Finance Secretary Carlos Dominguez III has called on movers and shakers in the Association of Southeast Asian Nations (ASEAN) to implement policies that would allow the sharing of resources within the regional bloc and make growth inclusive among its peoples to help counter the effects of emerging protectionist policies and a possible trade war between the United States and China.
Dominguez said the ASEAN should learn from the world’s experience with globalization, which “has been a great source of increasing wealth, [but] a very poor tool for spreading it.”
He also said the ASEAN should prepare its workforce to adapt to changes brought about by “disruptive technology,” referring to innovations that create new markets and jobs but eventually displaces existing ones, so that the region could “ride out the tide of change” while coping with the rising popularity of protectionism and other “inward-looking” trade policies.
“We must really focus ourselves on policies that make sure that the wealth that is created by globalization is shared by all,” Dominguez said at the 12th session of the ASEAN Finance Ministers Investors Seminar (AFMIS) held in Lapu-Lapu City last week.
The AFMIS, which preceded the April 7 meetings held separately and jointly among the ASEAN finance ministers and central bank governors, gathered ASEAN’s finance chiefs and investors to discuss ways to further expand investment opportunities in the region amid the current global uncertainties.
Dominguez said that along with other ASEAN member-economies, the Philippines views potential “inward-looking” policies and the possible trade war between economic powerhouses US and China that could emerge from such policies “with great concern.”
The impact on the ASEAN of a possible US-China trade war was discussed at the AFMIS open forum as Chinese President Xi Jinping and US President Donald Trump met face-to-face for the first time last week and wrapped up talks on a wide range of issues in Florida.
Dominguez said the ASEAN can help fend off the adverse effects of these “inward-looking” policies by implementing measures to speed up regional integration and the sharing of resources among their economies.
“So I think the lesson for us there is we have to integrate our economies a little more. We have, as I mentioned, a 650-million market. We are lucky we have a young population, we have a population that is trainable, and many of us in ASEAN need infrastructure. So sharing of resources within us will help alleviate any problems of a trade war or a protectionist policy,” Dominguez said.
He said that in the Philippines, the government is countering the adverse effects of globalization and the emerging inward-looking trade policies across the globe by investing heavily in infrastructure, education and health as such investments create jobs and disperse the benefits of growth to the countryside.
“With us, we are countering these inward-looking policies by heavily investing in infrastructure, which we are really far behind the rest of ASEAN,” he said. “It will create better jobs in the areas outside of the main business areas; it will create connectivity between the outlying farming areas to the main markets in Manila. So infrastructure is a main tool.”
“So we are moving towards that, we are moving towards investments in our people, in education. We are moving towards investment in health to make sure that our populations feel the benefits of the growth through globalization,” he added.
The Philippines’ Department of Education, Dominguez said, is also moving towards training students and graduates to be “more adaptive” to enable them to cope with disruptive technologies that would require them to learn something new every five years or so.
“Our education minister just told me that they are moving towards training people to be more adaptive because she says whoever graduates from college now, in probably five years he will have to learn something new. So it’s preparing our people to be more adaptive,” Dominguez said.
“If there’s going to be inward-looking policies, we have to change ourselves. Again, it’s retooling our young staff for the change, and preparing ourselves for the new jobs in the future,” he added.
In the open forum held following the AFMIS plenary session, Dominguez also said that:
• the Philippines is open to investments in anti-pollution and climate-resilient technologies. “We are very open to investments, especially in technologies that reduce pollution.”
• the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP) are currently implementing measures to improve the financial literacy of Filipinos so that the 80 percent of the country’s population that are currently “unbanked” can be encouraged to access, and take advantage of, the services offered by the banking and insurance sectors.
“Over 80 percent of our people are unbanked, and our central bank as well as the DOF are working very hard to increase the percentage of our population that are in the formal sector,” he said. “And we are not only talking of banking but insurance as well. There are many methods we are doing that, particularly increasing the number of branches we have, making sure that people have access to microcredit and certainly moving towards even microinsurance.”
