An agenda of economic growth and development for the next administration

Here is a program for the next administration to support the recovery and accelerate economic development:

1. Strengthening the health system

The pandemic has highlighted the need to invest more in quality health care to create greater resilience once shocks have been suffered. The government must develop long-term plans and strategies for the health system so that it emerges from the crisis stronger than before. It is expected to foster closer public-private collaboration to bring innovations to the health sector and further develop the country’s health care infrastructure. In addition, it should increase investment in human capital, especially in doctors, nurses and other health professionals. The universal health system must be overhauled. The use of digital and IT systems should be encouraged to make health services easily accessible, especially in remote areas.

2. Modernize and boost agriculture

Low labor productivity has affected the agricultural sector due to inefficient production methods, small average farm size and low investment in the sector. Property rights issues arising from unresolved land reform issues have created uncertainty, so they need to be addressed to increase private investment in the sector. In addition, public financing of agriculture must be increased but must be well targeted on sub-sectors and goods that have a comparative advantage. Agricultural policies should be isolated from politics; corruption in the sector must be eradicated. Modernizing agriculture will require modernizing R&D, investing in new and climate-smart technologies, and providing the right incentives for farmers and farm workers to increase productivity.

3. Promote manufacturing through a sound industrial policy

Sound industrial policy focuses on innovation and new technologies at national and regional levels. It must be based on rigorous economic analysis, transparency and accountability to highlight the country’s comparative advantage. The government can promote manufacturing by supporting sectors that have strong backward and forward linkages. Manufacturers who have a high absorption of the workforce, especially those who can provide opportunities for less educated workers, also need to be adequately supported. This industrial policy should also encourage closer collaboration between universities and the private sector in order to maximize commercial returns on innovations resulting from R&D.

4. Accelerate the adoption and digitization of Industry 4.0

The faster adoption of technologies, known as Industry 4.0, is expected to increase productivity in industrial sectors including manufacturing, power, mining, oil and gas, and agriculture. These technologies exploit improvements in data collection, computing power and connectivity. They include IoT, advanced analytics, robotics, automation, and advanced engineering techniques such as 3D printing. Various programs can be implemented to help MSMEs benefit more quickly from these new technologies. One-stop training platforms and programs could also be created to facilitate the transformation of these businesses in areas such as targeted marketing, consumer behavior information, logistics and purchasing.

5. Advancing renewable energy sources

DOE data shows that the share of renewable energies in the electricity capacity mix from 2020 amounts to 29.2%, with hydropower contributing the most (14.6%), followed by geothermal energy (7, 5%), solar (4%), wind (1.7%), and biomass (1.4 percent). The government should increase the contribution of renewable energies to its total power generation capacity to 50%. Ensuring effective and efficient regulation and providing investment incentives are among the measures needed to achieve this goal. The government should also encourage the adoption of electric vehicles, both two-wheeled and four-wheeled. Efforts should be made to expand the market through incentives for buyers and manufacturers, as well as subsidies for R&D activities.

6. Prepare for a mixed and hybrid education system

The quality of Filipino education was in a deplorable state even before Covid-19 hit. The Covid-19 has derailed efforts to improve the quality of education. Significant investments in blended learning need to be made so that the most essential learning skills are brought to the fore. A curriculum review with a view to streamlining and strengthening Kindergarten to Grade 12 and higher education curricula also needs to be carried out. Investment in teacher training and professional development must also be increased. Collaboration of the community, school, parents and learners in school improvement plans and governance should be encouraged.

7. Build a proactive social protection system

For decades, poverty has not been eradicated because many are simply above the line; they move in and out of poverty once shocks hit them. A strong social protection system can protect them from this event. With digital technology and the national identification system, a more efficient targeting and distribution system can be put in place. The national identification system can serve as the backbone of the targeting system. Digital IDs can be authenticated remotely to facilitate and secure financial transactions and give Filipinos better access to financial services. Unconditional cash transfers targeting the poor and marginalized must be at the heart of the social protection system, along with universal health care and quality education for all.

Dr Fernando T. Aldaba is Senior Fellow of Eagle Watch, Professor of Economics and Former Dean of the School of Social Sciences at Ateneo University of Manila.

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