Urban bias against the rural poor
The urban bias theory has two propositions: The development process in the Third World is systematically biased against the countryside and the bias is embedded in the political structure dominated by the urban groups. In other words, the rural areas are poor because they are politically powerless.
In the words of Michael Lipton, a British economist, specializing in rural poverty:
“… The most important class conflict in the poor countries of the world today is not between labor and capital. Nor is it between foreign and national interests. It is between rural classes and urban classes. The rural sector contains most of the poverty and most of the low-cost sources of potential advance; but the urban sector contains most of the articulateness, organization and power. So the urban classes have been able to win most of the rounds of the struggle with the countryside …”
Transpose this to the Philippines, in 2012, the rural poverty incidence is near 40 percent (38.3 percent for farmers and 39.2 for fishers, but no measure for landless farm workers) as compared to 13 percent for urban poverty.
This means the rural poverty incidence is three times that of urban poverty. Roughly today, there are about 20 million rural poor, and 6.5 million urban poor.
Public investments allocation is improving under the proactive leadership of Public Works Secretary Rogelio Singson. I have witnessed the road widening of highways into four lanes from Ilocos Norte to Bukidnon to Sultan Kudarat. This should improve market access and reduce transport costs of goods.
But urban bias continues …
The conditional cash transfer (CCT or 4Ps-Pantawid Pamilyang Pilipino Program) has benefited the rural poor.
The scheme gives stipends and food to the poorest if they meet certain conditions, such as that their children attend school, or their babies are vaccinated.
The 4Ps is a human development program that provides conditional cash grants to the poorest of the poor, to improve the health, nutrition, and education of children aged 0-18. It is in 79 provinces, 143 cities, and 1,484 municipalities.
As of June 24, 2015, there were 4.44 million registered household-beneficiaries.
The Economist magazine reported: “CCTs work because they are rules-based and relatively uncorrupt. Though the stipends are usually a pittance, they make a difference to the poorest because they are reliable—unlike the rest of the poor’s income. CCTs also help the next generation. By requiring children to have lessons and health checks, the programs should make children better educated and healthier than their parents. Schemes in Bangladesh, Cambodia and Pakistan have all got more girls into education. That is good in itself and good for getting jobs.”
But CCT is being attacked by urban folks as dole-outs and ineffective in fighting poverty. There is no way CCT can solve poverty in the Philippines. The monthly stipend is only about P1,400 a month for a household with three children.
The family poverty threshold is about P8,000 per month. But education is a great social mobilizer. Most parents of rural children have at best elementary school education.
Another bias is access to Pag-IBIG funds.
A Mindanao group has complained that there is a bias against non-urban employees since they make mandatory contributions to Pag-IBIG although the Fund caters mainly to urban employees.
To correct this bias, the group felt that rural workers should be allowed to borrow from the Fund for the purpose of acquiring farm lots where they can have both their home and their livelihood.
The group cited that an employees’ cooperative has borrowed money for developing an oil palm project from a government bank, and the bank priced this loan at 9 percent a year.
The co-op, faced with the poor world market situation at present, saw that their project has been placed at risk and asked the bank to reconsider their rate, but the bank has refused!
If the employees could access Pag-IBIG, they would be paying only 6 percent interest.
The urban bias extends to loans for long-gestating crops.
For a long time, the General Bank Act of 1954, likely formulated by the urban elite, puts the maximum grace period on repayment of principal to three years. Surely, not sufficient to fund rubber with six years gestation, coffee and cacao (in the early years, the old clones takes four years).
It took Bangko Sentral under mandate from the Agriculture and Fisheries Modernization Act (AFMA) only in 1991 to change the provision.
Meanwhile, Malaysia, under its poverty reduction programs, had been extending loans with five to seven years grace period on both interest and principal.
A former agriculture secretary claimed that tree-crops development did not flourish here compared to peers in the Association of Southeast Asian Nations. He said that some members of the Cabinet were opposed to government banks lending to long-term crops because of high risk.
Urban bias even extends to health care. For decades, specialized government hospitals were all located in Manila. The poor could not access those services. Government funds were used to build heart, lung and kidney centers when funds could have been better used, and benefited many, if regional hospitals were improved. Things are better now as more regional hospitals are being equipped.
A raging issue today is the MRT. The government subsidy to MRT-LRT was P12 billion in 2012. This was for one million passengers daily, or an annual subsidy of P11,000 per passenger. The urban leftist groups called this anti-poor.
The fact is that according to the 2012 official data, only 3.9 percent of Metro Manila population are poor! Certainly, those getting off Ayala Avenue are not poor. Compare to this the government support to small fishers at less than P2,000 per fisher for many years. Their poverty incidence was at 39.2 percent!
Then there is the 60:40 sharing of internal revenue allotment in favor of the national government. Certainly, the cities, given the large internally generated taxes such as business permits and property taxes, have the big edge. The poor provinces have no wherewithal to close the gap.
Some 20 million rural poor remain outside the material comforts of most of the urban folks. Unless the country’s urban-based elite truly appreciates the wide gap between the quality of life urban and rural populations, the divide will continue.
(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is vice chair of the MAP. Agribusiness and Countryside Development Committee, and the executive director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at [email protected] and [email protected]. For previous articles, visit map.org.ph.)
