A seldon plan for the philippines
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Transcript of A seldon plan for the philippines
A Seldon Plan for the Philippines Martijn Sinninghe Damsté
eufom European University for Economics & Management A.s.b.l.
Master ThesisSupervisor: Prof. A. ReuterImmatriculation: 328982Presentation date: 28 August 2015
Table of Contents
Introduction
Part 1. Overview
Part 2. Internal Factors
Part 3. External Factors
Conclusion
Introduction
● Inspiration: I. Asimov and his Foundation series
● Psychohistory
Introduction
Problem-solving question:How can the Philippine economy develop
from an underdeveloped into an emerging economy, taking into account internal developments and the hegemonic rivalry between the United States of America and the People's Republic of China?
Part 1. Overview
Gene
ral
Ove
rvie
wHistory
Spanish colonial age
US colonial age
Independence (Cold War and Marcos)
Politics(nominal democracy)
Political families
Nepotism and corruption
Political developments
Constitutional reform (cha-cha)
Bangsamoro
Part 1. Overview
Source: www.investphilippines.info/arangkada/executive-summary
Part 1. Overview
OFWRemittances
PHILIPPINE ECONOMY
CORRUPTIONTAX LEAKAGE
AND AVOIDANCE
POVERTY AND INEQUALITY
Part 2. Internal factors
CULTURE
170 ethnic groups
Moro people
Sinophobia
Cultural pessimism
• More distinct due to Islam
• Peripherical region
• Grievances
• Blind acceptance authority
• No own initiative
• Fatalism• Short-term
thinking• Social tolerance
to corruption• Religion• History
• Cultural diversity is risk factor
• Currently low profile but need to be aware
Part 2. Internal factors● Trends and developments
● Ageing of the population● Macro-economic outlook positive but to be taken
with a grain of salt● 6th Kondratieff – (psycho-social) health. Chances for
medical tourism
Part 3. External factors
Sino-American hegemonic rivalry
Hegemonic Stability Theory (HST)
Balance of PowersTheory (BoP)
Hegemon if:Will to lead
Ability to leadCommitment
If one country becomestoo powerful, others will
form a coalition to counter it
Unipolarity Multipolarity
1945-1991US hegemony
USSR contender
1991-nowUS hyper power
Rise of China
Multipolar futureChina not interested in
hegemonyFriction but escalation
unlikely
Part 3. External factors
Part 3. External factors
Game Theory
• Prisoner’s Dilemma and Hawk-Dove-Bully-Retaliator• Negotiations are the best option
Economic scenarios
• Maintenance of the Status Quo• Escalation• Asian Finlandization• Detente – most favorable
Conflict management
• In escalation (9 phases) focus shifts• From problem to person, from rational to emotional• Political supporters, voters, lobby, interest groups• The ‘human factor’
Conclusion
No changeCorruption Nepotism
Disfunctionaldemocracy
Tax leakage
Culture
Unrest
Poverty
Weak growth
ConclusionInclusive political/
economic institutionsExtractive political/
economic institutions
TransparencySocial mobility
CertaintyLevel playing fieldLong-term vision
Rules applied/changed for all
Closed small 'elite'No social mobility
Kleptocracy, corruptionNo certainty, rules can be
adjusted for benefitof elite
Examples:USSR + most successorsSaudi Arabia + Gulf States
North KoreaZimbabwe
Examples:USA
CanadaN. and W. Europe
Japan
Durable growthLimited sustainability
ConclusionInclusive political/
economic institutionsExtractive political/
economic institutions
What arethe Philippines?
Nominal democracy but..Small elite of political dynasties
Rent-seeking elitePoverty, inequalityNo social mobility
Rules only for elite, nepotismNo transparency, corruption
Cultural tolerance
They have(mostly) an
extractive system
ConclusionInclusive political/
economic institutionsExtractive political/
economic institutions
Bangsamoro
Transparency
Tax Reform (IBFD)
Infrastructure
'Social Revolution'
Constitutional reform
Anticipation for ageing
Anti-poverty programs
Medical tourism
Short term
Long term Long term
Short term
Conclusion
External factors
High economic exposureVery friendly relation
Geographically far away
Limited economic exposureProblematic relationGeograpically near
Escalation-0.18–+0.16%
Detente+2.3%
Status Quo+2.0%
Asian Finlandization+1.6-1.8%
Friendly but critical allyNegotiation
Improve relationsTrade
TourismOFWsFDIs
Questions?