Competitiveness, FDI and Technological Activity in East Asia
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Competitiveness, FDI and Technological Activity in East Asia

Edited by Sanjaya Lall and Shujiro Urata

This book addresses this imbalance with new country studies on the interaction between foreign direct investment (FDI) and technological activity in building export competitiveness. The book covers China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand, highlighting different strategic approaches to building capabilities in industrial enterprises. The book also includes a general overview and studies of Japanese multinationals overseas.
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Chapter 10: Can the Philippines ever catch up?

Joy V. Abrenica and Gwendolyn R. Tecson


Joy V. Abrenica and Gwendolyn R. Tecson INTRODUCTION Post-war industrial development in the Philippines presents a typical portrait of a developing country’s struggle to achieve technological competence. However, few countries have squandered their potential with as much profligacy as the Philippines. Despite its rich base of human capital and its early lead,1 the Philippines has performed poorly, particularly in a region where many other countries have successfully (often spectacularly) overcome similar constraints to development. Various factors have been held to account for the Philippines’ poor performance. One account blames macroeconomic mismanagement. Alternating cycles of crisis and boom are said to have engendered uncertainty and dissuaded the private sector from investing in building technological capabilities. One may, however, argue that no East Asian economy has been spared by the boom-bust cycle, though others have enjoyed longer periods of stability. Other analysts point to the failure of the state to steer the country’s technological development along a defined path (as in Korea or Taiwan) because of its liberal approach and over-dependence on market forces. However, policymaking in the Philippines has not always been liberal and marketoriented. There have been ample market interventions in the past, although they may not have been well designed or implemented. Market liberalism is of recent vintage in Philippine policymaking; the country is still in transition from an inward-looking policy environment.2 The technological lethargy of a country as well endowed with human capital as the Philippines cannot be easily explained. The boom–bust cycles certainly...

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