FILE PHOTO: A member of one of thirty families who live under a bridge bathes in Manila. AFP PHOTO /NOEL CELIS
MANILA, Philippines — The Philippines should do away with political dynasties and achieve “inclusive democracy” in order to address the burgeoning inequality in the country.
This was the finding of a study made by Ateneo School of Government Dean Ronald Mendoza, titled “Reducing Inequality in the Philippines: Rationale and Reforms,” which emphasized the country’s failure to liberalize its politics that causes bad governance.
In his paper, Mendoza pointed out that the country was not able to build a more inclusive democracy, which is crucial to making “upward mobility among people.”
“We managed to liberalize the economy, but we failed miserably to liberalize our politics. Eventually, even if you liberalize your economy, you will still hit a ceiling because of bad governance and because of that failure to liberalize politics,” his study states.
According to Mendoza, there are three facets of inequality in the Philippines: “weak upward mobility in our economy, our vulnerability to disaster, and the concentration of power among just a few political clans.”
“All these affect our people in a deep way,” he said.
“It’s not very surprising that we are divided because we are very unequal as a country right now. Inequality is self-reinforcing. We need to break free from this anti-democratic, anti-inclusive growth trap.”
These gaps were then widened even further by the COVID-19 pandemic, said Mendoza.
“Under lockdown, there is a deep divide between the technology ‘haves’ and ‘have-nots,’ creating a demarcation in resilience and crisis coping across students, workers, firms, and communities. Just to illustrate, several million students may be unable to enroll during the lockdown, due to factors such as lack of connectivity,” Mendoza said in his paper.
“Inequality is of interest not merely because of a desire for a more equal distribution of wealth,” he likewise said.
Inequality itself can derail economic growth, breed populism, and weaken social cohesion, he added.
“For these reasons, the challenge of our generation is no longer simply about reducing poverty. Reducing inequality is the key to political stability, crisis resilience, and sustained economic development,” Mendoza noted.
“Similar to the inequality trap scenario, the reform scenario described here is also mutually reinforcing—a spiral of citizens’ empowerment along the social, economic, and political spheres that tends to support sustained and inclusive economic growth and development,” he added.
Genuine competition, level playing field
Also, Mendoza believed there should be a resurgence of “genuine competition in the market economy” and a “level playing field where abuses of market power and other anti-competitive behaviors are prevented.”
A key institutional innovation that could encourage this is the creation of a strong and independent competition authority, he said.
Meanwhile, during the presentation of the study in a virtual town hall discussion held recently, Stratbase ADR Institute president Victor “Dindo” Manhit said the problem of inequality in the country is “crippling.”
“Inequality requires a multi-stakeholder strategy,” he said.
Manhit stressed the need for public-private partnerships, investments by the private sector, and a better environment for investment by the incoming administration by June 30, 2022, “with the hope that it can provide jobs, livelihood and income, and a comfortable life for many Filipinos in the long run.”
He then underscored the importance of a conducive environment, fostered by the government, for the private sector to prosper.
“The country’s next administration would need to exert a holistic effort for these challenges to be significantly addressed. We need a leader who acknowledges the important role that the private sector plays in development, especially through their investments across a wide range of sectors,” Manhit said.
For PHINMA Education chief operating officer Christopher Tan, the country should address the issues of access, completion, and employment to be able to tackle inequality.
“For access, the core market failure in the Philippine educational sector is the lack of supply of high-quality, low-cost education,” he said.
“There’s too much focus on diplomas instead of the skills needed by employers. The world of work is changing; more and more businesses operate through discrete projects and are less likely to provide employee tenure. Hence, they are looking at more specific skills rather than degrees,” Tan added.
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