Saturday, February 27, 2010

‘Next president must focus on corruption, poverty reduction’

Written by Cai Ordinario / Reporter
Friday, 26 February 2010 20:52

Original Story:

INSTITUTIONAL constraints to growth will remain a reality for the next administration, which makes it imperative for the next president to not only focus on only one goal of eradicating corruption or poverty, but both.

University of the Philippines School of Economics (UPSE) dean Emmanuel de Dios said problems in Philippine institutions need to be met with “a bit of statesmanship” and measures that should be implemented must move to eradicate both corruption and poverty, which often lead to political instability.

“Yes, [institutional constraints to growth] will be there. It requires a bit of statesmanship to maneuver around them. You have to move against poverty, you have to move against corruption. It sounds corny but those are really the links that must be [addressed]. Once you’re president, you have to [address] both,” de Dios said in an interview after his lecture at the recently held 8th Ayala Corp.-UPSE Economic Forum.

In his lecture, titled “How So Institutions Constrain Philippine Growth?”, de Dios discussed that political instability often leads to lower economic growth.

This has already been seen in the performance of the country in the survey World Governance Indicators (WGI) periodically released by the World Bank. The WGI evaluates countries performance in voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption.

De Dios said that based on the previous WGI, the Philippines always ranked low in control of corruption and political stability. The years when the country ranked its lowest in these areas, the country also suffered very low income levels and foreign investment flows.

“Instances of massive corruption or economic or political processes have historically been the proximate cause of severe instability. Both instability and corruption have demonstrated a negative impact on investment. Low investment rate is a known feature of mediocre economic performance,” de Dios said.

These years include 1984 to 1986, which was at the tailend of the Martial law period prior to Edsa 1; 1988, when there were coup d’etats during the Aquino administration; 1999, during the impeachment trial, which led to Edsa Dos; and 2004, which was characterized by the “Hello, Garci” scandal.

Original Story:

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