* Posted on September 15, 2013.
The Economic Freedom Network (EFN) Asia Conference 2013 will be held more than a month from now in Bangkok. The theme this year will be Asia, the Middle Income Trap and Economic Freedom.
The subject “middle income trap” is timely because many Asian economies are now the “engine of growth” of many countries around the world outside our continent. Not only because they are manufacturing powerhouses like Japan, S. Korea, China, Taiwan, India and Thailand, or financial centers like Shanghai, Hong Kong and Singapore, but also because they are huge labor suppliers and huge consumers, particularly China, India, Pakistan, Indonesia, Philippines and Vietnam.
In almost all industrialized economies in North America and Europe, their economic growth have tanked while a few others are in deep recession. It may be considered as “high income trap”. The fast growing economies of Asia must continue growing and avoid the “middle income trap”.
The “demographic dividend” is working in favor of many Asian economies. Wealthy people in the industrial world would still wish that real humans would take care of them as they age, not robots and machines. They can achieve that by easing their strict migration policies, or by moving to some of these countries with huge supply of manpower, so long as rule of law and private property rights are ensured in certain communities and cities.
Free trade, economic freedom and less interventionist policies, and governments that are focused on promulgating the rule of law, are the key to optimize private enterprise energy, dynamism and innovation.
Meanwhile, some basic economic data about the PH, Cambodia, Thailand and Vietnam.
Please note that those data refer mostly to the central or national government. I think local government units (provinces or regions, cities, villages or barangays) and government enterprises data are not included there, at least for the Philippines.
Thus, both government revenues/GDP and government spending/GDP ratio for the Philippines do not include those by LGUs and by some government corporations and financial institutions. So public contribution to PhilHealth, SSS and PagIBIG (housing) are not included in government revenues; also public payment to various local taxes and regulatory fees by LGUs. Governments almost anywhere are BIG and expansive.
Note Cambodia’s public debt, only 28.5 percent of GDP, a lot lower than those in the Philippines, Thailand and Vietnam. I wish the Cambodian government will not follow the heavy fiscal irresponsibility of its two neighbors.