IT is reported that President Aquino will go strong for “inclusive growth,” when he addresses the heads of state and other high officials in the Asia-Pacific Economic Cooperation (Apec) forum that opens today at the Philippine International Convention Center. We stand four-square behind the President, calling attention only to a detail in the topic that can get shoveled over in the discussion of the esoteric-sounding term.
The detail is that inclusive growth is of the greatest interest only to countries that are suffering from severe unemployment and poverty. Countries that have more or less solved those problems will not be much concerned. That means that in the original Association of Southeast Asian Nations (Asean), only the Philippines will have high interest on the topic. The rest will have only academic interest. In the forum itself, other countries, including latecomers in Asean and some South America countries, can, of course, be expected to have interest on the issue.
Inclusive growth simply means developing the economy through the age-old practice of creating jobs for the unemployed, the majority of whom tend to be the poor in the society concerned. This process enables the “excluded” group to join in the enjoyment of the fruits of development, as well as in the pride of their production. Now job creation, as we all know, cannot be detached from investment for the simple reason that working people cannot work with their bare hands, exposed to sun and rain. They need premises and equipment, in other words, capital or investment, to get their work going.
This is the nub of the problem. Developing countries do not have the capital they need to develop at the pace their people desire. They must search for it outside their boundaries. Fortunately, the world economy has graduated from the days of colonialism, when foreign capital came into poor countries by gunboat. Now, poor countries become abodes of foreign capital on the encouragement of such multilateral institutions as the World Bank and the Asian Development Bank. More important, poor countries do not anymore need to be coerced to accommodate foreign capital. They welcome it, because they need it.
Some poor countries are more attractive to foreign capital than others, with the consequence that they grow and develop faster. The problem is that the “laggards” are left, with masses of their people languishing in unemployment and poverty, their very stability threatened by these social infirmities.
At some point in the discussion of inclusive growth, the need for investment must be highlighted. And so must the need for what we now call foreign direct investment to channel itself to countries that are in dire need of it. We must assume, of course, that these countries welcome foreign investment.
This is one challenge that cooperation among countries can respond to. Apec, with a membership that ranges from developing to well-developed countries, is well positioned to respond to this challenge. Through voluntary agreements of all concerned, capital-abundant nations can contribute to the closing of the investment gap in capital-scarce countries.
Image credits: Jimbo Albano
2 comments
The very small investor those who holdings are
below 1 Million Pesos are left out by the Big Trusts and Banks who get
the most out of Debt Bond Issues. Only companies like San Miguel
Corporation and its subsidiaries really cater to the Low/Middle Income
Groups and take on Bond holders of 50,000 Pesos and above. That I would
say is inclusive Growth. The really low income people cannot be
included in the San Miguel Corporation Bond offering since there is
still a risk associated with default. The other Corporations listed on
the PSE should follow the example of San Miguel Corporation and include
the poor people in their growth.
Even the Government Bond offerings are not offered to the Poor People (low/middle income Groups) how is that inclusive growth ?
“Welcome foreign investment” means doing what needs to be done to reduce the risk of losing money for those foreign investors planning to invest here. As a minimum, the business investment climate here must at least equal to what other developing countries like ours have to offer. As it is, we still have a lot of catching up to do..