Asean’s infrastructure century



WHEN World War II war ended 72 years ago with Japan’s surrender in Tokyo Bay, the victorious allies—Britain, France, Russia, the US and Nationalist China (led by Generalissimo Chiang Kai-shek)—organized the United Nations.

The Philippines led the colonies of the US and the European powers to gain independence in Asia, Africa and South America. The world recognized them as (politically) “sovereign states” which subsequently became UN members.

But their economies were virtually wiped out by WWII. Both the victorious allies and the defeated Axis powers (Germany, Italy and Japan) jointly reconstructed the ravaged nations of the world, but the global geopolitical equation was exacerbated by the Cold War between communist Russia and the capitalist US and its European and Chinese Nationalist allies.

Although the number of “independent, sovereign states” mushroomed in Africa, Asia, and Latin America, the undeveloped, agricultural/aquatic countries, including the Philippines and most of Southeast Asia, Africa, the Middle East and South America, wallowed in poverty.

This caused the people of mainland of South Asia to go for narcotics or illegal drugs (in the Golden Triangle made up of Myanmar, Laos, Thailand, and China’s Yunnan province).

Notorious for illegal drug dealing in Central Asia are parts of Pakistan, Afghanistan, Turkmenistan, and neighboring countries. In South America, it has been Colombia, Nicaragua, Mexico, Panama, and Venezuela. In Africa, it is Somalia, Sudan, Libya, Kenya, Ethiopia and more in Central Africa.

In the Middle East are northeastern Iran, and the Iran-Iraq border areas. And, naturally, as the regional and world population increased, over the past 72 years, there were the correspondent related upsurges in crimes against persons and property. Add to this, the economic-technological race between the superpowers which bloated their military weapons and worsened the global poverty.

The Philippines, and the other Asean members are no exceptions to this spread of poverty that the United Nations has set seven original development goals scheduled to be attained in 2015. Eradication of extreme poverty was at the top of the list. It failed and the goals were expanded to 18 for attainment in 2040—extreme poverty remains on top.

But there is reason to be optimistic: based on recent regional and global developments, there are obvious turns to push economic initiatives to the forefront, in spite of geopolitical-military tensions in the Central Asian region (the Russian annexation of Crimea) and the Middle East (the international terrorists activities in Syria and Iraq), the Iranian and North Korean violations of the UN nuclear arms limitation agreement, and the worldwide expansion of the Islamic State’s (IS) terrorist violence.

China, in its obvious competition with the US for world hegemony, has initiated the peaceful move toward global economic cooperation starting with its offers of railway network and infrastructure funding and technical assistance for all. This is possible because of Beijing’s current economic successes since the death of Mao Zedong who ousted Chiang Kai-shek and his Nationalist Party who fled to and sought refuge in Taiwan.

This initiative from Chinese President Xi Jingping, of course is punctuated with China’s nine-dash-line territorial sovereignty claim over almost all of the South China Sea and the People’s Liberation Army’s military facilities buildup in the Spratly archipelago.

We found this economic push for “build, build, build,” as President Rodrigo Duterte terms it—as articulated in the public-private partnership projects forum of the Center for Philippine Futuristics Studies and Management last week—as the answer to the pressing extreme poverty issues of the Philippines and the entire Asean.

On the PPP pipeline here are 35 projects, ranging from rehabilitation and expansion of our national railway lines to connect most of the major islands to airports, seaports, special manufacturing zones and reclamation of parts of the Manila Bay, amounting to some P426.10 billion. Timeline: to be finished during the remaining term of Duterte (and probably a year more beyond).

Construction undertakings like the PPP have its beneficial multiplier impact on the total economy because of the capacity to generate at least 100 employment opportunities for every peso invested in the projects. This should easily push the NEDA projected growth rate from five to seven percent annually for the next decades.

This is clearly the reason the international financial/credit and economic rating institutions like Standard and Poor, Fitch, the World Bank and the Hong Kong Shanghai Banking Corp. have figured that the 10 Asean members will be the world’s fastest growing region—and the Philippines will lead it with about seven percent of GDPP annual growth rate.

The PPP Center’s deputy executive director Eleazar Ricote, with almost 20 years of PPP years under his belt, said their office is now a one-stop shop for any private enterprise which may want to participate in the PPP, which is bedrocked on the national development plan: AmbisyonNatin 2040 designed to provide a strong economy for the country, comfortable life for every citizen, and a sustainable peaceful future for the next generations.

He warns, however: “There are risks involved which the private participants must effectively manage to be successful. They will own the equities and the project.” The government or the public will facilitate their operations with the appropriate governing rules and linkages with the local government units.

This can be the empowering factor to shift the economy from a consumer-spending driven to an investment-triggered one—something good for the agriculture and fisheries sectors which are the under-employed and most marginalized of our labor groups. They make up 70 percent of our population. The same is true with the Aseam, except for Singapore and Brunei Darussalam.

The Bangko Sentral ng Pilipinas deputy director for economic research, Sittie Butocan, admitted that the PPP program will have the effect of increased money in circulation but assured the forum participants the BSP will monitor the daily developments to “prevent any overheating of the economy. We will stick to our mandated duty of keeping the price fluctuations at manageable levels for economic stability.”

Geopolitically, this is the outcome of the Duterte administration’s independent foreign policy—in short, be a friend of everyone and the enemy of no one. In fact, Japan and India have joined hands in prioritizing this international economic push. They announced last May their Asian-African Growth Corridor (AAGC) in partnership with the Economic Research Institute for Asean and East Asia.

The AAGC will work for enhancing capacities and human capital skills from India to Japan, qualify infrastructure and institutional connectivity, promote development and cooperation projects and push for people-to-people partnership.


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