Nothing to be ecstatic about the local growth

Ej Lopez

Ej Lopez

A week back, the country was roused by what seem to be good news that the economy grew by 7.5 percent in the second quarter of this year. In fact, practically all sectors of society was excited that finally the economy has signaled a positive swing about to happen to our local turf. Most business-reliant entrepreneurs and investors were pumped up by this swing, hopeful that such positive news may bring fruitful outcome to their interests. But that euphoric episode was immediately doused with cold water, with the recent news that unemployment did not improve or better still has increased and has put the quality of growth in question.

The National Statistics Office (NSO) has announced that the total number of the employment force is about 40.8 million people. About 93 percent of them are working, or 37.9 million people. On the other hand, around 2.8 million people of the labor force are unemployed because of the unavailability of jobs, or approximately 7 percent of the total employment pie.

Therefore, if we go back to the gross domestic product growth rate in the second quarter which is about 7.5 percent, this amount of growth did not in any way contribute to the decrease of unemployment statistics. Data showed that unemployment has not changed and in fact has even accelerated in the same period (July) of last year, which is 7 percent compared to 7.3 percent for the current year.

This goes to show that our growth rate is standing on shaky ground, and there’s nothing to be euphoric about it considering that the component of our major indicators are temporary and therefore not durable in character. Added to these is that the major indicators that comprise the growth achievement did not in any way contribute to additional employment, perhaps for the simple reason that investments that poured in were capital-intensive in nature (e.g. automation, technological innovations and the likes). What the country specifically needs to fuel an employment boom is to promote labor-intensive technology that will prop up innovations, and not the other way around. To date, it has always been the thrust of major investors to promote capital budgeting with minimal employment opportunities to speak of.

This current economic demeanor is the reason why the existing status of poor and hunger incidence has continuously persisted. With a gleam of optimism to nurture, it is sincerely hoped these people’s anguish that has not persevered in all regimes that have come and gone, will at least be eased if not completely addressed.

The entire nation’s thrust of promoting a tiger economy will be put to naught if we disregard this more important segment of development which is employment. For after all, it is the welfare and benefit of the people that we are more after, if ever we aspire for a permanent growth and more competitive economy.

Criminals running berserk
As if to challenge the competence of police authorities, the current spate of criminal activities ranging from kidnappings, carjacking, assassinations, bank robberies, holdups and the likes seem to have gone unabated, and the authorities appear to be have been caught flatfooted and overtaken by how swift these activities have been carried out “unnoticed.” Not even a “wimp” of intelligence information has been gathered to at least neutralize these felonious activities. Investigations have been conducted but nothing has clearly come out, and this seems to have ended even before it started. The urgency of these matters needs higher authority’s immediate intervention lest it becomes a big threat to economic stability, second only to the people’s security. It appears that even in broad daylight, these activities have been ruthlessly committed right before the very eyes of the populace and sometimes in the presence of the authorities.

These should be given due and immediate recourse by the President before these criminals gain higher ground and resort to bolder criminal actions.

In addition, the current disturbance created by the Misuari factions in the Moro National Liberation Front in the Southern Philippines has tested the mettle of police and military authorities in that part of the region. Few days have passed and it looks to many that a standoff is about to ensue, which will yet again be settled by political concessions. For sure, the destruction and deaths brought about by this group’s siege will be set aside and treated as collateral damage with no collateral penalty in deference to political considerations. These and a host of other things are what makes up many of the transgressions committed by a celebrated criminal as well as syndicated groups, that even higher authorities of the government sometimes apply relative cautiousness in their dealings with these groups for some reasons only they themselves know.

Business implications
These local security concerns are what largely hold back investors to seriously consider pouring their resources to the local economy. As what is revealed by the last quarter’s performance, economic growth is attained presumably by local and not by foreign investments that are based in the country. This was complemented by consumer spending brought about by additional income that was created by election-related activities, which is short-lived in character. As such, the kind of growth we are currently ecstatic about lacks permanence and therefore cannot address the long-term dilemma of unemployment, persisting hunger incidence and overall poverty. Until all these petty and significant security and political concerns are addressed, we may never realize and attain this long ardent dream of an economic tiger status in our lifetime.

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