85 men’s wealth equals what 3.5B poorest own

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Marlen V. Ronquillo

Marlen V. Ronquillo

[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.]

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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.

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6 Comments

  1. The root cause on the widening chasm of inequality, not only in the Philippines, but around the world, of course can be attributed to human greed. In every country, only the government has the coercive capability to address this social injustice. But sadly enough, only the rich and powerful individuals manage to sit in the government. History of the world is replete with uprisings and social revolutions, yet in the end, the rich and influentials maintain their dominance over the teeming poor and powerless. For the Philippines, our economic status in Asia has consistently retrogressed ever since. After the Second World War, we were second to Japan. Taiwan at that time was nothing but an island where Gen. Chiang Kai Sek and his band of defeated Chinese Nationalists were driven to by Mao Tse Tung. Through real land reform and apportioning of landholdings, Taiwan’s economic stature has become what is now. Korea was racked with civil war and eventually partitioned into a communist North and democratic South. Look at South Korea now. Hongkong, Singapore, followed suit. China, India are very populous countries yet they manage to creep to the status of an economic tiger. What then really ails this poor country, the Philippines, which incidentally is overtaken even by Vietnam, a country devastated also by civil war? For me, it is our political system. We are intoxicated by our obsession for ELECTION. Before, we had presidential election every 4 years and legislative election every 2 years. Then after Marcos and until now, we have presidential election every 6 years and legislative and local elections every 3 years. What’s the implication on this? First, this make our country’s economic development plan only good for 6 years. In fact, upon assumption to power, the preceding economic program will be discarded and supplanted with another short-term plan. The previously unfinished projects are thrown to oblivion without regard for the lost billions of taxpayers’ money. Second, this kind of electoral process makes possible the preservation of political dynasty. Third, it reinforce the belief of most poor and jobless Filipinos in the padrino system for landing a coveted job in the government. The government being the biggest employer in the country, it has become the biggest sponsor of patronage system in the country. Imagine, just multiply the number of elective positions, starting from the president, down to the senators, congressmen, governors, mayors, kagawads, etc. They number several thousands of potential patrons for employment. So, we cannot blame those army of job seekers to sell their souls to the devil, or simply stated, to sell their votes for a pittance. The result is a vicious cycle promoting continuous misery for the country. The social divide is just like the chasm that prevent the biblical Rich Man to go to Lazarus to ease his thirst.

  2. The following makes the poor poorer and the middle class diminished savings: (1.) 12% Vat, ( 2). 38% tax on gasoline, diesel, LPG; (3). 25% individual income tax;; (4). 20% tax on saving deposits Interest; (5) 300% increase in Real Estate tax; (6) High prices of monopolies/cartels on Electricity, Water, Telcos, Shipping, grocery items, housing materials like cement, steel bars, paints electrical, rice, fertilizers, : (6) almost static wages and the worst (7) super high cost of very slow and corrupt justice. Very few people knows that the Law Profession is the only profession that ask sky high acceptance fees. The PAO lawyers acts fast only if there is TV camera otherwise syam-syam aabutin ang kaso at ubos ang pamasahe at bayad sa stenographic notes.

  3. At this time, nothing or no one can help each person except himself. Whether the economy bursts or busts, as it has since the 90’s. The one most flexible to change, the one who has his plans A, B. and C, the person who has built contingencies for hard times and saved for the rainy days, has led a simple life without depriving himself of rest and time to enjoy his labor, is the one who would be able to find joy and contentment in this age of materialism. Aquino would not understand… He has more than enough to ride the waves. The materialistic would not understand because all he knows is hoard and accumulate. But the common man would be able to ride the waves, for as long as he does not add more mouths to eat with the very meager earnings he brings home…The simple and humble will survive, no matter what… Why be alarmed, unless war and crimes will be allowed to threaten a persons life and well-being. God save us…

  4. These ideas are too complex for Abnoy, who speaks from the same script over and over and over…that’s what retards do.

  5. florentino maddara on

    The CCT program of the gov is a product both of a lazy mind and an astute politician without regard to a long term solution to eradicate poverty in the country. Industrialization and a manufacturing/export oriented economy should have been the priority long before but what is our politicians doing ever since? Promoting one’s wealth, power and fame only to the detriment of the life of millions of their countrymen.