SDG 9 commits PHL to ‘inclusive, sustainable industrialization’

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The UN Millennium Development Goals (MDGs) sought to reduce poverty among UN member-states between 1990 and 2015. There were 10 MDGs. The most significant MDGs were the “halving” of poverty and inequality levels by 2015.

The Philippines failed to achieve both. The National Economic and Development Authority (Neda) admitted, in the Fifth MDG Progress Report (2014), that inequality barely changed—from 0.48 Gini coefficient in 1991 to 0.47 in 2012.  In fact, some commentators even assert that inequality has worsened, with some 40 richest Filipino families lording over a nation of over 100 million. As to the poverty reduction goal, the Neda reported that poverty incidence decreased from 34.4 percent in 1991 to 25.2 percent in 2012. For 2015, it went down further to 21.6 percent. However, the latest per-capita poverty rate of around P60 is way too low. Had the Philippine Statistical Authority used a more realistic $2-per-capita yardstick, the number of poor Filipinos would likely swell to a higher percentage.

Nonetheless, the poverty level had indeed gone down (not halved) in the MDG target period. There were also some positive results on the MDG front, especially on the following: “[1]providing universal access to primary education; [2] providing educational opportunities for girls; [3] reducing infant and under-five mortality; [4] reversing the incidence of malaria; [5] increasing tuberculosis detection and cure rates; and [6] increasing the proportion of households with access to safe water supply.”

But the Neda also reported that “there is a need to exert greater effort to accelerate progress on the following areas where we are lagging behind: [1] elementary education in terms of completion rate; [2] maternal mortality; [3] access to reproductive health; and [4] HIV/AIDS. On education, the participation rate has significantly improved but the completion rate at the elementary level has declined. On health, the increase in maternal mortality ratio indicates that the target of 52 deaths per 100,000 live births has a low probability of being met.”

Now the MDGs have been replaced by the Sustainable Development Goals (SDGs), as approved by the UN General Assembly in 2015. This time, the SDGs are more ambitious, with  zero hunger and zero poverty targets by 2030. The SDGs are collectively called the “2030 Agenda for Sustainable Development”. They were obviously framed in the context of the sustainability challenge hanging over the heads of policy-makers around the world—the sustainability of the environment given the global warming crisis and the sustainability of the global economy in the wake of the global financial crisis. Then UN General Secretary Ban Ki-Moon declared that “we don’t have plan B because there is no planet B”.

The 10 MDGs have been replaced by 17 SDGs, namely:

■ No poverty;

■ Zero hunger;

■ Good health and well-being;

■ Quality education;

■ Gender equality;

■ Clean water and sanitation;

■ Affordable and clean energy;

■ Decent work and economic growth;

■ Industry, innovation and infras-tructure;

■ Reduced inequalities;

■ Sustainable cities and  communities;

■ Responsible consumption and production;

■ Climate action;

■ Life below water;

■ Life on land;

■ Peace, justice and strong institutions; and

■ Partnership for the goals.

If realized, the above SDGs, indeed, are likely to transform the world into a stable, peaceful and environmentally and economically sustainable one. In a divided and conflict-ridden world, how can the SDG vision then be achieved? The quick answer: it will not be easy and the fight on the different fronts will be uphill.

However, one of the goals can also be an instrument for the realization of the other SDGs.  This is SDG 9, which commits nations to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”.

According to Dr. Manuel Montes of the South Centre in Geneva, SDG 9 re-introduces industrialization as a goal in the UN development agenda (see Montes, “Industrialization, inequality and sustainability”, Policy Brief 44 of South Centre, August 2017). This requires pro-active industry policies and a revival of “state leadership over key economic actions”, for examples, controls over speculative portfolio capital flows and bold reforms in “rigidified” and unequal social and economic structures. In short, this is “industrial policy” of a higher kind, to promote inclusive and sustainable growth among disparate developing countries in a highly uneven global economic order. So what kind of industrial policy is needed?

Montes suggests the following:

■ First, industrial policy must create the economic space and means for new economic activities and livelihoods to grow. For example, it is not enough for a developing country to link its national growth to the export market by participating in the global value chains (GVCs) of the multinationals of developed countries. The value added and job creation in this set-up can be extremely limited because the GVCs are naturally skewed in support of those who set up the GVCs. Developing countries, while participating in the GVCs and the global export market, must find ways to develop national technology, upgrade skills and diversify their economy.

■  Second, industrial policy must nurture domestic innovation and productivity across all sectors—industry, agriculture and services. This includes growing new “industries” in these sectors and looking for ways to grow these industries despite the restrictive patent regime erected by the big private corporations from the developed countries through the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS). The high cost of producing and distributing patented medicines in the Philippines easily comes to mind.

■ Third, industrial policy must address development questions related to the choice of appropriate technology and the efficient scale of production. For example, small-scale farming can be made more productive, environmentally friendly, job-creating and commercially viable.

■  Fourth, industrial policy must enable the rise of a strong domestic enterprise sector that can compete with foreign investors in a level playing field and supply the requirements of a growing domestic market. This is important for a country like the Philippines, which has a large population and enjoys a huge amount of overseas Filipino workers remittances. The country’s trade deficit has been growing because of its continuing dependence on imports, many of which can easily be produced at home at the same level of quality and price with those of the imported.

■ Fifth, industrial policy must promote policy coherence and coordination among different agencies. For example, the rice-tarrification issue pending in Congress requires discussion not only on issues of trade but also of agricultural modernization, agrarian reform and food security and sovereignty both in the short and long terms.

As amply articulated by Montes in the case of SDG 9, the SDGs can be a weapon for growth and sustainability. The point is how to fulfill the SDGs through a more pro-active and forward-looking national development program.



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