OF SUBSTANCE AND SPIRIT
Diwa C. Guinigundo
In many of our previous columns, we would always emphasize that mobility and business activities are not something that government can simply mandate and wish for.
Mobility and business activities are not something like rising pork and chicken prices that can be addressed by a price cap through an executive order. But even price control cannot be a sustainable solution because it tampers with market forces of supply and demand. For domestic demand continues to struggle with the pandemic scars that would not heal easily. Likewise, supply conditions due to Typhoon Ulysses, African Swine Fever, and pandemic-related logistics issues are more than one-day challenges. Pork, chicken, and vegetable prices had pushed domestic inflation of 4.2 percent in January to exceed the government target of 2 to 4 percent.
Some meat vendors in wet markets in Metro Manila were reported to be against selling pork during the 60-day implementation of price control. They are faced with the choice of losing if they observe price control or paying penalties if they violate. It is not surprising that last Tuesday, vendors in many wet markets declared pork holiday.
Government should realize that price control is like magic. It has a way of making supply disappear. We breached the 2 to 4 percent inflation target precisely because of supply issues that can best be mitigated by promoting more supply in the market like importation at calibrated tariffs or support on feeds and fertilizers. Moreover, with many of our trading partners showing early recoveries, we could only anticipate higher oil prices — now hovering around $60 per barrel — and other import prices. Rising prices of hog and poultry feeds would not be far behind.
Mobility and business activities are not something like a public initiative that is expected to bring about a recovery of lost jobs following the pandemic by the simple act of the Department of Trade and Industry’s formation of an Inter-Agency Task Force on National Employment Recovery Strategy. It is one thing to bring “together various measures, programs, and institutions that influence the demand and supply of labor, as well as the functioning of labor markets.” It is another thing to make them work. How we all wish talking down unemployment could be that easy. It’s difficult to imagine how modest business enterprises borrowing up to P1.5 - P3 million could sustain their operations and avoid lay-offs. If demand remains frozen, we might just be throwing good borrowed public money after bad. As palliative, that might work, but the reckoning goes back to how public confidence could be addressed by the choices we make today in pandemic mitigation.
In this connection, the recent call of the Employers Confederation of the Philippines President Sergio Ortiz-Luis Jr to “further reopen” the economy to prevent job losses because of either downsizing or outright closure of businesses totally missed the point. “Hindi na kaya ng ekonomiya.” For the employers, it remains a numbers game. “…The 10,000 deaths related to the coronavirus pandemic is a small number compared to those who die from hunger while the crime rate can increase due to job losses.” It was so easy for them to simplify the harsh reality and wish for more sufficient mass transportation, implement minimum health protocols, and reopen the economy.
The deepest recession in 2020 and the economic scars we continue to see in 2021 and beyond involve weak domestic demand because the people continue to be risk-averse. Flattening the pandemic curve is far from over. That should demonstrate the challenge to the minimum health protocols. Would you trust a piece of paper that you fill up as you enter a mall, or an eatery, to establish your whereabouts when you have thousands to be processed? Who will consolidate them into a central database to allow the health authorities to pinpoint densities of the population affected by the virus?
It is only recently, almost a year after the first report of the Wuhan infection, that a growing number of establishments and local governments have started to use QR codes for those with smartphones. Usage is still spotty and uneven. Mass transport is not widely available because many buses were decommissioned thanks to the sins of the past in vehicle registration and police enforcement. Who will invest in mass transport at this time when the pandemic has discouraged local trips. Even jeepneys have to adapt to physical distancing that had effectively reduced their passenger capacity?
What is so revolting about the employers’ position is that it pits those lives snuffed out by the virus against those lost to hunger. Both means are repugnant to civilized society. It is the responsibility of government to prevent both types of death. The virus kills people and, given our weak public health system, some degree of mobility and work restriction continues to be necessary. Unfortunately, managing the pandemic was and remains our weak point relative to many emerging markets. Yet helping business is also the duty of those who govern. One is a medical and health issue, the other is a business issue whose efficacy depends on a successful health mitigation. It is the height of folly and the depth of heartless business ethics that one should even talk of reopening the economy and avoiding hunger from job losses without ensuring that the public health system is up to it.
We are not even sure if avoiding hunger is the thrust of this line of reasoning. In ordinary times, wage increases to avoid hunger, even if consistent with higher labor productivity, were discouraged.
What is more challenging is finding the more permanent solution to the pandemic. We refer to mass vaccination which some of us are understandably hesitant to get. Assuming the vaccines available today are all effective and safe, Bloomberg a few days ago, argued that it would take the world in general seven years for life to return to normal. Bloomberg has been reported to have succeeded in compiling the biggest database of COVID-19 shots globally with more than 119 million doses administered.
The target for each national jurisdiction is to reach 75 percent coverage with a two-dose vaccine. Israel, given its rapid progress, is expected to hit the target in two months. The US will reach that coverage in about a year. At the other extreme are big countries like Indonesia, Russia, and India which are expected to spend more than 10 years to vaccinate 75 percent of their population given their rate of daily administration. The givens are formidable: rich countries will hit their target earlier, the poorer territories much later. But globally, Bloomberg is looking at a seven-year duration of this campaign.
Don’t ever forget Edgar Allan Poe’s wise observation that “in one case out of a hundred, a point is excessively discussed because it is obscure; in the other ninety-nine remaining, it is obscure because it is excessively discussed.”
This is prescient for In the Philippines, we remain extremely busy doing the noble tasks of sorting out the issues of whether we should vaccinate or not, why business and local governments could not source their own vaccines. Beyond these, we are also distracted by the wars on drugs and Reds, premature campaigning for 2022, imposing price control, and forming a thousand task forces and committees.
Meanwhile, the virus continues to mutate while we debate and decide.