The poverty trap: why President Duterte needs to get his priorities right

Photo: Rody Duterte/Facebook

Duterte has dedicated the first months of his presidency to his war on drugs, but with poverty at its highest level in over a decade, he would be better placed turning his attention to his vulnerable and poor citizens.

By Oliver Ward

A government income and expenditure survey estimates that 26.3% of Filipinos are poor and 12.1% are extremely poor. This should be no surprise; unemployment is preventing many from earning enough money to meet their basic needs.

Prostitution is rife, even amongst children and the exploitation of child labour is an all too common fact of life. A survey by the Food and Nutrition Research Institute has put the share of children suffering from malnutrition before the age of two years old at 26.2%, the worst conditions in over a decade.

Against this backdrop, Duterte has chosen to dedicate the first year of his presidency to tackling the nation’s drugs problem. But while drug abuse may contribute to crime, the fight should also be aggressively waged against the social factors of hunger, poverty and hopelessness that create addiction in the first place.

Families of the slain drug dealers often tell the same story, of an individual trying to make ends meet in an environment of minimal job opportunities. And in this environment, a war on drugs that fails to deal with the root causes can only by superficially successful. As such, the real fight is against the economic conditions that are leaving family after family lost in the gutter.

A lack of action

Despite a turbulent start to his presidency, the Department of Finance reports the Philippines had seen some of the fastest economic growth in the region under Duterte’s administration. Investors like his ten-point economic plan, mostly thanks to his pledge to allow foreign ownership of lands and vital industries, as well as his hopes to revive the steel industry. His goal is economic growth, and considering GDP grew by 7.1% in the third quarter of 2016, he may well remain on target.

However, it is still premature to sing Duterte’s praises. He has not exactly delivered the substantial change to economic policy and the lives of Filipinos he pledged before the election. In fact, the policies which created this surge cannot be attributed to Duterte, but to his predecessor, Benigno Aquino III.

Aquino’s macroeconomic policies favoured big businesses and these ideas loom large in Duterte’s strategy. Meanwhile, although growth has been good, most of the jobs that have been created are chronically low-paid and will fail to lift employees out of poverty.

Foreign benefits

Critics add that Duterte’s decision to allow foreign proprietors to own land and industry, along with his plan for favourable market conditions for big businesses, will only prove beneficial to foreign contractors who wish to exploit the county’s cheap labour and raw materials.

According to IBON, an independent think tank, these policies are “the best strategies to increase foreign corporate and oligarch profits.” Its experts add “it does not, and can never deliver socioeconomic development for the poor majority”. So does this demonstrate the leader’s firm commitment to neoliberalist policies, despite being elected on a ticket of working for the people?

President Duterte’s latest brainchild for tackling the deepening poverty crisis is Ambisyon Natin 2040. This is a plan initiated under the Aquino administration which has been picked up and carried by Duterte’s economic team.

It outlines a 25-year vision to eliminate poverty and hunger in the Philippines by way of four medium-term development plans. These include the creation of 1.5 million jobs every year for two decades, maintaining a 7% GDP growth rate, tripling the monthly income of poor families and spending 7% of GDP on infrastructure by 2020.

Inclusiveness, interrupted

These goals sound promising, but economic growth under the Aquino administration failed to help the situation, and hunger and poverty got worse in recent years. The problem is not maintaining growth, but achieving inclusive economic growth. In particular, growth which raises wealth levels and living standards for everyone, not just business elites and foreign investors.

This conclusion is backed up by a recent World Bank report which states economic progress in the last decade has lacked well-paid jobs because of the low education and skill levels of the working poor. This means that without meaningful education reform, and labour regulations to protect the Filipino workforce from foreign exploitation, any policy to promote economic growth and foreign investment will inevitably fail.

This reading of Philippine “success” suggests the President’s neoliberalist economic policies are not a serious attempt to improve living conditions, and in turn, tackle the drug problem. Duterte needs to grab the bull by the horns before a generation of Filipino children are lost to unrewarding work, drug dealing and prostitution.