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June 14, 2007

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Emmanuel

Alan Beattie, the author of this FT article, is usually reliable. Not here, though.

(1) My first gripe is with this statement:

"Remittances form more than 10 per cent of gross domestic product, the highest ratio in the world."

This is flat wrong. The Philippines is not even among the top twenty countries in this respect according to the World Bank publication "Remittances: Development Impact and Future Prospects".

(2) More trouble in store:

"Being a developing country used to be easy. You followed leaders - Japan, Hong Kong, Taiwan, South Korea - up a well-trodden ladder from agriculture through manufacturing to services. Starting with tilling the soil, you moved on to turning out T-shirts, then toys, then tractors, then television sets, and ended up trading Treasuries."

One word: India. India is taking advantage of its large, educated workforce fluent in English to offer more services and thus avoid direct competition with China. Given India's less well-developed transportation infrastructure, this makes sense. Like India, the Philippines has a large, educated workforce fluent in English that is suitable for a service economy.

Beattie's mistake is in assuming there is "one best way" to development. I have written more about this article here:

http://ipezone.blogspot.com/2007/06/ft-gets-philippines-wrong-bigtime.html

Dr. Rodrik: Please enable formatting for us commenters so we can italicize text, make links, etc. I think you need to fiddle with your Typepad settings a bit to get this done. Thanks!

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