We can listen to and argue with ten different economists and get various reasons and analyze what ails the Philippine economy to death, but what matters more to me is figuring out how to get out of the boom-bust cycle that has characterized development efforts since the 1990s.
Speaking at the recent Dutertenomics forum, the words of Philippines finance secretary Carlos G. Dominguez are a fitting review of what has ailed efforts to jumpstart our economy:
“In the decades when we neglected our infra while our neighbors rapidly built up theirs, we lost out on competitiveness. For an archipelagic country, poor infrastructure is debilitating. It raises the costs of transporting goods between islands. That is the reason our food price regime is high. Our congested roads and ports discouraged investors who need to operate on just-on-time deliveries. Our high power costs and unstable supply discouraged investments in manufacturing.
If we examine all the reasons why the Philippines fell behind the other economies of this dynamic region, it has much to do with poor infrastructure. It is here where we should begin rebuilding our competitiveness.”
Clearly, our country’s infrastructure gap needs to be filled.
To be frank, infrastructure isnt just about roads and bridges and waiting sheds often used in the past to make government look good, it also includes reliable water supply and affordable electricity- important ingredients to whip up sustainable economic growth that creates employment and reduces poverty.
To be brutally honest, ASEAN’s top 5 economies Thailand, Singapore, Malaysia and Brunei have impeccable infrastructure that harnessed a high level of job generating economic activity that propelled their economies forward tjrough sustained growth while cutting poverty- this enabled their “break out” of he boom-bust cycles that plague ours.
Thailand makes almost all of our regions pickup trucks while Malaysia has a national car. Much of what they make and grow are consumed within their own country. Good infrastructure facilitated these.
Little wonder why in the last decade their poverty rates have fallen to single digits while ours has remained in the 22-25%.
This job generating growth that enabled these countries to avoid the boom-bust cycle cannot happen on good credit ratings alone- the investor looks for infrastructure to make his investment happen.
Its the time to build.
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