Philippines in the new East Asia context

Posted at 01/29/12 11:18 PM

This year, I had the honor of being invited as a Young Global Leader (YGL) participant to the World Economic Forum in Davos, Switzerland.

The World Economic Forum is undoubtedly, the most high-profile, most covered yet exclusive conference in the world – only 2,000 participants are invited to attend the annual gathering – ranging from heads of state, prime ministers, the world’s royalty from kings & queens…down to their heirs, influential politicians, nobel laureates, academicians, advocacy leaders, social entrepreneurs and not to mention, famous celebrities.

Imagine, in this one conference….

Federal Chancellor of Germany Angela Merkel, United Kingdom Prime Minister David Cameron and Canada Prime Minister Stephen Harper each separately addressed the plenary but had one message: the world economy is in trouble and that action must be taken. But the nagging question on everybody’s mind was how to do it? Bailing out bankrupt economies? Ending the social welfare system and getting countries to be more economically productive? To keep and scrap economic unions like EU?

Microsoft founder Bill Gates spoke on health & chaired another session on G20.

Chelsea Clinton moderated an event on E-Philantrophy.

The revolutionary Nobel Laureate Muhammad Yunus of the Grameen Bank gave his insights on his breakthrough idea on the power of youth to transform society through social business.

French director Luc Besson taught a session on the power of film on how it can be an agent of change, Japanese actor Ken Watanabe spoke on the power of storytelling…famous authors Paolo Coehllo and Rick Warren, even Mick Jagger dropped by in a few YGL parties and danced with some of us, including me! Only in Davos.

Apart from Europe’s spreading economic crisis, there was discussion also on China’s emergence as the new economic power – eclipsing the United States – or if the European contagion will impact on China.

But in all these discussions - how does a small developing nation like the Philippines fit in all this?

With no representation from the Philippine government this year, the Philippines was surprisingly discussed in “The New Context in East Asia”, one of the sessions moderated by Senior Research Fellow Stephen Roach of the Jackson Institute for Global Affairs & Yale University.

One of the distinguished panelists, Karim Raslan of the Global Agenda Council on South-East Asia says the Philippines will be a serious player in Asia in the next few years, “The Philippines has a new president, Noynoy Aquino. The Philippines is the next growth story in the next 10 years, you see some investors in Indonesia already leaving and moving to the Philippines”.

Raslan cites one important but often neglected quality necessary for economic growth – and tha, the says, is honesty. “Honesty in a leader is important. In Indonesia we’ve seen leaders immune from prosecution, but in the Philippines – when you’re out of office there is (prosecution)”. Clearly referring to experiences of former President Joseph Estrada and now Gloria Arroyo, Raslan laughs, “now I don’t know…some might say that’s a good thing or a bad thing”.

I think it would’ve been a plus if President Aquino came & gave a session on “Good Governance equals Good Economics”, an agenda he’s been trumpeting, which could’ve signaled how doing business with government has changed.

It’s something, he says, Malaysia can learn from. With elections coming this year, Raslan adds, its important to address deep-rooted problems like corruption, “we put off economic reforms”

But when I asked Raslan to enumerate on some immediate economic growth areas, he was quick to say – focus on creating jobs & tourism, “the much controversial Open Skies policy is critical in encouraging tourism, the Philippines is a good tourism opportunity, it’s the closest to China and that’s a huge market to tap. I think Bohol can be the Bali of the Philippines”. I found this to be quite interesting, given a random poll in Davos – most of foreigners I had spoken to either traveled to Thailand, Hong Kong and Singapore – and the main reason? Simple. Direct flights to all these destinations.

Raslan also cited the Philippines overtaking India in the BPO industry, “BPO has transformed middle-class lives, good area for growth”. Mining, he admits, is a big potential source for the Philippines, but given climate change & more storms, “it's imperative that mining be worked down in a regulatory framework, you can’t turn the clock back on progress, but strict measures can be put in place”

Chang Dae-Wan, panelist & Chairman of the Maekyung Media Group from Korea says trade among Asian nations is key to each one’s growth, including the Philippines. “it is important for most Asian countries to unite economically, without excluding the European union. The west can’t get its act together, there's opportunity in crisis – the current crisis can make for greater integration in Asia”

Which is why, Raslan ends, “the Philippines needs to know more of Asia, and not be America–centric”.

Most Asian countries are having partnerships - Thailand going to Korea to learn anti-flood methods, Korean grid wanting to connect with the Japanese grid, Asia “credit rating companies” and the Asean 10 (our version of the European Union) are now the subject of talks. With China’s growth pegged at 9.2% and even if it turns out smaller, they’re financially stable enough to pump prime it, Asia is clearly where the growth is and the Philippines needs to be part of these partnerships.

HSBC recently projected that by 2050, the Philippines will be the 16th largest economy in the world, the reason being – sound economic fundamentals, rising income per capita, improved rule of law, stronger democracy and rising education.

Raslan sees this as possible, “good policy decisions will soon trickle down to the Filipino masses…in small increments….and to Filipinos, don’t be too negative, you’ll see it”.