Making the Market Work for the Poor:
Foundation Holds Second Liberal Leadership Training
Participants of the Second Liberal Leadership
Training at AIM Coference Center
Twenty-five local government officials, members of civil society
and students gathered together at the Asian
Institute of Management Conference Center, Makati
City from 13-15 November 2006 for the Friedrich Naumann Foundation’s
second Liberal Leadership Training (LLT) seminar “Market
Economy and Poverty Alleviation: Making the Market Work for the
Poor.” Moderator Siegfried Herzog debunked the belief
that government involvement in the economy through price fixing
and subsidies was helping the poor by analyzing the basics of
the market-price
mechanism and the principles
of the market economy. “The market
is a decision making tool, where consumers are free to
offer money and producers are free to demand,” Herzog said.
“Government intervention disrupts this natural interaction
and leads to an inefficient allocation of resources by causing
either excess supply or excess demand, which in turn will lead
to unintended consequencessuch as the emergence of black markets
in the case of excess demand.”
A
video presentation on the benefits of
globalization preceded the end of the first day. In it, the
Swedish author Johan Norberg addressed the concerns that globalization
will cause an influx of cheap imported goods that will destroy
local products by contrasting the industries, jobs and wealth
created by the open economies of Taiwan and Vietnam versus the
plight and poverty of largely protectionist Kenya.
In order for industry to start, a
right
to property is needed, especially
for the poor. It allows them to have control over their means
of production and gives them the opportunity to decide for themselves.
Friedrich Naumann Foundation
Regional Manager Sarinthorn Sachavirawong gave a
case study on how this benefited Malaysian Indian women. Her
presentation was followed by a discussion by Attorney Sedfrey
Candelaria, director of the Indigenous People’s Desk of
the Ateneo Human Rights Center, on the Philippine government’s
steps to protect native Filipinos’ rights
to ancestral domains and lands through the Indigenous People’s
Rights Act of 1997.
Aside from property, the poor need access to other means
of capital. Professor
Mohammed Yunus and the Grameen
Bank introduced the world to the concept of microfinance
by showing that the poor are not a liability. They can put capital
to productive use and collectively they can guarantee each others
repayments. All they lacked was access to capital. Economist Bienvenido
Nito discussed how the vision of Professor Yunus is alive in the
Philippines. “The poor can pay; the poor can save,”
he said. “In fact microfinance institutions have higher
collections and repayment rates than commercial banks.”
“The challenge for the country is to have more microfinance
banks and to scale up the industries.”
“Liberalizing the economy and limiting government intervention
to protecting the means of competition are the best benefits for
the poor,” Herzog said. “The aim of the second LLT
seminar was to demystify the concept of the free market and show
that it is an effective tool for poverty alleviation and eventual
eradication,” he added.
For a more in depth look into the discussions of the second LLT,
please visit the workshop blog at: liberaleconomy.wordpress.com.
