Aquino’s development plan, mere rehash of Arroyo’s policies

Ibon also noted how the plan acclaims “private actors” – from the smallest self-employed entrepreneurs to the largest conglomerates – (for creating) productive jobs and incomes. The critique said “this focus on propertied profit-seekers disappointingly glosses over the millions of landless farmers, underpaid workers and small employees who are country’s principal producers.”

The plan also promotes Public-Private Partnership (PPP), according to Africa. “This means that the private sector should be supported and allowed to profit from providing public goods and services,” the critique said.

According to the critique, chapter one says there will be transparent and responsive governance to ensure the success of big ticket PPP projects; chapter two says debt management will include seeking financing for PPP initiatives; chapter three says the Philippines will be promoted abroad as an “ideal partner” in PPPs, PPPs will be “(maximized) as a strategy in industry clustering; ”the plan hails PPPs for (intensifying) the culture of competitiveness.

It also added that PPPs will be sought out in a vast range of areas; transport, power, water, sewerage and sanitation; agro-industries, agro-forestry and fisheries; irrigation, post-harvest services, farm and fish trading centers; microinsurance; classrooms and subcontracted education services; health facilities and health insurance; housing development; and disaster risk reduction. Local Government Units too will enter into PPPs.

Africa also added that the plan promotes “a user pays culture,” meaning the private sector will charge for their service. “Users pay is escalating and unaffordable pricing for public infrastructure and social services. However, majority of the people are poor and they cannot afford to pay. If the poor can’t pay, they can’t use.”

“The danger of escalating and unaffordable pricing is particularly hazardous in health, education and housing – which already see expensive health care and high tuition and other fees upon commercialization,” the critique said.

The country is already faced with excessively high water, power, MRT/LRT and highway rates from past privatization, the critique said. However, the plan pushes for more privatization.

The critique also said, “In reality, significant public resources may end up being diverted for private gain. The sector is not necessarily infallible or efficient and problematic projects can have major cost overruns or result in poor delivery of services; the worst cases may even involve bailouts. Also, the expanded privatization effort will even erode the government’s technical capacity to regulate public infrastructure, utilities and services.”

The government is systematically turning vital social services into opportunities for private profit-making rather than directly providing these so that it will be accessible to everyone, including the country’s poorest, Ibon said.

Health, education, housing will be privatized. “The plan is explicit about seeking to use “national health budgets and subsidies to promote PPP for health” including “providing direct incentives for private sector participation,” which will further promote PPPs in the health sector “ranging from investments for tertiary care to involving private practice midwives in the delivery of primary services.”

“The PPP shall also be encouraged in addressing critical and basic educational inputs including the outsourced delivery of basic education services by qualified private service providers, aside from building classrooms through various procurement modalities under the government’s PPP program.”

“The plan also seeks to create an investment-friendly environment through PPPs, develop a financing framework for relocation and resettlement, including workable PPP schemes for socialized housing development and develop PPPs for onsite upgrading and resettlement.”

Window-dressing poverty

Africa said that the inclusion of the CCT in the plan is an acceptance of the fact that many Filipinos did not benefit from globalization. “The plan cannot but acknowledge the adverse impact of globalization policies even if it says this in a roundabout manner.”

The CCT, the critique said, refers to “industrial and occupational adjustments” and to those at “risk from displacement or facing potential income losses” due to “industrial restructuring, the globalized system of production and various international agreements.” Instead of correcting this, Ibon said, the plan merely proposes so-called social protection, particularly CCTs.

“There are about 100 million Filipinos in the country, would this so-called social protection respond to the needs of the majority?” asked Africa. He said that the social protection programs will not respond to the needs of the majority. What the country needs is a progressive economy that will create jobs, will give enough income and economy that will give social services to the people, Africa said.

The critique also said, that CCT is unsustainable, expensive to target, and a debt driven relief without reform. The government even doubled the target beneficiaries of CCT. According to Ibon, from one million under Gloria Macapagal-Arroyo’s administration in 2010, the Aquino administration doubled the target to 2.3 million in 2011 – correspondingly increasing the CCT budget from P10 billion ($232 million) in 2010 to P21.2 billion ($488 million) in 2011- with an eventual 4.3 million reached over the entire plan period.

The plan also plays up a so-called convergence of social protection programs, Ibon said. The Pantawid Pamilyang Pilipino Program (4Ps) of CCTs is the backbone complemented by Kalahi-CIDSS (Kapit Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services) community projects and SEA-K (Self-employment Assistance-Kaunlaran) livelihood support. The targets, Ibon said, are very small compared to the grave problems of some 65 million poor Filipinos; Kalahi-CIDSS have 571, 725 household beneficiaries (2011) and SEA-K with 28,445 families (2016). “At any rate, the impact of these programs are unlikely to be meaningful or sustained given larger unresolved problems with the economy.”

The plan also says a lot about building infrastructure projects. The critique said that the plan asserts that “inadequate infrastructure is a major constraint” so “massive investment in physical infrastructure” is a key strategy to make growth inclusive and to reduce poverty.

But Africa asked, “Infrastructure for what? Aquino said that there is a big problem on infrastructure but it is not true that it will solve the problem.”

Ibon said that there is no doubt that building physical infrastructure in transport, water, power and elsewhere is vital for a strong economy, however, it is important to ask if this will have a desired effect – as in, be broadly developmental – in the specific inequitable conditions of the Philippine economy.

Africa said it is clear how big firms participating in PPPs will benefit from guaranteed profits, and how export-oriented corporations using the improved infrastructure may reduce their costs of doing business. Again, the critique stressed, established foreign, corporate and landed elites will then likely gain.

The plan also has an imbalanced fiscal policy. The critique said the plan seeks to increase taxes paid by the poor while avoiding taxing the rich. “The plan argues that the government faces deficit problems. Hence, it will tighten public spending and reduce outlays for domestic development in terms of public infrastructure, social investments and welfare spending.”

What the country really needs

According to the critique, the plan will not create jobs for Filipinos, it will keep the Filipinos poor including those who momentarily received cash dole-outs and the plan will keep inequality in the country severe.

Africa stressed that free market economics will not result in development for the economy and the people. The critique also pointed out that that the country’s poor development experience with the free market underscores the need for a radical overhaul of socioeconomic policies. Thus, the country’s solution should be nationalist economics, Africa said.

“A national economics is about mutual benefits. The country will not close its doors from any foreign investors that have interests in investing in the Philippines, the only point is if the Philippine government is going to deal with foreign investors there should be mutual benefits. Such benefits where the greater majority will gain from,” said Africa.

He also added that it is the country’s resources that are being used and the country’s workforce who are working for foreign investors, hence the Filipino people should also benefit from their profits. But currently, Ibon said, it’s the other way around: foreign investors are plundering the country’s resources and the Filipinos are exploited so that they would rake in big profits.

It is urgent to strengthen the Philippine economy if the lives of Filipinos are to improve, the critique pointed out. “This means building the domestic economy and ensuring that the majority benefit from the country’s rich agricultural, aquatic, mineral and human resources rather than narrow elite.”

Africa said that Aquino’s PDP is his last chance to prove that he wants genuine change for the country. “It is his campaign promise, he said it again in his inauguration, he also said that in his first State of the Nation Address.” However, Africa added that Aquino’s PDP is just disappointing. “It’s all about old and problematic ways of managing the economy. It has low ambitions and over simplifies the problems of the country.” Ibon’s critique also says that the plan is not decisive in addressing the country’s poverty, backwardness and underdevelopment. ()

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  1. To the author:

    You have been saying a lot about “failed free-market economics”. I supposed you know what is meant by free-market economics, or do you?

    Because I can sense you do not know what you are talking about. You think free-market is the same with govt-managed economy. They are not. USA is no free-market economy and it is baseless to say USA is abandoning free-market policies because there is no free-market in the first place. Corporatism is not free-market. For god’s sake. You can rewrite your write-up in much more better way if you knew what you talk about.

    I suggest indulge in Wikipedia to be clear to some simple concepts.

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