Between poverty and prosperity

Ike Señeres

THE Conditional Cash Transfer (CCT) program is a good initiative, but the government has to be honest about the fact that it is a poverty alleviation program and not a poverty reduction program. That is the reason why I do not understand that it has lowered the poverty rate because of the success of the CCT program. As I see it, there is nothing to brag about in the supposed success of the CCT program, because it simply involves the distribution of money, which is a really simple thing to do. In a manner of speaking, it could be said that it is easy to give away fish, but it is harder to teach people how to fish.

In theory, it could be said that the more people who could afford to buy the imaginary basket of goods in the reckoning of the poverty rate, the lesser poor people there would be. It could also be said that if the government would give the people the means to buy some of the items in the imaginary basket, then the beneficiaries could possibly go above the poverty line. That is not the case however in the CCT program, because as it is supposed to be, the money given to these poor families is only supposed to tide them over, and not to make them rich.

Also in theory, it is implied that the more people who could earn enough to buy everything in the imaginary basket of goods, the lesser people would fall below the poverty line. Given that simple equation, the solution is actually very simple, and that is to give more people the means to earn more income so that they could afford to buy the imaginary basket of goods. It is not as simple as it seems however, because to be able to do that, the government has to create more jobs, or create more opportunities to earn from more businesses.

In the same manner that the government has to be truthful about the fact that CCT is not actually a poverty reduction program, it also has to be truthful about the supply of jobs in relation to the demand. According to the government, there is a large supply of jobs that are available, but the applicants could not be hired because there is a mismatch between their skill sets and the requirements of the employers. To that, I would say that the government should be careful about shooting its own foot, because what it said could be an indictment of the educational system that it is also supposed to manage.

Perhaps the officials of the Department of Labor and Employment (Dole) should review their own math, because if it is true that there is a large supply of jobs that are available locally, then there would be lesser people who would be going abroad to look for jobs elsewhere in the other countries. As a matter of fact, that would actually be a good way to measure the health of the local economy. If there would be lesser people who would go abroad, then that would mean that the economy is already better.

While listening to the campaign promises of the politicians in the last election, it would seem that it is as easy as 123 to reduce poverty. As it was implied in their campaign promises, the way to do that would be to create more jobs, and they also made that sound as if it was also as easy as 123. As the dust has settled however, the challenge of reducing poverty has now fallen on the laps of those who won. By the way, the challenge is actually bigger than it seems, because the Philippines committed to meet the United Nation’s goal of eradicating (not just reducing) poverty by 2030, being one of the global Sustainable Development Goals (SDGs).

By the way, the government should also realize that it does not follow that those who have jobs are automatically above the poverty line. That is so because the poverty rate is a measure of income, not a measure of employment. What that means is that many of those who are employed may also fall below the poverty line, simply because they are not earning enough to be able to buy all the items in the imaginary basket of goods. Both measures considered however, there is actually a direct correlation between the two, because a higher unemployment rate would actually result into a higher poverty rate.

I would not want to make it sound too simple, but having more exports and having lesser imports would actually mean more jobs created. Having said that, the next thing that we should do is to identify which government agencies should be responsible in making that happen. Right away I would say that that is not the function of the Dole, even if that would sound like an obvious assumption. Even if it would sound less obvious, I would right away say that the function of job creation should belong to the Department of Foreign Affairs (DFA) and the Department of Trade and Industry (DTI), because these are the two government agencies that are directly tasked by the law to do the work of economic diplomacy.

Simply put, it is the function of the DFA and the DTI to bring in more foreign investors and locators, as the case may be. While that may be true in the case of foreign promotions, these two agencies would have nothing to promote, if the domestic conditions are not attractive for foreign investors and locators, and because of that, I would say that the Department of Science and Technology (DOST), the National Economic Development Authority (Neda), the Department of Energy (DOE) and the Department of Transportation and Communications (DOTC) would also have roles to play.

In particular, the DOST should create the conditions so that it would be more attractive for high technology companies to come in and produce goods that have very high value added. The Neda should create the investment climate and the incentives that would attract more foreign investors and locators. The DOE should bring down electricity costs, because the high costs of energy is one major reason that is driving away the foreign investors and locators. The last but not the least, the DOTC should make internet connectivity faster and cheaper, because the slower and the more expensive internet connectivity is, the lesser foreign investors and locators would come. With more foreign investors and locators, we could create more jobs that would translate into more prosperity.

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