Policy continuity is essential for economic growth

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Program continuity dominated the discussion at the Times Forum. From left to right, Manila Times Chairman and CEO Dante Ang 2nd, FINEX Chairman Michael Arcatomy H. Guarin, Nordic Chamber Executive Director Jesper Svenningsen, Italian Chamber CEO Lorens Ziller, President of the Davao Chamber, Dr. Maria Lourdes G. Monteverde, President of the Cebu Chamber Charles Kenneth Co, Alfredo E. Pascual, President of MAP, and Chris Nelson, Executive Director of the British Chamber. TMT FILE PICTURE

NO MATTER who wins the next election, business leaders hope the next government will continue many of President Rodrigo Duterte’s economic policies and programs. It’s not just what the business community wants. It is also vital to maintaining the momentum needed to achieve the long-term aspirations of Filipinos.

In a recent roundtable interview, Michael Guarin, President of the Financial Executives Association of the Philippines or Finex, said, “Just because there’s a new administration doesn’t mean we have to start from scratch. We know what things, what programs and what initiatives have worked. Let’s keep rolling them out.

These comments were echoed by the other guests, which included the Presidents and Directors of the Management Association of the Philippines or MAP, Cebu Chamber of Commerce and Industry, Davao City Chamber of Commerce and Industry Inc. ., the Philippine Nordic Chamber of Commerce, the Philippine Chamber of Commerce and the British Chamber of Commerce of the Philippines.

In particular, they wanted the Build, Build, Build infrastructure development program to continue. They said there was room for improvement, including in digital infrastructure, public health care, red tape reduction and education reforms to improve the productivity of Filipino workers.

Chris Nelson of the British Chamber said that in addition to the apparent benefits to the national economy, pursuing key policies and programs improves the country’s competitiveness. The others chimed in, pointing out that the Philippines competes for trade and investment with other Southeast Asian countries, including Indonesia and Vietnam.

Indeed, predictable policies can be more useful than effective policies. Vietnam, for example, has imposed many restrictions on foreign investment, yet it threatens to overtake the Philippines due to its faster rate of economic growth.

Even more difficult for foreign investors, Vietnam controls the repatriation of income. Still, that hasn’t deterred investors — including Filipino companies like Unilab, Ayala Corp., Universal Robina Corp. – to do business there.

Of course, many factors can be attributed to Vietnam’s success, but one underestimated factor is its consistent policies that make the business environment predictable. This is explained by the fact that the same political party has governed it since its independence in 1976.

Like Vietnam, China also has foreign currency controls that would normally put off potential investors. Of course, China and Vietnam are also communist countries that prohibit private property.

Yet investors are flocking to China. And like Vietnam, a party has ruled this country since 1949. Since then, economic policies have remained consistent, except, of course, when Beijing decided to open up and liberalize its economy. In addition, China’s vast market of around 1.4 billion people makes it a magnet for investors, but again, the contribution of consistent policies is also to be commended.

In contrast, the Philippines is known to change its policy every six years or after the end of each term of its ruler. Development priorities are known to reverse or drastically change direction after each administration. Often, even the sanctity of contracts is not spared. The purpose, broadly speaking, is to claim credit, which is important for building political capital, perhaps for future election campaigns.

Apolitical bureaucracy

The renewal of major economic policies will be a good start, but not enough. The next administration is also expected to strengthen bureaucracy by allocating more positions to civil service professionals.

This means reducing the number of political appointments to be made by the president. For now, however, it seems unrealistic for the president to cut his own powers. But it would create an institutional memory that would allow policies and programs to move forward effectively.

Of course, successive governments should also improve existing policies and programs. But the point here is that they should continue in the same direction.

The moderation suggested here not only demonstrates, to use a cliché, political will. But it also shows that the next president cares more about policies aimed at the progress and prosperity of present and future generations than about political interests.

As then-US President Harry Truman said, “It’s amazing what you can accomplish if you don’t care who gets the credit.”

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