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Monday, December 27, 2004
RP’s low survey ranking blamed on gov’t policies
* A ‘national shame’ if Bangladesh were to rank higher than RP, says local trade official
GOVERNMENT and private sector representatives were one in denouncing the policies that have caused the Philippines to slide in its competitiveness. And they made calls for swift action to prevent the situation from deteriorating further and bringing “national shame” to the country.
Department of Trade and Industry (DTI) Cebu Provincial Office Director Nelia Navarro lamented how the country has slipped from its ranking of second only to Japan in Asia in terms of economic structure just four decades back, to a dismal 52nd in the latest ranking of 60 economies by the World Competitiveness Yearbook (WCY).
“It will be a national shame if a country like Bangladesh will overtake us, and this is not a remote possibility,” she said during a presentation of the 2004 WCY results at the University of San Carlos (USC).
On top
The United States placed first in competitiveness in the WCY survey for 2004, followed by Singapore, Canada, Australia, Iceland and Hong Kong.
Taiwan ranked 12th, Malaysia 16th, Japan 23rd, China 24th, Thailand 29th, India 34th, Korea 35th and Indonesia, 58th. Bangladesh was not included in the survey.
The Philippine government is now struggling to provide basic services to the people amid falling revenues. And Navarro was blunt in exposing its weaknesses.
“Collecting from the big fish leaves much to be desired. And even the DTI is encountering difficulties because of the strategy to cut spending,” she said.
Mario Antonio Lopez, professor of the Asian Institute of Management (AIM), research partner for the study, said the Philippines had its strengths, particularly in terms of low prices and cost of living, employment growth, market size and high-tech exports.
However, he said this did not prevent the Philippines from ranking 14th among the 15 countries in the Asia Pacific region included in the study. Only Indonesia did worse, landing in 15th place.
“It is no consolation that we’re a lit bit better than Indonesia because the gap is closing. And it’s a matter of time before they overtake us,” said Navarro.
Five years
The Philippine economy grew 6.4 percent in the first half of this year, little comfort since the the competitiveness of the country has been falling for the last five years, since it ranked 35th in the year 2000 in the same survey.
The WCY ranking is based on 323 criteria grouped into four categories: economic performance, government efficiency, business efficiency and infrastructure.
Navarro pointed out that the Philippines ranked 52nd in institutional framework and business legislation.
“No wonder we’re getting the crumbs and not the technology,” she said, referring to the way foreign investors were preferring to put their money in other countries rather than the Philippines.
Arleigh Sitoy, mayor of Cordova, emphasized the big effect of government’s decisions on the economic fortunes of the people.
He said Philippine society is “deeply stratified, with a few rich who control everything, from shipping to transport, who have relatives who are in politics, so policies protecting the status quo remain.”
He urged the private sector to be more aggressive in transforming the country, and the government to step aside when it is not needed.
“Let’s govern least. We should impose less taxes, cut down on our expenses and let the private sector contribute in nation building,” he said.
Corruption
The municipal mayor advocated simplifying regulations and giving higher pay to government employees to curb corruption.
Theater operator Valer-iano Avila, on the other hand, lambasted government for charging high taxes on theater operators who, he said, have not gotten anything in exchange for this.
He said the 30 percent tax on gross movie ticket receipts is “still the highest tax in any business” in the country, and yet the government is not doing much to stop the film piracy that has caused many theaters to close.
Market
Francisco Largo, assistant professor of the USC Economics Department, said market policies do make a difference as shown by the examples of Korea and Germany, where the market-friendly part of these divided countries prospered better than the closed economies of their counterparts.
He also hinted that developing countries also tended to shoot themselves in the foot.
“Developing countries typically have high potential (because of the low capital base), but the returns of investors are not that high due to intervening factors.”
He did not specify what these intervening factors were. But the AIM’s Professor Lopez revealed that many of the policies of the Philippines, for example, actually contradict each other.
While outwardly, the government may be aggressively seeking investment, when the investors do arrive, they are skinned by corrupt officials who all want a piece of the action. (CTL)
(December 27, 2004 issue)
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