Editorial:
Making pain worthwhile
GIVE Socioeconomic Planning Secretary Romulo Neri “A” for candor. Even his worst critics would have to grant that the head of the National Economic and Development Authority (Neda) sounds completely sincere when he concedes that amid the steady barrage of reports on “economic gains,” much of the basis of the bullishness are the positive financial indicators—not necessarily the indicators that signal flesh-and-blood issues like jobs, poverty and gaps in education and health care.
“We are trying to see how we can break out of this development impasse. It is hard to get anything done because of this, how to create more jobs. Many of the indicators are still finance-based. . . . the money market [is bustling], interest rates are down, the stock market is on all-time high, the deficit is down, the debt to GDP is down. All the indicators are good, but these are all financial indicators, so we have to convert these . . . into real benefits,” said the Neda director general.
Coming from an agency that should be the fulcrum of policy setting and planning in government, this brings hope that government officials are not living in two separate universes—one group obsessed only with meeting financial and monetary goals; and the second, with delivering avowed services to people. At the very least, Neda is signaling that it would help find a way for allowing these two sets of targets to intersect and give flesh to the government’s ultimate—and, truth to be told, its only goal, really—vision of helping people attain a better quality of life. Absent this marriage of goals, and we’re stuck in the same development debacle that has plagued the Third World since the ’80s.
This year, which GMA alternately calls the “boom year” and the “social payback year,” is actually the best time for pushing the envelope as far as enforcing the State commitment to its citizens is concerned. That is why Secretary Neri’s open acknowledgment of his angst provides some hope.
Year 2007 is a good time for compelling government—and even those in the private sector that benefit from cushy policies—to make good on the implicit promise to translate more gain into less pain. The Filipino people have faithfully borne the burden of expanded value-added taxes, along with the pain of other tax reforms: so faithfully in fact that Malacañang boasted on Wednesday that Singapore is loudly contemplating copying some of these reforms. One’s tempted to raise one’s eyebrows and ask sarcastically, “Oh, really?”
And yet, on second thought, this is a believable notion, considering the success with which the government’s EVAT ran a steam roller over our wallets to squeeze out additional revenues that it now says have made it awash in cash. While this was happening, our eight million migrant brother Filipinos kept a steady stream of dollars flowing into the country, thus bolstering the external sector so much so that this government also triumphantly announced prepayment of a substantial portion of the debt.
Indeed, the faithful adherence to the tough fiscal and monetary standards set by outsiders has borne fruit for the country—yielding savings in debt payment budgets as a result of lower rates; keeping inflation steady at modest levels; and getting upgrades on credit rating and better outlook reports that, in turn, are supposed to trigger inflows of investments.
And yet, at the end of the day, as Mr. Neri so humbly acknowledges, all of this would only have complete meaning if they translate into more tangible benefits for the people. The very same people whom Mrs. Arroyo said deserve some payback.
But a word of caution: payback is not to be simply equated with a barrage of infrastructure by a government claiming it is making up for underspending in the past few years of obsessing with fiscal balance. Especially in an election year. Payback must not spell mindless spending on “services” that are, truly, just ill-conceived scams from which to skim money for political campaigns or for lining some people’s pockets.
Payback means well-calibrated, well-planned programs and projects that not only fill the gap in infrastructure and services, but move toward a coherent, wholistic development plan for the most underserved areas, while boosting those with the most potential for attracting private investment.
Payback means a government or bureaucrats looking at every possible means for helping people maximize their meager assets or expand opportunities for bettering their lives without requiring so much state subsidy or encouraging mendicancy.
For instance, we are told one reason why finance and central bank officials were frowning on the grant of special subsidies for exporters reeling from the effects of an appreciating peso was that the government, basically, wasn’t doing the same for that other sector boosting the peso, i.e., the OFWs.
A simple example of how the government can show it cares is what happened in last year’s war between Israel and the Hezbollah in Lebanon. As a service, the central bank bought back a few thousand Lebanese pounds held by OFWs, which would have been impossible to convert at the height of the war last summer.
If it were truly so minded, there is no limit really to what a sincere government can do to translate at every turn possible a macro gain into a micro booster; transform a people’s sacrifice into some form of delayed gratification; and show people how to connect the dots between genuine reform and a better quality of life. That is, if it were truly so minded. One hopes Mr. Neri’s concern reaches epidemic proportions.
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