Thursday, April 8, 2010

Rebooting our economy

Inertia is a given and hence we can’t expect ourselves to turn on a dime and stare at a clean slate. But a clean slate is what we need in order to chart a new, progressive course. Job one: figure out how to raise our GDP per person – it’s our true north but let’s not get ahead of ourselves! A clean slate means we’re not hostage to old assumptions – because we now know where we stand, as an economy and as a global competitor.

Do we want an economy that is inward-looking, and thus lag the region in investment? Do we want OFW remittances to drive our economy, and thus miss the imperative of developing and marketing competitive products – e.g., we need an incremental $100 billion, against the global economy it’s miniscule; the issue against exports does not apply to a small fry like us although even Obama wants to double US exports to $2 trillion? Do we want to be everything to everybody and thus miss to prioritize – confine our infrastructure and strategic industries to underdevelopment? Do we want to be simply fighting fire, and thus render us inefficient, ineffective and open to corruption – e.g., importing grains, installing generators, etc.? Do we want to keep taking the path of least resistance, and thus inhibit us from being a great nation?

In the private sector – particularly global enterprises – inertia is overcome by supervision. For instance, global companies operating in the Philippines report to a regional management. This ensures that: (a) while focused locally, (b) they keep an eye on the true north, and (c) that the comfort-zone phenomenon does not set in – which can make them less able to compete.

In the Philippines, we are a standalone entity. In contrast, in the EU, member countries are under the EU’s supervision. This is to ensure that EU standards are adhered to. For example, one of their priority initiatives is the creation of a physical network or highway system. The object is to link every member country, and ensure accessibility to the broader EU market – a fundamental rationale for the creation of the EU. And as a new member gains accession, they tap into the infrastructure funds of the union. Unfortunately, human condition makes generously funded projects open to corruption. And so the EU exercises supervision over its member-countries to make the initiative transparent.

We need to self-police ourselves in the absence of an EU-like structure. For instance, if we prioritize and step up infrastructure development, government must be committed to transparency. The writer has talked about prioritizing three (3) fundamental economic imperatives: (a) basic infrastructure of water, food, power, etc.; (b) strategic industries to drive and enlarge the size of our GDP, and (c) addressing the enablers of/barriers to: competitiveness, corruption and economic freedom.

On the 3rd point, it appears (from a Manila Times article) that “ . . . six key government agencies have been silently reforming themselves, improving the way they have been doing their assigned tasks, and thereby contributing to meeting the MDG (Millennium Development Goals). They are all undertaking the Performance Governance System (PGS), a local adaptation of the Balanced Scorecard applied to the public sector, to track their performance against a set of goals. They will make their performance commitments public on March 25, 2010 at the Public Governance Forum jointly convened by the Institute for Solidarity in Asia (ISA), the National Competitiveness Council and the Development Academy of the Philippines.

“Apolitical government people in the administration and the civil service in these six government agencies are silently working on urgent governance reforms that could no longer wait for the next Filipino president to be sworn into office . . .”

This is great news and a great model. And it is heartening that people and institutions appear dogged in their efforts. More power to them!

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