Wrong economic direction

(The Philippine Star) - May 18, 2021 - 12:00am

I can’t help but react to what some economic soothsayers might be luring us to, no matter how well meaning. In a recent report, Moody’s Analytics suggested the optimistic direction for countries in the East Asia and Pacific region like the Philippines to go into the growing worldwide global tech and electronics industries. Seems logical. Singapore, Hong Kong, China and others are progressive and bursting at the seams in such industries.

We can remember that we had a similar bright opportunity in the 70s when we were next only to Japan in our economy. We were then assembling cars and producing parts. We were the darling and superstar in the region. Not only did we stagnate through martial law and post-Edsa years, we were overtaken by nine other nations and became the “kulelat” in the region. Our mass poverty index was more than 46 percent in 1985 and now still hovers around at least 20 percent of the 110 million burgeoning population.

It is good to think and dream we can be in the techno industry, like Hong Kong or Singapore. Reality and logic, however, tells us our educational system does not have the foundation for that. In fact, the World Bank recently came out with an assessment, and I quote: “…the quality of schooling is low, such that children who attend 12.8 years of schooling in the Philippine system learn as much as a child in a high-performing system learns in 8.4 years. Boosting learning will require following through on plans to improve teacher training, instructional materials, curricula.” (Systematic Country Diagnostics of the Phils.” WB-IBRD 2019)

In Moody’s assessment our top export was electronics amounting to $36.98 billion last year. Moody’s added, however, that we mostly assemble and test lower value microchips, while Singapore and Malaysia have semiconductor fabrication factories. In other words, we just import and process intermediate inputs for them, which are re-exported with scant value added. Haven’t we noticed that we are known to be one of the biggest users of the internet in the whole world and yet we have not produced a single cell phone unit, much less a prototype computer of our own?

We must realize that our country, unlike Hong Kong and Singapore, is endowed with enviable natural resources and is agricultural-based. It is a mismatch for the country to go for electronics production. We lack the proper educational foundation for that. At the most, we are content to be assembly plants for the exporting countries and their business process outsourcing (BPO) center because of cheap labor, instead of developing our agri-products.

We are endowed with lush and fertile lands and can produce and process superior products. Yet, we import rice from Thailand and Vietnam because we have relegated agriculture to the back burner. The reality is that the electronics business is not a match to the resources and capabilities we have as a nation.

Our economic planners and national leaders should really do some hard thinking on what is good for this country. – Marvel K. Tan, marvelktan@yahoo.com

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