Saturday, March 24, 2007

No cake, no bread, no SMS

Critics of the administration, admit impediments: President Arroyo has prudently managed the economy.

The fiscal deficit has been tamed; now all the previous talk about our possibly going the route of Argentina is gone. We have experienced, as the economist Emmanuel de Dios points out, 5 straight years of at least 3% economic growth, a feat never before seen in all our recorded economic history. Also, as Tony Lopez points out here, good money is also being made in the stock market, consumer prices are stable, and the peso stronger.

The opposition says that the problem with the present economy is that the rich are getting richer and the poor are getting poorer.

Now, in a capitalist economy, the rich (unless they're profligate) should naturally get richer if only for the simple reason that they control more of the factors of production. If our rich were to get poorer, now that should be a cause for concern since that would mean the economy is contracting. While we get jealous of the rich from time to time (don't we all?), we can't really blame them for being richer unless we start working on our hammer and sickle. The problem is not that the rich are getting richer, only that the poor are getting poorer.

The question that should be asked is: Are our poor really getting poorer?

Yes, they are, if we are to judge based on the SWS surveys on self-rated poverty and hunger incidence in the country. The Arroyo administration must face the issue squarely rather than whimsically suggesting temperance among the poor. The president must realize that the people who are texting all those trite jokes and mawkish proverbs are simply not the same people who go hungry.

Temperance and frugality are virtues that should be vigorously promoted by the government, but belt-tightening as poverty alleviation policy hardly fits the gung-ho and can-do attitude of President Arroyo when it comes to meeting the challenges of economic development. Surely, she can do better than that.

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