Not business as usual

Capitalism is changing. Even socialism with capitalist characteristics, as in China, is changing too. Business as usual is out the window as people pressure governments for change.

A post-COVID, post-Duterte Philippines must drastically change or risk change being forced on society. The lockdowns have brought our economy to its knees. NEDA said it may take 10 years for our economy to catch up with its pre-COVID trajectory.

As always, it is the poor who bear the burden of economic fallouts. Joblessness has increased over the last two years. Going abroad to work is no longer as easy, with our major labor markets also struggling with COVID-related economic challenges.

While some of our conglomerates have tried to help alleviate the social impact of the pandemic, they should be prepared to do a whole lot more. Indeed, social problems, pre-COVID, have gotten worse. Unfortunately, politicians leading our government are only inclined to protect their own interests and mis-spend our scarce resources, e.g. Pharmally scandal.

Interestingly, it is the world’s largest communist country that is feeling the urgent need to rein in their free wheeling capitalists. China is said to have more dollar billionaires than America.

China’s absolute leader Xi Jinping has introduced a new model for the economy that places common prosperity at its core. Jack Ma’s Alibaba conglomerate was the first to take a hit as Beijing stopped the public listing of its ANT financial arm. A war was declared against monopolists, abuse of consumer digital information, and unhealthy business practices.

President Xi acted in the nick of time. There had been growing dissatisfaction among young Chinese workers over long work hours for little pay. Their “lying flat” movement caught fire despite official efforts to snuff it out.

Young Chinese people are simply saying they are tired of crushing work hours, rising consumer prices, and unaffordable housing. As the cost-of-living rises, they see no prospect of social advancement. So, they are doing the bare minimum at work.

Economists identified housing, medical, and education costs as the “three big mountains” suffocating Chinese families and crowding out their consumption. Those are our three mountains too, and the pandemic made things worse.

Observers say Xi Jinping is undertaking the most forceful reform seen over many years, and the most populist one. It benefits the masses at the cost of the richest and the elite groups. The Chinese government has placed social equity ahead of shareholders.

The Chinese Communist Party is trying to remake the property, technology, and education sectors to curb cost pressures and better serve ordinary people. The founder of a private equity firm observed that “a new era that prioritizes fairness over efficiency has begun.”

“Common prosperity” is the overriding long-term goal, Xi said early this year, and China’s development should be centered on people’s expectations of better lives, urban-rural gaps, and income gaps.

Strangely, it was the young Chinese who had the guts to launch their protest even with all the personal dangers in their high surveillance command society. With our basic freedoms still theoretically guaranteed by the Constitution, the oppressed Pinoy has been intimidated by Duterte, as a SWS survey revealed.

Whoever is elected as our president next year will have to think of doing a Xi Jinping approach to common prosperity. Our elite has rested all these years in the assurance that the Filipino is patient and resilient. But how close is the Pinoy masa to a breaking point?

This is why the local billionaires running our conglomerates must realize they, indeed we, are living on borrowed time. They simply have to do a whole lot more than their token Corporate Social Responsibility projects on the road to common prosperity.

Let us start with the three mountains the Xi Jinping government is trying to scale. Housing, healthcare, education.

For example, some of our most prosperous conglomerates made huge fortunes on real estate. Yet, we continue to have a horrible housing problem. Even government owned property is being turned into luxury developments, with no regard to housing the homeless they have displaced.

This has to stop. Property developers must help reduce homelessness or be taxed heavily to create a fund to address the problem. It is scandalous for condo units to cost in the high millions while a good number of Pinoys live in 10 square meter shanties or under overpasses.

Anyone who can afford to buy a P100 million condo unit should have enough free cash to contribute half of that amount to a housing fund.

Depending on the corruption-riddled National Housing Authority has been our losing strategy for decades. It would be better if Ayala Land, Megaworld or Century Property each have an affordable housing subsidiary with access to government funds to provide housing similar to what Singapore has been providing its citizens.

On healthcare, its inadequacy was exposed during the pandemic. Yet, the budget for next year has been cut for key health agencies like the RITM.

We need to invest in health infrastructure like hospitals and health centers. We must also employ more healthcare workers and pay them as well as the police and the military.

We also need a truly effective health insurance scheme for all Filipinos that will take care of catastrophic illnesses like the COVID pandemic we are going through. PhilHealth must be restructured, refinanced, and placed under the Finance Secretary.

Education suffered greatly during this pandemic. We can assume most Filipino students lost two years of education. Let us stop pretending they learned anything in those so-called hybrid online classes.

Even before the pandemic, our students have been at the bottom of the list of countries tested internationally for competencies they should have learned in school. Again the business sector must help make sure we do not end up with a large unemployable workforce that can’t read or write or do basic math.

It cannot be business as usual in our post pandemic Philippines.

Better for our elite to voluntarily come up with a credible program for common prosperity than eventually having it forced on them. It can no longer be business as usual.

Boo Chanco’s email address is [email protected]

Follow him on Twitter @boochanco