Social market economy, atbp for the presidentiables

Social market economy, atbp for the presidentiables Featured

WITH intermittent snowfall generating outside temperature around the low teens and with Omicron lurking about this small farming community, more time has been allotted to reading posts of my friends on social media networks Facebook, Messenger and Viber, comfortably nestled before a faux fireplace. Separating the chaff from the grain has always been time wasting but not with these bloggers who post stimulating content. Claire Carlos, an author and political technocrat par excellence, is one of those that dish out short staccato-like numbered arguments, parsing complex problems, reducing them to bite-size morsels with clarity of which only an accomplished classroom schoolmarm is capable. Her thoughts on imposing discipline on logical processes explained how past president Fidel V. Ramos (FVR) concocted his "complete staff work" — a mantra many of us working under FVR understood only too well.

But the country's concerns go beyond — poverty alleviation, corruption, prohibited drugs, bureaucracy reform, foreign policy, the West Philippine Sea, etc. I refer to another blogger posting his 10 cents worth, which nonetheless are thought-provoking. Norman Madrid, a retired New York-based economist, posted eight-point policy initiatives, foremost of which was the amendment of the 1987 Constitution, striking out the anti-foreign direct investments (FDI) provisions (for details, friend him and access his FB). This echoes our Centrist Democratic (CD) position, articulated well by another prolific blogger, Orion Perez D, an advocate of the federal-parliamentary government and economic liberalization.

But to put things in proper perspective, these views were congruent with then candidate Duterte's stand on federalism, crusade against corruption and proscribed drugs, and political reforms, among others, which would in effect open up the economy. To prosper it needed one last ingredient — a display of political will, a sine qua non without which the 1987 Constitution remains untouched. He balked! These structural reforms were later dropped for political expediency in lieu of semantic contortions like the lamented Duterte Doctrine on "whiff of corruption" and "Operation Tokhang." But the underlying concepts are still valid and even timely for the next administration to consider, whoever takes the helm of the presidency — BBM, Leni, Isko, Ping, Manny. This time we must elect a president with a sufficient number of senators who will seriously revise the 1987 Constitution.

Current economic situation

At the twilight of his regime, the President may claim bragging rights to some economic gains during his tenure. The country posted a 2021 third quarter GDP growth of 7.1 percent. This was led by the industry and services sectors while agriculture, forestry and fishing contracted by minus 1.7 percent in the same quarter. Weighed down by the pandemic, forecast for the Philippine economy is a respectable 4.7 percent this year, hopefully accelerating to 5.9 percent in 2022 and 6 percent in 2023 (Philippine Statistics Authority). Although the pejorative "sick man of Asia" no longer applies to the Philippines, our economy comparatively is not as healthy as that of our neighbors — a consequence of this antiquated politico-economic system embedded in the 1987 Constitution.

Poverty may have declined to 16.6 percent rate in 2020 from 21.6 percent in 2015. But with the world pandemic-induced economic dislocations, poverty incidence is back to 23.7 percent in the first half of 2021. Duterte's AmBisyon2040 targets a decline of 14 percent by year-end 2022 totally eradicating poverty by 2040. This, by creating more jobs, improving productivity and investing in health and nutrition of the Filipino. But a recondition to all these are the dismantling of our perverted economic and political structures.

The following are excerpts from "Introduction to social market economy (SOME)" (The Manila Times, Oct. 27, 2016).

Wealth disparities

"A larger slice of the national wealth is still enjoyed by the very few families who are also game players of our political and economic landscapes. They have been enjoying their present positions that they will do everything just to maintain their rankings on Forbes' top wealthiest families in the Philippines.

"Top-to-bottom approach of our current development framework is no longer viable and has failed generations of Filipino families working their way out of the slums, only to be slammed back to the ground because our present economic policies have never been pro-people, but pro-elitist!

"The coming administration should look into SOME as a guiding concept and its imperatives, a tool for reducing poverty and nourishing conditions that respond to the needs of the people so they may also live a dignified and humane life."

Two traditional economic models

"In a capitalist driven economy, an individual takes precedence over the community and one should be free to take sole decisions on the course of his life. However, extreme liberal capitalists practiced an uninhibited and untrammeled free market economy where prices of goods and services and the production and distribution thereof are dictated solely by the market.

"On the other hand, the leftist model is notorious for the direct intrusion of the state due to a very centralized economic structure. It determines what goods and services to produce, who will produce them and subsequently who will consume them. Private property is absent and the means of production and distribution of goods and services are in the hands of the state. The economy is therefore centrally planned; clearly, a direct opposite of the capitalist economic model."

Economic framework that does justice

"SOME is a synthesis of two classical models of economic order. To the left is the socialist centralized planning adopted by countries such as (the "old") China and the Soviet Union, and to the right is the liberal capitalist model practiced by the (erstwhile) United States. These two models both have certain vital characteristics that when put together, form an economic model that carries with it the principles of social amelioration and the safety nets of the left, and the tempered free market of the laissez faire.

"SOME first laid its Midas touch to the still recuperating German economy way back in the post-World War 2 era. Lessons from the war provoked the Germans to create a social and economic model that does justice and seeks the common good. The inherent dignity of man, irrespective of religious faith and the belief in a God, is to take precedence over all. It must involve the right to self-determination, freedom of personal development and decision making.

"SOME, therefore, acknowledges the importance of an individual's creativity, innovation and decision-making capacities — and from the social context, it seeks to aid the disadvantaged through channeling revenues and resources from the privileged in our society."

PH version of social market economy

"The proposed economic model for the Philippine version of SOME does not veer away from that of the German model. Our country has inherited some of the important principles of the social market economy from our colonizers. Uncle Sam has planted the seeds of capitalism and independent-mindedness in our social fabric. We are therefore more familiar with the "free market" economy. This is a key value that also exists in the German model. The other important factor is that which was handed down to us by our Spanish colonizers — our Christian faith that also values the inherent dignity of man."

(To be continued on Wednesday, Jan. 26, 2022)


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