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Press release

Multisectoral group proposes indigenous model

for development; presents reform agenda to candidates

“For development programs to be meaningful and empowering, they must be rooted in the peculiarities of a society’s history and its own value systems.” This is the premise of a document entitled “Towards a Social Market Economy Framework for Philippine Development” prepared by two economics professors of De La Salle University-Manila, with inputs from a multisectoral, interdisciplinary group of prominent individuals coming from key sectors who met in a series of roundtable discussions sponsored by the Konrad Adenauer Foundation. It contains a section that spells out a Reform Agenda with provisions for the first 100 days of the newly elected government after the elections in May.

Dr. Ponciano S. Intal Jr., Executive Director of the DLSU-Angelo King Institute for Economic and Business Studies (DLSU-AKI), Mr. Gerardo Largoza, Assistant Professor of the Economics Department of DLSU-Manila, and the interdisciplinary group first posed the basic question: How can a country of comparatively educated, creative people with good natural resources end up being a growth laggard, and with high rates of poverty and unemployment? To which, they hypothesized that “our institutions do not square well with the requirement of a changing global economy” and that “our development strategy is not based on a social contract that is consistent with our cultural value system.”

They argued that evidence from countries like Germany and the newly-industrializing economies of Asia show that development comes as a result of some shared characteristics, such as macroeconomic stability, policies that promote equity, and foundational good governance—common features of what is often called a “social market economy.” They also emphasized the point that “these countries shaped their institutions and social arrangements according to their unique cultural values.” Therefore, they conclude, each country must construct its social bargain based on its own historical experience, conditions and value systems.

Among the features of a Philippine-style social market economy, according to Intal, Largoza and the interdisciplinary group, are as follows: (1) macroeconomic stability based on fiscal discipline and strategic investment, both based on a clear consensus of the roles of government, business, and labor in development; (2) competitiveness based on industries that tap national reserves of human and cultural capital; (3) social partnership achieved through norms and institutions that affirm, encourage, and deepen pakikipagkapwa-tao; and improved governance and leadership based on a true social contract.

A social contract, according to them, must be based on the following principles, among others: (1) that the role of the State is to secure minimum basic needs—housing, food, and medical needs—as care and investment for the next generation; and (2) those in public service ought to adopt a code of ethics based on living simply, spending wisely, and thinking long-term.

The proposed Reform Agenda also included specific suggestions, including the need to address the emerging fiscal crisis. To increase productivity and competitiveness, there must be greater focus on infrastructure and trade facilitation, and greater investment on human capital and technological upgrading to achieve sustained long-term growth. Among the recommendations to strengthen institutions are as follows: (1) restructuring the incentives facing the judiciary in order to increase the efficiency with which cases are settled and to reduce moral hazard problems; (2) reforming campaign finance via mandatory and audited declarations of received contributions, to strengthen the party system and make it more ideology/platform-based; and (3) limiting the number of political appointments to professionalize the bureaucracy.

The highlights of the proposed development model and agenda for reform will be presented to the public on March 10, Wednesday, 9:00 a.m. to 2:00 p.m., at Banquet Halls A and B, Angelo King International Center, Arellano Avenue corner Estrada Street, Malate, Manila. The major presidential candidates, as well as representatives of labor, management, and the Church, have been invited to serve as panel discussants.

The public presentation is organized by the DLSU-Angelo King Institute for Economic and Business Studies (DLSU-AKI) and sponsored by the Konrad Adenauer Foundation.