“Little league”

We’re probably right in our GDP forecast that it will “rise 7-7.5 percent this year or higher than the Asian Development Bank and World Bank’s projection of six percent and 6.2 percent, respectively.” [Phl seen to sustain growth thrust, The Philippine Star, 21st Jun 2013] “UAP economist Victor Abola said the local economy is undoubtedly growing with some sectors taking off, driven by robust domestic consumption.” On the other hand, we keep talking about “inclusive growth,” and thus people are wondering why despite the caveats re GDP numbers, we still crow about it: “Last quarter’s growth was the fastest among 11 Asian economies, eclipsing China’s 7.7 percent annual pace.” [Ibid.]

A friend emailed wondering if we’re like little leaguers unable to contain their glee . . . fortunately a couple of news items would put things in perspective: “What the Aquino administration is waiting for are the actual investments. Once those investments come online and are already on the ground, the government hopes to be able to increase the jobs, particularly in the manufacturing sector. [Where are the jobs, Business Mirror, 19th Jun 2013]

“In addition to addressing the critical constraints to private investments, we will also put emphasis on innovation, technology, and research and development. We will facilitate the improvement in labor productivity by investing in human capital and providing the capacity for the labor force to engage in higher-value activities. What all these demands is a greater sense of urgency among us in the government, as well as better coordination between and among the various agencies charged with implementing programs and projects,” Socioeconomic Planning Secretary Arsenio M. Balisacan explained at the briefing on the National Income Accounts in May.”

“For an economy like the Philippines, which has mostly been driven by the Services sector in the past few years, structural changes to the economy are a necessary ingredient in creating employment for millions. Philippine Economic Society President Alvin Ang told the Business Mirror that structural change requires shifting the country’s economic growth to labor-intensive sources like Manufacturing and Agriculture. But this shift in growth sources takes years and even decades to occur.”

“But persistent weaknesses and constraints have caused [the manufacturing industry] to lag behind its ASEAN neighbors, Dr. Rafaelita M. Aldaba [of the Philippine Institute for Development Studies] said in a recent talk entitled “AEC 2015 & Industry Roadmaps.” [Filipino Companies, Gov’t Urged To Prepare For AEC, Manila Bulletin, 22nd Jun 2013] “Whether a local enterprise will survive the liberalized and highly competitive AEC market will depend on its productivity, export orientation, foreign equity, and company size . . . She noted the “hollow” structure of the sector, where medium-size enterprises have a small share not just in manufacturing but also in the overall Philippine structure. This has led to weak linkages between the micro and small and medium MSMEs and the large enterprises, resulting in a subdued MSME performance with limited value added and employment share. The manufacturing front today . . . has not kept up with technological changes, having failed to invest in state-of-the-art technology and human capital.”

“Before 2015 arrives, the government should adopt a three-pronged strategy for a more globally competitive manufacturing industry . . . The first step is to enhance the investment climate by removing growth obstacles and supply chain gaps, efficiently using and expanding capacity, facilitating innovation and technological catch-up, providing access to finance and technology for MSMEs, and encouraging moving into higher value-added sectors. The second is to issue policies that correct market and government failures such as smuggling and corruption, and streamline and automate interrelated business procedures. This stage also calls for government and industry collaboration for continuous industrial and technological upgrading and sustained growth. Taking complementary actions is the third, said Aldaba. These include promoting a competitive exchange rate, open-trade regime, sustainable macro policies, sound tax policies and administration, efficient bureaucracy, and secure property rights. There is also an urgent need to address deficiencies in infrastructure, logistics and power supply.”

A Harvard social scientist preaches that success must be celebrated, even small ones and even before the fact. Yet is it time we treat Juan de la Cruz like an adult? “Our problems are man-made,” Kennedy said in a speech that has been dissected many times over. And not surprisingly, we have become complacent, reinforcing our “fatalism” – in spades?