Economic boom, then bust

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Friday, May 23, 2014


WHEN foreigners say it, should we listen?

There seems to be much love for the Philippines in the World Economic Forum (WEF) that, and I would also like to stress this, the country is hosting. WEF even had a session that discussed the Philippines’ tag as the “Next Asian Miracle.”

Of course, sober-minded economic observers clarify that the Philippines is not yet the “Next Asian Miracle” although it has the potential to be one. Among the concerns that need to be addressed are the countries fractious politics, government’s inconsistent policies and the sad state of our infrastructure.

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But there’s no question that our economy is on the upswing under President Noynoy Aquino. Our economic growth has outpaced those of many other countries in Asia. I would say, though, that this isn’t the first time our economy seems to be on the verge
of flying.

No wonder Group Malaysia CEO Karim Raslan, a WEF participant, zeroed in on the uncertainties in our political setup.

"We do have a very positive momentum in the Philippines for the past two to four years," he was quoted as saying. The problem is if this can be sustained after 2016 when a new president is elected.

The label “Next Asian Miracle” is not actually far from “Asia’s Next Economic Tiger” that the Philippines was touted under the administration of Fidel V. Ramos. The FVR government, which succeeded the tumultuous rule of PNoy’s mother, Cory, in 1992,
steadied the country’s course and led its economic growth and expansion.

In 1997, or the year before Ramos’s term ended, the Asian financial crisis struck. The country’s attempt to rebound from the crisis was disrupted, however, by the assumption in 1998 of what turned out to be an inept and corrupt government of Joseph “Erap” Estrada.

Erap was eventually ousted from the presidency through the Edsa 2 revolt in 2001 and was succeeded by Gloria Macapagal-Arroyo (GMA).

We already know what happened in the nine years that Arroyo was in Malacañang (she got a full six-year term when she “won” the 2004 polls). Impunity ruled and she is currently facing plunder cases.

The economic “boom” under FVR’s six-year term was replaced by the busts that were the Erap and Arroyo administrations from 1998 to 2010.

Which brings me to Ferdinand Marcos Sr.

The Philippine economy was considered the most progressive in Asia, second only to Japan, in the 1950s and the early 1960s. Growth was erratic, but it wasn’t a bust.

An Asian Development Bank study titled “Philippines: Critical Development Constraints” noted that in that period, the country had “one of the highest per capita gross domestic products in the region—higher than the People’s Republic of China, Indonesia and Thailand.”

Marcos would become president in 1965, was reelected in a rigged election in 1969 and declared martial law to skirt the term limits in 1972. Marcos’s rule was known for its profligate spending, unrestrained foreign borrowing and unprecedented public funds thievery.

After two decades (Marcos was ousted in 1986 through Edsa 1) the Philippines had become “the sick man of Asia.”

Considering history, the 2016 presidential elections are crucial for the country. We need a president that can sustain the momentum of economic growth not only through sheer ability but also because of his/her incorruptibility. Note that part of the growth we are experiencing is being propped up by the perception that the government is bent on limiting instances of corruption in or totally eliminating it from the government bureaucracy.

(khanwens@gmail.com)

Published in the Sun.Star Cebu newspaper on May 24, 2014.

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