PH policy a hostage to mediocrity
Credit to Author: BEN KRITZ, TMT| Date: Mon, 11 Mar 2019 16:22:52 +0000
A plan to liberalize the importation of sugar has provoked the filing of “so many petitions” by the sugar industry against the move, a NEDA official said in a news item from yesterday morning, prompting the agency to plan a study of the issue.
Whether or not that study reaches any conclusions or is even completed, the fact that the government is even acknowledging the complaints will be enough to quash the sugar liberalization idea, or render a policy so hamstrung by protective conditions as to be useless.
This week it’s sugar; last month it was rice; last year, it was the insolent proposal to modernize parts of the country’s public transportation fleet: Any policy that tends to aim, however imperfectly, at competitive progress dies at the hands of those defending the “livelihoods” of the little people. It is policy reduced to the lowest common denominator, rather than policy aimed to raise the social and economic floor, and the longer it continues, the less able the country is to break out of the pattern of mediocrity.
Let’s take a look at the sugar liberalization issue first. A detailed plan has not yet been presented, but presumably would involve tariff adjustments as well as loosening regulations on import permits. The rationale for liberalizing sugar imports is prices; local sugar prices are comparatively high for a variety of reasons, none of which is actually acceptable considering that this is a sugar-producing country.
When the circumstances are such that imported sugar subject to tariffs of any level is still cheaper than domestically produced sugar, there is something deeply wrong with the local industry. The solution to that is not to preserve the status quo by blocking imports, but to address the problems that make the local sugar sector so uncompetitive. As is the case with most agricultural commodities, the path to competitiveness does not lie through support for smallholder farmers, but in building economies of scale and critical mass. That is necessarily going to rob a lot of farmers of their independence – small farms need to be consolidated – and that is unpalatable to many people.
Much the same problem exists in the rice sector. Before he was kicked upstairs to head the Bangko Sentral ng Pilipinas,, former Budget Secretary Ben Diokno had the lack of grace to suggest that the Philippines would be better off relying on imports for most of rice needs, and instead put its efforts into higher value agricultural products. “Oh, but what about the poor rice farmers?” the defenders of “livelihood” wailed, led in this case by Agriculture Secretary Manny Piñol. What about them, indeed? There should not actually be “poor rice farmers” among the Filipino population, and there wouldn’t be, if the country would approach rice production from a national-scale perspective, maximizing yield and supply chain efficiency. Unfortunately, doing that, while it would eliminate “poor rice farmers,” would do so by rendering many of them mere workers, violating the ideal of land ownership. Those who proclaim themselves “pro-poor,” who shout the loudest about “inclusive growth,” can’t see past that.
And much the same attitude is applied against the idea that public transportation should be efficient and environmentally sustainable. For the sake of maintaining “livelihoods” that do not and never will, no matter how much state intervention is applied, rise very far above the absolute poverty level, efforts to bring the short-range public transit network into the 21st century are heroically resisted.
So the country is left with an economy that constantly lags behind achievable standards, where an enormous amount of input is necessary to obtain a relatively small output; agriculture, after all, comprises about a third of the workforce, but contributes only about a tenth of the country’s gross domestic product. None of this is news to anyone who has at least even tried to look at the socioeconomic state of the Philippines objectively, but there is a lack of will – really, a complete absence – to make hard choices and risk a few sacrifices for the greater good.
It will probably take a crisis, such as an absolute collapse of the food supply, for the significant change the country needs to begin to take place. The only other way is for society itself to decide to change – for enough overworked jeepney drivers, rice farmers, cane cutters to stop all at once and say, no, I am no longer satisfied putting in this level of effort to merely exist. That probably won’t happen, though; this society, and a fair part of the world at large, confers a certain nobility on poverty. That makes it hard to convince someone that they would do better if they didn’t feel so special.
Email: ben.kritz@manilatimes.net
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