The Different Phases of Economic Development

Although material wealth accumulation is among the concerns of genuine economic development, its greater concern is the total improvement of the quality of people’s lives. This, in turn, is related to sustainable economic development issues in a country which greatly influence business management.

Sustainable economic development ensures that the present needs of a particular generation are met in full without endangering the ability of future generations to also fully meet their own needs. Business managers must be conscious that the decisions they make regarding their respective organization’s activities must not lead to the abuse of ecological elements—air, water, and soil—as this will threaten sustainable economic development.

Economic Development

This is a total process which includes not only economic growth or the increase in the given amount of goods and services produced by the country’s economy but also considers the social, political, cultural, and spiritual aspects of the country’s growth.

Different countries have different management strategies to encourage ecological respect and to prevent, in the best way they could, damage to the environment. Common environmental and ecological problems that have to be dealt with by business managers include the destruction of natural habitats, depletion of clean water resources, urban, industrial, and agricultural’ pollution, and others.

In September 2000, world leaders gathered for the Millennium Summit, and thus adopted the United Nations (UN) Millennium Declaration. In so doing, they had committed their nations to a global partnership toward the reduction of extreme poverty and the pursuit of the Millennium Development Goals (MDG).

Economic Development Phases

These are the distinct stages involved in the total process of economic development in a particular country; these include economic growth, improvement of Human Development Index, availability of benefits provided by science and technology, and the societal improvement of the opportunities and general welfare of its members

The MDGs, according to the UN, are “the world’s time-bound and quantified targets for addressing extreme poverty in its many dimensions — income poverty, hunger, disease, lack of adequate shelter, and exclusion — while promoting gender equality, education, and environmental stability.” The deadline for the fulfillment of the MDGs was set for 2015. The following are the MDGs:

  1. Eradicate extreme hunger and poverty
  2. Achieve universal primary education
  3. Promote gender equality and empower women
  4. Reduce child mortality
  5. Improve maternal health
  6. Combat HIV/AIDS, Malaria, and other diseases
  7. Ensure environmental sustainability
  8. Develop a global partnership for development

Meanwhile, the National Economic and Development Authority (NEDA) has laid out the Philippine Development Plan (PDP) 2011-2016, which “adopts a framework of inclusive growth, which is high growth that is sustained, generates mass employment, and reduces poverty:” The PDP is focused on the following areas:

  1. In Pursuit of Inclusive Growth
  2. Macroeconomic Policy
  3. Competitive Industry and Services Sectors
  4. Competitive and Sustainable Agriculture and Fisheries Sector
  5. Accelerating Infrastructure Development
  6. Towards a Resilient and Inclusive Financial Sector
  7. Good Governance and the Rule of Law
  8. Social Development
  9. Peace and Security
  10. Conservation, Protection, and Rehabilitation of the Environment and Natural Resources

It is evident from the PDP focus areas that it covers not only the economic and industrial goals of the Philippines, but the social, environmental, and peace and security aspects as well.

The MDGs and the PDP can help guide the management of businesses in the Philippine setting. In particular, the PDP must be taken into consideration in order to deem management as appropriate or country-specific.

Another potential means for economic growth and development is the planned integration in 2015 of the ten Southeast Asian nations, which include the Philippines. The Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) could help the Philippines achieve its goal of inclusive growth that creates jobs and reduces poverty. According to a joint study by the International Labor Organization and the Asian Development Bank titled “ASEAN Community 2015: Managing Integration for Better Jobs and Shared Prosperity,” released in October 2014, the success of the AEC lies in decisive actions taken by member states regarding policy recommendations, strengthening regional cooperation that may bring about structural changes, improvement of business and job opportunities and job quality, enhancement of skills boosting productivity, better wages, and management of labor migration. These may ensure that the benefits of equitable growth and development are shared among member countries and sectors. Since the AEC is envisioned to become a single common market and production base for an estimated 600 million people of different nationalities, it means freer flow of goods, services, investments, and labor. The study concluded that “new opportunities for growth and prosperity may emerge but the challenge is to ensure that growth is inclusive and prosperity is shared.”

Inclusive Growth

“Inclusive growth means, first of ail, growth that is rapid enough to matter, given the country’s large population, geographical differences, and social complexity. It is sustained growth that creates jobs, draws the majority into the economic and social mainstream, and continuously reduces mass poverty.”

Obviously, managers of business here in the Philippines must be concerned about the findings of the study, as these are new challenges for them. The improvement of management style and the skills training and education of their human resources are needed in order to cope with the possible changes that will be brought about by the ASEAN integration in 2015.