The long and winding road
The Organisation for Economic Co-operation and Development (OECD), an intergovernmental economic organization that works to build better policies for better lives, reported that prospects for the world economy have brightened, but it is likely to remain uneven and dependent on the effectiveness of vaccination programs and public health policies. Some countries are recovering much faster than others. (www.oecd.org/economic-outlook/may-2021)
The United States and Korea are the frontrunners with their per capita income levels before the pandemic reached after about 18 months. Europe is expected to recover in 3 years while it could take 3 to 5 years for other countries.
The OECD observes that countries that have been quick to vaccinate their population against COVID-19 and manage to control infections through effective public health strategies are seeing their economies recover more quickly. Job vacancy postings in the United States are picking up, including in sectors such as tourism. But while vaccination rates are progressing well in many advanced economies, poorer and emerging-market countries are left behind.
There is also an uneven recovery among countries owing to differences in economic strength. For example, countries specializing in trade and manufacturing have seen faster recovery than other countries with a service economy. This is because consumers have been spending less on services and more on goods since the pandemic began.
So, where are we in the race towards recovery?
The Philippines is nowhere on the map of the OECD, but the country falls under the emerging economy classification with a forecasted recovery period to last up to 5 years. The economic think tank stresses that the key to speed up the recovery process is to vaccinate and cooperate, support people and support business, and prepare for a solid and sustainable recovery.
The country administered 6,314,548 doses on the vaccine rollout as of June 12, 2021, less than 5% of the target. The stimulus package for the most affected sectors is a pittance compared to our neighboring countries in Asia.
To prepare for a sustainable and robust recovery, OECD recommends: avoiding the removal of government stimulus funding too early; overhaul public finance frameworks to improve the timeliness and efficiency of spending; invest in healthcare, cleaner infrastructure, and digital technology to foster a transition to a more resilient and sustainable economy; focus on structural reforms that can boost medium-term growth in productivity and employment.
Unless the Philippine government adopts a better strategy, there is a greater risk that recovery may remain elusive even after five years. The next set of leaders who will take the helm of government will undoubtedly be moving mountains to fulfill their promises.