News and Features

Whose Corruption? (Part 1 of 2)

Virtually overnight, and not for the first time, a single family has come to symbolise all that is wrong with Philippine politics, dubbed Rockefellers of corruption, the epitome of Pork1. As the nation reels from the loss of Php 10-billion in taxpayers’ money, the Napoles family has found itself deep in the mire of a crisis of its own making amid a sea of fake charities.

Reports of the Napoles sisters’ expensive clothing and their odious deals with top military officials2 have  evolved into a mutant hybrid of the Godfather and Gossip Girl, providing rich fodder for near-daily exposes of  the fruits of ill-gotten wealth –  Ivy League educations, royal birthday celebrations, million-dollar properties in the United States.

Some of the nation’s netizens, taking their cue from the mainstream media, have focused narrowly on the Napoles’ individual lifestyle choices. Missing in this debate is an analysis of their crimes as part of wider social trends. This is akin to obsessing over Imelda’s shoes while missing out on context: the broader processes that paved the way for her husband’s reign: a way of distracting from the real issues.

But what, in fact, are the roots of political corruption – and more importantly, what counts as corruption?

In a society where the gap between rich and poor yawns ever greater? Where the  lawmakers are the lawbreakers? Where the boundaries between legality and illegality, morality and immorality, decency and indecency, corruption and non-corruption (if you will), have been blurred over beyond all hope of clarity?

In their seminal  work, The Spirit Level:  Why More Equal Societies Almost Always Do Better3,  British sociologists Richard Wilkinson and  Kate Pickett dissect the links between inequality, corruption, and social crises  in a cross-country comparison of more than a dozen societies, spanning decades of research.

Inequality, they conclude, is at the heart of many of the ills societies face today. The global income gap has grown to levels unseen since the Victorian era.

In profoundly unequal nations, corruption is normalised, impunity reigns, crime is rife and so is distrust; obesity and malnutrition rates soar on either end of the social spectrum. Progressive social reforms, like comprehensive public funding for health care and taxes on the rich, are eliminated in favour of a poverty discourse that isolates the “poor”. As Lynne Haney notes in her analysis of the post-socialist Hungarian welfare state4,universal welfare systems that spread their benefits across a broad section of the populace, regardless of class, have given way to means-tested poverty programmes that target the poorest of the poor. Social security becomes a form of state charity, with the bulk of funding for “poor relief” derived from taxes on the middle class, cutting into crucial political support for welfare writ large.

This has gone hand in hand with a growing public tendency to portray low-income families as lazy, dependent on the state, or a plain burden on tax-payers, even as what little remains of the social safety net is progressively rolled back.  The poor are kept barely afloat, while the relatively well-off struggle to disassociate themselves from these dregs of society through high walls and conspicuous consumption.

But inequality leaves nobody out, and over time rich and poor alike descend into a spiral of social discontent.

All this, of course, sounds disturbingly familiar.

Corruption by Different Names

Winnie Monsod’s recent column for the Inquirer (“Worse than the Pork Barrel Scam”5) raised an important point. In it, she challenges the way large-scale mining corporations have managed to skirt the legal system through the 1995 Mining Act, reaping astronomical profits while evading fair taxation, in a “scam” far worse than the pork barrel scandals that have hogged the news headlines.

Which is the more acceptable, more moral way to make a quick buck: to reap $ 10 billion in profits from the legal exploitation of our nation’s resources, or to allow Php 10 billion in tax payers’ money to find its merry way into the pockets of state bureaucrats? In a stark example of society’s double standards, one is dubbed the inevitable price of progress on a planet with finite resources. The other is plain corruption.

Following on from this logic, what Napoles did was reprehensible.  But the fact that a certain mining company in the Cordillera got away with a legal pat on the wrist after spilling thousands of tonnes of tailings into a river was technically legal – and pure business.

Both cases nevertheless constitute corruption of the highest order.

A recent Forbes list of the country’s richest individuals is a smattering of the usual suspects: mall magnates, mining investors, real estate tycoons, landlords, businessmen well-versed in the art of political patronage.

The 2012 net worth of the 25 richest Filipinos totalled $41.4 Billion, a figure far larger than the combined annual income of 73.8 million Filipinos, which amounted to 1.8 billion – in pesos5.

By mid-2013, eleven of the richest Filipinos were worth $ 40 Billion, according to the latest Forbes ratings. SM tycoon Henry Sy’s assets alone have increased by 277% in just four years and Lucio Tan’s, by 194%  over the same period, with the country’s top 1,000 corporations raking in astronomical profits since 2009. The combined wealth of the 40 richest Filipinos has now cornered nearly a quarter of the country’s gross domestic product.

That millions have been left out of the billionaire bandwagon, with millions more forced to share an ever-diminishing slice of the pie of economic growth, is a surprise to no one, despite attempts to downplay the reality of poverty with statistical magic that sets a family’s daily needs at unrealistically low thresholds.

Yet even if these measures hold up to scrutiny – if an average Filipino does indeed need no more than fifty pesos a day to survive, and if garbage recycling in the informal sector, under horrible conditions and daily wages at below Php 80 a day, can count as ‘gainful employment’ – then the fact that 26.8 million Filipinos are in absolute poverty, an increase of 3-4 million individuals since 2009, belie all claims of inclusive growth.

Minimum wage rates, unevenly implemented at best, are still far below that required by an average family to live a decent life, accounting for a mere 44% of daily cost of living, by Ibon Foundation estimates. Real employment fares no better, with 11.1 million jobless workers, or a 7.3% national unemployment rate.

10.6 million families considered themselves poor by the first quarter of 2013 according to Social Weather Stations (SWS) surveys, with 3.9 million experiencing involuntary, or forced, hunger from lack of income. Poverty incidence still stood at 22.3% of all Filipino families in 2012, according to the National Statistical Coordination Board (NSCB). A figure virtually unchanged since 2006.

It is this astronomical gap between the have-it-alls and the have-nots, teetering on the brink of social upheaval, that have compelled the powers that be to conceal some inconvenient truths.

The President’s recent State of the Nation Address, as with previous addresses, posits a future for this country that is utopian at best.  Poverty is on its way out. Foreign investment is on its way in. The country’s prospects, he insists, can only ever rise.

In fact, he’s right. Everything else is on the up.  On top of soaring unemployment and underemployment rates, rising food prices and rosy credit ratings, the only other thing booming is the stock market.

While politicians pay lip service to “inclusive growth”, the reality of exclusive economics prevails7. The attempt to disguise this fact is itself a result and a cause of increasing social polarisation.

For at the top of the pyramid, a handful of millionaires continue to reap vast sums off a fleeting, even illusory, economic boom.  At its base, millions are just barely surviving. And into this widening social chasm have jumped politicians willing to downplay  social crises that are systemic in nature, enacting  desperate measures to paper over the defects of an economic system that has  enriched a few while leaving the rest of us out.

Pointing to poverty as a matter of individual merit, they prescribe privatization and cash transfers, not structural solutions to the nation’s prolonged economic crisis, as viable alternatives to universal public services, a rebuilding of local industries and genuine agrarian reform, the creation of decent jobs and a corresponding rise in real wages.

About the Author

CJ Chanco is a communications undergraduate student at De La Salle University Manila, a member of the College Editors’ Guild of the Philippines, and a former features editor at The LaSallian.

He blogs at http://cynicmeetshope.wordpress.com.

Footnotes/References

1http://pcij.org/stories/pdaf-racket-rocks-daang-matuwid/

http://www.rappler.com/newsbreak/34870-almost-half-of-pdaf-goes-to-favored-ngos

2http://www.rappler.com/nation/35847-napoles-sandiganbayan-helmets

http://www.rappler.com/nation/34895-napoles-daughter-blogs-lavish-lifestyle

http://www.rappler.com/newsbreak/35851-napoles-properties-million-pesos

3http://www.equalitytrust.org.uk/resources/spirit-level-why-equality-better-everyone

4Haney, Lynne. “Welfare in Hungary.”

http://www.cjsonline.ca/pdf/hungary.pdf in

5http://opinion.inquirer.net/58521/worse-than-the-pork-barrel-scam

6 http://ibon.org/ibon_features.php?id=242

http://www.sws.org.ph/

http://www.nscb.gov.ph/activestats/

http://www.nscb.gov.ph/stattables/

7http://arnoldpadilla.wordpress.com/2013/07/18/prices-profits-and-poverty-three-years-of-the-aquino-presidency/

2 thoughts on “Whose Corruption? (Part 1 of 2)

  1. Pingback: Whose Corruption? (Part 2 of 2) | The Daily Opium

  2. Pingback: Whose Corruption? | A Cynic Meets Hope

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