• Job creation or political preservation?

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    Atty. Dodo Dulay

    Atty. Dodo Dulay

    VENICE : A little more than a week ago, thousands of workers and unemployed people marched in the Italian capital of Rome to protest against the country’s record high unemployment rate and to call on Italian Prime Minister Enrico Letta’s two-month-old government to deliver more than empty rhetoric on the issue.

    The rally, which was organized by the Italy’s three largest unions, was the first major protest since Letta’s broad, left-right coalition took office in February this year.

    Many Italians took to the streets after unemployment rose to 12 percent in April 2013, the highest level on record, and joblessness among people under 24 rose to an all-time high of 42 percent.

    The employment situation in the Philippines, however, is just as bad, if not worse than Italy.

    In the first quarter of 2012, there were 13.8 million unemployed Filipinos or a 34.4 percent unemployment rate. The last time the country suffered a similar double-digit trauma was in 2009 at 34.2 percent. A 2012 Social Weather Station (SWS) poll said that more women (43 percent) remained unemployed compared to their male counterparts (27.6 percent).

    That was last year. Unemployment figures remained at a whopping 11 million in the first quarter of 2013 based on SWS and Ibon Foundation surveys. SWS pegged the number at 25.4 percent among those aged 18 and above.

    Ibon Foundation, on the other hand, pegged it higher at 11.9 million unemployed and underemployed, with underemployment appearing to rise every year at 20 percent compared to last year’s 19.3 percent.

    The country also has one of the worst unemployment figures when set side by side with our Asian neighbours like Thailand (0.6 percent), Singapore (1.7 percent), Malaysia (3.0 percent), Korea (3.0 percent), China (4.1 percent), Taiwan (4.3 percent), Vietnam (4.4 percent), and Indonesia (6.5 percent).

    What’s surprising though is that despite the country’s unemployment figures being almost triple that of Italy, many of our unemployed and underemployed countrymen don’t seem to be as enraged or alarmed.

    And it appears, neither does the Aquino government.

    While some analysts predicted a 7.2 percent growth for the next three years of the Aquino administration, they haven’t said how this will translate to jobs for many of our unemployed and underemployed workers.

    Aside from the perfunctory statement from the Aquino administration that it would increase its efforts to provide jobs for the people, we haven’t heard of a concrete plan on how it intends to boost employment.

    Maybe the Palace ought to take a cue from the World Bank (WB).

    According to the WB, the Aquino administration needs to increase public infrastructure spending from the present 2.6 percent to at least 5 percent of our gross domestic product (GDP) in order to create new jobs and absorb the 1.1 million Filipinos joining the labor force each year. Infrastructure spending delivers a big job-creation bang for every peso spent.

    With the amount of foreign direct investments to the country remaining flat, job generation would be an impossible task without a substantial increase in government’s insfastructure spending.

    Our two cents’ worth: the Aquino administration can also spur job creation by enticing the business sector’s participation and cooperation. But this means Malacañang must implement drastic changes to make it easier for private entrepreneurs to set up or expand businesses in the country, especially at the local government unit (LGU) level.

    Based on an advocacy paper by the Joint Foreign Chambers, improved measures are necessary to facilitate faster creation of businesses in a country plagued by “red tape”.

    “LGUs in the Philippines levy certain taxes and fees and require various licenses and permits for business operations. Complaints are rare when these processes are transparent, efficient, fast, and honest. When they are not and when bribes are hinted at or even demanded, investors complain of ‘red tape’ and corruption. Various surveys of domestic and foreign investors in the Philippines over many years have rated ‘corruption’ as the top business problem, with ‘inefficient government bureaucracy’ as the second-most concern,” the paper said.

    This means President Benigno Aquino 3rd should do either of two things: Crack the whip on LGUs, especially those notorious for red tape and corruption. Or amend the Local Government Code to institutionalize drastic reform measures at the LGU level.

    Both will certainly be unpopular to local government officials, most of whom treat their political turf as their personal fiefdom. Indeed, many local government bureaucrats will find such reform measures inimical to their own interests.

    That would certainly pose a serious problem to the Aquino administration.

    The question is: Would Aquino have the gumption to do it knowing fully well he would need the support of the same local government officials in the 2016 polls?

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