Amen. In a globalised world these 3 approaches are essential if we need to leverage the talent and resources we have to make a better future for the Philippines. Let’s hope we can do this in time for 2014 when we integrate our economy with the rest of ASEAN.
From the Business Mirror
And yet this is still a far cry from the 1950s to the 1970s, when we were among Asia’s strongest economies. Regionally, we remain in the bottom tier, ahead only of Vietnam, Laos, Myanmar and Cambodia, while the rest of our Asean neighbors are in the top 50.
The ranking is based on 12 pillars of competitiveness: Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labor Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication and Innovation.
In their seminal book Why Nations Fail, Daron Acemoglu and James Robinson point to “extractive institutions” as one of the key causes of failure. Extractive economic institutions enrich only those in control of government, who, in turn, use their influence to create “extractive political institutions” to perpetuate these profitable parasitic relations. This creates a vicious cycle that eventually leads to the failure of the state.
Dr. Raul Fabella of the UP School of Economics similarly points to the failure of collective action as a main cause of our investment problem. Underdevelopment occurs when individuals in power put themselves above the benefit of the state.
The country’s gross lack of infrastructure is a prime example of this failure. Infrastructure can either be hard (such as roads, airports, energy networks and communications technology) or soft (such as law enforcement, emergency response, health care and financial institutions). Inefficiency in either kind makes doing business in the Philippines riskier and more expensive, driving away foreign investors and crippling industry.
If we are to boost Philippine competitiveness, we will need a mindset changeover. We must create an outward-looking culture that values innovation, drawing from the shared knowledge and expertise of other countries. There is no better place to begin this than in our schools, through a strengthened R&D capacity and educational linkages with universities abroad.
In a globalized era, the only way to effectively advance sustainable development is through cooperation, shared purpose and mutual trust. Perhaps, the best example of this is the Millennium Development Goals agreed to by 189 United Nations member-states in 2000. Because of this pledge, the number of people living in extreme povertyhas fallen by more than 2 billion since 1990 to 1.4 billion as of 2008. The survival of children under the age of five has increased, while deaths caused by malaria and tuberculosis have declined.
Bilateral cooperation is another way. Through the years, our country has been the top recipient of aid from Korea, while Japan remains our No. 1 Official Development Assistance giver. These partnerships have enabled us to support key areas of growth, particularly agriculture, ICT, education, health, infrastructure development, energy, environment and disaster relief. Cooperation, whether at the bilateral or multinational levels, can help individual countries address national challenges.
Innovation, whether from outside or generated from within, provides solutions to fundamental problems while creating opportunities across the social sphere. The Congressional Oversight Committee on Science, Technology and Engineering, of which I am chairman, is challenging our animators, scientists and developers to form multidisciplinary teams in Disaster Science and Management, Herbal Medicine and Wellness, Geriatric Medical Care and Language Learning to create world-class content. This innovation-friendly environment will lead to the creation of new products in high-value areas like devices for telemedicine, cloud computing, e-learning and smart government, and re-energize our export drive.
Now, more than ever, we have the manpower and resources to harness these developments. In two years, the Philippines will enter a demographic window, where working-age people will comprise about 65 percent of our total population, giving us the highest potential for economic growth. But also within that time, the 600-million-strong Asean community will come into being. Are our policy-makers and people prepared and ready for that?