GLOBAL DEVELOPMENTS PROVIDE GOLDEN OPPORTUNITY FOR THE PHILIPPINES

March 16, 2018

Quick Glance

  • Independent Foreign Policy has already led to successful projects including people-to-people, business-to-business, and organization-to-organization cooperations. 

  • The media play a vital role in highlighting the constructive and practical approach in foreign policy among the public.

  • People profit from peace rather than conflict, and innovation, cooperation, and entrepreneurship.

As the global political economy continues to change at an unprecedented pace, an internationally recognized expert of the multipolar world economy, Dr Dan Steinbock forecasts the Philippines could become a bright spot in the world if the government’s efforts on independent foreign policy and inclusive economic development can be achieved. The risk factors involve potential external and/or internal efforts at destabilization.

 

The new world order calls for stronger national economies as forces of globalization wane and mature economies seem to be unable to overcome secular stagnation. The Philippines 6.9% growth surpassed all estimates; it is faster than that of most large emerging economies, not to speak of major advanced economies. The country was recently also ranked as the top market to invest.  This is the confluence of factors resulting in Asia’s growth dynamism and President Duterte’s “people-first” economic reforms.

 

Global headwinds such as the US pushing for more tariffs, cutting $285 million UN contribution plus $70 million from the UN Relief Agency (which funds schools and clinics) and withdrawing from the Paris Treaty demonstrate US willingness to move unilaterally, even at the expense of world trade, stability, and security, whenever these do not suit the “America-First” model.  As such, other countries are well-advised to review and recalibrate their traditional dependency on the US for their own national interest.

 

As the US focuses on an “America-First Policy” and China steps in an increasingly important role in global governance, the Philippines stand to gain with being friends with all partners.  Indeed Duterte’s inclusive economic growth policy is predicated on an independent foreign policy that seeks to reduce excessive reliance on traditional Western powers and to diversify relations with economic partners that enjoy more sustainable economic growth prospects, such as China and ASEAN.

 

“The key is to work with various partners that can contribute to the betterment of the Philippines and lives of the Filipinos... and just like running a business enterprise, working with various suppliers is a key ingredient to success,” according to IDSI President George Siy.

 

Duterte pivot has already delivered early achievements.  For instance, the Philippines has rebuilt positive relationships with traditional and emerging major powers that have led to new opportunities for Filipino OFWs, entrepreneurs, producers and consumers. 

 

The Philippines is now more attractive for foreign investors.  For instance, after China’s pledges of economic assistance and investments, other countries have followed suit, including Japan, from around $2 billion in 6 years under the former administration to $12 billion in 1 year under Duterte. The country is also attracting Singaporeans, Malaysians, even USA to invest more.

 

Indeed according to the IMF, under the Duterte administration, foreign investment flows increased which tends to reflect longer-term interest by multinational corporations. It brings jobs and capital and is far less erratic relative to financial flows. It seeks stability. 

In contrast, under the previous administration, portfolio capital inflows increased dramatically, while foreign direct investment was negative, which reflects short-term interests by foreign financial interests. Portfolio capital flows are fickle, can cause dislocations and have little loyalty to markets they seek to exploit, Dr. Steinbock explained.

 

With China alone, the Philippines saw the increase of agricultural purchases up to $1.5 billion (biggest challenge is our Filipino farmers ability to produce more), access of fishermen in the Scarborough Shoal, the settlement of $100 million debt, an increase of almost 1 million tourists and other financial grants and investments.  These benefits directly accrue to the Filipino farmer, fisherman, and tourism entrepreneurs, among others.

 

China-led Belt and Road Initiative (BRI) aims to invest $1 trillion in infrastructure projects in sixty countries.  In the past half a century, the World Bank, the International Monetary Fund, and the Asian Development Bank have dedicated inadequate attention to infrastructure needs in emerging economies, particularly in Asia. In the past two decades, major advanced economies have been embroiled in costly efforts rather than economic development.  

 

In contrast, China-supported initiatives - from the BRI to the Asian Infrastructure Investment Bank (AIIB) - are funding large-scale infrastructure projects like the building of roads, bridges, airports, and irrigations including standards, logistics, products and customs harmonization. These are the kind of initiatives that the Philippines could and should take advantage of, according to Dr. Steinbock, whose advice is sought after by governments and multinational corporations in the USA, Europe, and Asia.

 

MANUFACTURED CONTROVERSIES

Manufactured controversies are threatening the economic growth in the Philippines, cautioned international economic strategist Dr Steinbock, founder of global advisory firm DifferenceGroup.

 

Too many negative Philippine news stories that claim to be neutral come from think tanks that are funded by other governments.  Case in point is the repeatedly-quoted article by US-analyst Anders Corr, a former Forbes contributor who made “gross misrepresentations” in his debt assessments of the Philippine economy, which has since been proven to be egregiously erroneous by Budget Secretary Benjamin Diokno and Trade Secretary Ramon Lopez. Diokno, a Professor Emeritus of the University of the Philippines, even suggested that Corr would have flunked the basic economics class.

 

A quick search would have exposed Corr’s links to various agencies associated with the US Department of Defense, as well as secretive assignments in Iraq, Afghanistan and other war theaters.
 

The Philippine media and public needs to be critical in assessing the accuracy claims of those interests that create “manufactured controversies” against the Philippines, advised Dr. Steinbock. 

 

GLOBAL CONTEXT

Fast developing countries can assume debt as long as projects are being done because it makes the economy more dynamic, creates more jobs.  “Infrastructures lead to faster and cheaper transport of goods, lower costs of doing business, higher standard of living for the people,” industry-business leader George Siy explains.

 

Never have the opportunities been closer, larger, more diverse, or the means to achieve them so easily within our reach…

Relationships will always have obstacles… but we must not only be resilient but entrepreneurial, creative, and work for the collective good.”

IDSI offers programs and seminars cooperations with organizations with the aim to help Filipinos learn more about practical, implementable, and multi-dimensional frameworks for success. 

 

For more details, please email idsicenter@gmail.com.

 

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