The phrase “follow through” is a reminder I repeatedly got from my tennis instructor a long time ago. It is about the racquet swing and body position after hitting the ball. The reminder to focus, to position properly, and to follow through became a valuable lesson. Similarly, development outcomes, which take time to be realized, can be facilitated by constant and purposeful follow throughs.
About 20 years ago, our graduate class Economics professor asked what we think are three development imperatives. If I were asked that question today, my answers would generally remain the same. These are: (1) wide-scale, unprecedented support for human resource development, (2) total commitment to clean up the government, and (3) strengthening entrepreneurship.
On the first item, most issues in the economy have a human development aspect. When we talk about the Philippines being behind in technology, we think about who creates technology. When we talk about unhealthy children, we think about why their parents are unable to feed them. When we talk about low productivity, we think about capabilities and working conditions.
Standard development economics textbooks remind us that health and education are twin aspects of human capital. Health is an important factor in school participation, hence the importance of school feeding programs. Healthier and longer lifetime raises the returns to education. Similarly, education contributes to overall wellness. Better educated people tend to benefit more from health programs.
Moreover, there is a social aspect of human development to which education contributes. Businessman and economist Calixto Chikiamco, in a book chapter “Reconciling the Market and the State” (The State and the Market 1998, p.14), explains that “not only can education help national productivity, it can also strengthen civil society.… It raises the quality of democratic dialogue and strengthens democratic governance.”
The second imperative is a total commitment to clean government. One of the problems of the government is overcoming a bad reputation. One can look at the challenge as an illustration of path dependency, a historical approach to analyzing conditions where the effect of past events persists and weigh heavily in current decision making. For example, undesirable experiences with government offices, say, due to slow bureaucracy or corruption, make people avoid dealing with government even if new processes have been put in place. Trust is slow to develop.
It is important for the government to regain the trust of its constituents, otherwise the lack of credibility will keep it permanently hostage to suspicion and cooperation from the private sector—both business and civil society.
A clean government contributes to macroeconomic stability. The efficiency gains from less corruption and improved performance free up funds for better public goods and services. Judicious spending reduces fiscal deficit and the pressure to borrow, which may push up interest rates and crowd out investments.
If transparency and accountability are expected from the government, responsible citizenship is expected from the private sector. This means, among others, paying taxes dutifully, not tempting government employees to act unlawfully in their favor, respecting the authority of government employees in matters of their jurisdiction, and correcting and calling out government in a constructive way.
My third item is on strengthening entrepreneurship. This not only generates employment and income, but also enhances competition leading to efficiency and excellence. Creative and resourceful entrepreneurs can respond quickly not only to changing consumer preferences but also to changing business environment.
Entrepreneurship provides an economic safety net for people who lose their jobs from downsizing of large firms, from economic downturns or from external shocks. Not everyone can become an entrepreneur, but an environment that supports entrepreneurship provides economic resilience.
In the early 2000s, I assisted in a research-based collaboration between the Financial Executives Institute of the Philippines and the Ateneo Center for Economic Research and Development. The collaboration outlined action points to strengthen small and medium enterprises (SMEs). These include strengthening entrepreneurship orientation of education, treating SMEs distinctly from micro-enterprises to address their differentiated needs, streamlining government procedures and requirements for business start-ups and overcoming disincentives, forming strong associations and establishing resource centers, providing expanded mechanisms for financing and guarantees, improving technology support, facilitating access to inputs and markets, and developing synergy through linkages.
There are other development imperatives and I simply focused on three, which I have written a long time ago and which remain to be major challenges. They are continuing issues that need a follow through—a behavior that signals a commitment to see results.
Dr. Cristina M. Bautista is Associate Professor and former Chairperson of the Department of Economics under the School of Social Sciences of Ateneo de Manila University.