IN comments he made at an investment roadshow in Hong Kong last week, Finance Secretary Cesar Purisima noted that the Philippines needs at least $125 billion—and in his view, probably more —to bring the country’s infrastructure up to a standard that would better integrate the country into the web of global supply chains and ease adaptation to climate change.
We have to bear in mind, of course, that the Aquino Administration’s discussing infrastructure investment is mostly idle speculation; the current government’s future plans do not extend past whatever can be initiated by the end of the first quarter of next year, and the next administration – if we are fortunate enough to avoid being saddled with either a poor facsimile of the current president or an addled twit who thinks being the adopted daughter of a rough-hewn action movie star is an actual public service qualification – is likely to have different and hopefully more substantial objectives.
The amount suggested by Purisima may be debatable, depending on what the country chooses to regard as “infrastructure.” In terms of the things Purisima discussed in his speech – roads, ports, airports, and other transportation systems – it is probably a fair estimate. If the other things that ought to be included under the category of “infrastructure” – electricity, water, and fuel distribution systems, and internet and communications systems – are added, the needed investment could easily be three or four times as great.
The money, however, is not the biggest problem, and in fact is probably not a problem at all; with a variety of investment models at its disposal, healthy financial reserves, and a reasonably favorable credit position, the country could manage a fairly large-scale infrastructure development initiative with little trouble. The problem lies in the perspective with which infrastructure needs are approached. Infrastructure is viewed as a “project” – a very big project, to be sure, but a one-off objective nonetheless. That is the wrong perspective, and is precisely the reason the Philippines has such a great need for infrastructure now.
The best evidence for this is the moribund state of Metro Manila’s light rail system and its “worst in the world” international airport. Both were built to be obsolete, because they were built for current (at that time) capacity, with little to no room for growth. The Aquino Administration has made as much as it can of its proposals to “expand capacity” by adding additional rail cars or expanding airport terminal facilities, but it is already obvious those upgrades will have no real impact; within a very short period of time, demand will overwhelm them. The same can be said of water and electric supply systems that are continually being extended from existing sources, and telecommunications networks that add thousands of new users every day to physical infrastructures that are optimally designed to handle a volume of traffic that was exceeded years ago.
Infrastructure should not be regarded as a project; it should be regarded as a policy. Even “planning for future growth” – a job that is done poorly now when it is done at all – is not quite enough. What is actually required to keep infrastructure from falling behind demand is a policy of continuous development – not just encouraging physical growth of systems, but their technological and social evolution toward greater efficiency and sustainability: Not just more roads or rails or runways or reservoirs, but better ideas and better ways of using them.
That’s a tough task, and a virtually impossible one in a government framework that completely remakes itself every few years, but it’s the task that we somehow need to figure out how to manage. That being the case, perhaps the “infrastructure” we should be focusing on first is the one inside in our own heads, because our way of thinking about these things is producing less than adequate results, and has for a long time.