As a foreigner student in Manila Philippines, I got many things about Philippines particularly the important information’s update to the study of problems of Philippines economic development. In my opinion the book is a comprehensive review of many things aspect of the Philippine economy mainly. Event, I do not know deepest that authors in this book but I believe that there are many authors within this book who are professional in their field respectively. The authors approaches are variously descriptive, analytical, interpretative, and comparative. Its aftermath made book excellently.
Arsenio Balisacan and Hal Hill divided their book in 4 part of study. Firstly, Setting the scene. In this part, there are 2 articles that are An Introduction to the Key Issues, the authors by Arsenio Balisacan and Hal Hill and Political economy written by Emmanuel S. de Dios and Paul D. Hutchcroft. Arsenio Balisacan and Hal Hill provided problems of Philippine development puzzle in their introductory chapter and assess some of the several attempts to solve it. The authors mentioned that there are 5 cautions or “A number of caveats need to be attached to this gloomy assessment” (2003:4). First, there was extensive wartime destruction. Many of apparently well-developed political, legal and bureaucratic institutions established in the wake of American colonial era had shallow roots and could easily be manipulated by powerful political-business oligarchs.
Second, The performance of the Philippines looks deficient partly because it is most often compared with its neighbors. Thirdly, it is important to emphasize that the really pronounced divergence in development performance occurred in the decade and a half from late 1970s until the early 1990s. “Philippines growth rates never matched those of the newly industrializing economies (NIEs), and especially from the late 1960s the country’s economy grew more slowly than those of major ASEAN neighbors” (2003:4-5). “But decennial growth comparisons reveal only a gradual divergence in the 1950s, 1960s, and even the 1970s” (2003:5). Finally, The Philippines weathered the recent economic crisis more successfully than most major Southeast Asian economies, For once, being the East Asian exception.
Furthermore, in this part (An Introduction to the Key Issues), They provide a broad overview of development record since 1980. Then, examining international and macroeconomic dimensions, trends of the sectoral level, and many socioeconomic indicators. On this sense, the authors state an assessment of the achievements failures of the post-Marcos period. Lastly, in section (1.4) Balisacan and Hal Hill returned to the larger question of why the Philippines have often underperformed relative to its obvious potential. In this regard, they proposed on three questions: What explains the Philippines indifferent long-term growth record? Why did it not receive a larger reform dividend from the significant policy initiatives that got under way in the late 1980s? And why was it able to come through the recent Asian economic crisis relatively unscathed? The writers concern that explained the last question because the second and third are arguably more straightforward with the other authors including in this book.
Surviving in Asia economic crisis the authors mentioned that two main reasons. First of all, Philippines was effectively excluded from international capital markets until 1992, excepts for inflows associated with the debt workouts. Beginning to emerge was the problem common to the crisis economies, of government attempting to peg the U.S. dollar, alongside which domestic currency interest rates exceeded those in international markets. Because of that there are many investor trusted with Philippines administration. With little perceived exchange rate risk, few foreign borrowers took out hedging. Second, the Philippines financial sector was in better shape than was the case in neighboring countries. The strength of banks is indicated by the fact that they were able to endure a sharp depreciation of the peso in the second half of 1997, a factor that was central to the financial crisis in neighboring countries. There was other contributing factor that is the strongest export growth of any crisis or near-crisis East Asian economy during 1998. Undoubtedly, the combination of sharp peso depreciation and an intact banking system contributed to this result.
The book proceeds smoothly to the chapter on political economy by De Dios and Hutchcroft. As I know through this part the author told us about the historical evolution of a national oligarchy and the weakening of political and government institutions regarding particularistic interests. The writers state “there is no size of government that is immune to damage from rogue elements thrown up by an unsophisticated political process. More fundamentally, therefore, it is essential to improve the overall performance of government, insulate it from the plunder of oligarchic groups, and promote new types of private sector initiative.” Specifically, the authors recommend strengthening the judicial and law enforcement systems and political and bureaucratic institutions. These improvements would address social demands for law and order as well as facilitate linkages between policy and implementation to meet the challenges of poverty and global competition.
Secondly, talking about macroeconomic policy and international dimensions. There are 3 topics in this section that Monetary and Exchange Rate Policy written by Maria Socorro Gochoco-Bautista and Dante Canlas, Public Finance printed by Gerardo P. Sicat and Rahimaisa D. Abdula, and the last is International Dimensions on paper Romeo Bautista and Gwendolyn Tecson. Personally, I am very interested to know regarding International Dimensions because International dimensions are one of aspects, which are the influences towards to get international trust. In this sense, the author premised that sustained growth of the Philippines economy could be achieved only if there is a wider sharing of the benefits of growth, arguably a necessary but not sufficient condition” (2003:136). Romeo Bautista et al (2003) when response a propos protection state “Protection is an inferior policy to one of production subsidies, and that subsidies should be directed to the source of the income gain-the upgrading of worker skills, for example, or the acquisition of improved technologies (2003:137). Meaning that the government is no need to protection market through subsidies to be many things but subsidies should be directed to the source that is to improve the worker skills.
The evolution of trade regime mirrors the general experience of developing countries that were slow to exploit the potentially large static and dynamic gains from foreign trade. The severity and protected nature of import protection policies adopted in the Philippines during the 1950s and 1960s led to a heavy bias against export production, penalizing agriculture, and labor-intensive industries, in which the country had comparative advantage. In the 1970s, selective export promotion not only favored large enterprises, the adoption of capital-intensive technologies, and heavy reliance on imported inputs, but also failed to compensate fully for the pervasive bias against exporting in the incentive system. The primary source of this bias was the highly protective tariff and import-licensing system, which was first addressed only in the early 1980s. Unfortunately, the major attempt at trade liberalization initiated in 1981 was thwarted by the foreign exchange crisis that began in August in 1983 and that resulted significantly negative growth of the Philippines economy in the following two years.
The authors mentioned that an important consequence of trade liberalization during the 1980s and 1990s has been the observed shift in FDI in the direction of increasing export orientation. Previous import substitution policies had effectively encouraged foreign capital to enter the domestic market with capital-intensive technologies and exploit the Philippine consumer with high-cost production behind the heavy protection provided by tariff and non-tariff barriers. For the future is that a major challenge for Philippine policy-makers is to continue moving toward economic openness while ensuring that complementary macro and sectoral policies conducive to broad-based income growth are in place according to the writers.
Thirdly, discussion on the sectors that are Agriculture written by Cristina C. David, Industry printed by Hal Hill, and Services explained by Ma. Joy V. Abrenica and Gilberto M. Llanto. On industry issue Hal Hill pointed out Rapid economic and industrial growth are of course largely determined by the same set of factors: good macroeconomic management, openness, sound and predictable institutions, an efficient financial sector, a reasonable measure of equity, good physical infrastructure, and a supportive external environment. Aside these, policies to promote rapid industrial expansion should be part of, and consistent with, an overall strategy of accelerated, equitable growth. There are three general sets of industry policy issues regarding role of the Philippines in free trade or trade liberalization, first, the incentive regime. In this regard, government’s Philippines focused on the forward reform momentum needs to be maintained, with continued lowering and unification of tariffs and the removal of remaining non-tariff barriers. Second is that Innovation and diffusion issues. The principal challenge is to maximize innovation and diffusion capacities, consistent with the country exploiting its comparative advantage in unskilled and semi-skilled labor-intensive industries. There are three explained to solve it. One elements of such strategy is an open policy toward the inflow of FDI and skilled labor. A second is stronger commitment to a high-quality public education system, particularly at the primary and junior secondary levels. Third, there may be a case for the government to support some R&D activities, but the more important strategy is encouraging domestic diffusion of public domain technologies. Finally is constraint to industrial growth. In this account, the most important contribution that the Philippines government can make to firms capacity to compete with international producers both at home and abroad is to ensure that the price, availability and equity of the requisite services are internationally competitive. These include domestic and international communication services, domestic and international shipping and civil aviation, airports and harbors, the domestic road network, financial services, the taxation regime, import-export procedures, and the general regulatory.
Finally, the last part is dialogue regarding social dimensions. Alejandro N. Herin and Ernesto M. Pernia pointed out Population, Human Resources, and Employment. On the second issue Arsenio M. Balisacan talking on the subject of poverty and inequality. Regional development is that as third topic in relation social dimensions written by Rosario G. Manasan and Shiladitya chatterjee. As the last concern on this topic that is Environment and Natural Resources by Ian Coxhead and Sisira Jayasuriya.
Individually, I am interested in Population, Human Resources, and Employment written by Alejandro N, Herrin and Ernesto M. Pernia. In my opinion, absolutely I believe that there is strong relation between population, human resources and employment regarding social dimension. In brief, If population in a country controlled by government, human resources will be easy to manage. Aftermath it is reducing that unemployment. Meaning that welfare state. On the contrast, if population growth is rapidly, human resources cannot competitive. As we know that absolutely the number of unemployment enlarge. The Philippines is facing these problems since 1930 in which the population has doubled thrice.
This book is a perfect literature on Philippine political economy. But, unfortunately, I have very limited capability to articulate my idea because of my English. I really appreciate for the author inside this book on their ability. I trust that this book is extremely worth not only for Philippine but also for the other country particularly developing countries.
No comments:
Post a Comment