As a one-time policy research director in government, I am a true believer in the high importance of infrastructure development to economic modernization.
I worked on these development policy issues at a time when our presidents and government had more “will than wallet.” They could not allocate the funds to public investments as much as was truly needed.
Not since President Marcos perhaps have we had a president more committed to infrastructure modernization than President Duterte. No one has lucked into a stronger and more stable economy than he has; as things stand today, he can pretty much attract all the investments and development financing that we need for national modernization. And no one, it appears, is more willing to close the deal.
Like most of our people, I found it exciting to read about all the billions of dollars of investments and project financing that DU30’s recent visits to China and Japan have generated.
From one corner of my eye, I thought I saw the Philippines rising as a modern 21st century economy.
Key to inclusive growth
The reason for bold and sweeping infrastructure development has been forcefully stated by the Asian Development Bank (ADB), in a well-researched paper.
Infrastructure, says the bank, is the key to inclusive growth and poverty-reduction in the Philippines and other Asian countries.
The backbone of Asia’s economic progress is infrastructure development.
Infrastructure plays a critical role in society and the economy by providing services to households and industries. The availability of transport, electricity, safe water and sanitation, and other key facilities such as schools and hospitals, has a tremendous impact on improving the quality of life of households, especially poor ones.
For businesses, infrastructure services facilitate production, transport, and transactions that spur growth, which in turn help to raise incomes and reduce poverty. Infrastructure development also helps countries in addressing climate change and reducing their vulnerability to shocks and disasters.
Conversely, says the bank, a lack of infrastructure development signals barriers to growth and overall development.
The Philippines, along with other Asian countries, still shows a significant deficiency in infrastructure services and infrastructure stock.
Millions of our people still have insufficient access to basic sanitation services, electricity, and safe water.
The key challenge is to provide high quality and efficient infrastructure systems that can support more inclusive and higher economic growth. The challenges are enormous.
In terms of funding, infrastructure modernization will require a total investment not just in the billions, perhaps even of several trillions of dollars.
Infrastructure consists of hard and soft components. The hard and visible infrastructure, such as roads, railways, electricity, and telecommunications, must be accompanied and supported by its soft component, such as policies and regulations, to enable the system to perform well and generate impacts. The right mix and synergy of the two is important to ensure that the infrastructure system supports inclusive growth and poverty reduction. Well-functioning and efficient infrastructure promotes inclusiveness by expanding access to vital services and improving economic opportunities for all.
This, in turn, reduces poverty.
The agreements forged by president Dutertre and his business delegation in Beijing and Tokyo, will go a considerable way in meeting some of the challenges.
It’s exciting to envision the prospect of our far-flung archipelago, being threaded together by modern railway systems, which in turn will be complemented by modern airports and air services, and safe and modern maritime transport and ports.
Artificial islands project
This vision of our infrastructure future is so compelling, that it hurts to know that some people smuggled into the agreements signed in Beijing, a project for the construction of artificial islands in Davao City.
Artificial islands? The National Economic and Development Authority (NEDA) and its Director- General Ernesto Pernia must explain this conundrum.
The project involves the construction not just of one, but four artificial islands in Davao City.
According to the news release, the islands will be spread along eight kilometers of coastline, and will total 208 hectares of reclaimed land.
The project is the joint undertaking of CCCC Dredging, a subsidiary of the state-owned China Communications Construction company (CCCC) in China, and the Philippines Mega harbor Port and Development, whose status and circumstances have yet to be disclosed.
On its face, the project raises some immediate and intriguing questions among our people, such as:
First, with the Philippine archipelago consisting of 7,107 islands, many of which the state cannot develop, why is our government embarking on the construction of artificial islands? Why not expend our resources and energies instead on developing already existing islands?
Second, with Davao City already the largest city of the Philippines, with a total land area of 2,444 hectares, why does it need more real estate? The city also combines with other cities and municipalities in Davao del Norte and Davao del Sur to form Metro Davao.
The sprawling metropolis covers a lot of territory. So why then is it necessary to expand the territory of Davao City and Metro Davao? Where is the wisdom and compelling necessity for this project?
Third, in this project, our government will be doing business with a Chinese company that was heavily involved in the construction of China’s artificial islands in disputed areas of the South China Sea – the spratleys — to which the Philippines is a claimant. Partly because of its work in the controversial island-building project, CCCC Dredging has had to delay its initial public offering (IPO) in the Hong Kong Stock Exchange.
Has CCCC Dredging been subjected to a due-diligence inquiry by our government?
I field these questions with the NEDA, because it is economists and development planners who should cost and evaluate this undertaking.
Mankind’s better moments
Having said that, I should qualify my words by saying that some historians say that some of mankind’s better moments involved ambitious construction projects.
In a stirring essay, “Mankind’s better moments,” the historian Barbara Tuchman cited as an epic achievement, the feat of the Dutch in making land out of sea. By progressive enclosure of the Zuider Sea over a period of 60 years, the Dutch added half a million acres to their country, enlarging its area by eight percent and providing homes, farms and towns for close to a quarter of a million people.
Wrote Tuchman: “The will to do the impossible, the spirit of can-do that overtakes our species now and then, was never more manifest than in this earth-shattering act by the smallest of the major European nations.”
Rising to the same height of narrative is the book Bold Endeavors by Felix Rohatyn (Simon & Schuster, 2009), which relates how the United States in 10 large transformative projects, built modern America – from the transcontinental railroad, to the Homestead Act, to the interstate highway system.
President Duterte could have far-reaching impact on our country and our future with his moves in infrastructure development. He needs a good storyteller.