‘Social prosperity,’ not just GDP growth, needed

More than their counterparts in previous administrations, the Duterte government’s economic team has been fixated on pursuing neoliberal globalization policies and programs  – liberalization, deregulation, and privatization –  to achieve a higher growth in gross domestic product (GDP). Likewise, they are fixated on GDP as the key measure or global norm of economic and national progress.

But in the aftermath of the 2008 global financial and economic crisis, this policy direction prescribed by the triumvirate multilateral agencies – the IMF-World Bank-WTO – has been widely questioned, if not debunked, because of its now universally acknowledged ill consequence: greatly increased/increasing inequality.  Among those who have firmly raised criticisms and called for changing tack is Nobel Prize laureate Joseph Stiglitz, former World Bank chief economist.

Move beyond economic growth and GDP as a measure of progress, and factor in the people’s wellbeing and “social prosperity”: This is the thoughtful suggestion that has been coming up of late, one that has been prompted by the rise of populist regimes all over the world.  It is contained in a study by Global Solutions Initiative, a think tank advising the Group of 20 leading developed and developing countries, which is due to hold its 15th meeting in November in Riyadh, Saudi Arabia.

The study puts forward the idea of a “recoupling dashboard” that could be adopted not only by the G20, but by all countries, to “dramatically increase their focus on social prosperity as a key tool in the fight against growing political extremism,” or populism.

“The financial crisis of 2008 made all these issues much more salient,” GSI president Dennis Snower told the Guardian. “Lots of people are now saying, ‘I’m sorry, but this [neoliberal globalization] system sucks.’” 

“In addition to being materially prosperous, we need empowerment and agency – that is, the ability to shape our destiny through our own efforts – and we need solidarity – that is, we need to be imbedded within our social circles,” Snower said.  All these have to be in harmony to show a country is adequately serving the needs of its citizens, he added.

The empowerment and solidarity indexes used by GSI have been drawn from existing major surveys of wellbeing, compiled by the United Nations, the World Bank, and the OECD (Organization for Economic Cooperation and Development), Snower pointed out. These include assessments of job security, education levels, life expectancy, charitable activity, trust in strangers, and confidence in government.

Using the new “dashboard,” Finland, New Zealand, and Iceland are considered among the most progressive nations, while India, China, and Mexico are ranked among the worst performers among a list of 35 nations. The US “dramatically underperforms” in terms of per-capita GDP while the UK has become “more neoliberal” with its social solidarity falling amidst rising GDP.

Significant growth in GDP has been generated in the last 40 years of globalization and technological advances, says the study.  But this has been accompanied by rising inequality, global heating, and a sense of disempowerment among various groups (underscoring mine).”  Several countries around the world, however, New Zealand for example, are now attempting to move beyond GDP and focus on citizens’ wellbeing.

Had nations monitored the wellbeing of citizens as much as GDP, the study concludes, they would have caught earlier warning signals about the “fragmentation of society” and the rise of populist politics.

 To a considerable degree, focus on the wellbeing of the Filipino people is the overarching objective of the two parties, in the now-suspended-but-may-possibly resume GRP-NDFP peace talks, as clearly expressed in two common draft agreements they have initialled (as of Nov. 17, 2017) for approval by the negotiating panels.

The common drafts are on Agrarian Reform and Rural Development (ARRD) and on National Industrialization and Economic Development (NIED).

On ARRD, the governing principles include the following: breaking up land monopoly and safeguarding against remonopolization;  agricultural lands and other agricultural means of production owned by landlords and corporate farms shall be subject to expropriation; expropriated lands shall be redistributed for free to all tillers, farmers, farmworkers, agricultural workers, fisherfolk, and all others willing and capable to till the land; necessary support services shall be provided; a policy of compensation shall be adopted to encourage landlords to invest the payment for their lands in industries and other productive enterprises; lands acquired by illegal, fraudulent, or violent means shall be subject to “confiscation with due process.”

As regards NIED, the two parties acknowledge that national industrialization is necessary to achieve “comprehensive national economic development, full employment, improve real wages and incomes, improve the standard of living, reduce inequality, and eliminate poverty.” National industrialization (to be carried out in stages) means domestic capacity to produce industrial goods including consumer, intermediate, and capital goods.

It entails maximizing the use of locally available raw materials, raising the level of science and technology, expanding domestic demand, and integrating regional production and markets into one national production system.  It shall ensure well-balanced growth with heavy and high-tech industry as the leading factor, agriculture as the base of the economy, and light and medium industries as the bridging factor to immediately produce basic consumer goods for the people and producer goods needed by agriculture.

The parties agree to adopt policies and measures to ensure that foreign invesments contribute to developing the national economy, especially in terms of technology transfer, product or market access, and like benefits.  In no case shall foreign equity exceed 40 percent in any enterprise.  Also, the parties agree to develop Filipino industrial capacity as the most effective economic means for national economic development. They further agree to support, protect and develop domestic entrepreneurs and micro, small, and medium enterprises in a broad range of industries.

But as I wrote in this space on Jan. 18, two of President Duterte’s military advisers (both former AFP chiefs, both non-economists) have publicly opposed the resumption of the GRP-NDFP peace negotiations. They also viciously – and erroneously – attacked the concept and workings of a Comprehensive Agreement on Social and Economic Reforms (CASER), which include ARRD and NIED as key components.

National security adviser Hermogenes Esperon Jr. (seconded by presidential peace adviser Carlito Galvez Jr.) alleges that the NDF crafted the CASER “with the goal of turning the Philippine economic model [a neoliberal model] to nationalist and socialist… dismantling the effects of globalization…” which, as noted above, has been producing increasing inequality on a global scale. 

Need I say more?

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