Blessed are the poor

Recently, I took my turn to host the regular fellowship dinner for the boisterous company of the Foundation for Economic Freedom.

The foundation is an assemblage of over-achievers in the economics profession who shuttle easily between academe, government service, and consulting, thereby placating the serial demands of their intellect, civic spirit, and pocketbooks. We take up the cudgels for free markets and the capitalist experiment whenever we can, believing as we do that these are the only reliable guarantors of human freedom as well as economic progress.

I go farther than this sometimes whenever I hector my colleagues – especially those who were or are public officials – that government itself is the problem, an excrescence that is justified only by the impossibility of perfect information and therefore the existence of public or social goods. That, however, is another story, as they say.

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Our topic for the night was an update on the state of poverty and hunger in the country, from Dr. Mahar Mangahas, my old mentor in graduate-school microeconomics and the guru of Social Weather Stations (SWS). Poverty and polling are Mahar’s twin passions today, and he has lately added to this populist bent by taking on a small role in Pakners, the newest flick from FPJ, his better-known cousin (among the masses, that is).

We gathered at the extravagantly appointed "9501" restaurant, atop the shiny new office building inside the ABS-CBN compound in Quezon City. As black-clad waiters served us a superb dinner on glistening china, I was asked half-jokingly if this was the proper venue for a discussion of something as grim as poverty.

I replied that, of course, it was. The building’s namesake, the late Eugenio Lopez Jr., had been well-known for his active involvement with various poverty programs – including Sister Christine Tan’s longstanding outreach to the slums of Leveriza in Pasay City – as well as the influence of public service and social welfare concerns on what should have been his exercise of hard-headed business judgment.

Although I met him only once, it seemed evident to me that the experience of prolonged detention under Martial Law – something I understood firsthand – had changed the man’s character for the better. Yes, indeed, Geny would have welcomed our presence in his building that evening.

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Mahar and his SWS colleagues use a definition of poverty that is provided by the survey respondents themselves. That is, the respondent is asked to state whether he considers his family as poor (mahirap) or not poor (hindi mahirap). Similar self-assessments provide related information about the chronicity and seasonality of poverty, the incidence and severity of hunger, and people’s confidence in the ability of government to uplift the plight of the poor.

Not surprisingly, the first significant finding by SWS is that the magnitude of poverty in our country is much more serious than official figures suggest. Based on quarterly or semi-annual surveys over the last 20 years starting 1983, the number of households who consider themselves "poor" has consistently ranged between 60-70 percent. By comparison, official census estimates start with about 45 percent during the last years of Marcos and, incredibly, drift down over time to only about 35 percent during the last years of Estrada.

As of March 2003, 59 percent, or 9.5 million households, considered themselves "poor." Because of short-term volatility, this number is not meaningfully higher than the 54 percent surveyed in July 2000, just before the accession of Arroyo to the presidency. Ironically, about a fifth of the respondents from higher-income "ABC" households also consider themselves "poor"! Talk about whiners, really.

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Over the same 20-year period, the up-and-down volatility of the poverty numbers is best explained – not by relative unemployment rates or per capita GNP – but by different inflation rates at different times. This is not surprising, since commodity prices do determine how much, or how little, a household can buy. Moreover, the poorer a household is, the bigger the effect of any price increase on its experienced poverty.

At the same time, the educational attainment of the household head – more than his or her sex or age – best explains differential self-assessments of poverty. In other words, the higher/(lower) the educational attainment of that person, the more likely the household would assess itself as being "not poor"/"poor." Again, the correlation is obvious between educational and economic achievement, especially in our society.

However, when asked what they thought would be the best evidence that government can uplift the poor, nearly one in every three respondents answered, providing jobs to the unemployed. Not lowering prices, or educating more schoolchildren, or even eliminating corruption, but – simply – providing jobs.

This simple statement betrays the latent diligence, the sheer appetite for work among our people that drives so many of us to the farthest corners of the globe, fuelling the Filipino diaspora. Unfortunately, among those who stay behind, it can also mean a wrong-headed conception of government as the ultimate dispenser of job opportunities, somehow created miraculously out of whole cloth.

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In the last few years, the SWS researchers have come across a disturbing new development: the existence of a so-called "child hunger gap." This emerged from responses to the survey question on hunger: "In the last three months, on at least one occasion, has your family experienced hunger and not have anything to eat?"

Respondents who answered "yes" averaged eight percent among households with adults only, but a higher 11.2 percent among households with minors present. I suspect that this "child hunger gap" of about 3.2 percent is explained, not only by the predictably larger size of households with children (i.e. more mouths to feed), but also by the unique frustration that a household head must feel when those unfed mouths are those of his helpless children.

A much more upbeat finding – certainly for the current administration – is the steady decline in the incidence of hunger on President Arroyo’s watch. From a high of 16.1 percent in March 2001, just after she assumed office, the overall level of experienced hunger dropped to only 6.7 percent by the March 2003 survey. Most dramatically, "severe hunger" ("often" or "always" experienced in the last three months) is down to only 0.8 percent.

This may seem paradoxical to the ideologues who would make much of the difference between Estrada’s ostentatious "preferential option for the poor" versus Arroyo’s continuation of the hard-nosed commitments to liberalization and globalization that she inherited from Ramos. Paradoxical indeed to those critics, yes, but certainly not to others who understand – the SWS respondents notwithstanding – that jobs for the poor are created, not by government, but by rich people wanting to become even richer.

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Mahar wound up his presentation that evening with a number of revelations that do not bode well for the doomsayers in our midst, be they of the leftist, cynical, or indifferent variety.

One: Compared to 29 other countries surveyed in 1998, Filipinos are more concerned about reducing or eradicating poverty, rather than reducing the inequalities between social classes. This implies that we are less resentful of class differences – although it may also mean that the absolute size of our poverty problem dominates any issues arising from social inequalities.

Two: When asked in mid-2001 how happy they were, 38 percent of respondents considered themselves "very happy" while another 49 percent answered "quite happy," for a total happiness rating of 87 percent. This placed us somewhat above the global average of 83 percent – certainly much happier than the Japanese (57 percent) though still below the happiest country in the world, Nigeria with 92 percent.

Three: Despite all of our problems and frustrations, we remain proud of who we are. Over the past 10 years, most of the respondents, ranging from 70-80 percent, have consistently answered that they were "very proud" of being Filipino. Another 15-20 percent considered themselves "quite proud."

Whether this pride subsists in spite of the facts of our national situation, and not because of them, is beside the point. It is there, something to build upon, for good or aught.

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Lastly, another piece of good news for the Arroyo administration: 95 percent of the respondents in November ’02 looked forward to the incoming new year with hopes rather than with fears – compared to only 87-88 percent the previous two year-ends.

In any self-assessment, such optimism – rather than pessimism – can spell the difference between actual improvement, rather than simply more of the same, in the future. By vouchsafing their optimism to President Arroyo, the masses are entrusting her with a well-earned gift. She owes it to them to use that gift with all due care and consideration – for their place in the future, not just hers in history.

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Readers can write Mr. Olivar at gbolivar1952@ yahoo.com.