IN A recent radio interview I was asked to comment on the good growth rate figures registered by the country. I said I was cautiously quite happy and also thought that rejoicing was premature. I share the anxiety of several known economists like Ben Diokno of UP and Ciel Habito of Ateneo who used phrases like "jobless growth" (Diokno) and "growth that was narrow, shallow and hollow" (Habito).

Ciel Habito’s explanations are graphic. He said our growth is "narrow" because it positively impacts only a few industries and only a small proportion of our population. It is "shallow" because the growth is not deeply (nor widely) linked with our total economy. And it is "hollow" because it produced little or no jobs which meant many did not benefit from the growth.


Why this is happening has been explained much more thoroughly by many economists including Ben and Ciel, in separate columns in different published popular articles. Our economy, termed by many as a "dual economy," badly needs structural changes. We need to move from mostly traditional and/or low-tech, often subsistence, agriculture; mostly lower skilled services; and very light manufacturing to modern agriculture; hi-tech services; and modern heavier manufacturing. The latter two are what promise the high paying jobs in-country.


There are, to be sure, many contributing reasons to why our growth has been like this and why it is not sustainable.


Rolly Dy of the University of Asia & the Pacific has written two very good articles in another paper that has laid out the lack of investments in agriculture and forestry, the sectors where most of our people, and most of our poor, are in. This is unfortunate because it is in agriculture and forestry where we can generate not only more employment and livelihood, but also address food security and provide some of the answers to climate change mitigation.


But I think the bigger part of the explanation is in our political economy. Political economy is the original discipline that subsumed economics. If one were to look at the laymen’s way of phrasing the "economic question" [Who decides what will be produced how, for how much, for which people and towards what ends?], one immediately senses the issue of power, the central concern of politics [Who decides what will happen in society at what costs and for whose benefits?]. This is where the issue of economic justice, a concept not germane to the economics discipline as currently conceived, comes in. But economic justice is a subset of the larger concept of SOCIAL JUSTICE! Here, I need to refer to someone else who many recognize is "thought leader" on the subject.


Christian Monsod, in his keynote remarks for the "Summit on Poverty, Inequality and Social Reform" last Dec. 1, 2011, said:


"… We are a nation of two worlds -- the world of the few -- with gated communities; with access to superior education; first world health care; private parks and leisure areas; and the money to control our politics and policies. And the world of the many -- with urban hovels and rural huts; inferior public schools; playgrounds that double as public streets and highways; poorly equipped and poorly manned public health centers and marginal access to public office.


"We continue to be a country of contradictions: we are an agrarian economy but import rice and other agricultural products; we have abundant fishery resources but have dwindling fish harvests; our coconut industry has earned billions but our coconut farmers are among the poorest of the poor; the indigenous peoples used to own all the land but are now land-poor; we have first world amenities in urban areas but no places to house the poor; our workers are among the best in the world but don’t have security of tenure in their own country; we have huge mineral resources but poverty incidence is highest (48.7%) in the mining sector; our country is one of the top biodiversity and endemicity areas of the world, but our mountains are denuded of forests; we have some of the best social justice and empowerment laws but corrupted judicial rulings victimize the poor.


"Moreover, our society is still feudalistic, dominated by a leadership class that manages to rotate among themselves the levers of power through changes in administration.


"The 1% of the families makes the laws, dispense justice, implement programs and control media. There are good people among them who go to church regularly, participate in community projects and donate to charities. They sincerely think that using their power and influence to advance their self-interest is part of the dynamics of a democracy, in the same way that hard work and innovation are rewarded in a competitive market.


"Sadly, they miss the point. There is nothing wrong with having wealth and power and special connections, but there is something very wrong about using them to influence politics and policies that deny or delay justice to the 99%. That is precisely the root of our problem. And we know this must change."



Why has it not changed, or at least not very much?


I think it is because our ruling and many in our educated classes have very little sense of social justice, which the Washington, D.C.-based Center for Economic and Social Justice defines as encompassing "economic justice. Social justice is the virtue which guides us in creating those organized human interactions we call institutions. In turn, social institutions, when justly organized, provide us with access to what is good for the person, both individually and in our associations with others. Social justice also imposes on each of us a personal responsibility to work with others to design and continually perfect our institutions as tools for personal and social development."


In our historically feudal society, upon which was imposed the corporate structure of capitalism, there was little need to consult with the masses, many of them uneducated, much less involve them in the "serious business of deciding the future of our society." It was enough that we "take care of them."


There is little recognition that our poorer folk, who are materially poor, carry with them and in them social and personal capital the access to which will definitely enrich our decision making, and helping ensure, at the same time, the greater probability that our decisions will be meaningful to them, such that they themselves will work to implement these decisions.


We cannot grow using models that may have worked ages ago in times and places where the contexts were vastly different. The mere trickles of wealth in the "unbalanced growth with trickle down effects so popular in the 1950s and the 1960s cannot work in these times.


We need not only a new economic model. We need a new political model, indeed, we need a new social model. That can happen only when we accept a more enlightened form of social justice.



Blog MarioMario Antonio G. Lopez wrote this piece for the column To Take a Stand in BusinessWorld.