What They Don’t Tell You

2 Comments / crunching numbers, data, fact check, governance / By
Menu

What They Don't Tell You

…and why we need these “inconvenient truths”

May 15-19, 2023

Reader, if you want to know the real state of the nation insofar as our development is concerned, all you have to do is read the Philippine Development Plan (PDP) 2023-2028.*  Like its predecessors, it always starts with the base line – where the country is at the start of the Plan.  It also, of course, tells us where the country wants to be at the end of the Marcos Jr. Administration, as well as how we are to get there.

But whether we like it or not, the document is a government one, and there is always that desire to gloss over the unpleasant parts, i.e., those that have to do with government failures, and present things in the best possible light. The National Economic Development Authority (NEDA), is perhaps the government agency that is the least likely to be giving us this kind of snow job, but one can (at least I can) still tell when it is holding back, so as not to offend the bosses.

In any case, the PDP is about 460 pages long, and is not easy reading. I seriously doubt whether PBBM or, for that matter, any of the political leadership, have read it – and they will not be the first non-readers. Politicians generally think that they know-it-all already. 

Furthermore, PBBM apparently has a sunny personality and has a marked preference for good news. So do all of us, actually, but that should not extend to ignoring  unpleasant facts altogether, or we might be creating  a beautiful bubble that might burst and leave us with egg all over our faces, pardon the mixed metaphors.

It is also made clear, though, that the success of the PDP requires not only the whole-of- government, but the whole-of-society as well.  That means us, Reader.  So if we are to really get into this, to do our thing for our country,  so to speak, we must know exactly what we are up against, we must face some very unpleasant , inconvenient truths.  I will deal with what I consider  the most important of them, and I will use the four other members of the ASEAN-5 countries (Indonesia, Malaysia, Thailand and Vietnam) as comparators.

 The FIRST INCONVENIENT TRUTH is that the Philippines has the lowest GDP per capita among the ASEAN-5. This means  the Filipino people have less income than the people of either Malaysia, Thailand, Indonesia or Vietnam. 

But this was not always the case. Look at the  situation in 1960 (at this time, Vietnam was at war with itself, and  joined the ASEAN only in 1995)

Reader, you will note that the Philippines is the kulelat of the Asean-5. But you can also  see that there was a time (1960) when the country was number two only  to Malaysia, whose per capita GDP was only 12% higher than the Philippines’, instead of the 225%  higher that it is today ( 2021). Also, note that the Philippines had a higher per capita income than Thailand (37% higher) in 1960, while today its per capita income is less than half of Thailand’s.  And we had per capita income 90% higher than Indonesia’s, where today the situation is reversed, and Indonesia’s per capita income is 46% higher than ours.

Malaysia left us behind, and outdistanced us more and more from the very beginning.  Thailand caught up with us in 1983, when the Philippine economy collapsed due to its foreign debt crisis. Indonesia overtook us in 2003, while Vietnam overtook us in 2020 (these, in nominal terms)

Why did this happen?  Simple:  their GDP growth rates were higher than ours or the growth rates of their population were lower than ours (GDP per capita growth rates are equal to the growth rate of GDP minus the growth rate of the population).  And what are the factors contributing to the differences in growth rates between countries?  Sachs lists them as initial conditions , natural resources and geography, government policies/institutions, and demography. And you guessed it, Reader.  Government policies and institutions account for from 70-89% of the growth differentials between countries.  Which suggests that if we, the whole-of-society, want to help in this regard, we  get involved in government ourselves (barangay elections), and we choose our leaders more wisely. 

— to be continued – 

Read more:

* Philippine Development Plan 2023-2028

As I See It

The Official Blog of Winnie Monsod

4.5 2 votes
Article Rating
2 Comments
Inline Feedbacks
View all comments
Loreta perea

I agree.. the no 1 factor for growth is government policies and institutions. If only people are wise voters this could not happen.

0
MandaluyongCommenter

Hi Mareng Winnie, can you give a link for the source you based on from what you wrote:

Sachs lists them as initial conditions , natural resources and geography, government policies/institutions, and demography. And you guessed it, Reader. Government policies and institutions account for from 70-89% of the growth differentials between countries.  

I’d love to read Sachs’ work as well

0
%d bloggers like this: