Wednesday, May 18, 2011

Do we need less people or more economic growth?

Or why the RH Bill brouhaha has distracted us from the real issue of economic reform



Having been somewhat involved in politics for the last decade, I've noticed that the population estimates of our country grows by about 10 million every election year.  In 2010, our population was estimated at 90 million and going by my figuring, we'll have about 100 million people in 2013 and about 110 million in 2016.

Supposing that we do pass the RH Bill by this year, it will take another year for the new law to be implemented and with blind figuring, I estimate that it will take about 5 years to 10 years before the new law achieves any of its objectives in terms of population growth and better reproductive health.  And there are no guarantees it will, really, not if you are relying on leading horses to water -- the reality is that you'll still have to count on people using the services provided by the new law.


Let's say that the RH Bill does what it is supposed to do and apart from having lesser babies every year, we'll have less people dying too -- as a result of people not getting diseases or dying from abortion.

Guess what? We'll still have more than a hundred million people by 2016.  But that's not to say I am against the RH Bill, the people can have it if they really want it.  However, what RH bill proponents have to admit is this: 70 to 80 percent of the 100 million people we have will still be poor.

Now, there are people who see a large and largely poor population as a liability, some of the reasons given are quite convincing and huge volumes have been written about it.  There's no way that a blog, like mine or a handful of people can actually prove the reasons wrong.

But think about this... If for example, by some kind of miracle, the Philippine population was halved, would we necessarily have a higher per capita income?

Nope. You wouldn't.  Why? It's because, and I may be wrong here or oversimplifying it, you'd have half as many people buying goods, services, paying taxes, and whatever else.

Now, without junking the idea of a need to control population growth and provide reproductive health care services, what if we had pursued constitutional reform and did away with the protectionist provisions that limits foreign ownership of certain businesses?

What if in 2008 or 2009, President Gloria Macapagal Arroyo made a specific proposal for Constitutional Reform to amend or revise Article XII, essentially revising or deleting clauses that limit foreign capital participation in Philippine businesses.  By doing so, Congress would now be given the power to set foreign capital participation in Philippine businesses just by passing laws that would set the levels.

Supposing that in this fantasy of mine, the revisions or amendments get passed in a jiffy and would be implementable by 2010 with all the new laws needed to set foreign capital participation, what would our situation be like then?

I'll wager a couple of things... And among those things, I think there'll be an unprecedented drive for foreign businesses to set up in the Philippines.

Just last week, we had the Inquirer editorial saying that the Health Secretary himself wouldn't allow his daughter to study nursing because there were simply just too many nurses.

Imagine, if because we allowed full foreign ownership of hospitals, foreign health/medical institutions started setting up its hospitals here for their patients.  Why would they do that?  Well, just figure that getting medical treatment here in the Philippines is far cheaper than having medical treatment done in the US.  

One example I can throw out is my mom's heart angio-whatsitcalled... Anyway, i think cost $20,000 in the US, whereas in the Philippines the same procedure might cost about P200,000 or at the current exchange rate of 43 pesos to 1 dollar, $5,000.  Even figuring that the actual hospital bill would be $10,000, I guess hospitals could still afford to throw in a stay in Boracay or Bohol as an added bonus.

That could potentially lead to a higher demand for nurses as well as doctors and other health care professionals.  And, mind you, if the other investment policies are competitive enough and a lot of foreign medical institutions open up hospitals here for their patients, there is a high likelihood that the demand can be so great that we won't have a glut.

Now nurses are one thing, how about ordinary labor? Yeah, the unskilled kind that you see working on buildings everywhere.

By allowing foreign ownership of land, you'll get a boom in real estate here and that means construction work everywhere.

Forget about legislating a minimum wage. Or rather, scrap the minimum wage law all together and just let demand set the price for labor and you'll see that more companies will choose to relocate their manufacturing here.  As more companies relocate here, they'll need more workers and as the demand increases, so will the price of labor.

The idea here is that it is better for everyone to be earning a little than to have a few earning a lot with a lot of people earning nothing.  This will be the situation at the start, but things will naturally progress to a point where everyone will be earning more as the demand for labor goes up.

Anyway, between the RH bill (reducing the number of people born as well as increasing the life expectancy of people -- doinks!) which won't do much in 10 years and economic liberalization through constitutional reform which will result in economic resurgence in 10 years (a situation where there is a very high employment rate, therefore higher Per Capita), I'd say I'm going for economic liberalization.

(If you want a meatier discussion on Economic Liberalization, go on over to:


5 comments:

Pam Villa-Domingo said...

Hi Paul! I enjoyed reading this, KUDOS! I love the photo too.. CUTE!!! Sensing your undertone, it seems you don't have a stand with the RH Bill? Me, I'm so ANTI!!! As you said, we need more economic reforms than go for less people. If we have a good economic program in place then population will not matter anymore right? And I know you are also an advocate of better quality education for the public schools.... Instead of putting the funds there, they plan to fund condoms.... homaygad... By the way, I'm sharing this in my FB wall...

Paul Farol said...

Thanks for commenting Pam!

My view on the RH bill is that it doesn't matter as far as getting more investments flowing into the country is concerned.

Making people more productive is the right answer, walang masipag na gutom.

Bob said...

we need more jobs for the people at the same time controlling the growth of the population.

Bob said...

we need to attract local and foreign investors so we can have sufficient job for most of the people, however, we also need to control the ballooning population so people in the next generation will get to enjoy the fruit of our labor.

Anonymous said...

Agree 100% suppressing our numbers alone is not an answer to the economic woes of our nation.

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