Monday, May 29, 2006

The power of access

EVERYONE seems to know all along that “access” plays an important role in development. It’s almost commonsensical and one couldn’t help but wonder why Philippine policy makers seem not to have figured it out long ago and put the necessary measures well in place. Yes, that’s the sense one gets upon reading the latest study on the “power of access” done by SRI International and funded by Fedex Corporation.

The study defines “access as a means of interaction and exchange among people, businesses and nations” that is critical to economic growth and improving human welfare. Access is viewed in three variables—space, time, and information. Access provides benefits to people, business, and nations by providing them opportunities to participate, choose and improve.

Frederick Smith, Fedex’ chief operating officer, said access enables nations to enter broader markets, gain global linkages, attain national and international cohesion and achieve growth and prosperity. It also boosts the country’s private sector by increasing businesses’ market reach; it facilitates innovation, and creates more opportunities for growth. And more important, access—according to Smith—empowers people, connects them, enhances their well-being and constantly expands their choices in life.

In that study, SRI ranked the Philippines number 65 in 75 countries in its Access Index, just a notch higher than the bottom 10. The same study also computed the opportunities created by Access for each beneficiary group and found that the Philippines ranked 57 in access opportunities for people, 52 for business, and 59 for the entire country. These figures suggest the continuing difficulties suffered by the country in terms of access to goods, services, ideas, information and opportunities.

Specifically, it means that Filipinos—compared to most other Asians—have fewer choices in terms of products and services, education and training, job opportunities, information and financial resources; and personal and professional networks. It means Philippine businesses have less access to customers and inputs, information, financial resources, technologies, and new business models. And the country in general lacks access to global supplies and markets, investments, information and financial resources, and technology and innovation.

It’s not so easy to figure out why. For so long, policy makers have not been investing in much-needed economic and social infrastructure such that producers are unable to bring goods and services to local and international markets cheaply and on time. The roads are bad, the ports are inefficiently run, and the country’s water transport systems are oligopolistic, thus making the transport of basic commodities like cereals from Mindanao much more expensive than bringing them to Metro Manila from Argentina.

To remedy this problem, Congress had enacted laws to allow private sector participation in infrastructure development through build-operative-transfer and similar schemes, yet these policies never took off, as bureaucrats used the said policy instrument for corruption and rent-seeking. The Naia Terminal 3 is the latest monument to such gallery of shame, turning off a lot of investors who were initially willing to build important economic infrastructure for us.

Information technology, particularly broadband Internet, supposedly promises to be a social equalizer. But right now, the penetration of broadband Internet has yet to transcend beyond the Cybercafe and middleclass villages. It appears that cost is a major consideration (the cheapest broadband is about a thousand pesos a month). The real reason probably is that there are only a few providers in country and given this oligopolistic situation, there seems to be no compulsion among these providers to reach the masses.

Breaking the digital divide is the key, but it seems telecom providers would rather roll out the more profitable gizmos like the 3G, unmindful of the fact that these new technologies would likely heighten digital divide and deny access to the larger masses of the population.

Solution? Try putting foreign competition in the business and surely, this problem of limited access will disappear in just a year or two. Greater competition, through greater openness to foreign investments is the key, just like what China is doing. The same could be said of the country’s interisland shipping industry. And of course, the government should come up with a comprehensive public investment program to address the country’s strategic infrastructure requirements. Lately, the government has been boasting about the “dividends” provided by the EVAT. Let’s mobilize this resource, preferably complimented by foreign grants, to enhance access once and for all in order to lift this country out of underdevelopment and poverty. The government should not dilly-dally, for access delayed is social justice denied.


Deany Bocobo said...

Our telecomms business is badly cartelized. The MSM won't tackle issues like Smart and Globe getting their 3G licenses for FREE, when the EU got $5 billion for theirs, and just last year, Indonesia garnered $500 million in licensing the electromagnetic spectrum. There's no real ACCESS to information when it is high priced like this. And here information isn't news or blogs, but the kind of info people exchange on cell phones.

Dave Llorito said...

that's for this visit, djb. i feel honored.

i agree with you. that's why we need to introduce more competition. one major error among policy makers is that they thought monopoly/oligopoly only exist in the manufacturing sector. the real monopoly now is in the services sector and its its choking us.