Some Takeaways from "Frontiers of Development Economics: The Future in Perspective"

by Alan S. Cajes, PhD

This publication by the World Bank  provides a useful reference in understanding economic development. Some of the key takeaways include the following: there is no single formula for development; economic development is not just about infrastructure and economic activities, but also covers knowledge, institutions, and culture; the new growth theory underscores the role of ideas in promoting economic growth; the proper implementation of good ideas can increase the country’s total productivity; innovation serves as a catalyst to hasten the occurrence of development, and  innovation can be used to offset diminishing returns.  Indeed, sound ideas are part of human capital. Thus entrepreneurial ability, as a form of human capital, can help accelerate the process of economic development.

Structural changes and better economic outcomes can also be fostered by scientific ideas and rationality.  That is why the importation of ideas is generally accepted as a strategy to stimulate economic development. However, ideas are an insufficient, although a necessary, condition for development. Bad ideas have wreaked havoc on the economies of many nations. Hence, the rejection of bad ideas is as important as the adoption of good ideas. 

The story of economic development is paved with good and bad ideas. This is clearly demonstrated by the experiences of several socialist countries. In the case of the Philippines, the infusion of liberal ideas eventually awakened the consciousness of the natives about the bad economic situation they had after more than three centuries of Spanish domination. The lessons that the Ilustrados gained, by visiting and studying in other countries, enabled them to distinguish between right and wrong political and economic ideas.

The post-World War II Philippines was generally a poignant reminder of the failures of the import-substitution industrialization. This idea was adopted despite the fact that it was meant for industrial countries. To some extent, import-substitution industrialization produced some benefits, such as the development of local industries. However, in the long run, it became outdated and obsolete compared to what our Asian neighbors have adopted. Thus, the abandonment of unsound ideas is as good as the reception of rational ideas.

In the end, good ideas are like appropriate technologies. They have to be tested and analyzed to ensure that they fit the context of the place where they are to be planted. During my humble experiences in cooperative development, I have first-hand knowledge of the fact that a model that works in one cooperative won’t work when transplanted to another cooperative. There are several factors to be considered, such as the culture of the cooperative members and officers, their risk appetite, the type of business they are into, the supplies of raw materials, infrastructure support, access to funding and coaches, etc. 

Reference

Meier, Gerald M.; Stiglitz, Joseph E. [editors]. Frontiers of development economics : the future in perspective (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/586861468762924370/Frontiers-of-development-economics-the-future-in-perspective

Geotourism and the Bohol Island Geopark

by Alan S. Cajes, PhD

Photo taken from https://geopark.bohol.gov.ph/en/geosites/

This article basically attempts to answer the question: what form of tourism is appropriate for the Bohol Island UNESCO Global Geopark?

On 24 May 2023, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) Executive Board designated Bohol Island as the first UNESCO Global Geopark of the Philippines, thanks to the efforts of the various proponents and stakeholders. A UNESCO Global Geopark is a single, unified geographical area “where sites and landscapes of international geological significance are managed with a holistic concept of protection, education and sustainable development (UNESCO)”. 

In the case of the Bohol Island UNESCO Global Geopark, it covers “8808 square kilometers of land and surrounding lush marine protected areas (UNESCO)”. The covered geosites include the following: caves, sinkholes and cone karst, including the Chocolate Hills; Danajon Double Barrier Reef; uplifted marine terrace in Maribojoc and Loon; rupture site in Inabanga; Alicia Schist; springs; waterfalls, etc.

For the geosites, the appropriate form of tourism is geotourism, a form of tourism “that sustains or enhances the distinctive geographical character of a place—its environment, heritage, aesthetics, culture, and the well-being of its residents (National Geographic). Geotourism adheres to 13 principles (see below), including the following: adherence to the principles of the World Tourism Organization’s Global Code of Ethics for Tourism and the principles of the Cultural Tourism Charter established by the International Council on Monuments and Sites (ICOMOS). 

Article 2.4-2.5 of the Global Code of Ethics for Tourism are particularly instructive:

• Article 2.4. Tourism infrastructure should be designed and tourism activities programmed in such a way as to protect the natural heritage composed of ecosystems and biodiversity and to preserve endangered species of wildlife; the stakeholders in tourism development, and especially professionals, should agree to the imposition of limitations or constraints on their activities when these are exercised in particularly sensitive areas: desert, polar or high mountain regions, coastal areas, tropical forests or wetlands, propitious to the creation of nature reserves or protected areas;
• Article 2.5. Nature tourism and ecotourism are recognized as being particularly conducive to enriching and enhancing the standing of tourism, provided they respect the natural heritage and local populations and are in keeping with the carrying capacity of the sites

A relevant ICOMOS principle states: “In any case, with the future in mind, it is the respect of the world, cultural and natural heritage which must take precedence over any other considerations however justified these may be from a social, political or economic point of view.”

Given the above principles, it is imperative that a third party evaluation study be done (Principle 13) to determine the state of the geotourism areas and destinations, as well as propose the strategies or ways forward. Lest we forget, the UNESCO Global Geoparks have four years before a thorough re-examination will be done. The review will determine if the UNESCO Global Geopark:

• Still fulfills the criteria and its status will be extended to another 4 years (green card);
• No longer fulfills the criteria and appropriate steps must be undertaken in a period of 2 years (yellow card);
• Will lose its status as a UNESCO Global Geopark should it fails to fulfill the criteria within 2 years after getting a yellow card (red card).

 Other possible immediate actions:

1. Ensure that the Protected Area Management Board is functional and meets regularly;
2. Establish some kind of multisectoral Geotourism Council to include the concerned residents, tourist associations, tour operators, tourism industry representatives, etc. to forge consensus on allowable, prohibited or restorative acts in the covered areas;
3. Tourism industry to pursue industry self-regulation to prevent violations from its industry players;
4. LGUs and concerned agencies to inform, educate and communicate to the stakeholders the honors, benefits and accountabilities of being a UNESCO Global Geopark, as well as properly enforce their respective mandates;
5. Identify the geosites (e.g., which hills are part of the Chocolate Hills), put up easy to spot and read billboards or markings, and engage the affected stakeholders in a “Binol-anon” way of conversation;
6. For the Provincial Government of Bohol, consider re-certification under the ISO 14000 (Environmental Management System) to encourage tourist establishments to conform or get certified under relevant ISO standards, such as ISO 18065:2015 for tourism and related services.

 The Geotourism Principles

1. Integrity of a Place - Enhance the geographical character of the destination by developing and improving it in ways distinctive to the locale. Encourage market differentiation and cultural pride in ways that are reflective of natural and cultural heritage.

2. International Codes - Adhere to the principles embodied in the World Tourism Organization’s Global Code of Ethics for Tourism and the principles of the Cultural Tourism Charter established by the International Council on Monuments and Sites (ICOMOS).

3. Community Involvement - Base tourism on community resources to the extent possible, encouraging local small businesses and civic groups to build partnerships to promote and provide a distinctive, honest visitor experience and market their locales effectively. Help businesses develop approaches to tourism that build on the area’s nature, history, and culture, including food and drink, artisanship, performance arts, and the like.

4. Community Benefit - Encourage micro- to medium-size enterprises and tourism business strategies that emphasize economic and social benefits to involved communities, especially poverty alleviation, with clear communication of the destination stewardship policies required to maintain those benefits.

5. Tourist Satisfaction - Ensure that satisfied, excited geotravelers bring new vacation stories home and send friends off to experience the same thing, thus providing continuing demand for the destination.

6. Conservation of Resources - Encourage businesses to minimize water pollution, solid waste, energy consumption, water usage, landscaping chemicals, and overly bright nighttime lighting. Advertise these measures in a way that attracts the large, environmentally sympathetic tourist market.

7. Protection and Enhancement of Destination Appeal - Encourage the destination to sustain natural habitats, heritage sites, aesthetic appeal, and local culture. Prevent degradation by keeping the volume of tourists within maximum acceptable limits. Seek business models that can operate profitably within those limits. Use persuasion, incentives, and legal enforcement as needed.

8. Planning - Recognize and respect immediate economic need without sacrificing long-term character and the geotourism potential of the destination. Where tourism attracts in-migration of workers, develop new communities that themselves constitute a destination enhancement. Strive to diversify the economy and limit population influx to sustainable levels. Adopt public strategies for mitigating practices that are incompatible with geotourism and damaging to the image of the destination.

9. Land Use - Anticipate development pressures and apply techniques to prevent undesired overdevelopment and degradation. Contain resort and vacation-home sprawl, especially on coasts and islands, so as to retain a diversity of natural and scenic environments and ensure continued resident access to waterfronts. Encourage major self-contained tourism attractions, such as large-scale theme parks and convention centers unrelated to character of place, to be sited in needier locations with no significant ecological, scenic, or cultural assets.

10. Market Diversity - Encourage a full range of appropriate food and lodging facilities, so as to appeal to the entire demographic spectrum of the geotourism market and so maximize economic resiliency over both the short and long term.

11. Interactive Interpretation - Engage both visitors and hosts in learning about the place. Encourage residents to show off the natural and cultural heritage of their communities, so that tourists gain a richer experience and residents develop pride in their locales.

12. Market Selectivity - Encourage growth in tourism market segments most likely to appreciate, respect, and disseminate information about the distinctive assets of the locale.

13. Evaluation - Establish an evaluation process to be conducted on a regular basis by an independent panel representing all stakeholders' interests, and publicize evaluation results.

Disclosure: the author is a Bol-anon by consanguinity, a long time resident of Batuan in Bohol, an associate member of the National Geographic and the International Ecotourism Society, and not a recipient of any funding or support in writing this article.

On Data and Development Economics

 by Alan A. Cajes, PhD

In an article entitled Development Economics, Debraj Ray discusses and explains some concepts that are central to the study of development economics, which studies the economies of the developing countries. The concepts include the conventional growth theory (movement to a steady state), the notion of convergence (getting some parameters right), nonconvergence viewpoint (movement along different paths due to differences in histories, institutions, etc.), and the issues related to the microeconomics of development (credit market, collective action for public goods, conflicts, institutional effects).

Although the author describes the concepts and how such concepts affect our understanding of development path of nations, Ray does not take any side. What can be inferred from the discussion is the non-empirical approach in discussing the concepts. The concepts, for instance, could not be used to assess the predicament of the Philippines as a national economy. Some of the concepts are explained via the experiences of different economies that have varied historical and related experiences. The author, however, points to the direction of empirical research in development economics. As researchers use information and communication technology (ICT)-aided empirical studies, there is a direction towards induction based on observations and hard knowledge.

I learned a lot while trying to grasp the various concepts presented in the article. This reminds me of a Facebook post by an economist from another university claiming that economics is moving away from theoretical analysis (theory explains the data) to data-based analysis (facts first, theory later). This also reminds me of Dr. Cielito Habito’s “PiTik” test or the use of key economic indicators like “presyo, trabahao and kita” (prices, jobs and incomes). 

In one session where I had the opportunity to sit down with friends of Dr. Habito, he explained to us the other dimensions of economic development. He did not begin with theories or concepts. He showed us health and environment-related data. One has something to do with the issue of sustainability. Overfishing and extensive farming, which do not respect the ecological limits, will eventually constrain production, and then later the market prices.

Thus, the challenge posed by climate change, sea-level rise and related disasters will have to be factored in by specific communities and local government units (LGUs) because the negative effects are differentiated. Specific data on these issues will have to be gathered and analyzed so that these inform local policies and decisions.

I affirm this observation given some experiences I have in conducting natural resources and vulnerability assessments of some LGUs with funding support from the Climate Change Commission. What is evident is that communities need to generate quantitative data on the ground to inform economic policies. Thus, data science and data analytics is gaining ground as a tool for analysis by various disciplines, including economics.