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A Seldon Plan for the Philippines
Martijn Sinninghe Damsté
eufom European University for Economics &
Management A.s.b.l.
Master Thesis
Supervisor: Prof. A. Reuter
Immatriculation: 328982
Presentation date: 28 August 2015
Table of Contents
Introduction
Part 1. Overview
Part 2. Internal Factors
Part 3. External Factors
Conclusion
Introduction
● Inspiration: I. Asimov and
his Foundation series
● Psychohistory
Introduction
Problem-solving question:
How can the Philippine economy develop
from an underdeveloped into an emerging
economy, taking into account internal
developments and the hegemonic rivalry
between the United States of America and
the People's Republic of China?
Part 1. Overview
General
Overview
History
Spanish colonial age
US colonial age
Independence (Cold
War and Marcos)
Politics
(nominal democracy)
Political families
Nepotism and
corruption
Political
developments
Constitutional reform
(cha-cha)
Bangsamoro
Part 1. Overview
Source: www.investphilippines.info/arangkada/executive-summary
Part 1. Overview
OFW
Remittances
PHILIPPINE ECONOMY
CORRUPTION
TAX LEAKAGE
AND
AVOIDANCE
POVERTY AND
INEQUALITY
Part 2. Internal factors
CULTURE
170 ethnic
groups
Moro
people
Sinophobia
Cultural
pessimism
• More distinct
due to Islam
• Peripherical
region
• Grievances
• Blind
acceptance
authority
• No own
initiative
• Fatalism
• Short-term
thinking
• Social tolerance
to corruption
• Religion
• History
• Cultural diversity is
risk factor
• Currently low profile but
need to be aware
Part 2. Internal factors
● Trends and developments
● Ageing of the population
● Macro-economic outlook positive but to be taken
with a grain of salt
● 6th Kondratieff – (psycho-social) health. Chances
for medical tourism
Part 3. External factors
Sino-American hegemonic rivalry
Hegemonic Stability
Theory (HST)
Balance of Powers
Theory (BoP)
Hegemon if:
Will to lead
Ability to lead
Commitment
If one country becomes
too powerful, others will
form a coalition to counter it
Unipolarity Multipolarity
1945-1991
US hegemony
USSR contender
1991-now
US hyper power
Rise of China
Multipolar future
China not interested in
hegemony
Friction but escalation
unlikely
Part 3. External factors
Part 3. External factors
Game Theory
•Prisoner’s Dilemma and Hawk-Dove-Bully-Retaliator
•Negotiations are the best option
Economic
scenarios
•Maintenance of the Status Quo
•Escalation
•Asian Finlandization
•Detente – most favorable
Conflict
management
•In escalation (9 phases) focus shifts
•From problem to person, from rational to emotional
•Political supporters, voters, lobby, interest groups
•The ‘human factor’
Conclusion
No change
Corruption Nepotism
Disfunctional
democracy
Tax leakage
Culture
Unrest
Poverty
Weak growth
Conclusion
Inclusive political/
economic institutions
Extractive political/
economic institutions
Transparency
Social mobility
Certainty
Level playing field
Long-term vision
Rules applied/changed for all
Closed small 'elite'
No social mobility
Kleptocracy, corruption
No certainty, rules can be
adjusted for benefit
of elite
Examples:
USSR + most successors
Saudi Arabia + Gulf States
North Korea
Zimbabwe
Examples:
USA
Canada
N. and W. Europe
Japan
Durable growthLimited sustainability
Conclusion
Inclusive political/
economic institutions
Extractive political/
economic institutions
What are
the Philippines?
Nominal democracy but..
Small elite of political dynasties
Rent-seeking elite
Poverty, inequality
No social mobility
Rules only for elite, nepotism
No transparency, corruption
Cultural tolerance
They have
(mostly) an
extractive system
Conclusion
Inclusive political/
economic institutions
Extractive political/
economic institutions
Bangsamoro
Transparency
Tax Reform (IBFD)
Infrastructure
'Social Revolution'
Constitutional reform
Anticipation for ageing
Anti-poverty programs
Medical tourism
Short term
Long term Long term
Short term
Conclusion
External factors
High economic exposure
Very friendly relation
Geographically far away
Limited economic exposure
Problematic relation
Geograpically near
Escalation
-0.18–+0.16%
Detente
+2.3%
Status Quo
+2.0%
Asian Finlandization
+1.6-1.8%
Friendly but critical ally
Negotiation
Improve relations
Trade
Tourism
OFWs
FDIs
Questions?

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A seldon plan for the philippines

  • 1. A Seldon Plan for the Philippines Martijn Sinninghe Damsté eufom European University for Economics & Management A.s.b.l. Master Thesis Supervisor: Prof. A. Reuter Immatriculation: 328982 Presentation date: 28 August 2015
  • 2. Table of Contents Introduction Part 1. Overview Part 2. Internal Factors Part 3. External Factors Conclusion
  • 3. Introduction ● Inspiration: I. Asimov and his Foundation series ● Psychohistory
  • 4. Introduction Problem-solving question: How can the Philippine economy develop from an underdeveloped into an emerging economy, taking into account internal developments and the hegemonic rivalry between the United States of America and the People's Republic of China?
  • 5. Part 1. Overview General Overview History Spanish colonial age US colonial age Independence (Cold War and Marcos) Politics (nominal democracy) Political families Nepotism and corruption Political developments Constitutional reform (cha-cha) Bangsamoro
  • 6. Part 1. Overview Source: www.investphilippines.info/arangkada/executive-summary
  • 7. Part 1. Overview OFW Remittances PHILIPPINE ECONOMY CORRUPTION TAX LEAKAGE AND AVOIDANCE POVERTY AND INEQUALITY
  • 8. Part 2. Internal factors CULTURE 170 ethnic groups Moro people Sinophobia Cultural pessimism • More distinct due to Islam • Peripherical region • Grievances • Blind acceptance authority • No own initiative • Fatalism • Short-term thinking • Social tolerance to corruption • Religion • History • Cultural diversity is risk factor • Currently low profile but need to be aware
  • 9. Part 2. Internal factors ● Trends and developments ● Ageing of the population ● Macro-economic outlook positive but to be taken with a grain of salt ● 6th Kondratieff – (psycho-social) health. Chances for medical tourism
  • 10. Part 3. External factors Sino-American hegemonic rivalry Hegemonic Stability Theory (HST) Balance of Powers Theory (BoP) Hegemon if: Will to lead Ability to lead Commitment If one country becomes too powerful, others will form a coalition to counter it Unipolarity Multipolarity 1945-1991 US hegemony USSR contender 1991-now US hyper power Rise of China Multipolar future China not interested in hegemony Friction but escalation unlikely
  • 11. Part 3. External factors
  • 12. Part 3. External factors Game Theory •Prisoner’s Dilemma and Hawk-Dove-Bully-Retaliator •Negotiations are the best option Economic scenarios •Maintenance of the Status Quo •Escalation •Asian Finlandization •Detente – most favorable Conflict management •In escalation (9 phases) focus shifts •From problem to person, from rational to emotional •Political supporters, voters, lobby, interest groups •The ‘human factor’
  • 13. Conclusion No change Corruption Nepotism Disfunctional democracy Tax leakage Culture Unrest Poverty Weak growth
  • 14. Conclusion Inclusive political/ economic institutions Extractive political/ economic institutions Transparency Social mobility Certainty Level playing field Long-term vision Rules applied/changed for all Closed small 'elite' No social mobility Kleptocracy, corruption No certainty, rules can be adjusted for benefit of elite Examples: USSR + most successors Saudi Arabia + Gulf States North Korea Zimbabwe Examples: USA Canada N. and W. Europe Japan Durable growthLimited sustainability
  • 15. Conclusion Inclusive political/ economic institutions Extractive political/ economic institutions What are the Philippines? Nominal democracy but.. Small elite of political dynasties Rent-seeking elite Poverty, inequality No social mobility Rules only for elite, nepotism No transparency, corruption Cultural tolerance They have (mostly) an extractive system
  • 16. Conclusion Inclusive political/ economic institutions Extractive political/ economic institutions Bangsamoro Transparency Tax Reform (IBFD) Infrastructure 'Social Revolution' Constitutional reform Anticipation for ageing Anti-poverty programs Medical tourism Short term Long term Long term Short term
  • 17. Conclusion External factors High economic exposure Very friendly relation Geographically far away Limited economic exposure Problematic relation Geograpically near Escalation -0.18–+0.16% Detente +2.3% Status Quo +2.0% Asian Finlandization +1.6-1.8% Friendly but critical ally Negotiation Improve relations Trade Tourism OFWs FDIs