Thursday, January 25, 2007

Debate on Gawad Kalinga

Dear Norman and others,
I beg the indulgence of all, but this seems to be an educational conversation, especially in light of what Boy Montelibano noted is an election year. Maybe those running for office can pick up something here. In response to Norman's rejoinder, I will answer in three ways:

Norman's assumptions of what GK is doing are inaccurate. When Perry labeled it a humanitarian effort, it conflated it with Western- forms of assistance. It is not. It is a culture-based (Filipino) social movement that has global implications.

- I strongly disagree with Norman's view of the World Bank's historical SAP (structural adjustment program) performance in the Philippines, as well as free-trade as it is currently being implemented by the developed nations. The documentation shows that WB-IMF practically handpicked (by browbeating Marcos), trained, cajoled the Filipino technocrats who co-implemented SAP. WB internal documents, as emphasized by R. Broad, also show that there was no mathematical or economic basis for a Philippine SAP. Implement SAP within a dictatorial and corrupt Marcos regime and what do you expect? Let us not blame Filipinos when the WB-IMF were wedded to the Marcos regime.
On free-trade, when the World Bank decides to do an honest assessment on the topic it find concludes that free-trade isn't free at all and adversely impacts the Philippines. See World Bank's Cororaton’s study.
The new tigers of Asia did not use WB's formula. They had proactive government officials who protected the national interest (industrialization, build up domestic economy then export, etc.). They were able to get trade concessions from the developed countries. Our leaders did not. So, it’s back to a question of leadership...

- I disagree that low wages is a way to development. This is unrealistic and not feasible. Instead of low wages, we should be more creative, more daring, more courageous and we should value the human capital of Filipinos. In this regard, I recommend reading the Hypwerwage Theory of Thads Bentulan aka the Streetstrategist and Universal Basic Income.

Other than those above points, I have no quarrel with Norman's plan for a Filipino conspiracy to conquer the world. In discussions such as this, I like to keep in mind the words of American, Filipinist historian, Alfred McCoy, that social science often times diverges from social reality.

GK's Tony Meloto always stressed that GK is neither a project nor a program. They are neither funding depended nor are they concerned with exit strategies. They do not ask, much less beg, for money from anyone. They have not and will not. Yet, supporters have pledged to build a million homes.

GK is an initiative of 10-15% of the one million member Couples for Christ (CFC). They started it with their own experimental efforts (in the late 1980s) and money through 'padugo'. This enabled them to come up with a model for a new kind of social movement for nation building, which is built on servant-leadership, modeling change, healing social divisions, and a holistic, seven-point, community based development process. GK claims their sites are 'non-sectarian, multi-sectoral, non-partisan and non-discriminatory' and are developed through 'caring and sharing of time and resources, massive mobilization of volunteers and partners, and patriotism in action'. GK's model of a transformed community is a peace zone and faith community, environmentally healthy, and productive through programs on shelter, child and youth development, health, environmental, food, and economic productivity initiatives, community empowerment and values transformation.

The reason why GK initially focused on housing is because of the acute need for it. Housing and related expenses, as I have said, constituted the bulk of the poor's household expenses. With their new home, it enabled them to save, use the home as either an economic asset or entrepreneurial tool, gave them dignity and confidence, freed resources for better nutrition and health, etc. Again, housing is only one of six initiatives in each GK site.


GK's Dylan Wilk says that corruption stifles business in the Philippines and that working with GK fosters a culture of integrity. If the rich, the powerful, and the government are transformed then the poor have a chance to progress. Tony Meloto said that the poor already know how to fish so there's no need to teach them how to fish. But, 'they ain't fishing'. Thus, with the 900 communities GK has set up, it is launchiong its economic productivity strategy encapsulated in the following:
- Develop middle class and entrepreneurial values in GK communities,
- Make education, technical skills training, etc. available in all GK communities,
- Adopt a one town-one product (OTOP) strategy for each GK community based on comparative advantage,
- Develop food sufficiency (i.e., square yard vegetable production) in each GK community with the goal of surplus production,
- Foster trade among the projected 7,000 GK communities in the Philippines and eventually GK communities worldwide,
- Encourage expatriate Filipinos to retire in the Philippines bringing with them their savings, skills, and time. A developed 'Reunion Village' (complete with in-house farm, convention center, R & R facilities) in Batangas has a current market value of at least 150 million pesos (one home costs US$40,000). This is run and managed by GK beneficiaries. Several more are being planned and target the 300,000 eligible Fil-Am retirees,
- Develop each GK site as commercial and tourist centers. In GK Baseco, Starbucks-donated equipment enabled the set up of Bayani Café where a cup of coffee retails for P65.
- Use information and communication technologies (ICT) to promote entrepreneurial activities. A MOA was signed with the Rotary and a b2b Filipino group to pilot test b2b centers in five GK sites, and, most importantly,

GK is open to any suggestion that fosters productivity in GK sites that is sustainable and socially just.


I have been trying to convince the StreetStrategist that Hyperwage Theory and GK are not mutually exclusive. GK complements Hyperwage in that the former shares the value system of the latter. It puts a premium on Filipino human capital and seeks to develop it. Hence, prices for GK goods are of the middle class range (inflation is a not an issue), i.e. P65 coffee, US$40K retirement homes, PhP5,000++ art pieces. GK is a social movement, which can espouse Hyperwage because of the same value system.

You will have to read the Hyperwage Theory. The StreetStrategist recently wrote Why Filipinos Aren’t Rich and reiterated his call for a hypwerwage policy. According to him, labor is undervalued, hence there is little purchasing power. This stifles entrepreneurial activities and innovation. Hyperwage will enlarge the middle class. Radically raising the salaries of the working class (the household helper is proposed to earn P20,000/month) will have significant multiplier effects.

GK, Hyperwage, and other social justice movements all look at the unequal distribution of wealth and power as the single most pernicious barrier to Philippine development. Each propose their own solutions to underdevelopment, but nothing will move without a transformational leadership at all levels of society.

NOTE TO HYPERWAGE E-GROUP MEMBERS: For background information on the debate on Servant- Leadership and Gawad Kalinga, click on this link.

Thanks again and regards.

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