by Nicasio Angelo Agustin
I have heard the word “competitiveness” more than 100 times for the last 10 days and this pertains to the recently released results of some surveys on the competitiveness of countries and economies worldwide.
The most recent of these competitiveness indices is the World Economic Freedom which was released middle of January 2012 by the Heritage Foundation, a think tank in Washington and Wall Street.
The index rates countries in 10 categories – labor freedom, business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights and freedom from corruption – and the results are averaged to create an overall score.
In this index, the good news is that the rank of the Philippines improved from 115th in the previous year to 107th in the current year’s result; the bad news is that the survey covered 179 countries. On the whole, while the country is improving, it still belongs in the lowest 40% of all nations. To put it simply, 60% of all nations are better than the Philippines.
There are other measures of global competitiveness, such as the World Economic Forum (WEF) Global Competitiveness Report, the International Finance Corporation/World Bank (IFC/WB) Doing Business Survey, IMD World Competitiveness Report, and Future Brand’s Country Brand Index. In all these surveys, the Philippines is among those in the lower 50%.
Perhaps, it’s too much to expect the country to be in the top 30% or even in the top 50%. Those spots are most probably “reserved” for the bigger states, the more advanced nations, and the leading economies of the world. After all, we are but a developing economy (for a long time now!). How can we ever compete?
Then, with whom should we compare the Philippines?
Let’s take the ASEAN countries. The results are more disturbing. For the WEF and IFC/WB, we are number 7 out of 8 ASEAN countries in 2011. In both surveys, Cambodia (No. 8) was our saving grace. For the IMD, we ranked 5th out of 5 ASEAN countries covered by the survey!
Why do we have to compare our performance with other countries?
With these exercises, countries do not necessarily compete, as Krugman says. However, these indices of competitiveness show us where we are in terms of macroeconomic management, technological readiness, market efficiency for goods and services, and governance. In short, it gives us an idea of how good we are in handling the affairs of our country, how good we are in bringing about progress that is felt by everybody, how good we are in pursuing common development goals, how responsive we are to international trends, and how good we are in creating opportunities for investments and employment for the benefit of our people. They show us the reality, the relevance of what we believe are our achievements, and our status and significance in the global scene.
These indices provide an objective benchmark which we could use to measure whether we are good enough, good or not so good. Without an appropriate benchmark, our achievements in terms of economic growth, poverty reduction, employment rate, lower prices, higher wages, etc. could mislead us into believing that we have a strong economy.
Having seen our performance in these indices, what then should we do? While the results are quite disturbing, the right attitude is to verify and scrutinize the more specific sub-indicators of each of the indices and find out where we are lagging behind and do some things about them. Now is not the best time to ignore the facts. It’s not the time to challenge the methodologies. And it’s not the time to claim that we think we are better than what the results suggest.
Take an honest and humble position and embrace reality. By doing something with these realities, we do justice to those amongst us who badly feel such realities in their day-to-day existence. And it’s everybody’s responsibility to make them “competitive” as individuals, as communities, at par with their counterparts in some other parts of the globe.
