Part 1 Inclusive growth: Rising tides and leaky boats
THE Philippines hosts the Asia Pacific Economic Cooperation (APEC) Economic Leaders Meeting in November 2015. In preparation the first Senior Officials and Related Meetings was held in Clark Field, Pampanga; propitiously, it is being held on the heels of the visit of Pope Francis.
ADB’s “Key Indicators for Asia and the Pacific 2014” reveals the region’s extreme poverty rate in 2010 to be at 20.7% which rises to 49.5% when the impact of food security, vulnerability to natural disasters, climate change, illness, and economic crises are counted. Many people argue that the poor, closest to the heart of the Pope, can be lifted from their state by allowing them to rise with the tides of economic growth, even with the leaky boats of the lost, the last and the least.
Indeed the Philippines has to grapple, like climate watchers, with an issue of efficiency and fairness of the market system. As APEC Chair, the country has to spell a difference in at least a deeper understanding of inequality in the current socio-political environment. Providentially, Pope Francis’ visit to the Philippines could set the tone for APEC 2015.
“Mercy and Compassion” was the theme that the Catholic Bishops’ Conference of the Philippines (CBCP) chose for the Pope’s visit. At first blush, this is so dissonant from the core of APEC — trade and investment liberalization, economic-technical cooperation, and business facilitation. Values as foundations of technical reports are rarely raised by participants in a forum like APEC.
APEC itself has arguably managed many chaotic issues including those related to the environment, terrorism, biotechnology, agriculture, gender, and youth. However, the Pope forces us to re-examine the contemporary economic model, , as pure profit orientation (Capitalism 1.0) moving to incorporate people (Capitalism 2.0) and planet (Capitalism 3.0) concerns in enterprise operations.
Reinventing capitalism: Beyond Profits
In Evangelii Gaudium, the Pope exhorts all leaders to focus on “generous solidarity and to …return …economics and finance to an ethical approach which favors human beings” (Par. 58). In line with his theme of modern idolatry, he asks: “how can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points” (Par. 53)?
A timely appeal to APEC Leaders is the Pope’s message of shared responsibility – that “each meaningful economic decision made in one part of the world has repercussions everywhere else” (Par. 206). He adds that “if we really want to achieve a healthy world economy, what is needed at this juncture of history is a more efficient way of interacting which, with due regard for the sovereignty of each nation, ensures the economic well-being of all countries, not just of a few” (Par. 206); and that policies must not simply ensure “nourishment or a dignified sustenance for all people, but also their general temporal welfare and prosperity” (Par. 192). But Church leaders have been thinking these concerns even before.
Cardinal Sin’s pastoral statement for APEC 1996
At the last APEC summit hosted by the Philippines in 1996, no less than Jaime Cardinal Sin issued a Pastoral statement on parallel issues similar to the Papal messages: economic functioning of humane societies; assurance that work is equitably compensated; rational discussion and critique into the further humanization of the production process; a favourable look at the eventual globalization of the economy; and, reliable assurances… against reneging of individual participants.”
I reflected on APEC after the Manila and Subic 1996 meetings as Chair of the Senior Officials Meetings. I shared Cardinal Sin’s sentiments in Canada as the baton of the APEC hosting was passed to it by the Philippines in 1997.
Even in Japan (Awashima Forum IV, Numazu City, Japan, 10-11 March 1997), I mused: “That APEC will remain faithful to socially responsible market-type mechanisms is a hope many would wish to see through 2010, 2020, and the rest of the Asia-Pacific century. If it fails to do so, someone may have to reinvent it.” Today, the reinvention of capitalism is receiving much attention in other fora but APEC seems not the place where such seeded sentiments take root.
Externalities: People and planet
The old thinking on sole resource ownership has disappeared. The use of human and natural resources has become problematic as so-called “externalities” are generated in the economic system. Resources are no longer “owned” by particular individual persons or states alone.
Regulatory rules are the answer to such externalities. But there are externalities whose solutions are beyond regulatory prescriptions, and there are also public goods or public “bads” which must be paid for.
Pope Francis earliest message in Manila was on corruption, a form of economic transaction that produces externalities. Eventually that culture of corruption transforms into public “bads” which impact every citizen by degrading governance across communities, and thereby, once produced, makes it impossible to exclude some people from this debilitating milieu.
Church leaders clearly know the impact on the poor of corrupt practices among willing partners; the Pope was diplomatically short in enumerating these. But many Filipinos are well aware of myriad examples.
As the Pope noted at Manila Cathedral and Malacanang, Philippine bishops have already adopted 2015 as the Year of the Poor. The pontiff called for honesty, integrity, and commitment to the common good. He challenged “all Filipinos at all levels of society to reject every form of corruption, which diverts resources from the poor, and to make concerned efforts to ensure the inclusion of every man and woman and child in the life of the community.”
While necessary to reinvent capitalism, is such plea sufficient in the Philippine context?
Part 2 “Connectivity in APEC – a fresh perspective based on the Pope’s Manila messages” will appear on Monday.
Federico (Poch) M. Macaranas, Ph.D., is the Asian Institute of Management ASEAN 2015 Project Co-Director. He served as Chairman of the APEC Senior Officials Meetings in 1996.