APRIL 25 2007 (STAR) BULL MARKET, BULL SHEET By Wilson Lee Flores - I didn’t vote for President Gloria Macapagal Arroyo in the controversial 2004 election, but congratulations to my former Ateneo economics professor for helping guide the Philippines towards consistently good economic growth in recent years and for her recent real gains in wooing big-time foreign investors like China’s No. 2 wealthiest billionaire Shi Rong Mao of the Shimao realty group, Saudi Arabia’s wealthiest tycoon Prince Alwaleed, and Hong Kong’s legendary taipan Li Ka Shing. All these world-famous billionaires coming here are real votes of confidence in the Philippine future, a hundred times more credible than all the praise releases and statistics by GMA’s propagandists.

I’m now touring various cities in China as part of my unique study program. I am now in this bustling port city of Tianjin. As I beheld the high-tech economic zones and world-class port facilities of industrialized Tianjin, I couldn’t forget the lectures of my Peking University economics professors who stressed the importance of bridging the gap between the rich coastal regions of China and the less developed hinterlands of the central and western regions, between the increasingly affluent urban centers versus the poorer agricultural areas, between the many millions of new-rich vis-à-vis the other sectors that are still not well-off.

The professors at Peking University said that China’s central government is working to bridge these gaps, and they recommend more reforms such as improving the social security system, pensions, medical care, education and other social services. They repeatedly said that China’s stunning high economic growth alone is not an accurate measure of true success in nation-building, that quality is more important than quantity, that there should be more equitable distribution of income, more focus on environmental protection and ecology, on improving the overall quality of life. I’m amazed at the humility of Chinese government leaders in acknowledging these challenges raised by academics.

For President GMA, here are some of my own unsolicited gems of advice and constructive criticism for the sake of sustaining the momentum of Philippine economic growth:

• Reduce debt.

One of the most disturbing statistics of our Philippine economy is the high level of foreign debt. At Peking University, I discovered that the Chinese word for "debt" is composed of two characters meaning "person" and "responsibility." In other words, for thousands of years, the East Asian concept of debt has the built-in idea of responsibility. I hope our politicians can reverse the decades-old history of the government irresponsibly borrowing huge amounts of money, and politicos proudly crowing about each approved loan as if this were income without need of repayment.

Huge debt deprives the poor masses of basic social services from government, like education or medical health, since the state has to pay huge interest charges along with the principal over the long term. Is it true that the country’s huge public debt is already more than 70 percent of the Philippine economy’s gross domestic product (GDP)?

• Target a minimum eight-percent economic growth.

On GMA’s birthday, her propagandists went into overdrive in claiming her administration led the Philippines toward higher economic growth rates compared to past Presidents Marcos, Aquino, Ramos, and Estrada. I’m not in a position to compare the statistics, and still I congratulate GMA for real economic growth, but I want to bluntly and honestly tell her those growth rates are simply not enough! My reckoning is that the Philippines needs a minimum annual economic growth of at least eight percent, or better, 10 percent and more, and this fast growth must be sustained for at least 20 years in order for us to really overcome massive poverty.

In real (inflation-adjusted) peso terms, our GDP per capita has been at a virtual standstill since 1980 at P12,619 compared to P13,139 in 2003. In terms of US dollars, the Philippine per capita GDP reached a high of $1,180 in 1996, but declined to $953 in 2003.

Asian Development Bank country director Thomas Crouch recently said that the present Philippine economic growth of five to six percent — which GMA has been crowing about — was not enough to really reduce the problem of poverty. Philippine STAR reader Misael C. Balayan e-mailed this comment: "The six years of modest economic expansion under GMA, while respectable, have not been enough to lick the poverty problem... Philippine economic growth has not been strong enough to raise employment levels significantly."

• Alleviate poverty.

Despite a realty boom of more elegant condos, mass poverty has seemingly worsened. If not, as claimed by GMA propagandists, why do surveys show that a lot of Filipinos are hungry and why is it that I think even those data are understated (since I couldn’t imagine the real hungry poor can be contacted by telephone or that survey researchers on the field will go into dangerous-looking or decrepit squatter colonies)?

One of the President’s public responses to the hunger survey — claiming she, too, sometimes skips meals due to overwork — was a wrong, outrageous and seemingly insensitive Marie Antoinette-like remark. When the French masses were protesting hunger, the Paris Hilton-type Queen Marie Antoinette replied by saying, "Let them eat cake."

I hope GMA can increase efforts on poverty-alleviation. It is said that despite the rise of many competing glitzy condos, 38 percent of families do not have solid-structure shelter, 80 percent of families do not have access to safe drinking water, and 44 percent of families in the lower 40-percent income group have no electricity. The World Bank recently stated in its research that almost 15 million Filipinos live on one dollar a day, but GMA’s propagandists publicly replied that the World Band report was "misleading."

• Address inequality in income distribution.

There is obviously a huge and seemingly widening chasm of income disparity between "imperial" Metro Manila and other urban centers vis-à-vis the rest of the Philippines, between our overcrowded cities and the resource-rich, land-rich rural barrios, between the few who are rich, the small and endangered middle-class versus the majority masses who are chained to abject poverty. The Philippines is one of the major nations on earth with a shocking disparity in income distribution.

Resolute reforms are needed, such as efficient tax collection nationwide coupled with honest and efficient disbursement of state funds for better education and other social services. The huge disparities in the Philippine economy are gross and disturbing inefficiencies, which mock our pretensions of being a constitutional democracy and which actually weaken the dynamism of the Philippine economy.

Congrats, President GMA, for six years of decent economic growth, but I strongly believe there should be economic growth with equity!

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