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By Darwin G. Amojelar, Reporter
It would take nearly two
centuries for the Philippines to catch up with the living standards
of industrialized countries at its current pace of economic growth,
the Asian Development Bank (ADB) reported Thursday.
In a study titled, “A
Cross-Country Analysis of Achievements and Inequities in Economic
Growth and Standards of Living,” the Manila-based lender said the
results suggest a large disparity in living standards across
countries, and the disparity in per capita income was far greater
than that in the other indicators of living standards.
The bank said the Philippines
would take 175 years to catch up with industrialized countries’
per capita income with only $33.7 average gross domestic product
(GDP) per capita income at 2005 purchasing power parity (PPP)
compared to the industrialized countries with $397.20.
A proxy for economic output, GDP
refers to the total value of goods and services produced in a
country in a year.
The Philippines’ average GDP
from 2000 to 2007 was at 2.9 percent, lower compared to
Indonesia’s 3.7 percent, Thailand’s 4.3 percent and Vietnam’s
6.3 percent.
Per capita GDP in purchasing
power parity dollars measures how rich a country is in terms of
material consumption.
Lagging behind neighbors
The country’s requirement
period was no longer compared to other Southeast Asian countries
like Indonesia that needed only 110 years with per capita GDP of
$36.2 to catch up with the living standards of industrialized
countries. Thailand needs only 59 years, with per capital GDP $78.2,
and Vietnam, 61 years, with per capital GDP $23.4.
The economic growth of Indonesia,
Thailand and Vietnam were also higher compared to the Philippines at
3.7 percent, 4.3 percent and 6.3 percent, respectively.
“The per capita GDP is an
important determinant of a country’s living standards: the richer
a country is, the higher is the expected standard of living. An
implication of this observation is that a country can enhance its
living standards by promoting economic growth,” the ADB explained.
“If economic growth is the only
channel to improve standards of living, it will take an
exceptionally long—perhaps unrealistically long—period to
improve standards of living; therefore, policies other than those
promoting economic growth are essential to achieve this
objective,” the report added.
Standard of living indicators
Standard of living is based on
six indicators—per capita GDP at 2005 purchasing power parity
terms; life expectancy at birth; adult literacy rate; primary
enrollment rate; under-5 survival rate; and births attended by
skilled health personnel.
The ADB said these indicators
were selected to reflect people’s material well-being, health and
education. The indicators are also a mixture of both inputs and
results that satisfy certain criteria, such as availability of data
and statistical correlation with other development indicators.
In terms of life expectancy at
birth, the Philippines needs 151 years to catch up with
industrialized countries; adult literacy rate, 132 years; net
primary enrollment rate, 133 years; under-5 survival rate, 155
years; and births attended by skilled personnel, 241 years.
The study was based on data from
177 countries covering the period 2000 to 2007.
The ADB said there were factors
other than income that have an impact on a country’s standard of
living, including the basic services provided by governments in
health and education, and access to these services by the
population, which determines health and education outcomes.
“Countries whose performance in
standards of living is inferior in relation to their per capita GDP
do not have systems that promote the efficient delivery of services
in health and education. While economic growth is essential, it is
not enough to improve citizens’ well being,” the bank explained.
If growth was not enough, the ADB
said the government approach would be to increase public spending.
“More spending by governments can be crucial in promoting
improvements in health and education outcomes. For instance, policy
interventions to reduce mortality may require increased public
spending or, similarly, it may be necessary to spend more on
educational programs that aim to increase primary completion
rates.”
The report added that most poor
people do not get their fair share of government spending on public
services in health and education. “While increased public spending
is essential, it is not enough to improve people’s standards of
living. Rather, governments’ planning, delivery and management of
public services are major factors that determine progress in human
development.”
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