Global economy on the mend . . .

It’s heartening we’re again upbeat with exports rebounding.

Before the global recession, our exports were at $49 B, and went down to $37.2 B. And it appears that with the global economy on the mend, we are seeing an uptick in exports that should bring us back to where we were, i.e., a re-grow of 24%. But with some big countries still to regain their economic strides, it’s not surprising that some of us are cautious. (And, unfortunately, there is uncertainty in the Mediterranean, if not the Euro zone.)

And this is where the development of the first Philippine Investment Promotions Plan (PIPP) comes in handy and timely. It calls for “an average 16% growth every year between 2010 to 2014, higher than the 12% eyed in the Trade department’s road map for the past three years”. The Business World article is very encouraging as it continues: “streamlined efforts are especially needed now as competition among investment hosts in Southeast Asia stiffens amid the lowering of trade barriers.

"With the emergence of less costly free trade of goods and parts inside the region, investors such as multinational companies will increasingly see the Association of Southeast Asian Nations as a single market and will reposition their production, logistics and sales networks in the region depending upon pros and cons of each country," the PIPP stated. “It is therefore of paramount importance for the Philippines’ investment promotion to focus on select opportunistic sectors in which the country has competitive advantages to other ASEAN member countries.

“It identified the electronics, business process outsourcing and renewable energy industries as the top competitive sectors but added that more could be added after studies are made. Bernardo F. Angeles, Jr. -- assistant head of the technical working group -- earlier identified other industries the PIPP would focus on: agro-industry, food processing, mining, logistics, aviation, shipbuilding, and tourism.”

That is the heart and soul of the plan. How we define how investors must pitch their proposals is crucial. For example, our electronics exports are largely semi-conductors – it is imperative that investors pursue higher value-added products. (The Indonesian BOI chairman was recently on CNN talking precisely about this imperative!) The key is to produce compelling products so that they are competitive and thus find a bigger market.

The PIPP ought to be shared with the public especially our economists and the JFC (Joint Foreign Chambers) who have similarly done their homework to right our economic ship – because we have no choice but to right our economic ship! For instance, raising our exports generated via aggressive investment and competitiveness will raise our revenues far greater than increasing tax collections even by the most optimistic numbers reported.

Separately, the UPSE forum teed up poverty as an urgent issue, thus: ‘Poverty reduction in East Asia has been quite fast, and the Philippine case appears as an exception’. The good news is we recognize the imperative of aggressive investment and competitiveness. But it is silent about partnering with foreign investors as presented by the JFC – we don’t have to go it alone, nor can we afford it?

The writer has talked about a reverse thought process, i.e., starting with the end in view. Doing ground-up, linear and incremental initiatives for decades haven’t work: (a) they’re confusing development – which must be sustainable – with compassion and crony capitalism, and (b) compromising if not missing our structural problem, i.e., investment and competitiveness? Net, we will be unable to provide even such basics as water and power until we develop discipline in our thought process and focus in our execution – the challenge of Eden?

The bottom line: the test of the pudding is in the eating! But we can’t let the world leave us behind – and so failure is not an option!