Monday, January 12, 2009

Economics and geography

World Bank economists presented a new study on economic geography in the Philippines yesterday. Some of this goes over my head, but essentially it discusses how urban and rural areas need to cooperate to spur economic growth for all.

Jesus Llanto of the ABS CBN News of the Philippines was at the press briefing.

Contrary to the belief that distributing economic activities from the urban centers to remote areas will reduce poverty and spur growth, it is the economic integration of the urban centers and far-flung areas that will boost economic development and cut poverty, said World Bank economists during a presentation of the report, entitled Reshaping Economic Geography, at Makati City today.

“The reality is that interaction between leading and lagging places is the key to economic development,” said Indermit Gill, director of the WDR and WB chief economist for Europe and Central Asia.

Gill said that economic growth tends to favor some regions and this is the reason why economic activities tend to be concentrated on some areas. “Economic growth is seldom spatially-balanced.”

“The world is not flat. Markets favor some places over the others. To fight this concentration is tantamount to fighting prosperity,” Gill added.

Business activities in the Philippines, Gill noted, are concentrated in Metro Manila, its two neighboring regions—Central Luzon and CALABARZON—and in a few cities like Cebu, Davao and Cagayan de Oro.

The World Development Report 2009 noted that current policy debates on urbanization, area development, and globalization tend to emphasize geographic targeting, which focuses on what to do in rural areas or slums, what to do in remote areas, among others.

The report, according to Mr. Gill, reframes these debates in a way that better conforms to the reality of growth and development.

Experts said that the process of redistributing economic activities in other areas will not successfully induce growth and reduce poverty.

“It’s like building more mediocre libraries than building one effective library,” said Arturo Corpuz, vice president for Urban-Regional Planning of Ayala-Land Inc.

No comments: