Aired on November 1, 2010
Narration by RG Foncardas
Towards Building a Country: Investment Policies
In a column published shortly after President Benigno S. Aquino’s inauguration, economist Solita “Winnie” Monsod cited the challenges that the new president has to face. The growth of the Philippines’ gross domestic product has slowed down compared to our population growth. More people became poor between 1997 and 2006, and perhaps later figures will show equally disturbing results. More importantly, we are failing to meet several of the Millennium Development Goals, including infant mortality and poverty reduction.
Such challenges mean that the new President faces an uphill battle when it comes to dealing with poverty and social inequality. One way of doing this is to promote a more balanced economic investment policy.
The President’s inaugural address gave hints as to what he would do. He promised to get rid of red tape, meaning that it would be easier to set up shop. Government would be an enabler, not a hindrance, to business. His government would be “investor-friendly.” At the same time, he made clear that he would ensure jobs were created here so that people would not need to go overseas.
We welcome these steps, because foreign and local businesses, especially entrepreneurs, would face fewer barriers in beginning their businesses. Any way we can end the social and familial consequences of the OFW phenomenon is something we should encourage.
Aside from the need to stimulate business in the country, there is the need to address the severe decline in our agricultural and industrial industry. Factories have been closing because other countries can do the work we do with lower labor costs. We import more rice than we produce, even if innovations in rice farming took place on our shores. Our manufacturing sector forces us to be more dependent on imports, and less on developing goods for our own use. Hence, the government should re-examine our current investment priorities with imagination and a view to sustainability and a degree of self reliance.
While it starts at the top, a good investment policy works on the ground. Much of the work of launching businesses takes place at the local level. More than 90% of our businesses are small and medium scale, which need much support. Investment policies at this level can rapidly increase employment and maximize an area’s human resources. Starting from the bottom and prioritizing the scaling up of the businesses of our entrepreneurial poor might very well be part of the answer to our national investment problems.