Business World, 2 July 2014


The Philippines is one of the top 10 most worsened — not most improved — states, both by score and by rank. This result contradicts the picture painted by Malacañang that the Philippines is improving in the area of good governance.

The Fund for Peace put the Philippines as the 52nd most fragile (used to be “failed”) state with a score of 85.3 (a score closer to 1 is better). The score put the Philippines on the index’s “very high warning” for fragility, the fourth-worst on the scale, which ranged from the worst (“very high alert”) to the best (“very sustainable”).

This year, Sudan, with a score of 112.9, was deemed the most fragile state while Finland, with a score of 18.7 points, was deemed the most sustainable.

What’s the significance of the Fragile State Index (FSI)?

“Weak and failing states pose a challenge to the international community. In today’s world, with its highly globalized economy, information systems and interlaced security, pressures on one fragile state can have serious repercussions not only for that state and its people, but also for its neighbors and other states halfway across the globe,” according to the Fund for Peace.

The FSI is based on the Fund for Peace’s proprietary Conflict Assessment System Tool (CAST) analytical platform. It distills millions of pieces of information into a form that is relevant, easily digestible, and informative.

Millions of documents are analyzed every year. By applying highly specialized search parameters, scores are apportioned for every country based on 12 key political, social and economic indicators: demographic pressures; refugees and internally displaced people or IDPs; group grievance; human flight and brain drain; uneven development; poverty and income decline; legitimacy of the state; public services, human rights and rule of law; security apparatus; factionalized elites; and external intervention. These are the result of years of painstaking expert social science research.

The 2014 FSI results suggest that the Philippines, compared to its neighboring countries and the rest of the world, has a long way to go before it becomes truly competitive globally.

Looking at countries closest to home, the Philippines has remained the most fragile among ASEAN-6 countries. This bloc includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The ranking among ASEAN-6 countries has not changed since four years ago: Singapore first, the Philippines last.

This poor ranking is especially true in terms of poverty and income decline and public services. The latter includes public infrastructure.

“Poverty and economic decline strain the ability of the state to provide for its citizens if they cannot provide for themselves and can create friction between the ‘haves’ and the ‘have nots,’” the Fund for Peace notes.

This economic indicator includes pressures and measures related to economic deficit, government debt, unemployment and adult unemployment. It also measures purchasing power, the gross domestic product (GDP) per capita, GDP growth and inflation.

On poverty and economic decline, the numbers suggest rising misery rather than improving happiness for Filipinos. In 2010, the Philippines’ score for poverty and economic decline was 5.8; in 2014 it was 5.7 points, or practically unchanged. With population growing rapidly (approximately two million Filipinos are born yearly) and with income inequality worsening, no wonder many Filipinos do not see their personal welfare improving, despite the two consecutive years of above normal growth in 2012 and 2013.

The warning to policymakers is unmistakably clear: non-inclusive growth is not sustainable. Strong growth accompanied by rising poverty might lead to social conflict that could disrupt future growth.

On public services, it is clear that the state is responsible for the provision of health, education, and sanitation services, among others.

This indicator measures things related to policing, criminality, education provision, literacy, water and sanitation, and infrastructure. It also includes quality of health care, telephony, Internet access, energy reliability, and roads.

Among ASEAN-6 economies, the Philippines has the lowest score in public services (6.9 in 2014 from 5.0 in 2010), and the highest erosion of score (1.9) from 2010 to 2014. This is due to lack of focus and commitment on the part of policy makers to improve public services.

Why is the Philippines one of the top 10 biggest losers?

The short answer: the government needs to be more caring, more focused, and abler.

The FSI is based on 12 primary social, economic and political indicators of the Fund’s Conflict Assessment System Tool methodology. The Philippines lost a lot of ground in refugees and IDPs (1.2 points), demographic pressure (0.7), external intervention (0.7), public services (0.5) and group grievance (0.4).

On the other hand, it made slight gains in human flight and brain drain (-0.3), legitimacy of the state (-0.3), and human rights and rule of law (-0.3).

By rank, the Philippines lost seven places — from 59 in 2013 to 52 in 2014.

The indicator “refugees and IDPs” refers to “pressures associated with population displacements. This strains public services and has the potential to pose a security threat.” The deterioration in the Philippines’ score in refugees and IDPs may be attributed largely to the government’s mishandling of the Zamboanga conflict.

Demographic pressure refers to “pressures on the population such as diseases and natural disasters that make it difficult for the government to protect its citizens or demonstrate a lack of capacity or will.” The sharp drop in the Philippines’ score in democratic pressure may be attributed largely to the government’s uncaring and niggardly response to the super typhoon Yolanda.

The significant drop in the government’s score in public services is due to serious underspending in social services and public infrastructure.

The Philippines has become a more fragile state, compared to where it was a year ago. This suggests that it has a lot of catching up to do with its ASEAN neighbors. It’s bad enough that the country has regressed in many aspects of governance. Worse, while its ASEAN competitors continue to move forward, the Philippines continues to stall and, occasionally, backslide.