[Editor’s note: Columnist Marlen V. Ronquillo hopes an Oxfam International Report that was released just as the Davos World Economic Summit opened last week would shock President Benigno S. Cojuangco Aquino into changing his government’s basic policy direction.]
Oxfam report should jolt PNoy out of his policy torpor
This scenario may be for real: President Aquino often dismisses inequality issues in the same dismissive tone and manner by which the University of Chicago economics department has been dismissing Keynesian economics. “With giggles,” it is said.
The problem with this is that hard truths always strike back at the deniers. Policy activists and progressive academics who have been long derided by the Chicago school for advocating government intervention during severe economic slumps have been plugging holes into the supreme faith in the efficiency of markets and their abililty and power, by themselves, to push the economy into full equilibrium.
The outright rejection of Keynesian intervention is no longer in vogue—it is a discredited dogma even—as events from 2008 hence have eminently debunked the healing wounds of the efficient markets during severe slumps and depressions.
It is also perfectly credible to assume that our president is still merrily unbothered by the emergence of inequality as the dominant topic across the globe and taken up with real intensity in places as diverse as the Vatican and the White House.
Who? Me? Bothered? I have stepped up on the CCT and the BUB, the acronym for the budget policy that aims to identify budgetary priorities from ground up. He deeply feels that these two will genuinely lead to inclusive growth.
Wrong, Mr. President. Clear up your policy chambers of cobwebs. Not my words, of course, but the suggestions from a recent Oxfam International report titled “Working for the Few.” As the title suggests, it is about the searing, heartbreaking scope of global inequality, which has been a nagging, tugging reality in our sad sack of a country. This is the harsh reality that no one in the political leadership seems to mind: that there is a very tiny special class of super wealthy plutocrats and there is us. The Left would not mind such gap either for it will only thrive—or the leaders feel they can only thrive—under such exploitative condition.
What did Oxfam International find out? A business magazine published the gist.
The most striking of the findings is a real shocker: that 85 people have a combined wealth that is equal to what is owned by 3.5 billion of the planet’s poorest. No explanation of the inequality issues can be clearer, and starker, than this: half of the world’s wealth is owned by 85 people.
What else was said in “Working for a Few”? I quote from Businessweek.
• In 24 out of 26 countries studied by Oxfam, the richest 1 percent has increased their share of national wealth since 1980
• Only three in ten people live in countries where economic inequality has not increased over the past three decades
• In the US, 95 percent of post-financial-crash wealth generated since 2009 went into the bank accounts of the richest 1 percent
• Nine in 10 people in the US control more wealth in real terms than they did before the financial crash
The Oxfam report, timed just before the world’s most famous and powerful people convened in Davos for the yearly networking sessions, should jolt President Aquino out of his policy torpor. Adhering to orthodoxy, just like what he has been doing for over three years, would make his commitment, Kayo ang Boss Ko, a supreme commitment to comfort the most comfortable, not a commitment to improve the lives of the Everyman.
A radical shift in policy making to create a vibrant middle class and lift those at the bottom into, say, low middle income status is a must. How profoundly would he alter the policy-making process to fulfill just that we do not know. That is his business and the business of his economic team.
But we know a few things. He and his economic team have to stop obsessing over three things:
• Aiming for high growth rates that does not factor in impact on human lives. And of which lifting poor lives and promoting meritocracy and economic mobility are not a part and parcel of. What is the use of a 7 percent GDP growth if all gains are sucked up by the plutocrats?
• The inordinate preoccupation to get better ratings from Fitch, Moody and Standard and Poor. These are discredited institutions. They downgrade countries, only to find out that the downgrade even propped up the credit standing of the downgraded countries.
• Making the PPP the anchor of a perceived great modernization forward.
The PPP is structured to fund projects that only the giants can afford to undertake. It will worsen the income divide.
Items 1 and 3, would, according to conventional expectations, result in the trickling down of the gains from robust economic activities into the bottom sectors. President Aquino holds this view as his sacred economic text. After the release of the Oxfam report, a Guardian commentator called trickle-down economics the “greatest broken promise of our lifetime.”
Those who still hold this view are the “deepest sleepers” of our time, according to the same commentator.
We are all fully aware that he has less than three years to reverse course and profoundly recast his economic policies. Not much time is left. For starters, he should read and inhale the Oxfam report. Then change his computer keyboards for new ones that can type the world “inequality.”
Only then can he awaken from his deep sleep and policy torpor.