Page last updated at 07:51 CST6CDT, Wednesday, 12 August 2020 PH
I am known to be an optimist in my prognostication about the economy. I usually prefer to see the glass as half-filled instead of being obsessed with its being half-empty. This time, possibly surprising my readers, I will take the pessimistic view that the vaccine to the COVID-19 may not be found for years to come. I tend to agree with the medical experts who assert, that despite numerous groups all over the world spending heavily on finding a vaccine to the deadly virus that has brought the global economy to its knees, the possibility of a vaccine is still many years in the future. There have been many other varieties of the corona virus in the past, not to mention such well known diseases as HIV and even the simple cold, to which no vaccine has been found up to now. Of course, I will be the first one to be very pleasantly surprised, nay ecstatic, if as some overly optimistic public officials have asserted the vaccine is found at the end of 2020 or early 2021.
Given my more pessimistic view about the vaccine, I fully appreciate the cautious stance taken by the International Monetary Fund (IMF) officials when they warned both investors and consumers that they have to be resigned to the fact that uncertainties will continue to hound their decision making for some time to come. The full economic recovery of the world and local economies will depend on the following: 1) The duration of the pandemic and additional national and local lockdowns; 2) Extent of voluntary social distancing; 3) Severity of new safety regulations; 4) Ability of displaced workers to secure employment; 5) Long-term impact of business closures and unemployment; 6) Extent of reconfigurations of supply chains; 7) Likely damage to financial institutions; 8) Extent of further dislocation of financial markets.
Given these uncertainties, there are a number of relatively certain decisions we must consider making. First, there is no question that whatever political ideologies have prevailed in any given society, we must be committed to a stronger and more pervasive role that the Government has to play in the so-called New Normal. Even the most conservative politicians cannot deny that the pandemic has required a greater role of government intervention in economic activities. Especially for countries like the Philippines where governance in the public sector has not been exactly exemplary, there must be a greater commitment of competent and honest individuals to seek public office in one branch or another. Millennials and centennials must be able to channel their idealism to making the sacrifices to work in the public sector whatever the economic disadvantage and moral hazard they may face. In the new normal, the government must be an increasingly preferred place for our bright and idealistic youth to seek employment.
The prolonged uncertainty caused by the pandemic should lead to a stronger commitment to work for a society in which there is greater equity in the distribution of income and wealth. Those who belong to the more economically privileged sectors of society must be more determined to address the glaring economic inequalities, first by using their human right of freedom of economic initiative to start enterprises, whether big or small, that will employ well paid workers who will be given opportunities for continued learning of new knowledge and skills. Instead of perpetuating the old normal of adopting labor-intensive technologies to be able to employ numerous workers who are paid rock bottom wages, the new normal must be to mechanize (robotise) as many jobs as possible so that there will be a continuing need to invest in skills development of the working force tin order to enable them to perform more productive, and therefore, better remunerated jobs. In addition to constantly improving the quality of our educational institutions engaged in formal education, there should be a proliferation of non-formal and informal training programs that enable continuous learning of the workforce. Worthy of note here is the ICT Academy that the Government is putting up, as DPWH Secretary Mark Villar announced in the Pre-SONA briefings last July 8, to impart ICT literacy to as many Filipino workers as possible. This is especially applicable to the BPO-IT sector in which voice-oriented services are easily robotized. Call centre agents must be retrained for higher skilled jobs, especially in knowledge process outsourcing and data analytics.
Most important of all, the long wait for a vaccine should be used to drastically change our priority away from greater urbanization and industrialization towards authentic rural and agricultural development. The Build, Build, Build program must give greater importance to farm-to-market roads, irrigation systems, post-harvest facilities and other services needed by the farmers and farm workers to raise their incomes through greater farm productivity and improved logistics. The good that has resulted from the pandemic is the greater realisation among our leaders of the primordial importance of food security. Without falling into the extreme of autarky (we still have to import selected basic food items which we cannot produce efficiently), we should aspire for as much food security as possible. As Secretary of Agriculture William Dar said in a webinar: “The vision now is to be a food-secure and resilient country with prosperous farmers and fisherfolk. For our survival and recovery, we need to look at three stages: survive, reboot and grow.” The pandemic gave rise to such innovations as online agriculture stores, urban gardening and new platforms linking farmers directly to buyers. I would like to especially cite the laudable move of the SM group to allocate space in its malls where farmers can install for free their stalls to sell their fresh produce.
Because the immediate recovery of the tourism sector lies in domestic travel, one cannot overemphasise the need for continues improvement of the same countryside roads common to farmers and domestic tourists. Domestic tourism can immediately employ millions of workers, especially if—as Secretary Bernadette Romulo Puyat—we focus on agri-tourism. It was heartening to hear Secretary Mark Villar report in the same Pre-SONA briefing last July 8 that Tourism Road Infrastructure Program (TRIP) has already succeeded in constructing some 1,950 kilometers of access roads to tourist destinations. These additional roads, when added to the Philippine Nautical Highway constructed during the term of former President Gloria Macapagal Arroyo, can increasingly accommodate the more than 60 million middle-income Filipinos who are the potential domestic tourists. The Philippines is well known to have some of the most beautiful islands in the world (especially Palawan). It is time that more of our own monied people get to know these tourist attractions as they got to be familiar with their usual haunts in Europe, the US and other foreign countries when they could still freely travel all over the world before the pandemic.
Let us not waste the opportunity that the pandemic has created for newer approaches to economic development that will give greater emphasis, not to mere economic growth, but to greater equity in the distribution of income and wealth. The higher rates of unemployment and the accompanying increase in mass poverty should move many of our educated youth to want to depart from old models of running the economy and managing businesses which prompted Pope Francis to exclaim that the free market economy kills. I am convinced that there are enough generous young people who, seeing the sufferings resulting from a prolonged pandemic, will be motivated to use their talents to create a new normal that will be characterized by greater equity in the distribution of income and wealth among our population. For comments, my email address is email@example.com