First, let me express my appreciation to the Government of Costa Rica for leading the Group in various Second Committee meetings and resolutions that champion the interests of middle-income countries (MICs).
Second, we also welcome and give our best regards to UN DESA’s Chief Economist Mr. Elliott Harris for his appointment as the MICs focal point at UN DESA.
I’d like to add to the discussion of a comprehensive approach in addressing the issues faced by MICs even as we consider our differences in terms of income, economic growth drivers, social and governance structures, geopolitical conditions, level of urbanization, and so on.
I would say that the MICs are facing three major challenges: Industry 4.0, climate change, and a third, and quite current challenge, is the weak global demand.
The fourth industrial revolution presents opportunities to accelerate economic growth. However, we need to ensure broad-based participation in this growth process. We need to improve human capital, especially of the poor, and aggressively address the digital divide. We need to ensure that the technology is accessible to all.
In the Philippines, we are pursuing governance reforms in order to expand our digital infrastructure. And very soon, we will be rolling out a national ID system. Its implementation will conform to the parameters set by the recently enacted law that ensures data privacy and data security. This is a massive undertaking with the intent of providing a platform where every Filipino can have a digital footprint. But we will require technical assistance to move this forward.
On climate change, as already stated, we all need to do our part on climate change mitigation and adaptation. The Philippines is certainly no stranger to the adverse effects of extreme weather disturbances. We know that its onslaught can stall and even reverse the gains we have achieved in bringing about economic growth and reducing poverty. We also know that we are not solely to blame for these extreme weather events. We therefore reiterate the call to adhere to the principle of common but differentiated responsibilities.
This brings me to the third challenge we currently face: the weak global demand, partly resulting from the protectionist stance of some of the developed economies.
We know that the MICs can avoid the middle-income trap by achieving higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added sectors. This requires huge investments and can be justified only with a bigger market; as Adam Smith once said, division of labor is limited by the extent of the market.
Given the less favorable global economy, governments need to stimulate growth from domestic sources. Some of these measures include structural reform, providing better access to finance and technology, better infrastructure to increase logistics efficiency, and so on. These need to be done any way. In fact, this puts us in a better position to take advantage of a growing global demand, when it happens.
Finally, I would like to add to the call of measuring poverty and development in multiple dimensions. Our poverty reduction accomplishment, especially using the international poverty line is also quite remarkable. But like I reported in yesterday’s conference on MPI, there are a lot of criticisms concerning the income poverty measure. The MPI holds promise as an additional metric, this time indicating multiple deprivation. But this is still incomplete. Based on our survey on what really matters for Filipinos, income figures only indirectly in all these aspirations. Rather, Filipinos aspire to enjoy strongly-rooted relationships, live a comfortable lifestyle and feel secure about the future.
We need to develop models to guide the policies on how to bring this about for all Filipinos. We need to develop a model to understand the translation of Income into outcome, then to perception of well-being, bringing in the impact of markets, the macroeconomy, geophysical characteristics, vulnerabilities and so on. Only then can we really empower our citizens to do, and to be.
Thank you. END