How government deals with poverty

Today is Blog Action Day on Poverty.

Let me just say that it is the responsibility of government to ensure that poverty is alleviated and eventually stamped out. I mean if governments can bail out big banks using taxpayers money, then poor folks also are right in saying government must do something for the poor as well.

Right now, the poverty incidence in the Philippines is at its highest. Conservative government estimates say that about 1/3 of the population is poor. Despite this, Mrs. Arroyo has spoken on many occasions that the poverty rate will go further down and thus in a few more decades, the Philippines will be a first world country.

So how has the government dealt with the issue of poverty?

1. Change the definition – One way of bringing down the poverty rate is by changing the definition of poverty. Change the threshold. One innovation done by the Arroyo regime is to place the poverty threshold at something like P36/day. So if you have that amount, you’re not considered poor. Jay Taruc once did an I-Witness episode challenging ordinary folks, and even the president, if they could live on such a small amount for a day.

2. Exports- One of the government’s main thrusts is to export people who can no longer make a living here. Announcements of jobs available abroad have become frequent. Hundreds line up everyday at the Philippine Overseas Employment Agency. I’m not sure if developed countries have such thing as an “overseas employment agency”. Only in backward and undeveloped countries can you see the government systematically exporting people. When news of about 50,000 Pinoy jobs abroad might be lost due to the global financial turmoil, the Arroyo government was almost in a state of panic. What will they do to all those returning Filipinos? The government can’t possibly give them jobs here! Well last night on TV, Noli de Castro announced a not-so-new program. Returning Filipinos can be “re-trained” so that they can be “re-exported” along with their new skills.

3. Tax them – During her State of the Nation Address last July, Mrs. Arroyo gave the outrageous assertion that the VAT on oil and electricity were the best means of alleviating poverty. It was the government’s way of helping the poor. More taxes on essential products. The argument is that revenues from the VAT will be used for poverty-alleviation programs, or dole-outs. What is revolting is that government actually collects more taxes from the poor than what government gives out in terms of subsidies. The subsidies are there to make you feel better after being robbed by government several times over. For example, a small consumer of electricity would have paid a cumulative P1,800 in VAT on power since 2006. For one month in 2008 though, he gets a P500 one-time subsidy. He will however continue paying for the VAT on power, way after he has used up his one-time subsidy.

4. Tax them some more – A law has been passed granting minimum wage earners and their counterpart in government service some substantial tax exemptions. The scheme would save them around P10,000 in a year, a big amount in these hard times. But the Bureau of Internal Revenue said that that implementation of the law would have to take effect on the date it was signed, which was June 2008. The law, says the BIR, cannot cover the period starting January 2008. Because of this, minimum wage and salary earners will lose some P5,000 worth of tax exemptions.

The harsh reality is that government has failed insofar as poverty alleviation is concerned. The people know it and have expressed their discontent many times. The slight improvement in Mrs. Arroyo’s approval ratings doesn’t change the fact that she still has NEGATIVE approval ratings.

Another harsh lesson is that unless the poor are themselves politically empowered, poverty would remain. Those in power now represent and will continue to defend, the class interests of the economic and political elite. Would the 2010 elections translate to serious efforts at eradicating poverty? I doubt it. There may be some openings for reforms but the structural changes needed to resolve this age-old issue may not be found in the upcoming electoral exercise.

Just look at Congress. How many of them are in the category of being poor? You can count them on the fingers of one hand. It is therefore no wonder that not many pro-poor legislation has passed.