The composite scores for economic inclusiveness

Economic Inclusiveness: Malaysia Was Biggest Winner

The Philippines ranked the poorest among ASEAN-4 economies in terms of economic inclusiveness. Together with Indonesia and Thailand, it lost one rank from 1990-1999 to 2000-2012. By contrast, Malaysia improved by 2 ranks during the same period. 

The other dimension of social inclusiveness, which is measured by the following outcome indicators: (1) gender parity at the secondary school level; (2) gross secondary school enrolment; (3) average years of schooling; (4) percentage of live births attended by skilled health staff; and (5) mortality rate of children under age 5. 

Among ASEAN-4 economies, the rank of the Philippines in terms of social inclusiveness deteriorated the most:  from 10 in the decade of 90s to 14 from 2000-2012. Indonesia improved by one rank; Malaysia’s rank was unchanged; while Thailand lost by one rank. 

The other dimension of inclusiveness is environmental inclusiveness. It is measured by: (1) access to improved sanitation; (2) access to water sources; (3) annual change in total greenhouse gas (GHG) emissions; (4) annual change in forest area; and (5) annual change in the share of fossil-fuel energy consumption to total consumption of energy. 

None of the ASEAN-4 economies suffered deterioration in rank in environmental inclusiveness during the period of study. Both Malaysia and Thailand improved significantly in terms of environmental inclusiveness. 

LESSONS TO BE LEARNED

First, the empirical results suggest that much more needs to be done by the present and future Philippine governments in order for it to catch up with its ASEAN competitors. 

Second, it is not possible to achieve inclusivity by neglecting agriculture and the rural sector. The first recommendation of the study is for authorities to address the neglect of the rural sector. The study proposes: “to increase agricultural productivity by focusing on quality and standards, investment in R&D” and to “ develop non-farm sector through rural industrialization.” 

These recommendations are right on target for the Philippines, where one-third of its work force comes from agriculture and one-half of the country’s poor live in rural areas. 

The ESCAP study should open the eyes of policy makers on the real meaning of inclusivity. The body of evidence shows that the present administration’s talk about inclusive growth is superficial since its attention to agriculture and the rural sector is, at best, perfunctory. 

Source: Malaya 2015, "THE REAL EVIDENCE ON INCLUSIVENESS: THE PHILIPPINES FAILS", viewed 9 July 2015,<http://www.malaya.com.ph/business-news/opinion/real-evidence-inclusiveness-philippines-fails>