Inclusive growth: The zombie idea that lives on

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Marlen V. Ronquillo

AFTER Mr. Aquino made 24/7 pitches for inclusive growth and failed miserably to dent the rich-poor divide, many had the expectation that Mr. Duterte would not use that broken record. But Mr. Duterte did, in Danang of all places, in the context of an address to CEOs of the Asia-Pacific region. Better access to markets will make emerging economies improve, which will then spread the gains all over, he said. That, he added, will benefit the poor in the emerging economies.

It sounds good, in theory. But what about the practical application.

Let us assume that the Asia-Pacific region and all its CEOs have applied Mr. Duterte’s exhortation in their business models. Emerging economies like the Philippines, for a steady run of about a decade, have been benefiting from better access to global markets. And the trade barriers, from tariffs to phyto-sanitary requirements on agricultural products from the emerging markets, have all but vanished.

Will the Philippine poor get a boost in their incomes and quality of life from this fair and just operations of the regional market? No. The expanded PH economy will be of no consequence to those at the economic bottom. The benefits will go to the usual suspects, the top 1 percent that normally scoop up 60 percent of all income gains year in and year out. After the top 1 percent, the next 9 percent will be the biggest beneficiaries of our economy’s income gains.

The rest? Nada.

The GDP surge may be a spectacular one. Just the same it will have no meaning on the incomes – and the lives – of the Everyman.

Only the crumbs will trickledown to the likes of me and my neighbors, who are at the bottom 90 percent. That is true universally. “Trickle-down“ economics is a hoax like its “inclusive growth” twin. And the best take on “trickle-down“ economics had been written by Pope Francis. This is the Pope’s view on the debunked theory.

“Some people continue to defend trickle-down theories which assume that economic growth, encouraged by the free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.“

There is another Francis version, the better and the layman’s version.

“The promise was that when the glass was full, it would overflow, benefiting the poor. What happens instead is that when the glass is full, it gets magically bigger, but nothing ever comes out for the poor.”

Simply put, trickle-down is bunk. It has not worked and it will never work. The six years of Mr. Aquino provide the empirical evidence.

The average 6.2 growth rate under Mr. Aquino was ideal by regional standards. But it had a limited impact. It was the perfect lift and gift to the top 1 percent. Under Mr. Aquino’s growth-oriented regime, a new category of the super-rich was created—those elevated into the exalted category of “ those-who-can-buy-a-small country-rich.” The peons remained peons and nothing changed in the remote communities with 84 percent or 74 percent poverty rates.

Mr. Duterte’s pitch for inclusive growth comes at a time when there is basis for comparison and analysis – the news media’s simultaneous accounting on the fourth year of the Yolanda savagery and the corporate earnings of the country’s business giants.

The news stories on the resettlement side were very bleak: relocation sites barely fit for humans were barely occupied and the government has been engaged in a slow-motion transfer of the super-typhoon victims into these shabby housing sites.

The misery in the typhoon-savaged areas remain, despite the outpouring of international support and the supposed institutional support crafted for the typhoon victims and the ravaged areas. Eastern Visayas, already poor before Yolanda struck with utmost fury, is a graveyard of broken lives now.

As usual, the bright, hopeful side was on the corporate earning side.

A P5 billion to P7 billion net profit was routine. Some holding and investments companies exceeded the P20 billion profit mark. Mind you, the reports just covered three quarters, not the entire year. These are publicly listed companies on paper but the profit-sharing structure makes sure that the few owners would reap the large part of the jumbo profits.

The fact that the thought leaders and the think-tanks live off the largesse from their corporate sponsors—and ownership of Big Media belongs to the top 1 percent—means that there will be no opinion pieces on the grimness of the Yolanda anniversary and the tight grip of the corporate giants on the income gains in the country.

The so-called “civil society“ does not rock the corporate boat, never, for one reason or another.

Many Filipinos voted for Mr. Duterte to put an end to the social darwinism of Mr. Aquino.

Sadly, he is mouthing the same empty slogans of Mr. Aquino.

Sir, there will be no “inclusive growth“ if the status quo remains the anchor of your economic policies. Just the same old, same old kalakaran under Mr. Aquino.

With no bold and radical pre-distribution and redistribution policies, nothing will change in this sad, deeply unequal country of ours.

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