RP to weather global crisis but has to open up economy - Singaporean diplomat

MANILA, Philippines - A Singaporean diplomat believes the Philippines has weathered the worst of the global financial crisis but needs to further open up its economy to ensure steady growth.

Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy in Singapore, said the Philippines would do well despite the international financial meltdown because it is not as globalized as Singapore.

“Singapore will experience its biggest contraction. The economy will shrink by five to 10 percent this year and that’s not surprising because it is also the most globalized economy in the world,” Mahbubani told The STAR in an interview last Friday. “And because we are the most globalized, if something goes wrong in (the world), we suffer the most,” he said.

Mahbubani also sits on the boards and councils of several institutions in Singapore, Europe and North America, including the International Institute for Strategic Studies Council, the Asia Society’s International Council, the Yale President’s Council on International Activities, and the Singapore-China Foundation-Scholarship Committee.

“The Philippines will dow ell this year. Of course, it will be affected indirectly, the P16-billion remittance from around 10 million overseas Filipino workers last year will come down because some will lose jobs, experience salary cuts and thus have less income. The outsourcing industry is also expected to suffer,” he pointed out.

Mahbubani, however, stressed the country should not retreat from globalization.

“In fact, Asian countries can be the biggest beneficiaries of globalization,” said Mahbubani, who was recently named by the Financial Times among the 50 global leaders who would shape the future of capitalism.

“The success of 10 million overseas Filipino workers shows that the Philippines has the population that can compete globally,” he said.

Mahbubani said one of the interesting statistics that he has come across is that in the 1950s, the Philippine economy was five times the size of the economy of South Korea. Today, however, South Korea’s gross national product or GNP is eight times that of the Philippines.

“Philippine population has grown much, but not the GNP. Maybe the Philippines should ask itself the question why South Korea succeeded and it did not? I think one of the reasons is because South Korea began servicing the global economy,” he said. “The Philippines has tremendous advantage, especially with its talented labor force. Investors would love to come and invest here.”

Mahbubani proposed several ways to help the Philippines achieve greater globalization, including bigger incentives for investors, more direct flights to the rest of the world, less restrictions on foreign investments.

But the Singaporean diplomat stressed the importance of good leadership and good governance in times of crisis.

“We need leaders who can inspire confidence in the population by doing the right thing,” he said.

“The quality of the people you have in government is very important. That is why we at the Lee Kuan Yew School of Public Policy in Singapore believe that it is important to invest in training of public servants,” Mahbubani said.