Focus on agriculture to help the poor, says WB official
The Philippine government’s anti-poverty plan is going the wrong way, a World Bank official said.
Rogier Van den Brink, lead economist for Poverty Reduction and Economic Management for East Asia and the Pacific of the WB, told a forum that government should develop agriculture, not manufacturing, in order to help the poor and make them feel the fruits of economic growth.
“GDP (gross domestic product) growth originating from agriculture (generates a lot more) benefits than from any other sector,” he said.
He said the Philippines’ “long history of policy distortions” slowed the growth of agriculture in the past six decades.
He cited the case of China, which grew its economy by starting with agriculture liberalization and followed it up by supporting the manufacturing industry.
Van den Brink said bringing down the price of rice alone to the same level as those in other Asean countries would boost the spending power of the poor.
He said Filipinos pay P35 per kilogram of rice while those in Thailand and Vietnam pay around P15. He said lowering the price of rice to the same level would raise the purchasing power of the poor.
He said agriculture’s multiplier effects benefit the farmers and labor sectors because of lower prices of food.
It is the middlemen, he said, not the farmers, who benefit from low farm gate prices in the Philippines.
He said the next government should break the rice monopoly through import restrictions and tariffs.
Van den Brink also said government should help small and medium enterprises by easing the process of doing business. SMEs make up more than 90 percent of businesses in the Philippines.
He said the cumbersome process of registering and maintaining a small business results in about P100 billion in lost business opportunities.