pinkey gupta 1 (five pillars of economic development)

FIVE PILLARS OF ECONOMICDEVELOPMENT.

• Five pillar of growth presents the major results of

a short term research projects identifying the FIVE

MAJOR AREAS of reforms deemed pivotal in

pursuing sustained economic growth and

alleviation of poverty of the country.

pinkey gupta

CIMS B-SCHOOL

The major areas/pillars of economic reforms are as follows.

1. MACROECONOMIC

AL STABILITY.

2. INVESTMENT

CLIMATE.

3. GOVERNANCE.

4. SOCIAL REFORMS.

5. ENVIRONMENTAL

MANAGEMENT.

A. ACHEVING MACROECONOMIC

STABILITY.

It is crucial that it is supported by a prudent monetary and an effective external debt management policy to ensure external sector viability.

To achieve macroeconomic stability following measures should be considered.

I. ADDRESSING FISCAL DEFICITS.

1. IMPROVE REVENUE COLLECTIONS.

ADMINISTRATIVE REFORMS.

Improve tax administration.

Institutionalize an attrition system.

revenue measures.

Rationalize fiscal incentives.

Reduce exemption from VAT.

Index excise taxes on cigarettes & alcohol.

Increases excise tax on petroleum products.

Pursue tax decentralization.

Introduce a second wave of privatization.

2.IMPROVE EXPENDITURE MANAGEMENT.

Review allocation for priority development

assistance fund (PDAF).

Strengthen performance assessment &

evaluation system for each agency.

Adopt a medium term expenditure frame work.

Re-engineer the bureaucracy.

Enact a fiscal responsibility bill.

3. Contain fiscal risk fromgocc’s & contingentliabilities due to guarantees. Strengthen govt. oversight of GOCC’s

operations during budget deliberations.

Limit automatic guarantees to BOT

investors & GOCC’s.

Make contingent liabilities(CL’s) more

transparent.

Set a budget for contingent liabilities

separate from GAA that should be approved

4. Managing public debtefficiently.

Ensure effective debt management at all times by borrowing preferably at least cost with longer maturities.

II.MAIMTAINING STABLE MONETARY INDICATORS.

1.INFLIATION.

Ensure a flexible & market based

interest &

foreign exchange rate.

2. External sector andexternal debt.

• Promote trade co-operation & enhance trade competition policies.

• Expand the export base.

• Assist micro, small & medium enterprises (MSME’s) through financial & technical support.

III. STRENGTHENING THE FINANCIALSECTOR.

1.ADDRESSING THE BANKING SECTOR’S PROBLEMS.

• Synchronize regulatory

functions.

• Address issues of ownership

structure structures &

jurisdictions.

• Enact a credit reporting law.

2.Capital mobilization from non-bank sources.

Enact a law or personal equity retirement account (PERA).

Amend the insurance code.

Update the investment corporation act.

Ensure efficiency in regulating corporations.

Disentangle banks from corporations.

B.CREATING A BETTER BUSINESSENVIRONMENT.

I. INFRASTRUCTURE DEVELOPMENT.

1.An efficient infrastructure system is key factor in a country’s economic development because it facilitates the movement of goods, services & people.

2.Ensure efficient management of public fund for rural infrastructure.

3.Promote transparency in project bidding & implementation.

ii. Power sector development.

The huge capital investment that necessities great participations of private investors in the energy sector.

1.Strengthen the regulatory framework of the energy sector.

2.Rationalize generation rates.

3.Develop new renewable energy sources.

4.Accelerate open access.

5.Re-examine vertical merges & cross-ownership.

iii. Regulatory concerns.

An efficient regulatory environment is critical

in attracting investment necessary to generate

& encourage productivity.

1.Minimize corruption through streamlining of

govt. regulation.

2.Enact the corporation recovery law.

3.Enact a comprehensive competition policy.

4.Liberalize further the public utilities sectors.

iv. Technology management.

Only technology indicator in which the country does excellently is in terms of high technology export.

1. Prioritize the research agenda.

2. Provide a more attractive tax incentive scheme.

3. Strengthen the governance & institutional frame work of the science & technology system.

4. Improve science & technology educations.

5. Manage technology transfer, utilization & commercialization.

C. ESTABLISHING GOOD GOVERNANCESAND STRONG INSTITUTIONS.

With increased pressure to create efficient market & attract investments, government are now compelled to build better institutions & to incorporate good governance in policy & program implementation.

i. Strengthen the bureaucracy.

Re-engineer the Bureaucracy by rationalizing the functions of agencies.

Amend the civil services code.

Review the salary standardization law (SSL).

ii. Improve the delivery of basic services.

Strengthen the oversight functions of govt. forming parties.

Pass an integrated identifications systems for efficient service delivery.

iii. Ensure enforcement of the judicial system.

Support reforms in the judicial system.

Consider the recommendation of the Feliciano commission.

Enact a whistleblower’s protection act.

iv. Institute political and electoral reform.

Develop genuine political parties.

Institute capsizing finance reforms.

Pursue COMELEC reorganization & review the Omnibus election code.

D. INSTITUTING SOCIAL REFORMS TOIMPROVE EQUITY.

Economic policies should

be complemented with the

appropriate social reforms

policy interventions which

empower the individual to

be productive agents in the

economy & ultimately

society.

i. Prioritizing social reforms.ii. Educational sectors.

Review the magna carter for public school teachers.

Realization the public higher educations sectors.

Conduct a study on the special educations funds of the LGU’s.

Address financial constraints to meet classroom & book shortages & teachers training.

iii. Health sector.

Increase delivery of the primary health care.

Re-tool & Re-train the health professionals.

Develop & strengthen the technical expertise of public health practitioners.

Improve the role of the local government in health care delivery & financing.

Adopt & improve priority & policies to improve maternal health that include information , education & communication (IEC) activities.

iv. Housing sector.

Prioritize government funding assistance.

Encourage private sector investment in low cost buildings.

Encourage community approach home-ownership.

v. Access to land.

Allow farmers to use the land as

collateral.

Enact & implement a national

land use policy.

Increase tax on idle lands.

Adopt a more acceptable land

valuations systems.

Ensure efficient use of

government funds.

vi. Access to employment opportunities.

Incorporate a six-month on the job

training in the school curricula.

Upgrade workers skills &

competencies.

Promote a stronger public-private

partnership in developing an

effective labor market information

system.

Review the system of providing

retirement disability & others social

protection scheme to workers.

E. MANAGING THE ENVIRONMENT.

Rapid environment changes

can lead to special

circumstances in the society,

such as migrations,

urbanizations, deterioration's

of the persons health

conditions displacement of

indigenous people a

communities & lack of

access to basic environment

services such as water.

1. Adopt & implement an integrated water shed

management policy.

2. enact a national land use policy.

3. formulate & adopt capacity –building &

awareness initiative's.

4. formulate & adopt an appropriate incentive

system.

5. Establishing proper environment accounting

system.

6. ensure strict implementation of environmental

laws.

thank you.