Towards a welfare society

Friendly Observer

By Arthur Keefe

                Something which strikes newcomers to this country, is the deep poverty of so many of the population. Whilst a sizable middle and upper class live in considerable comfort, waited on by their poorer neighbors, many go hungry, suffer for lack of medical treatment and have no prospect of any improvement in their living standards. In many ways, the situation is comparable to the bleakest times in Victorian England, 150 years ago, as readers of the novels of Dickens or Tressal will recognize.

                It is therefore extremely encouraging to see some small, but highly significant steps by government to address these problems. The issue of Philhealth memberships cards to the poorest and the payment of monthly allowances to the poorest families represent a real breakthrough. Their value may be low and their impact limited but it is an important start on the road towards a more just society.

                Introducing policies such as this must overcome huge obstacles. Firstly, the economic ones: The Philippines is not a rich country by international standards and with some estimates putting the number of people below the poverty line at 40 percent , or over 30 M people, even small allowances will be hard to finance. The weakness of the revenue collection system here (BIR, Customs, etc) makes it even harder to find the budget.

                However, even a newcomer to economics will understand that raising the income and therefore expenditure of a large part of the population will provide economic stimulus, or in economic jargon, will have a multiplier effect.

                Unlike richer people, who may save or even export part of their income, the poor will spend it all ensuring it circulates through the economy. It is also less likely to be spent on imported luxury goods which give little benefit to the domestic economy.

                Secondly, there are the political problems or public acceptance. Some of those are understandable and are echoed in advanced economies, too. If you work hard, invest in education and see others receiving benefits with little or no apparent effort, you can resent your taxes being used to assist such people. This is simplified to a debate about who are the 'deserving and the undeserving poor.'

         People unable to work, such as the disabled or elderly, are usually accepted as deserving, whilst the able bodied unemployed are often considered undeserving.

       The problem with such simplistic separation is that many unemployed (or underemployed, casual or part-time workers) are often not so through choice.

       In addition, even if the parents are poor through their own actions, we need to be concerned about their children and their care-givers. Society's investment in its next generation through nutrition, health care and education, is in the interests of society as a whole.

         Thirdly, most government programs here suffer from some degree of maladministration, ranging from inefficiency through to blatant corruption.

         In the case of welfare programs, it is crucial for public confidence and support, that the benefits go to these eligible by need, and are not diverted to relatives or cronies of administrators, or denied to those whose politics do not 'fit!' In all countries, there will be those who seek to defraud the system and it is important that such people are pursued with vigor and punished when caught. In the UK, benefit fraudsters are often given only a slap on the wrist which undermines public support for the whole scheme.

         In conclusion, the government's attempts to lay the foundations of a welfare society are extremely welcome. It will take time to build one these and there are serious obstacles to be overcome. The 30 M people living in poverty cannot afford the schemes to fail and their success in the long run is in the interests of all.