Raul V. Fabella
National Academy of Science and Technology
https://doi.org/10.57043/transnastphl.2013.3193
ABSTRACT
Development progeria is the phenomenon where a poor country, with a per capita income, say, of less than $5th, displays the industrial share dynamics of a rich mature economy. The phenomenon is characterized by the progressive retreat of the shares in total value added of the Tradable sectors, such as Manufacturing and Agriculture, and the increasing share of the Service sector. Economies on the successful economic catch-up trajectory exhibit the opposite dynamics: the share of the industry-especiallyb manufacturing sectors in total value added-gains while that of the Service sector loses. Since high investment rate and rapid economic growth rate is generally associated with a rapidly gaining Industry and Manufacturing sectors, the longer-term growth rate of development progeriacs is low, mimicking that of mature economies. Thus, a development progeriac’s prospect for catching-up with mature economies is limited, if not nonexistent. Development progeria is the economic analogue of progeria (premature aging) in medical parlance caused by a genetic malfunction. Medically, a progeriac is usually a pre-teen child displaying the physical characteristics of a 60-year-old. We argue that the strong peso policy and market and other institutional failures have contributed to the emergence over the years of development progeria in the Philippines. We discuss ways to reverse the decline of Manufacturing