Thursday, November 06, 2008 Countries with huge population can survive global financial crisis
A COUNTRY with a very large population can tap its human resources to survive a global crisis, an economist said.
When a country’s export sector is not performing well due to the economic slowdown in another country, it can turn to its huge internal market to sell its goods and services, said economist Bernardo Villegas.
Villegas said it is wise for a nation to have a “double-track strategy” that involves the export industry and the domestic market.
“You can always play with one or the other, depending on what is happening with the world economy. A large population is a tremendous advantage because a country already has an assurance in the ups and downs of the international market,” he told participants of the economic briefing organized by the University of the Asia and Pacific (UA&P) last Tuesday at the
Casino Español.
Philippines, with its more than 90 million people, has been identified as one of the next 11 emerging engines of growth in the world. The other emerging economies include Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, South Korea, Turkey, and Vietnam, which have populations of at least 50 million.
Villegas said that the 11 countries have the potential to eventually compete side by side with Brazil, Russia, India and China—which are all identified as emerging engines of growth that are gradually eclipsing traditional engines like the United States, Europe and Japan in terms of sales of goods and services.
When asked for his view on population control, Villegas said that “so much can be done to increase resources (like micro-credit and socialized housing) in order to alleviate poverty than to be obsessed with condoms and other methods of birth control or to blame unborn babies for (our) poverty.”
He cited Singapore’s aggressive campaign to increase its human resources after 20 years of population control and China’s one-child policy, which could hamper its growth.
But a country should not depend on its large population for growth, especially during a global crisis.
Villegas asked the briefing participants to look at India, which has “bureaucracy, corruption and poor infrastructure like the Philippines.”
But India, he noted, is performing very well with its 1.1 billion population, high demand for domestic services and export-oriented information technology and business process outsourcing businesses.
“So corruption is not an excuse. One contributor to India’s performance is its tremendous entrepreneurial spirit. And this is my campaign in the Philippines—to have many entrepreneurs here,” he said.
He added that one factor of the high growth rate of Central Visayas, which is 8.7 percent for 2006-2007 (the second highest among the regions during this period), is its large pool of entrepreneurs, like the Cebuanos.
The domestic market and the “entrepreneurial challenge” are among the trends that will continue in Asia in the next three years, regardless of what will happen in other economies, he said.
Other trends include the predominance of China in manufacturing; growth in intra-regional trade, especially between the Association of Southeast Asian Nations (Asean) and China, as well as between the Asean and India; outsourcing of manufacturing and services to Asia; focus on agricultural productivity in Southeast Asia; and emergence of micro, small and medium enterprises, among others. (NRC)
