The Philippines runs a beggar economy. It is as slapdash as a cardboard house on Fourth & Main in Los Angeles, screaming for handouts, with lots of poor people cheating and crying for a freebies. Even rich folks angle for favors, little better than beggars, because they don't want to EARN their advantages; they want their riches the easy way.
The government outright gives cash to poor families. Industries from transportation to manufacturing to retail to farming lack technology and sophistication; to be blunt, buildings and equipment are pieces of junk.
As I said, it is a beggar economy.
Three recent developments fomented this blog (that's different than fermented, just as oiled and juiced are different, but not a whole lot):
- Respected economic organizations are warring with each other as to whether or not the burgeoning (different than bungee jumping) Philippine population growth is a good thing or a bad thing. HSBC claims the Philippines will be the 16th largest economy in the world in 2050, largely on the back of its population growth. Others beg (heh, heh) to disagree.
- JoeAm did a blog on agribusiness, taking the Philippines to task for wasting one of the richest lands and climates in the world. The country does this by following a socialistic model of land handouts which assure inefficient conversion of land to cash, because the poor farmers who receive the land gratis don't know how to make money with it, and don't have the critical mass to compete with modern agribusiness. The socialistic land use model is ideologically dead and plain economically stupid.
- News reports state that Philippine coffee is in high demand globally. Producers are hard pressed to keep up with demand. Why? Because it TASTES GOOD. Do you realize the untapped potential that exists here? The sky is the limit.
Now, I am personally for more restrained birthing, but think the number of babies birthed is largely irrelevant to economic opportunity The Philippines has a 75% chance of doing well during the next 40 years one way or another. The decision chart flows something like this:
- Do you have lots of babies or not?
- If yes, do you educate them or not?
- If yes, expect people to go overseas to work, giving the Philippines an advantage with the money they send home (now something like 12 billion pesos per year). The Philippines will do well.
- If no, expect people to labor at minimum wage, keeping Philippine labor costs competitively low. The Philippines will do well.
- If no, can you deploy people more productively than the current beggar model deploys resources?
- If yes, the Philippines will become a tourist, agribusiness, trade, finance, and manufacturing powerhouse. The Philippines will do well.
- If no, you will have a bigger beggar economy.
Now this decision chart does not consider the social ramifications (education generally allows people to live cleaner, healthier more productive lives) or ecological considerations (over-population will remove land from agribusiness and tourist rosters, undermining those industries; changing micro-climates or more intense storms may wreak havoc with water supplies and the nation's ability to keep mud out of living rooms and cities out of the seas). It also does not consider what happens if poor people get their fill of being the doormats for rich people and rebel physically, like with guns and truncheons. Or if Senator Enrile in his last days finally pulls off the coup he has been itching to get done for a half-century.
I think a small wave of enlightenment will sweep across the poorer Philippines and family size will shrink modestly. Education will improve somewhat as internet teaching comes to the fore. The economy will do well, but not spectacularly. By 2050, it will be bigger economy and maybe not a beggar economy.
For myself, I will continue to drink Philippine coffee because it IS the best.