The Long View: Insecurity and the Invisible Class

The Long View
Insecurity and the Invisible Class

By Manuel L. Quezon III
Philippine Daily Inquirer
First Posted 04:18:00 03/02/2009

The Philippines makes a cameo appearance in Niall Ferguson’s bestselling book (based on the TV documentary series with the same name), “The Ascent of Money.” In the chapter in which he discusses the American belief in a “property-owning democracy,” where governments since the New Deal have fostered easy credit and mortgages to enable as many citizens as possible to own their own homes, with the added benefit that titles to property immediately give homeowners a strong incentive to participate in, and help support, the legal system.

In developing countries, however, owning property requires hurdling many legal obstacles. While it takes around 30 days to register a property in Argentina, in the worst cases – Bangladesh and Haiti – can take closer to 300 days. At this point, the Philippines enters the picture where, “formalizing home ownership was, until recently, a 168-step process involving 53 public and private agencies and taking between 13-25 years.” In contrast, in the English-speaking world, says Ferguson, “it can take as little as two days and seldom more than three weeks.”

He tackled the case of Hernando de Soto, who put forward the view that public and private land occupied by squatters is a tremendous financial resource, which can – be made productive until settlers own the land. Owning property provides access to loans, and so, providing legal title to land occupied by squatters transforms the urban poor into urban entrepreneurs. As a result of his efforts to expand property rights to the poor, Maoists tried to assassinate him.

Yet Ferguson points out the problem with De Soto’s advocacy. For example, in the case of 200,000 Lima, Peru households provided titles in 1998-1999, only 25 percent had access to loans a couple of years later; in Cambodia, granting legal titles to urban property only enabled speculators to muscle in and edge out the beneficiaries. Owning land does confer benefits, he concludes, but access to credit isn’t a sure thing; he seems inclined, in his book, to advocate the benefits of micro-finance while warning that in some cases, micro-finance charges such high interest it’s difficult to see how it differs from the activities of loan sharks.

Ferguson suggests that “real security comes from having a steady income” : something of direct relevance to our domestic situation, with millions subjected to temporary jobs to avoid the benefits of permanent employment. Since there is an oversupply of labor, employers can be selective about conditions for hiring, a situation that doesn’t seem poised to change anytime soon (in the Middle Ages the European poor were in a similar situation until the Black Death killed so many people that peasants were able to dictate conditions on employment to desperate aristocrats), either domestically or abroad.

One could hope that government would try to form a consensus, at least, between labor and management in the manner that the Germans did after World War II, where everyone agreed to set aside benefits and rights but only until conditions improved, at which point labor would steadily benefit from the overall improvement in the economy.

This was a concern I heard expressed in Cebu, where the collapse of the furniture-for-export industry a couple of years ago, as one official told me, meant an increased dependence on OFWs to take up the slack in terms of income for families. But this brought up another problem, as OFWs themselves were subject to periodic unemployment in between contracts, leading to a feast-or-famine situation resembling the lives of farmers instead of what urban residents had come to expect.

Meanwhile, the collapse of the export industry meant that the skilled laborers who’d formerly been tax-paying and benefits-collecting citizens with (previously) steady, permanent, employment – that is, people who enjoyed a measure of security- were now wiped out. Becoming, themselves, a kind of negative lesson: it does not pay to hold down a steady and skilled or semi-skilled job.

Until recently it didn’t matter: plumbers, electricians, engineers, practically anyone, could try their luck abroad. That is increasingly not the case. The Guardian on Jan. 31 published a story on ships marooned all over the world as global trade has collapsed, with their crews sent home and skeleton crews left to do basic maintenance. Consider the implications on India and the Philippines, the leading players in providing sailors to merchant marines. Consider more Americans turning to nursing, and its implications for Filipinos.

For the very skilled, there may be hope, because if you talk to many business owners they will tell you there are many jobs waiting to be filled – except that they couldn’t find qualified people to fill the managerial and other jobs that were open. Which is why I do agree with people like Bong Austero who’ve been outraged that officials focus on doom and gloom scenarios without pointing out the opportunities that arise as well. The question remains, though, if the domestic demand for certain jobs can matter for a population bursting at the seams.

And meanwhile, there continue the biting criticisms. Blogger Caffeinesparks puts it this way, reacting to the outpouring of sympathy and shock over the death of Amiel Alcantara, the child accidentally run over in Ateneo de Manila – in the shanties along Pasig river, a kid playing falls into the water – drowned. Dead; a street urchin playing on the island along the road, runs after a kitten, gets run over – dead; babies die because their mothers live too far from health care centers or can only afford a manghihilot; 10 mothers dead a day “due to childbirth.” These are the grim and unnoticed statistics “so plentiful as to be unfelt”of what she calls the Invisible Class.

The number who can find skilled work at home might be in the tens of thousands, and other opportunities can open up for hundreds of thousands, but there are millions for whom domestic employment can only be at the level of menial, state-sponsored patronage-oriented employment and never more advanced.

Manuel L. Quezon III.

6 thoughts on “The Long View: Insecurity and the Invisible Class

  1. quick question:

    “Yet Ferguson points out the problem with De Soto’s advocacy. For example, in the case of 200,000 Lima, Peru households provided titles in 1998-1999, only 25 percent had access to loans a couple of years later; in Cambodia, granting legal titles to urban property only enabled speculators to muscle in and edge out the beneficiaries. ”

    why is this not evidence of credit? these speculators bought the land from the beneficiaries — is this what ferguson means? if so, why is this a failure to access credit, when credit is transforming assets into cash for today’s use? thanks!

  2. he meant from the point of view of de soto and others, that so much wealth is trapped in squatter-occupied land, and therefore, if you transfer property to the squatters, they can mobilize the value of the land by availing of credit to set up businesses, then if the transfer of property from state/landlords to squatters only results in the squatters gaining title only to be edged out or sell out, it defeats the purpose of the reform.

  3. Nobody is indispensable. You might have steady job today, but there will come a time that when crisis takes over, that you’ll lose your only source of income. It is true for both blue collar and white collar workers.

    A key solution to this is for people who belong to middle class and above to be entrepreneurs. Run a business that will generate jobs. Jobs that can alleviate the poor conditions of our poor brothers.

    Government could take an initiative to offer loans with extremely low interest so as to help the people start business. The downside is, the government is risking money here and not all Filipinos are not keen of becoming businessmen. But should we start changing that culture now?

    Though, being self-employed and having to run your own business does not exempt you from the impact of economic downturn, it is better than nothing.

    What do you suggest?

  4. THAT was sparks’ reaction to amiel alcantara’s death in campus?! i’m disappointed. it’s like changing the subject instead of tackling it. and then, again, she’s an ateneo professor ‘no?

  5. MLQ3, why not put this on the front page. If I didn’t go to Noemi’s blog, i wouldn’t have found it. I’ve stopped reading the Inquirer when they fired all their online bloggers.

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