The Covid-19 economic stimulus package for local firms can be used to institutionalize reforms particularly in credit access, digitization and innovation, to make a lasting impact on inclusive growth, according to a policy brief released by the United Nations in the Philippines.
The policy brief said such a stimulus package for local firms is a potential catalyst for inclusive growth if proper focus is given to small and medium enterprises (SMEs), and their capacity to benefit from the recovery boom that typically follows deep economic crises.
It can be also used to incentivize industrial linkages and the transition towards green technologies and products, it said.
The report recommended industrial policies in the context of Covid-19 and climate change, as it aimed to contribute to the analysis of opportunities for the diversification and upgrading of the Philippine economy to generate productive employment that would make growth more inclusive.
It said lessons drawn from other countries reflect important features of industrial policies for catch-up industrial growth.
“Invariably anchored on bold and long-term targets to build domestic industrial base(s), successful countries extended strict rules to induce GVCs (global value chains) or large companies to integrate local firms in their input sourcing strategies with complementary investment in upskilling the workforce and supporting research institutes,” it added.
The policy brief said tax breaks and subsidies are combined with pragmatic strategies to deliver necessary skills, finance, and infrastructure to producers, and to build socio-political consensus.
“A Covid-19 economic package for local firms can take place under a fully coordinated industrial package that contributes to long-lasting development impact,” it said.
The UN report further said the climate change crisis is another formidable challenge shaping the industrial policy of governments worldwide.
“It also poses an enormous opportunity for developing countries to leapfrog into new products, technologies and markets that are efficient, profitable and sustainable,” it said.
The severely urgent need to bring down global carbon emissions and the exponential growth of green technologies can sustainably drive industrial growth, it added.
“However, there are short-run transition costs that might further increase the burden of smallholder and SMEs. Once again, this calls for approaches oriented towards sustaining the weakest of firms and communities,” the report said.
“Linking probiotics to stress reduction and immunity will be an opportunity for the future of the category, as well as exploring adaptogens,” it added.
The EMB recommended the consumption of dairy and non-dairy drinks during and after the Covid-19 pandemic to maximize its mental and physical health benefits.
“Consumers see dairy drinks as a key part of their routine to stay healthy. In particular, consumers view milk’s protein and calcium content as important for physical health,” it said.
The UN policy brief also said that to create fiscal space without excessive debt, governments could re-examine budget policies and address “fiscal termites “ or long-standing problems that undermine national budgets such as tax competition, tax evasion, transfer pricing, and fossil fuel subsidies. – Press release
April 25, 2024
