Remarks before
Swaminathan Foundation
Chennai, India
June 28, 2018
Prof. M.S. Swaminathan; Honorary Consul B. Narendran of the Consulate of the Republic of the Philippines in Chennai; Dr. V. Selvam, Executive Director, M S Swaminathan Research Foundation; members of the board and trustees; students; distinguished guests and friends: good morning.
I had the pleasure of meeting Professor M.S. Swaminathan in 1986. At that time, he was the Director General of the International Rice Research Institute (IRRI) located a few kilometers south of Manila. I was then serving as the secretary of the Department of Agriculture. That was a very fateful meeting.
In the succeeding period, Dr. Swaminathan helped the efforts in the Philippines to rebuild our rice production at a particularly destructive drought. It was with his scientific insights that the IRRI and the Department of Agriculture put together the Rice Production Enhancement Program that helped our farmers and our rice consumers immensely.
I will be forever grateful to Professor M.S. Swaminathan and I am happy to see that his work continues through this research foundation. Indeed, as Mahatma Gandhi once remarked, “In a gentle way, you can shake the world.” In his way, Professor Swaminathan did shake the world, and I have no doubt that this foundation will continue to shake the world.
Dr. Swaminathan, in addition, has been an inspiration to me, both officially and personally. First, he inspired us to create the Philippine Rice Research Institute, which Dr. Swaminathan reminded me this morning he had suggested to the previous president, President Marcos, who rejected the idea. But it was under the presidency of Corazon Aquino — and I was the minister of that time of agriculture — that we established the Philippine Rice Research Institute. And this institute has continued to adopt the rice research that IRRI has done to the conditions in the Philippines.
The second inspiration that Dr. Swaminathan has inspired me is to recommend the appointment of Dr. Bruce Tolentino, whom I believe the good doctor remembers, who is currently the Deputy Director-General of the IRRI. I recommended to our president that he be appointed to the Monetary Board of the Philippines. That is the highest policy-making body for finance in the Philippines. This is the first time you have an agriculture economist who is specializing in rural development who is now sitting in the highest policy-making body for the monetary policy in the Philippines. And that, again, is an inspiration of Dr. Swaminathan because we believe that there is no separation between the importance of finance and monetary policy and rural development.
The third personal inspiration Dr. Swaminathan has given me has been to convince my family and friends to establish a foundation in the South of the Philippines where we are from called the Foundation for Development through Education. Through this foundation, we provide complete scholarships to two communities in the Philippines–the Islamic community and the indigenous people. We provide college education, and so far we have graduated a hundred students in the last 18 years. So again, Dr. Swaminathan, that is your legacy in the Philippines.
Thank you for inviting me to join you today and exchange ideas on the development experience of our two countries. Both India and the Philippines are growing at impressive rates. Both our economies have ample headroom to enable the present pace of growth to continue into the long term. In both our countries, millions are looking forward to economic expansion as a means to lift themselves out of poverty. Both our countries are growing our economies under challenging constraints.
Today, the effects of global warming are more compelling than ever. We are losing ice at both of the world’s poles at an escalating rate. As a result, sea levels are rising. Warming waters have caused an alarming loss of coastal reefs and more severe weather conditions. Rising sea levels, which Dr. Swaminathan predicted in 1989, threatened our population and economic centers.
We have to endeavor to shape our economic development so that it does not aggravate climate change. This is, as you can imagine, a great challenge. Development generally involves raising incomes. Higher incomes drive a greater propensity to consume. That propensity will require more power resources, more transport systems and manufacturing capacity. All these will add to the carbon that already fills our atmosphere. But they are costs we must assume to bring relief to the marginalized sectors of our society, create jobs for the unemployed and assure ample food for our people.
Apart from seeking growth that is sustainable, we have to ensure that it is also inclusive. Rapid development can produce widespread social dislocation. This could lead to stresses and breakdown of the old systems that delivered stability. We must fashion our growth so that every section of our community will have a stake in it. We need to ensure that rapid expansion does not lead to polarization of wealth that can only invite polarization in our politics. We need to pursue development with the classic goal of building a strong middle class.
There are significant differences in the development challenges our two countries confront.
India has the advantage of being a large land mass as well as a large domestic market capable of supporting a large industrial base. You have an extensive rail system that allows the most efficient movement of goods and people across the subcontinent. Like the Philippines, you have a young workforce capable of supporting economic expansion into the long term.
The Philippines is an archipelago of over seven thousand islands. We need to build an efficient logistics system to overcome the added costs of moving goods and people across our economy. We need an efficient system of ports, airports, rail services and access roads to make sure that every island and every community is included in the mainstream of economic development.
This is the reason why we have put priority on modernizing our infrastructure at this time. We need to move goods and people more efficiently in order to be competitive. A better infrastructure backbone will help us overcome the hindrances posed by being an archipelagic country. It will prevent islands and regions from being left behind as the economy grows. I am happy to note that one of your top companies called GMR is very much involved in the creation of modern airports in the Philippines.
The ambitious infrastructure program pursued by our government is known as the Build, Build, Build. It supports our economic growth even at its earliest phases. Investments in infrastructure have the highest multiplier effects on the economy. It creates jobs, opens new investment areas and allows new linkages. The program is a growth stimulant.
Over the next five years, we expect to invest about 170 Billion US dollars in providing better infrastructure projects for our economy and our people. This year, 25.4 percent of our national budget, equivalent to 6.3 percent of GDP will be allocated for the infrastructure program. By 2022, we expect to increase investments in infrastructure to 7.3 percent of our GDP.
Of the 75 high-impact and big-ticket projects we have identified for this program, 35 projects have completed the approvals process and now are shovel-ready. We expect the rest of the projects to pass the approvals process this year.
Modernizing a nation’s infrastructure backbone is, without doubt, a costly proposition. In order to fund our infrastructure program, we need to ensure additional revenues for the government. To do this, we have to overhaul our outdated tax policies to make them simpler, fairer and more efficient.
In the Philippines, therefore, the comprehensive tax reform program and the massive infrastructure build-up must go hand in hand. They are the two main pillars of our economic strategy. Together, they enable government to radically redefine the parameters of our development, making our growth truly inclusive and our society more just.
Our infrastructure program also benefits from expanded official development assistance (ODA) flows from our friends in the region, and from a revived interest in infrastructure investments among multilateral institutions. We are also open to Public-Private Partnerships in implementing our infrastructure projects when it is deemed feasible.
Since the crushing debt crisis of the 1980s, the Philippines endeavored to build a stronger fiscal position, manage public funds more prudently and carefully work down our debt to sustainable levels. The measure of our success in this regard is the investment-grade rating we have been given by the credit rating agencies.
We are aware that no society achieves its full development potential unless it is able to ensure a safe environment for its citizens. The present political leadership has, therefore, put the fight against criminality, especially criminality associated with illicit drugs, high in its action plan. As a result, our overall crime volume has decreased by almost 22 percent since the start of this administration.
We understand that fighting corruption and improving government efficiencies are indispensable to raising our economy’s competitiveness. We have embarked on a program to reduce red tape, increase the efficiency of our frontline agencies including our revenue collecting bureaus and make government in general more accountable to its citizens.
Over the long term, we likewise understand that attracting investments and building a strong manufacturing base are the keys to ensuring our people with abundant employment opportunities. We aim to shift our development pattern from being consumption-led to one driven by investments. All our policy reforms are directed at the goal of improving productivity and easing doing business in the Philippines.
By 2022, when the term of the present political leadership ends, we aspire to bring down poverty incidence from the present 22 percent to only 14 percent. That is the single most important economic measure that will define our success or failure. We stake our legacy on that.
We also are very keenly aware that part of economic development is to assure … that our people have a source of good nutrition at affordable prices. That’s why a lot of our infrastructure projects are involved in developing irrigation systems, farming systems, roads that will connect the rural areas to our main consumption areas.
In closing, let me say that we look forward to improving our trade and investment relationships with all countries. India inspires us with its rapid growth made possible by a shift to a more market-oriented policy. I am sure that in the coming years, there will be even more opportunities for our enterprises and people to interact more intensively and for our bilateral relationship to become even more beneficial to both sides.
Thank you and good day.
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