The World Bank’s latest report, “Falling Long-Term Growth Prospects: Trends, Expectations, and Policies,” paints a concerning picture of a global growth slowdown. The report highlights the weakening forces that have driven growth and prosperity over the past three decades, and warns of the implications this decline holds for emerging markets and developing economies. However, amid these challenges, there is hope for countries like the Philippines to accelerate their economic growth through sustained improvements in key areas.
According to the World Bank, the Philippines, along with other countries in East Asia and the Pacific, can increase their potential growth by implementing growth-enhancing reforms. These reforms, if successfully implemented, could raise potential growth by 0.8 percentage points per year by the end of the decade. The report emphasizes the significant role of investment growth in driving this increase, with more than half of the projected growth boost coming from improvements in investment. (Read the BusinessMirror report: “WB whips out to-do list for faster PHL growth,” February 6, 2024).
To achieve this growth, the Philippines should prioritize several measures. Firstly, the broadening of the tax base to finance infrastructure projects is crucial. Better infrastructure not only supports connectivity but also stimulates innovation, paving the way for sustained economic growth. Additionally, reforms aimed at improving the quality of education will enhance labor force skills and promote productivity growth. Measures to adjust curricula and implement catch-up programs can mitigate learning losses caused by the pandemic.
Looking beyond immediate challenges, the World Bank says the country must also focus on developing resilient and inclusive education systems that can withstand future crises. This includes embracing remote learning as a means of ensuring continuity in education during emergencies. By investing in education and building a skilled workforce, the Philippines can create a foundation for long-term economic growth and development.
The World Bank says the success of these reforms relies not only on national efforts but also on increased cross-border cooperation and substantial financing from the global community. The magnitude of the global growth slowdown demands ambitious policy responses at both the national and global levels. Countries should learn from their past policy successes and replicate them to foster economic growth. A major investment push, grounded in robust macroeconomic frameworks, can reverse the current slowdown and set the stage for a more prosperous future.
The World Bank’s report serves as a wake-up call for policymakers worldwide. It highlights the urgent need for action to combat the persistent decline in long-term growth prospects. The Philippines, with its potential for accelerated growth, should seize this opportunity and implement the necessary reforms to unlock its economic potential. By focusing on investment, education, and infrastructure, the country can position itself as a beacon of growth in the region.
To realize these goals, it would do well for the government to prioritize collaboration with international partners and secure the financial support required to implement these reforms. The global community must recognize the significance of this global growth slowdown and provide the necessary resources and support to enable countries to overcome these challenges.
As we navigate an era of dwindling global growth rates, it is essential to remember that economic prosperity is not guaranteed. It requires concerted efforts, bold policy actions, and international cooperation. The Philippines has the potential to be at the forefront of a growth resurgence, but it must act swiftly and decisively to seize this opportunity. By doing so, the country can combat poverty and achieve its future development goals.