WARNING of future “shocks,” a global economic and policy analyst on Wednesday urged the Duterte administration to concentrate on job creation and reduce the country’s dependence on remittances from Filipino overseas workers in the long term.
The new world order calls for stronger national economies as forces of globalization and integration wane and mature economies are unable to return to growth, Dan Steinbock told a roundtable discussion with The Manila Times editorial team.
Steinbock said President Rodrigo Duterte was on the right path with a policy goal of bringing home overseas Filipino workers (OFWs) and generating jobs by attracting foreign investment and upgrading the country’s infrastructure.
“Duterte is making the right move. It will be the first time in five years that I can sit down and say that you have chosen the policy stance that makes sense, most importantly investment. Whether it comes from foreign sources or domestic, you cannot build infrastructure without it,” he said.
Steinbock said the huge population of Filipinos could be a destabilizing force in the future, and warned that having a good demographic profile – a huge pool of young workers – won’t be enough to yield high economic growth.
Steinbock pointed out that a significant chunk of the working population had been forced to work overseas because of the lack of local opportunities.
“Demographics is not enough unless you have jobs. We saw in Latin America what happened [in the 1950s to 1960s]. They had youthful demographics but no jobs,” he said. “So for me, demographics is actually really important. You cannot have a major change without it. However, if you don’t have jobs, you have a problem.”
Previous administrations were complacent, Steinbock argued.
“I think the fact that so many people have been exported is not good and we cannot be complacent about it,” he said.
“When you export people, you don’t grow. You have to have the people…It just doesn’t work,” he said. “Any sustainable, fast-growing, large emerging economy, none of them is exporting people.”
Money transfers from overseas Filipinos account for at least 10 percent of the country’s gross domestic
product. From January to October 2016, personal remittances totaled $24.43 billion, up 3.9 percent from a year earlier, while cash remittances reached $22.22 billion, up 4 percent.
Steinbock, founder of the Difference Group, a global consultancy and research outfit, said the Philippines could take advantage of its good demographics by harnessing its potential in manufacturing, electronics, information and communications technology and tourism, among other sectors.
“I think that Mr. Duterte sees the future very far away, 2040, as the new government plans seem to indicate where you would have more opportunities within the Philippines, you would have people and jobs, and thereby have the consumption that will benefit the economy and so forth,” Steinbock said.
In his official visit to Japan last year, Duterte told Filipino workers the current generation of OFWs would be the last.
“We have to improve the economy na hindi ka na babalik dito, na kung bumalik ka rito, baka-bakasyon na lang [We have to improve the economy so you will not come back here (Japan). If ever you will return here (Japan), it will be for a vacation],” he told migrant workers in Tokyo.