Why we're retrograding instead of advancing

AS I WRECK THIS CHAIR By William M. Esposo
Thursday, April 3, 2008

We are a nation trying to go north (a term used to describe prosperous nations) but we don't realize that we're really headed in the opposite direction.

We're saddled with loser mindsets that are either illogical or way off the mark which can only bring us deeper into despair. We keep looking for salvation while pursuing the wrong solutions.

Many times in past elections, our countrymen opted to vote for the "lesser evil" and look at what we got. We also want to be rid of the oligarchy but when a good candidate boldly runs for public office sans support from the oligarchs, we dismiss that candidate as a loser and refuse to support him. Are we surprised at the present crop of leaders who now run our country?

Among these many loser mindsets that plague us is our belief that economic progress follows the massive influx of foreign investments. We keep hearing this from our misdirected government. Little do they realize that this so-called solution to our economic woes only puts the cart before the horse.

Most people also tend to associate poverty alleviation with the mere provision of better paying jobs to the needy, a matter of putting more pesos and centavos in the pockets of the poor. It is not.

Put more money in the hands of the poor without first addressing the lack of education and values that make them poor and there is the greater probability that they will not exit their family's generation after generation cycle of poverty.

What separates the rich from the poor is what they know and how they react to situations in life. The gold in the bank vaults of the rich and the coins in the pockets of the poor are mere manifestations of that difference in knowledge, values and attitude.

The fight to eradicate poverty is more of transformation through education and values formation and less of dole outs. The first and most important phase is to transform the poor who are many into productive consumers, meaning develop the poor to form a substantial market which then will convince investors to put their money in Philippine ventures.

Most Filipinos do not realize that the alleviation of poverty in our country is the key to spurring the economy to grow. The investments are only the second phase of the economic solution. Alleviate poverty and investments will pour into the country, not the other way around.

Of the 84 million or so Filipinos, easily 40 million are living below the poverty line, maybe more these days. That means that about 40 million Filipinos cannot afford 80% of the products that middle class and lower middle class household members can buy.

That is a lot of market that is undeveloped and untapped — food, durable goods, services, housing, construction and so forth. That is a lot of manufacturing that can be setup if those 40 million can only afford to buy more products. If we have 84 million Filipinos who can each afford to purchase about P30,000 worth of products a year — that would be the best incentive to foreign investors.

Instead, what is happening is that we have less and less purchasing power to offer an investor because of the way our economy continues to deteriorate. That is not to understate the effects of rampant graft and corruption that also drives investors away from our shores.

The over 40 million of Filipinos who cannot afford the basic necessities in life are also unable to share in the national tax burden. We thus enter a vicious cycle — the few who can pay taxes have to pay more so that government can function and allow basic services to be maintained. This opens us up to a situation that discourages foreign investments.

Foreign investors enter a country to sell goods or services there, not to pay high taxes. In fact, countries who are wooing foreign investors are offering tax incentives.

The biggest investment impediment that our poverty situation creates is the prospect of a social explosion. When too many people are brutalized and dehumanized by poverty, the country encounters periods of instability and disorder. The higher our country rates in political risk, the lesser our chances of getting foreign investments. Investors are characterized as the easiest people to scare.

Investors do not come to our shores with the objective of eradicating poverty — that is only in their public relations mission statement — but with the objective of selling their goods and making a profit.

We have enough Filipinos with the money who can invest in businesses that will address poverty. The loot alone that our plunderers have stashed away overseas can easily fund businesses that can address the poverty problem.

What we need is for those who corner the national wealth to bridge the wealth gap — to actively invest in businesses here (not deposit their loot overseas) that will uplift the poor. It is only after we bridge our wealth gap when we can hope to attract foreign investors.

Chair Wrecker e-mail and website: macesposo@yahoo.com and www.chairwrecker.com