A Key To Inclusive Growth

[wowiesy]

A key to inclusive growth


A Key To Inclusive Growth
by John Mangun

‘INCLUSIVE Growth” is becoming a catch phrase, almost a mantra not unlike “renewable energy” and “climate change” with much sound and fury and not enough substance in the discussion.
K. C. Chakrabarty, of the Reserve Bank of India, explains the concept: “Inclusive growth refers to both the pace and the pattern of the economic growth. The literature on the subject draws a fine distinction between direct income redistribution or shared growth and inclusive growth. The inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution.”

While most governments would prefer income redistribution as it is easy and politically expedient, it does not work. Ideal economic growth sees all demographic groups progressing. The question is, how does a nation achieve that?

Almost every article you read about inclusive growth in reality smears the outsourcing business because most callcenter agents have at least two years of college. “Where are the jobs for the less educated?” is the complaint.

Frankly, that is false reasoning for two reasons. The first is that 10 years ago college attendees like the current agents were working at National Bookstore in jobs that paid much less. The upward mobility they experienced through outsourcing opened up positions to high-school graduates. Upward economic mobility requires that more positions open at the top so that more positions can open at the bottom.

The second thing wrong with the idea about these jobs only available for the more highly educated is that the migration of workers has been a two-edged sword. Twenty years ago highly educated teachers were going abroad to be domestic workers. Even now some of our best and brightest are working behind the front desk of some European hotel. With supporting their families back home and paying their living expenses, they can never truly make enough to move up to a more lucrative endeavor that would be good for PHL.

The call-center agent that saves enough to open her own photography business or his own beauty salon is contributing to inclusive growth.

But the argument always comes back to the question of where are the jobs today for the less educated and less skilled?

The experts and pundits always point to the solution that increased industrialization and manufacturing would offer. They are only partly right.

The Philippines had a sunrise of manufacturing for export in the late 1980s with all the rubber-shoe factories now located in China. But look at Thailand they counter.

Thailand has a thriving jewelry manufacturing business because of their natural wealth of gemstones. But that requires mining and we cannot do that in PHL. Thailand is a major exporter of furniture. The Philippines has a logging ban. Thailand exports rice. PHL spends money on buying land for redistribution that could be used for “buying” irrigation.

Industrialization has been a key to growth in many countries similar to PHL. Proponents of industrialization like to cite Malaysia where industry contributes over 40 percent to the GDP versus some 30 percent in PHL. But what are Malaysia’s major economic drivers? Rubber and palm-oil processing, tin mining and smelting, processing timber, petroleum production and refining, and logging. Its high-tech industries were built on the back of and after many long years of exploiting its natural resources that the PHL is not doing.

Upward mobility is the key to inclusive growth. It can start at the very bottom if incomes are high enough. Agriculture employs 30 percent of all PHL workers and the average pay is about P200 per day. These people can never earn enough to move up. Government could mandate their wages at P350 per day and you will see near instant inclusive growth plus a migration back to the farms.

An average Malaysian farm family earns twice as much as the Filipino counterpart. But for all the companionate talk of “Inclusive Growth,” are we willing to pay more for our agricultural produce?

Sustainable inclusive growth means all socioeconomic sectors are growing, not simply handouts from the top.

[uls]

Upward mobility is the key to inclusive growth. It can start at the very bottom if incomes are high enough. Agriculture employs 30 percent of all PHL workers and the average pay is about P200 per day. These people can never earn enough to move up. Government could mandate their wages at P350 per day and you will see near instant inclusive growth plus a migration back to the farms.

An average Malaysian farm family earns twice as much as the Filipino counterpart. But for all the companionate talk of “Inclusive Growth,” are we willing to pay more for our agricultural produce?

who's gonna pay farm workers P350/day?

if govt mandates it companies will simply reduce the number of workers

[niky]

The funny thing is... it's not the farmer's wages that are too low. it's the income generation capacity of those farmers. Simply, given the lack of technology and investment, as well as arbitrary limits on land ownership, farming will never become lucrative enough or profitable enough to make our agri-sector grow.

There are those who argue for farmers to own their own machines... what will they get from that if the plots are too small for them to see an ROI on those machines?

We need to take a step back and look at what's wrong with agriculture. What technologies, techniques and products we can apply to it to make it thriving and self-sufficient. More loans? Better access to new seed stocks or technological advances? Demystifying GMOs?

Maybe what we really need is price supports for basic goods. Simply to encourage farmers to grow more. Then pay farmers to idle their land, to renew it and increase yields. Both of those worked for the US...

[ab_initio]

I have written a paper on inclusive growth, but I did not get the chance to publish it. I would try to share a bit of that paper. My idea is to haul the informal settlers in the urban jungle to the mountains and create a community there...blah blah blah. Basta, just replicate the things that attract them to the densely populated urban area. I have lobbyist friends who I always share my obsession of hauling them off to agricultural lands which are still under the public domain. The only thing that hinders us would be a repeat of the Villavicencio v. Lukban. Also, the problem with them, they don't like the province and be farmers. Before I publish it, I wanna make sure that there is a direction. There is already some kind of institutional mechanism that is in place.

Any suggestions?

[niky]

I have written a paper on inclusive growth, but I did not get the chance to publish it. I would try to share a bit of that paper. My idea is to haul the informal settlers in the urban jungle to the mountains and create a community there...blah blah blah. Basta, just replicate the things that attract them to the densely populated urban area. I have lobbyist friends who I always share my obsession of hauling them off to agricultural lands which are still under the public domain. The only thing that hinders us would be a repeat of the Villavicencio v. Lukban. Also, the problem with them, they don't like the province and be farmers. Before I publish it, I wanna make sure that there is a direction. There is already some kind of institutional mechanism that is in place.

Any suggestions?

Money changes everything. You have to find a way to make them more productive. Make sure the value of their work is at least enough that they earn more a day farming than begging. Difficult... You can earn a lot while begging.

[uls]

"haul the informal settlers in the urban jungle to the mountains and create a community there"

hindi ba ang primary complaint ng mga squatter na ni-re-relocate ay walang hanapbuhay sa lugar kung saan sila tinatapon (i mean ililipat)?

so ilagay mo sa middle-of-nowhere ang mga squatter ano gagawin nila? live off the land?

sa panahon ngayon people (kahit squatter) wanna eat at Jollibee, go to malls, and post on facebook. nobody wanna live like they're on Survivor

[uls]

investor puts up an industrial farm or manufacturing facility in the middle of nowhere

now you have demand for labor

now you have a reason for people to stay in that area

[pop3corn]

Key to inclusive growth is good education. But to have good education one must possess a quality that is not easily distracted and that zeroes in on a goal.

So for all you people thinking that our world will only flourish if all people are upgraded of their standards of living, I doubt it will happen in our country.

The rich and the educated employ efficient thinking and therefore their produce are exponential, whereas the rank and file and the poor, employs straightforward thinking. Work earn save. those savings they have are useless if they don't use the time value of money on it.

Kaya ganun na Lang talaga Pilipinas, besides multitask thinking - nakow wag nyo na gawin, Baka nagka brain aneurism pa kayo.

A true patriot is one who accepts that we are not that progressive but is satisfied with the balance of our Filipino lives.

Balance doesnt mean equality. Balance is 75% water and 25% land just like our mother earth. Live with it

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