Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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No To Trickle Down Theories

           What Typhoon Yolanda did to Eastern Visayas was a wake-up call to all of us Filipinos.  Since at least the end of the Second World War, successive generations of national leaders turned a blind eye to the extreme poverty of that hapless region that has suffered one of the highest rates of poverty incidence in the country.  The percentage of its population living below the poverty line was more than double the national average.  Even during periods of higher economic growth, the sustenance fisher folks, the small coconut farmers and the landless rural workers that comprised the vast majority of its population never participated in the economic progress the rest of the nation was enjoying.  Before Yolanda, one could have easily forecasted that even if Philippine GDP were to increase at the rates of 7 to 9 per cent for the next ten or more years, there would have been no "trickle down" to Eastern Visayas.  The poor in that region are too hungry, unschooled, unskilled, unhealthy and unhoused to even qualify to become overseas, construction, or tourism workers, or much less BPO employees, who are the ones most benefited by the engines of growth of the Philippine economy today.  Rural infrastructures have been some of the worst in the whole country.  The general neglect of countryside development that accounted for decades of failures in economic development in the country as a whole was most acute in Eastern Visayas.

          Eastern Visayas is the starkest example of the limitations of the so-called trickle-down theories in economics.  Pope Francis, in his recent Apostolic Exhortation "The Gospel of Joy," eloquently criticized these theories: "...some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.  This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.  Meanwhile, the excluded are still waiting.  To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed.  Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people's pain, and feeling a need to help them, as though all this were someone else's responsibility and not our own.  The culture of prosperity deadens us, we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us."

          Pope Francis has reiterated in plainer language what Blessed John Paul II already articulated in his encyclical Centessimus Annus in 1991 in which the soon-to-be canonized Pope made it clear that free markets, though useful for generating growth and prosperity for an increasing number of low-income households, cannot address entirely the needs of the poorest of the poor.  There are those at the bottom of the pyramid who are unable to benefit from free markets unless they are first directly helped by a responsible State in such areas as quality and free public education for their children, more efficient rural infrastructures, access to rural health clinics, potable water and socialized housing.  These pre-requisite benefits cannot be delivered by the market as a rule.  They must be the subject of public policy or the charitable intervention of civil society.  As Pope Francis says, it is naive to trust in the goodness of those wielding economic power.  Not all the Corporate Social Responsibility (CSR) of the business sector can compensate for the failure of the State to exercise its responsibility to promote the common good by efficiently delivering what are known as public goods.

          The blessing in disguise of Typhoon Yolanda is the heightened attention from both local and foreign agencies toward the needs of the fisher folks, the coconut farmers and landless rural workers of Leyte and Samar.  Never again can the rest of the Filipinos turn a blind eye to the dehumanizing poverty that we have allowed our brothers and sisters in these islands to suffer for decades.  We will not wait for a trickle down that will never happen even if our GDP continues to grow at the highest rate today in East Asia.  We must endow Eastern Visayas with an abundance of farm-to-market roads, irrigation systems, post-harvest facilities and other infrastructural support for their farmers and fisher folks.  We must provide quality public education to their children.  We must build more barangay health clinics.  We must give them access to potable water. We must provide them affordable housing units.   All these will not be provided even by the freest markets that we can create in the rest of the country. Together with Pope Francis, we should say No to Trickle Down Theories.   For comments, my email address is bernardo.villegas@uap.asia