Development economics emerged in the late 1940s and 1950s as a Third World was forming from the shambles of disintegrating colonial empires. Its pioneers were independent scholars who addressed the problem of “underdevelopment” from respective experiences, regions and intellectual formations. The 19th-century late industrializers, Soviet economic planning, and the management of the British war economy were among the historical experiences that informed their work.
A significant development that demands wider public dissemination is
the revival of the discourse on the issue of financial integration, involving highly influential institutions and personalities. A paper from the International Monetary Fund (IMF) discusses this topic, titled Effects of Financial Globalization on Developing Countries: Some Empirical Evidence, dated 17 March 2003 and authored by Eswar Prasad, Kenneth Rogoff, Shang-Jin Wei, and M. Ayhan Kose. For those who are very critical of the IMF, this paper may turn out to be a surprise, and a pleasant one at that.
Persistent budget deficits traceable to a falling tax effort since 1998
have focused attention on the need to reform tax administration in the Philippines. At the moment, there are a number of proposals to reform tax administration. These include House Bills 5054; 5465, 5546, and Senate Bill 2463.
The template for most of these bills is from the original bill HB 5054,
also known as the “IRMA bill” (since it sought to create an “Internal
Revenue Management Authority” while abolishing the Bureau of Internal Revenue). This has since been modified, most preeminently by HB 5465 or the “NARA” proposal (standing for the “National Authority for Revenue Administration”).
It would be a big boost to the new development economics if the
economics is blended in with the social, cultural, political and
institutional setting and environment, so that the possibilities for
change and development are clearly defined. In this respect, we need to interact with political science, sociology, anthropology, psychology, and the legal profession.
A corollary to this is that we shouldn’t fall into the neoclassical
trap of distinguishing markets with everything else, so that we become anti-market in the real sense of not wanting to improve the
commodities, labor and capital markets of Third World countries. Thus we see some of us resisting China’s or Vietnam’s use of better economic incentives on the grounds that they are “market” devices.
War is looming. And like it or not, the Philippines is not spared. The
Economist, which incidentally is pro-war, believes that the country
will suffer heavily once the full-blown war in Iraq erupts.
Not surprisingly, the exchange rate has become volatile, with the peso vis-a-vis the dollar reaching a two-year low. The Philippine currency is not at all overvalued, if we consider the surprisingly sustained low inflation rate. The depreciation is simply an indicator of the investors’ nervousness amidst the imminent war in Iraq.
In its drive to be globally competitive, the government should spare no effort in upgrading the country’s port services and facilities. Among the areas it should take a closer look at are alternative and more efficient modes and routes of sea transport as well as the need to redefine the functions of the port authority.