There appears to be a widely held belief by foreign financial analysts that the Philippines has pulled off some form of economic miracle over the past few years.
Looking at the facts “on the ground,” one sees a situation of continuing high levels of unemployment and underemployment, lack of opportunity, and in common with much of the rest of the world, an ever widening gap between those who have and those who have not.
As I have written before, the Philippines economic miracle is a result of fiscal measures, which could have been designed specifically to underpin a claim of economic progress in order to attract investment.
To a point this has had some success, there has been more foreign interest in investing in the Philippines and the local capital market has been and continues building things like mad. The government is not short of money but seems very reluctant to spend it; possibly another aspect of the “economic miracle.”
Even now, though, with positive reports from foreign analysts and a capital-spending boom in the Philippines, there is little investment that will create long-term employment, greater opportunity and domestic technology development. There is still a continually growing (about 2 percent per year) exodus of skills from the Philippines to seek work elsewhere in what is becoming an extremely uncertain employment world, and overseas remittances continue to be a main contributor to the national economy, providing about 10 percent of GDP.
Regardless of the real economy in terms of jobs and opportunity, the state should leverage the foreign perceptions of the Philippines economic miracle in order to attract industrial development, job creation and technology growth, and given the increasing costs of production in China, still the “factory of the world,” now would seem to be a good time in which to do it.
So many Filipinos would prefer to use their skills at home rather than in foreign countries, many of which in the Middle East, in particular, are having problems of their own, thanks to what now looks like a continuing, dramatic fall in the price of oil and other basic commodities.
The world economy is in a bit of a mess thanks mainly to neoliberal policies and the control of the financial sector. For sure, the consumptive requirements of the 1 percent at the top will not provide employment and decent lifestyles for the other 99 percent. Quite obviously the money needs to be spread around in a more egalitarian way.
Now must be the time for the Philippines to industrialise, regional competitor costs are rising, commodity prices are low, there is a wealth of skilled Filipino labour and the Philippines is being portrayed as an economic success, a good place to invest. The export zones do their bit but that contribution is clearly not nearly enough to absorb the job needs of a population of over 100 million.
It looks as if properly handled this could be a time of great opportunity for the Philippines, if only the business environment could be made more welcoming. It is ironic that a state is managed in such a way that its citizens are forced to leave the country in order to achieve a reasonable quality of life. There are, indeed, lots of jobs in domestic construction now, but this is short-term, irregular employment which does little for technological skill development and whatever skill enhancements Filipinos learn from working overseas cannot be readily put into practice in their own country.
Get the steel industry going again, make mining move, attract some car manufacturers to set up complete plants, get the garment industry revitalized, get major electronics manufacturing companies to set up big facilities, get some petrochemical investment. So many things could be done to industrialise the nation and provide decent work, which will not trespass on the markets of local big business.
All that is needed is a will to make the place less difficult to set up and operate a business, and if enough is made to happen, then even the much needed hard infrastructure will come, too.
Mike can be contacted at email@example.com.