Here’s another reminder to the administration that while the country may have been doing relatively well economically in recent years, our neighbors are doing better. The World Investment Report 2013 released by the United Nations Conference on Trade and Development showed that in Southeast Asia last year, the Philippines lagged behind most of its neighbors in attracting foreign direct investment.
With “inclusive growth†the buzz phrase of the daang matuwid administration, more long-term FDI is needed to stimulate economic activity especially in the countryside and create jobs – the sustainable type that can encourage Filipinos to stop leaving the country for better employment opportunities overseas.
FDI especially in manufacturing helped power China’s phenomenal growth in the past three decades, lifting millions of its people from poverty and making it overtake Japan as the world’s second largest economy. Even Myanmar is seeing the light, opening up to the world and reaping the benefits. According to the UNCTAD report, Myanmar drew $2.24 billion in FDI last year, nearly equaling the Philippines’ $2.79 billion.
The amounts are paltry compared to Singapore’s hefty $57 billion in FDI. But never mind Southeast Asia’s perpetually overachieving city-state. Countries closer to the Philippines in the level of economic development also did better in 2012: Indonesia attracted $19.8 billion in FDI, Malaysia drew $10 billion and Thailand $8.6 billion. Vietnam was way ahead of the Philippines with $8.3 billion and even Cambodia closed in with $1.55 billion.
What are other countries doing better than the Philippines? Most of the factors have been enumerated over the years by investment groups, with the Philippine political leadership nagged about the necessary reforms.
The country has a skilled workforce, rich natural resources, and infrastructure that while inadequate is still much better than Myanmar’s. What has always been lacking is the political resolve to implement reforms, mainly because the changes will hurt vested political interests. The Aquino administration can still make a difference, building on the nation’s strengths and recent economic gains. In global competition, there is no room for smugness.