I WAS browsing around the internet at the weekend doing a bit of research for a talk I am to give later in the week when I came across a most interesting survey by the World Bank, the Enterprise Survey—“what businesses experience.” The Philippines is there along with 123 other countries and reflects the results of interviews with owners or senior managers of 1,326 firms. It contains a wealth of data on all facets of the economy.
A measure which stood out was that in the Philippines the value of a “gift” necessary to get a government contract was 16.8 percent of the contract value, lower than sometimes reported but much higher against a regional Asia Pacific value of 2.5 percent and a world average of 1.8 percent. The stated value in the Philippines was higher than any other country surveyed. Having started off with negatives, there were some bright spots—getting a water connection was one, where only 7.4 percent of firms had to provide a “gift” compared to a regional average of 24 percent and a world average of 15.6 percent. Another criterion against which the Philippines did well was the percentage of firms identifying an inadequately educated workforce as a major constraint—only 7.8 percent against 20.7 percent regionally and 24.4 percent internationally.
What, however, makes me realize that such surveys require very careful use is the percentage of annual sales lost due to electrical outages. In the Philippines 0.8 percent it says, regionally 1.7 percent and worldwide 2.5 percent. Energy Regulatory Commission regulations allow 2,700 minutes per year as an acceptable level of electricity outages over 20 incidents. In the United Kingdom, outages are 90 minutes a year over 0.8 incidents and in the United States, 240 minutes a year over 1.5 incidents. Of course, “worldwide” will also include Africa where many countries such as Mauritius have nearly 3,000 outage incidents a year, or Uganda where 10 percent of annual sales are lost due to electricity outages.
So what can we make of all this? My take is that it is not particularly helpful to draw inferences from the performance of the Philippines in comparison to worldwide results, the results of the advanced economies or for that matter the struggling third world. Valid holistic comparisons have to be made against countries which are at about the same stage of development as the Philippines. On the subject of electricity and some other criteria, Mexico is a reasonable comparator; population is about the same (Mexico’s is about 10 percent more than the Philippines), historical linkages with the Philippines, a similar colonization story and religious focus.
The GDP of Mexico is $1.26 trillion and that of the Philippines is about $272 billion, or about 22 percent that of Mexico. It may be expected therefore that Mexico can afford a better infrastructure than the Philippines, and indeed it seems to do better with electricity. The average Mexican uses about 1,800 kWh/year compared to his Filipino counterpart’s 620 kWh/year. This may be due to the cost of electricity in Mexico being $0.10/kWh and in the Philippines being about $0.25/kWh. Mexico generates about 296 billion kWh/year compared to the 67 billion kWh/year generated by the Philippines. But against that, the number of firms identifying an inadequately educated workforce as a major constraint is 30.9 percent.
Comparatively, therefore, the Philippines scores well in some areas and poorly in others, as most places do. If I had wanted to be sensationalist I could have written this whole column majoring on either the Enterprise Ranking for the value of gifts to get government contracts, or the low electricity utilization. Sensationalism can be positive or negative and how else but through the media, including social media, can such sensationalism be broadcast? The international media stopped providing videos of ISIS beheadings, no video was available anywhere of the fate of Alan Henning (thank goodness), and since then there have been no more. Terrorists publicize terrible acts in order to terrify, and it works if the media allow it. The media can be used with devastating effect to influence public opinion, and the Chinese government through its Xinhua news agency, knows that very well with 20 or 30 different newspapers and TV channels all giving the same opinion.
The flames of some of the political goings-on around here recently are fueled and fanned by the media. Perhaps if they were covered in a more objective manner rather than the partisan way in which coverage happens, then the politicians would be able to spend more time attending to the needs of the nation?
Mike can be contacted at email@example.com.