Reducing inequality and achieving inclusive growth are inseparable. When we narrow inequality, we reinforce the capacity of sectors and individuals to overcome structural factors that limit their mobility in society.
When we promote growth that is beneficial to all classes and encourage people’s productive participation in the economy, we not only neutralize equality barriers. We also make people capable of being upwardly mobile.
In the past two years, the COVID-19 pandemic has exacerbated inequality gaps around the globe. In 2020, the UN World Social Report examined four megatrends on inequality — technological innovation, climate change, urbanization, and international migration — and the challenge to “encourage a more equitable and sustainable world.”
For 2021, the UN report focused on rural development, which involves nearly half of the global population, and raised the goal of not leaving the sector behind amid growing efforts toward economic recovery, reducing inequalities, and tackling the climate crisis.
In the Philippine context, grappling with inequality woes is exemplified by the efforts and initiatives of a wide range of social actors. These activities were discussed during the virtual town hall discussion “Bridging the Gap: Reducing Inequality in the Philippines for Inclusive Growth,” hosted by the Stratbase ADR Institute.
During this pandemic, our society experienced record highs in unemployment, hunger, poverty, business closures, and inflation rates. Much of these could be attributed to the administration’s less-than-desirable management of the pandemic.
But as inequality persists in the Philippines, we have to respond to it through a multi-stakeholder strategy. We need public-private partnerships, investments by the private sector, and a better environment for investment by the incoming administration, with the hope that it can provide jobs, livelihood, and income, and a comfortable life for many Filipinos in the long run.
Dr. Ronald U. Mendoza, Dean of the Ateneo School of Government, commenced the public exchange by discussing the essence of his special study “Reducing Inequality in the Philippines: Rationale and Reforms.”
According to Mr. Mendoza, we should work on three reform areas to establish a more inclusive democracy in our country: social mobility, disaster readiness, and political reforms.
Mr. Mendoza highlighted the need to “liberalize our politics” after we had liberalized the economy. If politics is not liberalized, “eventually, even if you liberalize your economy, you will still hit a ceiling because of bad governance.”
Inasmuch as economics and politics are directly intertwined, Dr. Charlotte Justine Diokno-Sicat, Research Fellow of the Philippine Institute for Development Studies (PIDS) and Vice-President of the Philippine Economic Society (PES), expounded on her study, “Promoting an Investment-Driven Economy Through Good Governance.”
She argued that public sector governance should be improved and be made innovative. Accordingly, two things should be done: fiscal consolidation of the national government, and emphasis on the importance of “strategic investments in both physical and human capital of both national and local governments.”
“This will all encourage private sector participation at all levels and in bridging the gap and reducing inequality in the Philippines for inclusive growth. Every single Filipino has a role to play,” she added.
Ms. Diokno-Sikat’s view is contextualized under a whole-of-society approach to effectively foster equality improvements.
Akin to the focus of the 2021 UN World Social Report I cited earlier, Dr. Carlos Primo “CP” David, Professor at the National Institute of Geological Sciences, University of Philippines Diliman, Trustee and Program Convenor of the Stratbase ADR Institute, and Convenor of Philippine Business for Environmental Stewardship (PBEST), provided an agricultural perspective in addressing food security in his study, “Improving the Philippine Agriculture Sector by Establishing Food Production Areas.”
Specifically, he recommends “a self-contained food production area that consists of industrial farms, coupled with small older farms surrounding it, those one-to-two-hectare farms that actually operate together with industrial farms, but not independent of it.”
“I espouse the idea of pockets of innovation and development,” he concluded.
Using an educational perspective, Christopher Tan, Chief Operating Officer of PHINMA Education, and a Board Member, of the Philippine Association of Colleges and Universities, talked about improving Filipinos’ quality of life through education reforms.
Highlighting three issues to address inequality — access, completion, and employment — he emphasized the need for a responsive, nimble, and continuous learning system. He also stressed the importance of skills development.
“We need to have the ability to channel the power of business as a force for good, banking on the complementarity between the private sector and the public sector,” he added.
Similar with Ms. Diokno-Sicat’s focal point, Francisco del Rosario, Jr., Chairman of the Institute for Solidarity in Asia (ISA), in discussing his topic, “Transforming the Public Sector for Inclusive Growth,” talked about the empowerment of the public sector so it becomes more efficient and less corrupt.
To reverse the worsening cycle of poverty, the country’s next administration would need to exert a holistic effort for these inequality challenges to be significantly addressed.
The next government must uphold the rule of law, strengthen efforts in transparency and accountability, and spearhead political and economic reforms in order to attract more investments that will develop industries that will be long-term prosperity generators.
Indeed, the twin goals of reducing inequality and achieving inclusive growth are only possible through good governance. Let this thought guide us as we choose our next leaders in the coming elections.
Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.