June 28th, 2022
The biggest long-term challenge has always been food security. We are a service-oriented economy now. And, as I discussed in UPLB’s first academic convocation this year, the key to development is education. The key to education is nutrition. And the key to nutrition is AGRICULTURE. A service-based economy’s main concern is what the workers will eat.
The President himself handling the agriculture portfolio signals to us how serious he is about solving the longstanding problems in this area.
There are other challenges, but the Pareto efficient way of solving our national problems is focusing on agriculture first and best.
The problems I identified in this sector are irrigation (we only irrigate 6% of our total land area, which is among the lowest in Asia-Pacific); resource misallocation (27% of farmer receipts comes in the form of trade protections, direct input support, and other government programs and policies. This is among the highest in Asia, meaning we don’t lack support for farmers, but the support is not in the right places); and land use (we cultivate more than twice the arable land area of the country; hence, lower efficiencies and yields).
That lecture is already with PBBM, who sought it through Sen. Imee Marcos.
The other long-term challenge is housing. We are increasingly denser as a nation, due to continued population growth and urbanization. PBBM’s administration will be expected to have solutions for housing, just as the first Marcos administration was able to introduce such measures as the BLISS, the Ministry of Human Settlements, and PAG-IBIG Fund.
My proposal is to enlarge the PAG-IBIG Fund into a Central Provident Fund similar to Singapore’s. The fund should be capable of financing state-led, public-private-partnership-financed, master-planned housing projects that will address housing inequities, sprawl, transport issues, and other concerns of urban planning and renewal.
Education reform will be critical – but we need to honestly reckon with real problems in the education sector. I have already discussed some points with incoming Secretary VP Sara Duterte. The key issue is depth and relevance – are we teaching them what they need, and are our methods appropriate for learning?
Healthcare needs an overhaul. We have combined the worst aspects of a market-based system (no ceiling prices on health services, VAT exemptions on prescription rather than outright subsidies) with the worst aspects of a government-supported system (i.e. no adequate performance evaluation for Philhealth accreditation, Philhealth itself is not efficient at paying claims and managing its portfolio, disjointed local and national medical facilities).
What we need is to combine all the best characteristics of the market (innovation through, say, telemedicine, bulk procurement rather than price caps on medicines, competition in the pharmaceuticals sector through generics and biosimilars, removal of information asymmetries through education) with the best characteristics of a government-funded system (single-payer for preventative care, procurement negotiation to lower costs, single record for every patient).
Innovation and entrepreneurship is also an issue. I have talked to VP Sara that her proposal for mandatory military service could be potent in building an entrepreneurial culture, with exposure to the right kind of skills in military service. If we train our youth on intelligence and strategy, quick decisionmaking, military technology and engineering, leadership, and a sense of camaraderie with comrades rather than usual networks of nepotism, then we can replicate what military service did to South Korea, Singapore, Switzerland, and Israel. What you learn in the military of these countries are exactly the kind of skills you need for tech entrepreneurship. On the other hand, if our mandatory military service program merely migrates to the youth the same issues of hierarchical inertia, faulty or conflicting intelligence, outdated technology, and lack of meritocracy that our security forces are sometimes accused of, we will not get the results we want.
The incoming administration has its work cut for them, but a mandate of almost 60% for both President and Vice President is the strongest, most incontrovertible sign that the people want real changes that are immune to factionalism and minoritarian politics.