The World Economic Forum is coming to Manila this week and will give the big international business players the opportunity of a look see on the country. Let’s hope they will be encouraged with what they see and bring out the big money to make the much needed foriegn investments by the country. Let’s see.
From the Philippine Daily Inquirer
- 20 & 21 May 2014
- By Doris C. Dumlao
PH to share turnaround story as host of the WEF
THE EAST Asia summit of the World Economic Forum (WEF) usually takes place in a country that’s shaping the story of the region for that particular year.
Last year’s host Burma (Myanmar), for instance, had just come out of decades of economic and political isolation and being Southeast Asia’s last frontier, business groups—including outbound-looking Philippine conglomerates—are scrambling to gain a foothold.
When Indonesia hosted the summit in 2011, it was the hottest emerging market as the commodity boom benefited the world’s largest coal exporter. At the time Thailand hosted the same summit in 2012, it was grappling with slowing exports, but intensified public spending allowed it to defy the global slowdown.
The program is built on three pillars: achieving equitable progress, advancing models for sustainable growth, and realizing regional connectivity.
“We are especially pleased to be holding the meeting in the Philippines for the first time. This is the right moment to shine the spotlight on a country which has turned itself around remarkably after years of unfulfilled promise,” WEF’s Rao said.
“All indications suggest the Philippines will be the second-fastest growing Asian economy in 2014, second only to China, and on target to be the world’s 14th largest economy by 2050. The resilience of the people and economy in the face of the devastating impact of Supertyphoon “Yolanda” (international name: Haiyan) has been truly impressive,” he said.
While the East Asia summit will formally open tomorrow, most of the public events will take place on Thursday and Friday.
From the local perspective, one keenly awaited session will be Thursday’s “Philippines: The Next Asian Miracle,” which will have as part of its panel Manuel V. Pangilinan, one of the most influential business leaders in the country and Karim Raslan, a Malaysian business consultant, a writer and group chief executive of the KRA Group. He was also the founding chair of WEF’s global advisory council (GAC) in Southeast Asia.
I’ve known Raslan for many years, having been enlisted by him to be part of the same GAC in Southeast Asia and I distinctly remember him telling me—long before it happened—that he could feel a turnaround happening for the Philippines. This session, to be moderated by Young Global Leader (YGL) Karen Davila, will also have as panelists Cherrie Atilano, cofounder and president of Gawad Kalinga Enchanted Farm Agricool, YGL Kevin Lu of international business school Insead and Marife Zamora, chair of Convergys Philippines Services Corp.
Over the years, the Philippines has been uplifted by overseas remittances and business process outsourcing and I’m hoping to see a vibrant discussion on other growth sectors that the country can tap.
Sessions on education, entrepreneurship and employment as well as equitable employment are likewise keenly awaited, given the region’s demographic profile which is heavily skewed toward the young.
Tessie Sy-Coson, vice chair of leading conglomerate SM Investments Corp., will be part of the panel on the education-enterprise employment nexus on Thursday, which will discuss strategies on generating employment and driving economic growth in the region. Likewise a panelist in this session is one of the country’s most prominent social entrepreneurs, Mark Ruiz, president and cofounder of Hapinoy/Microventures.
The forum is all about tackling global, regional and industry agendas that will change the game and as Rao often says, also about creating trusts, collaborations and partnerships via multistakeholder platforms. A lot of the interesting conversations will take place outside of the sessions, during coffee breaks, side events, networking lunches and evening receptions.
It will be three hottest days this summer.
Having personally participated in all these past three summits, I’m glad to see our country hosting this year’s East Asia summit in the next three days especially at the crucial juncture that the unification of Southeast Asian markets is almost upon us. It also comes at a time that the Philippines, a laggard for a long time, has become the region’s outperformer.
Now, it’s the Philippines’ turn to share with the world its turnaround story as the country rolls out the red carpet for over 600 corporate and civic leaders, policy-makers, social entrepreneurs who will tackle the opportunities and challenges faced by the region with the creation of Asean Economic Community by 2015.
It’s the same story that President Aquino and his economic team had pitched to investors many times before—in Davos, Switzerland, last year during the President’s WEF debut at the annual meetings, in Naypyitaw, Burma, during the last East Asia summit or in sovereign roadshows. It’s about this “sick man of Asia” making progress in curbing corruption as a means to drastically reduce poverty, thereby opening opportunities for consumers and businesses and promoting inclusive growth.
In the words of Tourism Secretary Ramon Jimenez, it’s an opportunity to look more closely at what some deem as the next “Asian miracle” which is but a logical approach to cleaning up a very dirty kitchen inherited from the previous regime, and operating better because it now has a relatively cleaner kitchen.
Ahead of the WEF East Asia summit, the Philippine sovereign—which already enjoys an investment grade from all three major credit rating agencies—got a further upgrade from Standard & Poor’s, which now rates the government at one notch above the minimum investment grade. And with a growth rate of 7.2 percent in 2013, the Philippines was the fastest-growing economy in Southeast Asia, and the second fastest in the whole of Asia, next only to China.
But it’s one thing for foreigners to hear about a good story and another thing to hit the ground to see for yourself. Some corporate leaders visiting the country for the first time, apart from picking the brains of fellow delegates, can better feel the pulse of the local Main Street: by talking to the taxi driver, the cashier at a local mall or the waitress. Some of them will probably stay for a few days after the summit for rest and recreation. When they see the countryside and talk to rural folks, they can be the better judge of whether the Philippines’ changing fortunes are gaining traction and more importantly, being shared by more people.
The theme of the 23rd World Economic Forum on East Asia, which opens tomorrow and runs until Friday, is “Leveraging Growth for Equitable Progress,” reflecting the challenges faced by a fast-growing region, which is simultaneously grappling with persistent disparities in competitiveness and development.
Delegates will come from 30 countries, including leaders from 25 industry sectors—such as financial services, healthcare, agriculture, connectivity, social “intrapreneurship” and civic engagement. There will be at least two other heads of state or government joining Mr. Aquino: President Susilo Bambang Yudhoyono of Indonesia and Prime Minister Nguyen Tan Dung of Vietnam. Together, these three represent leadership in the three most populous and fastest-growing nations in the region, said Sushant Palakurthi Rao, WEF senior director and head of Southeast Asia.
World Economic Forum on inclusive growth opens
ALL eyes are on Manila as about 600 delegates from 30 countries converge here today for the 23rd World Economic Forum (WEF) to discuss how the rapid East Asian economic growth could distribute its benefits more equitably among its 600 million people.
The three-day meeting of representatives of business, government, civil society and academia convenes against a backdrop of not only impressive growth rates in the economic bloc, but also persistent disparities in competitiveness and development.
Aquino sent invitations to Chinese President Xi Jinping and Prime Minister Li Keqiang, but both did not even bother to reply.
The closest to a state official that China will have in Manila is an executive dean of Peking University.
Vietnam and China are also locked in a tense stand-off over a giant oil rig the Chinese towed into waters claimed by both countries.
Despite the growing tension, delegates expect the over-arching message from the forum to be one of pragmatism.
“My belief is that pragmatism rules, and a pragmatic view of the situation would suggest that peaceful resolutions of these issues would be made,” said the EU-Asean Business Council’s Donald Kanak.
PH back from the brink
Guillermo Luz, private sector cochairman of the National Competitiveness Council (NCC) and former executive director of the Makati Business Club ( MBC), said the forum could showcase the Philippines as a viable economic, financial, and investment hub for foreign visitors.
Chief market strategist Jonathan Ravelas of BDO Unibank, Inc. said the Philippines, being the host country, has reached an important milestone.
“Our economic ‘back-from-the-brink’ story is one of the best, if not the best, in recent years, being an economy with the youngest population in Asia, and with sustainable growth ranging from 6 to 7 percent,” Ravelas told The Manila Times.
However, aware that the country’s growth rates are high, what the WEF is likely to want to check out during the forum is the sustainability of that growth, said Alvin Ang, economist at the University of Santo Tomas.
“The forum will be an opportunity for the Philippines to say ‘yes, growth will be sustainable,’” Ang said.
The private sector plays a big part in that growth, particularly in job generation.
“We should raise the point that WEF member countries can help the Philippine economy grow by investing in it, in the productive sectors that could create jobs to sustain the current growth path,” Ang said.
Manufacturing offers many possibilities, he said. The sector needs more foreign direct investment so it can be more integrated into the Asean market.
Presenting what the Philippines has to offer to the global investment community with a stronger, broader, deeper participation from the both the private and public sectors will help Filipinos better understand the concerns of the investing community and be able to act on these concerns as soon as possible, said Jun Neri, Bank of the Philippine Islands chief economist.
The country has a big chance of success in vying for a share of the global market in services, but will have a more difficult time competing in agriculture and manufacturing if the current productivity does not improve, Neri said.
Luz underscores the country’s advantage in terms of manpower. “In the area of people, we have an advantage—but only if we educate and train our people,” he said.
“We will also have the largest working-age population [ages 18 to 64] over the next 30 to 40 years. If we educate and train our people for high- value jobs here or across Asean, that places the country in a strong position,” Luz said.
Local private industries and corporations that have been preparing and will continue to prepare for the 2015 target date for AEC will be able to compete better in areas that have not yet been liberalized.
“Those who do not prepare will suffer,” Neri added.
President Benigno Aquino 3rd and his team will be joined at the meeting by Nguyen Tan Dung, Prime Minister of Vietnam, Susilo Bambang Yudhoyono, President of Indonesia, and U Nyan Tun, Vice-President of Myanmar. Under the meeting’s theme, Leveraging
Growth for Equitable Progress, participants will discuss the opportunities to promote greater inclusion across East Asia, with a three- point agenda: achieving equitable progress, advancing models for sustainable growth and realizing regional connectivity. Big buzz phrases like “Asia’s next economic miracle” and “a dream of 600 million fulfilled” will not be in short supply when the 600 thinkers discuss the Asean Economic Community (AEC) during the event.
The AEC, a long cherished dream among 10 Asean countries that is expected to launch next year will be a common market with a combined gross domestic product of about US$2 trillion, according to a report by McClatchy Tribune Information Services (MCT).
By January 1 next year, tariff and non-tariff barriers across South-east Asia will be removed, and restrictions on services, investments and labor mobility eased.
“This brings unprecedented opportunities for partnership, trade and foreign direct investment,” said WEF managing director Philipp Rosler.
On the ground, however, economists and bureaucrats are carefully managing expectations, saying this “dream” is likely to arrive as a “series of little bangs” rather than a seismic shift.
Neither would the AEC upend the way business is conducted.
“Integration is a process. It is not going to be a big bang,” said Philippine Finance Secretary Cesar Purisima. Europe, he pointed out, is still integrating more than three decades since the European Union was formed.
For Philippine Trade Secretary Gregory Domingo, the “big bang”
already happened four years ago, when nearly all tariff lines in South-east Asia were rolled back to zero or near-zero.
The big shift will be in non-tariff barriers that could see countries such as the Philippines easing limits on ownership of key industries and opening up more sectors to foreign competition, he said.
Already, big lenders from abroad, including Singapore-based Bridge Financial Services, are anticipating a law that will allow them to own 100 percent of Philippine banks, Edward Garcia, former president of the Rural Bankers Association of the Philippines, told
The Straits Times.
While this week’s WEF meeting will focus on the economic promises of Asean 2015, rising geopolitical tension in the region will not be far from the minds of the delegates.
China, which has seen its territorial dispute with the Philippines worsen in recent months, is apparently snubbing the host by sending just a token delegation to the forum this year.