor as worker-builders of the BBB projects for the poor communities.
Third and relatedly, government should develop better mechanisms to extend social protection to all the poor and near poor. The common complaint in the last two months of ECQ and GCQ is that many have been excluded. The use by the DSWD of the 4P or CCT list of beneficiaries is patently exclusionary because the list has not been updated, migrant workers and families have not been registered in the different barangays they are temporarily residing, and political patronage is omnipresent in any system of listing of who will benefit and who will not. The solution: cover all the families in depressed communities sans the usual mean testing and time-exhausting verification by DSWD personnel. And don’t forget, spending for social protection for the many, as correctly pointed out by the Keynesians, is a good and proven economic stimulus. It even becomes stronger as an stimulus if it is linked to productive job creation, no matter how temporary.
Fourth, there is a need to overhaul the architecture of Philippine integration in the global market. As pointed out in an earlier column, Factory Asia and the global value chains that some economic technocrats love to promote are being disrupted by the technology revolution, trade wars and now by the Covid-19 pandemic. No, the Philippines need not de-link or withdraw from the global market. But why put all our economic eggs in the export market where demand is on the decline? And why maintain a one-sided trade liberalization program when the trade data show that our trade deficits in industrial and agricultural products keep rising every year while industrial and agricultural jobs at home continue to plummet? Were it not for the remittances of over 10 million OFWs, these trade deficits would have been unsustainable and would have led to a repeat of the crisis of the 1980s.
So it is high time that the trade policy regime based on false neo-liberal assumptions be overhauled or rebalanced. Such rebalancing should be accompanied by the revival of Philippine manufacturing that can be sustained by a huge domestic market of 110 million Filipinos. Why indeed can’t the Philippines duplicate South Korea, which has succeeded in producing needed PPEs for their health workers and millions of test kits and face masks for their population in a relatively short time, thus enabling Korea to contain the virus spread more quickly?
Of course, trade policy reform should also be accompanied by reforms on the agricultural front. At the moment, there are controversial debates on whether it is timely for the Philippines to import once more around 3 million tons of rice when some studies indicate that production at home this year is enough. The DA has been mouthing the slogan “plant, plant, plant.” But is it able to walk the talk? Is it succeeding in nudging our farming sector to become more productive and capable of meeting the food requirements of the nation? Is it prepared to junk the neoliberal agricultural deregulation policy, a policy that dates back to the 1980s? This policy has not delivered the food security promise propounded by the IMF-WB then.
Overall, Covid-19 times are times for reflection on what is the best way forward to the nation.
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