As a fast growing nation, the Philippines has gone far beyond the need to just maintain the status quo for our economy. The oft-repeated new mantra of the times — inclusive growth — is the direction the economy must take or the sitting government becomes irrelevant in the eyes of its people. The rapid changes in the way people live, work and play at breakneck speed make it compelling for the country’s political and business leaders to ensure that the economy gets on the bandwagon called the Fourth Industrial Revolution.
In the adaptation of The Fourth Industrial Revolution, 2016, by World Economic Forum (WEF) founder Klaus Schwab’s, the WEF clearly defined what is now happening in the world. “This global transformation that is characterized by the convergence of digital, physical, and biological technologies in ways that are changing both the world around us and our very idea of what it means to be human. The changes are historic in terms of their size, speed and scope.”
The bottom line is that individual economies must open up while maintaining a clear sense of stability on the domestic front in order to compete in the global arena, and the Philippines is no exemption.
In its Global Competitiveness Report 2016-2017 released last week, the WEF said it has found that declining openness is threatening growth and prosperity, and that monetary stimulus measures such as quantitative easing are not enough to sustain growth and must be accompanied by competitiveness reforms. “For emerging economies, updated business practices and investment in innovation are now as important as infrastructure,” it said.
Citing recent reports on global competitiveness, the WEF noted “… an open, trading economy generates incentives to innovate and invest in new technologies because firms are exposed to competition and new ideas and can benefit from the technology transfer that comes from imports and foreign investment. At the same time, firms can benefit from larger markets abroad. However, the benefits of openness are at risk: protectionist measures, especially non-tariff barriers, have increased and global trade has not recovered since the global trade slowdown following the financial crisis.”
Even if the Philippines slid by 10 notches to 57th place in the latest WEF Global Competitive Index, from 47th last year – the first time the country dropped in the rankings since 2009 – the WEF’s competitiveness was quick to point out its real index score was down a mere 0.03 to 4.36 from 4.39.
The Philippines is not alone, with the competitiveness gap in East Asia and the Pacific widening in some of the larger emerging markets in the region. Malaysia has fallen seven places out of the top 20 to 25, and Thailand has slipped to 34th from 32nd. Even though the Philippines dropped in the rankings, the WEF emphasized that the country, along with China and Cambodia, has remained one of the improved economies in the region since 2007.
“A consistent theme for … the region’s developing countries is the need to make inroads into the more complex areas of competitiveness related to business sophistication and innovation if they are to break out of the middle-income trap,” according to the WEF.
Simply put, it is imperative for the economic managers of the Duterte administration to really work hard as though his six-year term is coming to an end and there is no time to waste before the targets of the reform agenda are achieved.
Semantics in praise releases will not spur the country out of the flat zone in global competitiveness, only honest-to-goodness hard work is what Filipinos deserve from people in public service, particularly from the President’s economic managers.