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The ASEAN Summit, logistical nightmares, and the Phl regional lag

Annual ASEAN Summit meetings now involve the participation of the leaders of world economic and nearby powers. The 10 heads of ASEAN states are joined by nine other regional leaders. This is part of the globalization of economic relations.

The summit this year in Manila is also the 50th Anniversary of ASEAN, lending signal honor to the host country even as it only performs a rotational duty.

Expanded meetings. As host, our government appropriated large budgetary resources to make it a success. The summit meeting is essentially a conference of heads of states and their officials. Secondarily, it is an occasion for bilateral or small group official contacts.

In addition, however, the government encouraged the private sector to sponsor parallel activities. As a result, there were other meetings and conferences among private groups, businesses and think tank organizations.

Such occasions were used to undertake further explorations of issues and opportunities for the future among various development stakeholders in the country’s development.

Logistical nightmares and inefficiencies. Given the nature of the country’s overextended infrastructure facilities, the demand of such meetings on the existing capacity is massive, so that something had to give.

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Heads of states arriving at the same time posed the problem of security as well as flow of traffic. How could traffic be managed?

Using the lessons learned from the experience of the recent Asia-Pacific Economic Cooperation meeting held in 2015 (which involved the quick visits of as many heads of states) and the visit of the Pope in 2014, the government took draconian measures of discipline and sacrifice to implement the logistical plan.

A three-day non-working holiday for Metro Manila and outlying affected areas was declared. Government offices and schools were closed.

Clark airport in Pampanga was used as the arrival option for most of the arriving heads of state and traffic managers condoned an ASEAN lane to assure quick passage to Manila, while throttling traffic for the general public.

A grand tsunami of disturbance was the inevitable consequence.

The measures taken to impose discipline on the country’s traffic – probably inescapable and required because of our traffic gridlock – were severe. They resulted in momentary loss of business, work disruptions for ordinary workers and of essential government services that are already wanting.

According to current estimates, traffic congestions cost the nation P3 billion per day. These include costs to worker efficiencies and the rise in the cost of goods and services. Disruptions such as work holidays drive those costs higher. Hence the country becomes less efficient.

The expansion and modernization of the country’s transport infrastructure is a long-term cure. The bottlenecks in the transport grid, the lack of new capacity, the need for an efficiently run and extended mass transportation system for people to move efficiently is the need of the hour.

The sooner the government gets this program going, the better for all. Luckily, the government is addressing infrastructure programs as high priority.

Phl lags in ASEAN. Perhaps, it might be said, all these disruptions are momentary, they are worth the costs for the moment. Anyway, the nation is reaping benefits from our membership in ASEAN.

The message for us is to move our economic policies where we have lacked before. Looking forward, it is possible we can recover lost ground in the future. This means moving forward where economic policies still need to be adjusted.

The parallel private activities that are organized along with the ASEAN Summit meetings are designed to generate promotional outcomes for participating Philippine industries and products. Hope can be eternal and good results might arise.

In particular, Philippine benefits need to improve. If the results are mediocre for us, it is because of our policies. Our institutions are not maximizing the benefits of ASEAN for our country.

The reason is simple. In general, the countries that have benefited most from ASEAN – Singapore, Malaysia, Thailand, Indonesia and now Vietnam – have much more open economic policies than us. In short, they have less restrictive economic policies in matters that encourage trade and industrialization.

It is important to make a historical point that partly explains the Philippine lag in performance, a situation that has widened over the years.

Around 1981, Thailand was slightly ahead of the Philippines and the Philippines slightly ahead of Indonesia. Today, because of the persistence of high growth, Thailand has greatly advanced and Indonesia convincingly leads us in economic performance. 

Discontinuities in growth, political troubles, and inadequacy of relevant economic reforms on our part and, in contrast, their focused changes in critical economic policies have created the difference.

In part, this problem of resurgence of Thailand and Indonesia over the Philippines is partially due to international lack of support of the Philippines during a time of need.

When the Philippines was hit by political and economic crisis in 1983-84, the international financial community essentially stayed away.

In 1997-98 when Thailand and Indonesia were engulfed by the Asian financial crisis, the international financial community gave massive support to keep the two countries, as well as other countries affected by the crisis, financially afloat and capable of recovery. It liberalized its aid package with respect to fiscal and balance of payments needs.

Both Thailand and Indonesia recovered quickly. In contrast, the Philippines was essentially abandoned to itself in 1984.

Moreover, recent history of the Philippines and Indonesia showed a different treatment of their fallen leaders by their successors. Politics was a big difference.

When Marcos fell from power in our country, his immediate successors reversed and negated his legacy, among them, a nuclear power plant that could have saved the country from a major power crisis.

In Indonesia, when Suharto fell from power, his successors continued to honor his contributions to his nation and built on what he had left behind.

My email is: gpsicat@gmail.com. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/

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