Two-faced Philippines

If you have been to Alabang’s gated subdivisions, below its hilltops lie a breathtaking sprawl of manicured greenery and neat rows of mansions that whisper affluence. A tall barb-wired perimeter wall marks the backside of the exclusive village, where the Daang Hari road cuts a swathe, the Great Divide between the haves and the have-nots.

Across the controversial road is an unfinished low-cost subdivision that has since been invaded by squatters and turned into Slums Ville, more popularly known as the “Gillage”. Tin roofs, makeshift walls and unshod toddlers with distended bellies scream destitution. The two hamlets underscore the gaping disparity between the rich and the poor.

One of the measures of poverty is the Gini coefficient that assesses the inequality of income or wealth. Developed in 1912 by an Italian statistician and sociologist, Corrado Gini, it gauges the variation of distribution where the value of zero represents perfect equality while a value of 1 represents maximal inequality. Sweden has a Gini coefficient of 0.23 while Namibia has 0.70. Obviously there is little relative poverty in countries with a value nearer to zero.

Philippines is not the only country that displays the starkest contrast of wealth and poverty. Until recently, Brazil was one of the most unequal countries in the world. Today, its level of economic inequality is declining at a faster rate compared to other nations. From 2003-2009, the income of poor Brazilians has grown 7x as much as the rich. Poverty has fallen during that time from 22% to 7% of the population.

Compared to the US, from 1980-2005, more than 80% of the increase in Americans’ income went to the top 1% of earners. Productivity among low and middle-income American workers increased, but their incomes did not. If current trends continue, the United States may soon be more unequal than Brazil. This is why the Occupy Wall Street Movement has caught on. Alternatively it has been dubbed the 99%, referring to the mal-distribution of income.

Wilford King, a statistician at the University of Wisconsin published a comprehensive study called The Wealth and Income of the People of the United States in 1915. US had grown to become the world’s wealthiest nation displacing Great Britain.

One of King’s objectives was to be assured all Americans were sharing in the country’s newfound wealth. Instead he found out that the richest 1% owned about 18% of the nation’s income.

This was the era when the Rockefellers, Vanderbilts, Carnegies — prompted the creation of the modern income tax, to prevent disparities in the accumulated wealth of America’s richest families — from turning into a European-style aristocracy. The socialist movement was gaining ground with a wave of anarchist bombings terrorizing the nation’s industrialists. President Woodrow Wilson’s attorney general, Alexander Palmer, staged brutal raids on radicals of every stripe to avert an imminent class-war. Today, the richest 1% own 24% of the nation’s wealth.

The growing income inequality is accepted because the man-on-the-street generally does not know any better. In a survey of 27 nations conducted from 1998 to 2001, US had the highest proportion of respondents that agreed with the statement “people are rewarded for intelligence and skill” (69%). But when it came to real as opposed to perceived social mobility, surveys find less in the US than the class-bound Old World: France, Germany, Sweden, Denmark, Spain — and newer nations like Canada and Australia. According to the CIA, the income distribution in the US is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly at par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America and increasing in the Land of the Free.

“It is easy to find a man in almost any line of employment who is twice as efficient as another employee, but it is very rare to find one who is ten times as efficient. It is common, however, to see one man possessing not ten times but a thousand times the wealth of his neighbor,” wrote Wilford King in 1915.

In the Philippines, the war against poverty is as old as our history and has yet to be won. With an entrenched oligarchy, a dwindling middle class sustained by foreign remittances, the laborer, the farmer and the fisher folk condemned to remain a lifelong minimum wage earner with no hope of attaining wealth — all the conditions are ripe for an intense class-conflict.

Our Gini coefficient was 0.4466 in 1985 and remains at 0.4484 in 2009. The inequality has not changed. It is one of the highest in ASEAN. In 2009, the income of the top 1% of families (185,000) was equal to the income of the bottom 30% of families (5,500,000).

Social justice is no longer an altruism but an urgent tool for fast-tracking economic growth. It is not only moral and constitutional, but also spurs development. Eighty percent of provinces would grow faster with more equality.

Even though the SC decision favoring land distribution to the farmers of Hacienda Luisita reeks of vindictiveness, it is in line with President Aquino’s platform for social justice. The promise of EDSA1 made 25 years ago now has a chance to come true.

As for the bi-polar world of the opulent and the threadbare, there is a true tale of two communities. A friendly game of basketball was going on in the village, when a group of youths from the “gillage” asked if they could join. The villagers agreed. But as the game continued, one of the rich kids noticed the visitor’s t-shirt. It was the one that got filched as it was drying on their clothesline. He told his teammates about it, wondering if he should confront the teenager. His friends asked how he knew that it was his. He pointed at the sleeve. His name was embroidered on it. In the end, he decided it wasn’t worth the trouble.

There is a moral lesson here that’s also a lesson on economic development. It we don’t learn to share wealth, it could be taken forcibly away.

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