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Submitted to: Professor Marilyn Lim Reported and Submitted by: Marie Grace Z. Gomez and Claro Emmanuel M. Lavado September 24, 2011 PUP OUS MPA 629 Trends and Issues in Public Administration LOGO Globalization Class participation – “Meaning of Globalization” Play Video What is globalization? Increased and intensified flows between countries of goods, services, capital, ideas, information and people, which produce national cross-border integration of a number of economic, social and cultural activities. An increased global integration and interdependence; Has a multidimensional character: economic, political, social and cultural; Characterized by unprecedented rapid flows of goods and services; private capital; circulation of ideas and tendencies; and Emergence of new social and political movements. Drivers of Globalization Trade and investment liberalization policies Technological innovation and the reduction in communication and transportation costs Entrepreneurship Global social networks Challenges of PA in Globalizing the World 1. 2. 3. 4. 5. 6. Alleviation of poverty and inequality Advancement of human rights and democracy Protection of the environment and sustainable development Mobility of workers and migration Demographic trends: ageing population and impact of HIV/AIDS Bridging the digital divide Impact of globalization 1. Affects the role and functioning of the State 2. Re-designing the State 3. Reinventing the Government Impact of globalization 1. Affects the role and functioning of the State a. Role in domestic and international governance b. Multi-layered governance Impact of globalization 2. Re-designing the State a. Privatization and deregulation b. Market-like mechanisms c. Decentralization d. Debucratization Impact of globalization 3. Reinventing the Government a. Let the managers manage b. Empowering citizens c. New responsibility mechanisms d. Introducing business principles into public affairs e. Downplaying the concept of “public service” f. Promoting professional ethics in the public sphere g. Performance management h. Performance budgeting Public’s View on the pros and cons of globalization Class participation – “Is Globalization is good or bad” Play Video Philippines’ Response to Globalization Timelines 1949 to 1960: Protective Era Response Implication Imposed Import and Foreign exchange controls due to sever Balance of Payments (BOP) crisis dwindling foreign exchange reserves. Bias against export production prevented local industries from advancing and achieving comparative advantage and economies of scale in producing world market Philippines’ Response to Globalization Timelines 1960s: Period of Decontrol Response Implication BSP launched decontrol program, calling for the gradual removal of import and foreign exchange controls RA 6158 or Investment Incentives Act which offers incentives to local and foreign investors who would venture into preferred areas of investments Creation of BOI mandated to make Investment Priorities Plan (IPP) Inability of exports to expand inhibited the growth of industrial employment Philippines’ Response to Globalization Timelines 1970s Response Implication RA 6135 or Export Incentives Act in 1970 providing additional incentives to export producers Generated employment because BOI-registered exporters are allowed to deduct the total cost of direct labor and local raw materials used in export production from their taxable income Devaluation of the Phil Peso policy Peso-dollar exchange rate gradually went up 1972, Simplification of the Tariff and Customs Code, establishment of export processing zones and industrial estates, General Agreement on Tariffs and Trade (GATT), strengthening and streamlining of government offices dealing with export promotion, liberalization of export financing; establishment of export industry authorities Drew favorable reception from electronics and garments firms which are heavily dependent on imported materials Exodus of mostly blue-collar workers to Middle East started Philippines’ Response to Globalization Timelines 1980s Response Implication Adopted Structural Export and manufacture adjustment program (SAP) of semi-conductors and garment gained prominence 1986, EO 226 or Omnibus Simplified laws and Investments Code provided income tax holiday Timelines 1990s and onwards Philippines’ Response to Globalization Response RA 7042 Foreign Investment Act Implication Liberalized the existing regulations (i.e., for those not included in the Foreign Investment Negative List) EO 470 lowered the maximum tariff rate to 50% •Exports grew 1970 - US$1.1B 1980 US$5.8B 1990 - US$8.2B 1994 – US$13.4B 1992, full foreign exchange liberalization •Human capital and technology- Aimed to create a favorable intensive goods grew macroeconomic environment that will •Rise of homeworkers, thus, Labor accelerate the process of bringing Code included conditions for Philippine-based industries as well as subcontracting workers Filipinos to the forefront of •Rise of OFWs competitiveness in the world market •Incidence of Child work Foreign Direct Investments Progressive decline for banks and financial institutions but progressive increase for manufacturing and the rise ands fall for mining. Responses and Effects of Globalization to Philippines Now, let us move forward to vital facts…. Global GDP vs Philippines GDP over the years ASEAN Countries Association of Southeast Asian Nations Where we are today WEF Global Competitiveness Report Rank: No. 85 / 139 (2010) No. 7 of 8 in ASEAN IFC Doing Business Survey Rank: No. 148 / 183 (2011) No. 8 of 8 in ASEAN IMD World Competitiveness Report Rank: No. 41/59 (2011) No. 5 of 5 in ASEAN FutureBrand’s Country Brand Index Rank: No. 65 / 110 No. 14 of 17 in Asia Pacific No.75/ 139 (2011) Our Target WEF Global Competitiveness Report Rank: No. 85 / 139 (2010) No. 7 of 8 in ASEAN IFC Doing Business Survey Rank: No. 148 / 183 (2010) No. 8 of 8 in ASEAN IMD World Competitiveness Report Rank: No. 41/59 (2011) No. 5 of 5 in ASEAN FutureBrand’s Country Brand Index Rank: No. 65 / 110 No. 14 of 17 in Asia Pacific No. 30 or higher by 2016 No. 50 or higher by 2016 No. 20 or higher by 2016 No. 30 or higher by 2016 The impact we would like to see Increase FDI from US$1.7B in 2010 to annually _______ by 2016 * Increase exports from US$ 63.3 B (2010) ** to US$ 120.40 B GDP Growth of 7- 8%*** Sources: *NSCB (Breakdown: 2010 Baseline - US$ 51.39 (goods) US$ 12.27(services) 2016 Target - US$ 91.5 B (goods) & US$ 28.9 B (services) ** Chapter 3 Phil Development Plan (Competitive Industry Sector ) *** NEDA Targets The impact we would like to see Generate 1 million new local jobs per year **** Lower Poverty Incidence from 26.5 % in 2009 to 16.6 % in 2015. Shrink class D (62%) and class E (29%) and expand class C from (8.6%) Sources: **** p. 25, Phil. Labor and Employment Plan 2011-2016 Where we stand in international metrics … OUR CHALLENGE WEF – Global Competitiveness PHILIPPINES vs ASEAN 2008-2010 Over-all rankings COUNTRIES 2010 2009 2008 3 3 5 MALAYSIA 26 24 21 BRUNEI DARUSSALAM 28 32 39 THAILAND 38 36 34 VIETNAM 44 59 54 75 55 70 PHILIPPINES 85 87 71 CAMBODIA 109 110 109 SINGAPORE INDONESIA l Other ASEAN Countries not included in the Survey: Laos & Myanmar WEF – Global Competitiveness Report RED Bottom 20% (111th – 139th) 25 indicators PURPLE Ranked 21 - 40% (83rd – 110th) 37 indicators ORANGE Ranked 41 – 50% (69th – 82nd) BLACK Ranked 49% or higher (1st– 81st) 20 indicators 29 indicators 111 indicators Priority Areas based on WEF Survey INDICATORS RANKING AGENCIES CONCERNED 2010 2011 1st pillar: Institutions 1.03 Diversion of public funds 1.04 Public trust of politicians 135 134 127 128 1.05 Irregular payments and bribes 1.06 Judicial independence 128 111 119 102 1.07 Favoritism in decisions of government officials 1.08 Wastefulness of government spending 131 118 DBM, Ombudsman, COA Ombudsman, MultiSectoral Anti-Corruption Council, Congress, Senate, LGUs Ombudsman, CSC, COA DOJ, Courts, Supreme Court Cabinet 118 109 DBM, COA, NEDA, OP Priority Areas based on WEF Survey INDICATORS 1st pillar: Institutions 1.09 Burden of government regulation 1.10 Efficiency of legal framework in settling disputes 1.11 Efficiency of legal framework in challenging regulations 1.12 Transparency of government policymaking 1.13 Business costs of terrorism 1.17 Ethical behavior of firms RANKING AGENCIES CONCERNED 2010 2011 126 122 126 115 116 118 123 120 126 129 130 118 DBM, NEDA, OP DOJ, Courts, Supreme Courts, Ombudsman, Sandiganbayan DOJ, Courts, Supreme Court Cabinet, NEDA DND, DILG DOLE, DTI, SEC, PEZA, BOI, Private Sector Priority Areas based on WEF Survey INDICATORS RANKING AGENCIES CONCERNED 2010 2011 2nd pillar: Infrastructure 2.01 Quality of overall infrastructure 2.02 Quality of roads 2.04 Quality of port infrastructure 2.05 Quality of air transport infrastructure 113 114 131 112 113 100 123 115 DPWH, DOTC DPWH, DOTC DPWH, DOTC, PPA DOTC 117 119 DOH 3rd pillar: Macroeconomic environment 4th pillar: Health and primary education 4.04 Tuberculosis incidence* Priority Areas based on WEF Survey INDICATORS RANKING AGENCIES CONCERNED 2010 2011 5th pillar: Higher education and training 5.04 Quality of math and science education 6th pillar: Market efficiency 6.06 Number of procedures required to start a business* 6.07 Time required to start a business* 6.13 Burden of customs procedures 112 115 DepED, DOST, private sector 128 134 DTI, DILG, LGUs 120 129 112 128 DTI, DILG, LGUs DOF, BOC Priority Areas based on WEF Survey INDICATORS RANKING AGENCIES CONCERNED 2010 2011 7th pillar: Labor market efficiency 7.04 Hiring and firing practices 7.05 Redundancy costs* 116 114 113 118 DOLE DOLE-NWPC 112 90 NTC, DOTC, Private Sector 8th pillar: Financial market development 9th pillar: Technological readiness 9.04 Internet users* Priority Areas based on WEF Survey INDICATORS RANKING AGENCIES CONCERNED 2010 2011 10th pillar: Market size 11th pillar: Business sophistication 12th pillar: Innovation 12.05 Government procurement of advanced tech products 129 126 ? IFC WB – DOING BUSINESS SURVEY PHILIPPINES’ 3-YEAR TREND Over-all Ranking 2011 148 2010 144 2009 140 WB - IFC’s Doing Business Survey: Philippines vs ASEAN* 3-year trend COUNTRIES 2011 2010 2009 1 1 1 THAILAND 19 12 13 MALAYSIA 21 23 20 VIETNAM 78 93 92 BRUNEI DARUSSALAM 112 96 88 INDONESIA 121 122 129 CAMBODIA 147 145 135 PHILIPPINES 148 144 140 SINGAPORE * Other ASEAN Countries not included in the Survey: Laos & Myanmar IFC – Doing Business Survey INDICATORS RED Bottom 20% (146th – 183rd) PURPLE Ranked 21 – 40% (109th – 145th) ORANGE BLACK Ranked 41 – 50% (91st – 108th) Ranked 49% or higher (1st – 90th) 3 indicators 4 indicators 1 indicator 1 indicator 9 indicators DOING BUSINESS REPORT 2011 (out of 183 economies) INDICATORS OVER-ALL RANKING Starting a business Dealing with construction permits Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business PHL BRN CAM IDN MYS SGP THA VNM 148 156 156 112 133 74 147 170 146 121 155 60 21 113 108 1 4 2 19 95 12 78 100 62 102 128 132 124 61 183 116 120 22 52 117 89 74 57 118 98 116 44 130 47 60 1 4 23 37 15 6 2 4 1 19 72 12 91 12 43 15 173 124 63 118 153 159 42 142 183 154 142 59 55 13 2 25 46 31 124 Priority Areas based on IFC Survey INDICATORS OVER-ALL RANKING Starting a business RANKING CONCERNED AGENCIES 148 156 Dealing with construction permits 156 Closing a business 153 DTI, DILG, SEC, BIR, etc DTI, LGUs DTI, DILG, SEC, BIR, etc Working Groups 1. 2. 3. 4. 5. 6. 7. Education and Competitive Human Resources (DepEd) Balanced Scorecard System (CSC, DAP, NGA) Infrastructure for Competitiveness (DOTC / DPWH) Open Skies Ro-Ro / Inter-Modal Transport System Public-Private Partnerships Luzon Logistics Hub Transaction Costs and Flows (DTI/DILG) BPLS - Business Permits and Licensing System PBR - Philippine Business Registry Import and Export Clearance Process / Single Window (BOC) Energy Costs and Availability (DOE) Transparency in Budget Delivery (DBM) * Priority areas under PIP program with Millenium Challenge Corp Special projects Country Tourism Brand Creation of a new, unified country tourism brand and campaign covering advertising, public relations, events, social marketing and new media for both international and domestic audiences Renovation of airports Airports are the most visible “destination” for travellers which can leave a lasting impression at both arrival and departure stages of a trip. There is an urgent need to fix both NAIA and Mactan, renovating and modernizing the interiors and improving airport processes to make travel a more pleasant experience. Other airport projects can follow Upgrade of Roxas Boulevard-to-Intramuros stretch Roxas Boulevard, Luneta Park, and Intramuros remain one of the most visited tourist destinations in Manila and are considered iconic, signature visitor sites. There is a need to restore the area to its former glory Aside from the public administration challenges mentioned, … There is a new global challenge that the world is faced with…. Impact of Global Warming or Climate change to Human Health (Show PPT) … DOLE’s proactive response is Green Productivity Initiatives The Singapore’s Phenomenon The Man Who Defined Singapore Lee Kuan Yew Prime Minister of Singapore 1965 - 1990 Founder of modern Singapore Led Singapore for 31 years (19651990); Britisheducated lawyer Now 87 yrs. old, he turned Singapore from a resource-poor, malaria island into a modern financial center Singapore, as of 2009, although very small, has a wealth fund of between $200 to $300 Billion – an indicator of the country’s progress The Beginnings of Singapore under Lee Kuan Yew Looking back….. Expelled from the Federation of Malaysia in 1965 Became a republic on August 9, 1965 Beset with pressing problems (1965-79) Unemployment Housing Education Lack of Natural Resources Lee Kuan Yew : An Authoritarian Leader Controlled the country tightly through the People’s Action Party Restricted civil liberties Leashed the press / free speech Trampled on dissidents Stunted entrepreneurship and creativity in its citizens Vigorously fought graft and corruption. Lee’s key social reform campaigns Do not chew gums Do not spit on public places Do not throw garbage from rooftops Speak good English Smile Mate and Multiply – as part of plan to create first-world citizens within its first world-world infrastructure Lee’s gigantic efforts to build Singapore Promoted manufacturing sector Industrial sector estates were set up Attracted foreign investment through tax incentives Ship servicing at the ports promoted Lee’s gigantic efforts to build Singapore Invited big oil companies (Shell and ESSO ) to establish oil refineries in Singapore, which in the mid ‘70s became the largest oilrefining center in the world Invested heavily on the educational system that adopted English as medium of instruction. Emphasized practical training to develop a competent workforce well-suited for the industry Lee’s gigantic efforts to build Singapore The 1980’s and 1990’s Unemployment rate fell from 10% to 3% GDP growth averaging at 8% Upgrading to higher technology industries Changi airport opened in 1981; Singapore Airline Became a Major airline Port of Singapore became the world’s busiest port Lee’s gigantic efforts to build Singapore Service and tourism industries grew immediately Promoted public housing that have larger and higher standard apartments with better amenities. 90% of the population lives in apartments Excellent transportation system Singapore Flyer, Marina Bay Super Tall Solar Trees, Bay South Lion Fountain, Downtown Singapore Singapore City Modern Apartment Changi Airport In 1990, Lee Kuan Yew passed the reins of government to his handpicked successor, Goh Chok Tong and continues to retain a fair amount of influence over the present administration of his son, Lee Hsien Loong. Under Mr. Lee’s two successors Individualism gained more breathing room Ban on chewing gum relaxed Night clubs, once invisible, throb into the wee hours Casinos have been opened More open and consultative style of leadership Political / electoral reforms being instituted The loosening up in Singapore has Lee Kuan Yew’s full support. He says: “ I think we have to go in whatever direction world conditions dictate if we are to survive and to be part of this modern world. If we are not connected to this modern world, we are dead. We’ll go back to the fishing village we once were.” Conclusion Every nation must continually go with the flow of the world’s changing times so as not be left behind. But to be continuously progressive with the changing world, strong conscientious political will is necessary coupled with its productive citizens. Thank you