Dealing with Fiscal Retrenchment: Strategies, Innovations ...
Transcript of Dealing with Fiscal Retrenchment: Strategies, Innovations ...
The Asian Leadership Forum (ALF) is one of
EROPA’s key responses
to the ever-changing challenges of public ad-
ministration and govern-
ance. Leaders involved in
policy-making are invited to share their experiences
and insights to the
EROPA community. The first ALF was held in
Kathmandu, Nepal in
2010.
This year’s ALF, chaired
by no other than Asian Association for Public
Administration President
Dr. Akira Nakamura, fea-
tured three speakers namely: Professor Yasu-
yuki Kitawaki of Josai
University, Japan; Direc-tor Kanit Sangsubhan of
Fiscal Policy Research
Institute from Thailand; and Vice Chancellor Ak-
wasi Asabere-Ameyaw of
University of Education from Ghana.
The 2nd Asian Leadership
Forum centered around the theme, “Dealing with
Fiscal Retrenchment:
Strategies, Innovations, and Ways Forward.”
Volume 1 , Issue 2
EROPA’s 2nd Asian Leadership Forum
Dealing with Fiscal Retrenchment:
Strategies, Innovations and Ways Forward
22 February 2012
I N S I D E T H I S I S S U E :
Subtheme 1 2
Subtheme 2 4
Subtheme 3 5
ALF Discussion 6
Day 2 in Pictures 12
DAILY BULLETIN
S I M U LTA N E O U S S E S S I O N S — C H A I R P E R S O N S
Conference Sponsors
SUNHYUK KIM
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PONLAPAT BURACOM
NIDA, THAILAND
Professor Ponlapat Bura-
com of the National Insti-
tute of Development Ad-
ministration (NIDA)
served as the moderator for
the session.
Dr. Weerasak Krueathep
of Chulalongkorn Univer-
sity started his presentation
by asking a hypothetical
question: if you have a
small amount of money,
what would you do with
it? Would you spend it or
save it?
In his presentation on
“Municipal Responses to
Fiscal Austerity: The Thai
Case” Dr. Krueathep la-
mented the dearth of local
finance literature in Thai-
land; thus there is not
much information about
the Thai fiscal structure
and its behavior. Based on
existing literature in other
countries, he noted three
strategies for fiscal re-
trenchment, particularly
for local governments:
expenditure cut, revenue
enhancement, and institu-
tional/managerial improve-
ment.
Based on the survey ad-
ministered to Thai munici-
pal government officials,
Dr. Krueathep found that
between the fiscal period
2009 and 2010, there was a
decline in the level of
spending by the various
tiers local government in
Thailand. Larger cities cut
their spending massively
as against smaller munici-
palities. (cont. on page 6)
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P L A N N I N G A N D B U D G E T I N G F O R C A P I T A L I M P R O V E M E N T S I N T H A I M U N I C I P A L I T I E S : P R O B L E M S I N T H E D E V E L O P M E N T O F T H A I M U N I C I P A L S E L F - G O V E R N I N G C A P A C I T Y
S U B T H E M E 1 : F I S C A L R E T R E N C H M E N T : C H A L L E N G E S , O P P O R T U N I T I E S A N D I N N OVA T I O N S I N P U B L I C A D M I N I S T R A T I O N
Dr. Wongpredee provided
an overview of the capital
investment among Thai
local governments, and
argued that despite 10
years of decentralization
they have been quite pas-
sive in terms of capital
investments. He further
noted that the study was
intended to find out
whether the Thai Ministry
of Interior (MOI) has an
effect relative to this ob-
servation. (cont. on p
Dr. Sudhipongpracha then
continued with the presen-
tation by noting that the
focus of their study …
cont. on p. 6
Drs. Tatchalerm Sudhi-
pongpracha and Achakorn
Wongpredee of NIDA pre-
sented their paper on
“Planning and Budgeting
for Capital Improvements
in Thai Municipalities:
Problems in the Develop-
ment of Thai Municipal
Self-Governing Capacity.”
Volume 1 , Issue 2
M U N I C I P A L R E S P O N S E S T O F I S C A L A U S T E R I T Y : T H E T H A I C A S E
Daily Bul le tin
Professor Akio Kamiko,
Dean of the Graduate
School of Ritsumeikan
University, Japan, pre-
sented his paper entitled
“Ways for Local Govern-
ments to Survive in the
Period of Budget
Squeeze.” He briefly pro-
vided a general picture of
the fiscal condition of the
Japanese government cit-
ing that the current govern-
ment spending level of
Japan reaches about 200%
of its GDP, perhaps much
worse than Greece and
other debt burdened devel-
oped nations. However,
the case of Japan is far
different from other coun-
tries as its debts are drawn
from private savings
(internal financial market)
and that the interest rates
are low. In Japan, the rapid
growth in the 1980s, low
level of inflation, progres-
sive taxation structure
have abated the negative
effects fiscal situation in
real terms.
Within the context of de-
centralization, according to
Professor Kamiko, local
governments in Japan wear
two hats–that of the central
government branch office
and that of an autonomous
government. He noted that
the main challenges in pur-
suing budget squeeze are
the legal requirements,
parties concerned sense of
right to public budget, per-
sonnel expenses, debt ser-
vice and public works.
Generally, local govern-
ments in Japan borrow for
capital investments. He
also pointed out that debt
financing is pursued exclu-
sively for capital invest-
ments;
by reducing public works,
it does not necessarily
make the budget less tight.
(cont. on p. 11)
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P O L I C I E S F O R S E C U R I N G S O C I A L E N T E R P R I S E S U S T A I N A B I L I T Y I N T I M E S O F F I S C A L R E T R E N C H M E N T
W A Y S F O R L O C A L G O V E R N M E N T T O S U R V I V E I N T H E P E R I O D O F B U D G E T S Q U E E Z E
terprise which could be
seen as a response to fiscal
retrenchment.
Dr. Hayllar reiterated what
most of the speakers have
said about the global finan-
cial crisis–its impact on
both developed and less
developed countries. He
also noted that people ac-
tually no longer trust their
governments and that with
the global crisis, the disad-
vantaged people are more
likely to be affected at a
greater scale.
Dr. Hayllar observed that
the current situation has
led to several incidences
of unrest …(cont. on p.11)
The final paper of the ses-
sion “Policies for Securing
Social Enterprise Sustain-
ability in Times of Fiscal
Retrenchment” was pre-
sented by Dr. Mark Rich-
ard Hayllar. At the outset,
he clarified that he was not
talking about local govern-
ments and fiscal retrench-
ment but about social en-
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Pananda Chansukree, a
Doctorate student from
Thailand’s National Insti-
tute of Development Ad-
ministration, presented her
quantitative study on Poli-tico-Economic Institutions and Economic Perform-
ance: Evidence from East
Asia and Latin America, 1990-2009.
In her quantitative re-
search, Chansukree asked
two important questions:
“How do the political and
economic institutions of a
country affect its economic
performances?” and “What
is the appropriate structure
of politico-economic insti-
tutions for economic de-
velopment?”
Chansukree used variables
such as those related to
economic growth, unem-
ployment, poverty and
income inequality, and
found that East Asia had
higher scores than Latin
America across almost all
variables. Latin America,
however, fared better in
protection of property
rights and economic free-
dom.
Furthermore, the findings
showed that governance
was more important than
democracy (cont. on p.10)
The Asian Leadership Fo-
rum (ALF) is a platform for
policy leaders in the Asia
Pacific region to discuss important issues in Public
Administration. This is a
venue for ministers, vice-
ministers, parliamentarians,
governors, city mayors, and
other high ranking govern-
ment officials who can
share their respective views
in the field. Dr. Akira Naka-
mura, who was Professor at
the Meiji University and a long-time member of
EROPA, is the brain-child for
the institutionalization of this
activity.
The First Asian Leadership
Page 4
T O W A R D D E M O C R A T I C - D I S T A N C E : F O R E C A S T I N G H O W S P E C I F I C E V E N T S P R E D I C T S T A B L E G O V E R N M E N T S I N E M E R G I N G C O U N T R I E S
S U B T H E M E 2 : T H E RO L E O F T H E S TAT E I N M A N AG I N G N E W C H A L L E N G E S : O P P O R T U N I T I E S A N D I N N OVAT I O N
narrative of all states, there
would be tipping points
and derivative events that
would eventually caused
marginal alternation. The
author continued that said
alterations were building
blocks toward a state’s
final structure.
Saye, however, was quick
to point out, that the so-
called final structure was
just applicable to certain
periods because societies
were continuously evolv-
ing. Saye asked whether
democracy was the “end”
societies require or was it
just stable governments
regardless of form. In
doing, the author proposed
a continuum of full de-
mocracy, (cont. on p.10)
Lisa Saye’s research To-ward Democratic Dis-
tance: Forecasting How
Specific Events Predict Stable Governments in
Emerging Countries intro-
duced a concept of causal-
ity which attempted to pin-
point countries’ situation
in the continuum of de-
mocracy. In a nut shell,
Saye explained that in the
Volume 1 , Issue 2
P O L I T I C O E C O N O M I C I N S T I T U T I O N S A N D E C O N O M I C P E R F O R M A N C E : E V I D E N C E F R O M E A S T A S I A A N D L A T I N A M E R I C A , 1 9 9 0 - 2 0 0 9
Forum, which focused on
the theme “The Need for
Leadership Development,”
was held in Kathmandu, Nepal coinciding with the
EROPA Seminar. Speakers
in the first ALF were Mr.
Hitoshi Kimura, former
member of the House of
Councilors of Japan, Dr.
Francisco Duque III, Chair-
A B O U T T H E A S I A N L E A D E R S H I P F O RU M
man of the Philippine Civil
Service Commission, Dr.
Jiang Wu, President of the
Chinese Academy of Per-sonnel Science, and Dr.
Yuba Raj Khatiwada, Gov-
ernor of the Nepal Rastra
Bank.
Daily Bul le tin
The first speaker Dr.
Yuexia Miao, Chinese
Academy of Personnel
Science, China, presented
Building a Special Talent
Zone (STZ): Challenges
and Opportunities of Local
Government Innovation in
China—The Wuxi Case,
which is regarded as an
institutional innovation in
China.
Dr. Miao compared the
main features of Special
Economic Zone and Spe-
cial Talent Zone in the
case of China. He pro-
posed that approaches to
reform undertaken by
these two zones are quite
different. For example, in
case of the special eco-
nomic zone, the top-down
approach of the central
government delegating
economic management
power to local govern-
ments was dominant; as
for STZ, the bottom-up
approach of local govern-
ments applying for rights
of talent management in-
novation from the central
government is the distin-
guishing feature. The au-
thor showed his firm belief
that building STZ brings
new opportunities for local
government innovation.
He cited examples from
Chinese (continued on p.7)
Thailand.
Dr. Phinaitrup initiated her
presentation by introduc-
ing the cluster policy in the
development of small and
medium size enterprises
(SMEs) in Thailand which
has been a milestone for
improving their competi-
tive advantage. She ex-
pressed her opinion that
The third speaker Dr.
Boon-Anan Phinaitrup, of
the National Institute of
Development Administra-
tion, NIDA, Thailand, pre-
sented her treatise on En-hancing SME Competitive-ness by Using Cluster Ap-
proach: A Case Study of Western Region Organic Vegetable Cluster in Nak-
hon Pathom Province in
innovation creates competi-
tive advantage by finding
and accepting new ways of
doing things for better pro-
duction. She further added
that innovation can be mani-
fested in improvements in
technology, better ways of
doing things, and product or
process changes.
(continued on p. 10)
Page 5
I N T E R - M U N I C I P A L C O O P E R A T I O N I N S E R V I C E D E L I V E R Y : T R A D I T I O N A L C O L L A B O R A T I V E P U B L I C M A N A G E M E N T R E E X A M I N E D
SU B T H E M E 3 : I N N OVAT I O N S I N P U B L I C S E RV I C E D E L I V E RY
E N H A N C I N G S M E C O M P E T I T I V E N E S S B Y U S I N G C L U S T E R A P P R O A C H : A C A S E S T U D Y O F W E S T E R N R E G I O N O R G A N I C V E G E T A B L E C L U S T E R I N N A K H O N P A T H O M P R O V I N C E
portant is joint coopera-
tion. He focused on the
major challenges face by
local governments today.
He cited the example of
the conventional notion
regarding the transfer of
authority from central to
local government units,
which indeed help increase
both the values and stature
of government. However,
he identified weak policy
and management capaci-
ties of local governments
which have served as bar-
riers leading to significant
improvement in the wel-
fare of people through
decentralization. (cont. p.7)
The second speaker, Dr.
Masao Kikuchi, Meiji Uni-
versity, Japan, presented
his paper on Inter-
Municipal Cooperation in
Service Delivery:
“Traditional” Collabora-
tive Public Management
Reexamined. His paper
tried to explore how im-
“Decentralization
is a key area of
democratic
governance.” - Dr.
Masao Kikuchi
B U I L D I N G A S P E C I A L T A L E N T Z O N E : C H A L L E N G E S A N D O P P O R T U N I T I E S O F L O C A L G O V E R N M E N T I N N O V A T I O N I N C H I N A – T H E W U X I C A S E
Of the retrenchment ex-
perience, he observed that
municipal governments
hardly employed any re-
trenchment strategies when
they have large amount of
reserves; while those with
large amounts of debt, find
themselves in a situation
where they feel the need to
do something.
Dr. Krueathep also found
some evidence in line with
common-pooled resources
literature in Rodden (2002,
2006) that among other
things being equal, local
authorities that are hard
put in their tax efforts are
more likely to adopt reve-
nue enhancement strate-
gies in the midst of eco-
nomic crisis and localities
with a high degree of re-
source self-dependency are
more apt to maintain their
financial prudence.
He further indicated that
Thai cities are running at a
fiscal risk and that the re-
cent fiscal adjustments
may not have adequate
long lasting impact. In his
opinion, Thai local govern-
ments tend to save them-
selves first and put the
people last, which is in
contrast with what is ob-
served in the western
countries. He reiterated the
fact that the Thai fiscal
structure did not encourage
fiscal discipline and that
the Thai local government
need more autonomy from
the central government so
as to maintain a better fis-
cal discipline and financial
system.
Responding to questions
from the audience, the pre-
senter clarified the issue of
tax/revenue structure. Thai
local governments have
only about 9% of own
source revenues. As such,
there is a need to reform
the revenue structure and
give local governments
more power to generate
revenues. The presenter
also noted the fact that the
tax system in Thailand
needs further refinement
and the country is yet to
implement more meaning-
ful property tax system.
Mr. Min Yang of the Japa-
nese Local Government
Council in Singapore
asked if there were any
key performance indicators
that the Thai central gov-
ernment uses in allocating
inter government fiscal
transfers. To which the
presenter answered in the
affirmative, stating that
although Thailand has no
income per capita measure
at the local level, the cen-
tral government has been
using population size, size
of local government area
and level of gross provin-
cial product. According to
the presenter, in practice
the system was not well
developed since there ex-
ists a limited number of
indicators.
that there was no intention
to establish a relationship
between the Thai local
government and those in
the US. He further indi-
cated that nepotism is not
really noticeable in the US
system vis-à-vis Thailand.
Professor Michael Sinclair
from Toronto, Canada,
asked whether debt financ-
ing is being pursued by
local governments in Thai-
land. Dr. Sudhipongpracha
of local government to the
central government. The
presenters recommended
more transparency and
reduction in central gov-
ernment control over local
governments.
Dr. Thanapan from NIDA
asked whether the authors
were trying to compare
Thai local governments
with those of the USA as
regards to lobbying. Dr.
Sudhipongpracha re-
sponded clearly stating
indicated that local govern-
ments in Thailand could
only seek debt financing
with the approval of the cen-
tral government.
Page 6
P L A N N I N G A N D B U D G E T I N G F O R C A P I T A L I M P R O V E M E N T S … C O N T I N U E D F R O M P . 2 )
M U N I C I PA L R E S P O N S E S … ( C O N T I N U E D F R O M P . 2 )
was on municipal local gov-
ernments – the second tier of
the Thai local government
structure. He indicated that the
study centered on two propo-
sitions: i) that compared to
other types of local govern-
ment, Thai municipalities re-
lied more on central govern-
ment grants and transfers for
their capital projects; and,
ii) that there was a relation-
ship between the Thai munici-
palities’ passivity about capi-
tal investment and the central
government agencies’ domi-
nant role in the decentraliza-
tion process.
He argued that after 1998
which was the first year after
decentralization, Thai munici-
palities relied heavily on the
central government for financ-
ing capital investments. It is
highly politicized as well.
Thus, the municipalities are
constrained to perform their
administrative functions, pub-
lic services and discretionary
powers; they remain under the
control of the MOI.
In his presentation, Dr. Sudhi-
pongpracha decried the fact
the even after 10 years the
central government have still
not taught the municipalities
the ropes of governance. He
further noted that municipali-
ties are discouraged to pursue
capital investments due to the
inconsistencies of the Office
of the Auditor General in en-
forcing the accounting and
auditing procedures. He also
observed that MOI lacks clear
standards and regulation,
which has exacerbated “pork
barrel” and clientistic attitudes
“Thai cities are
running at a fiscal
risk and that the
recent fiscal
adjustments may
not have adequate
long lasting
impact”
Volume 1 , Issue 2
Daily Bul le tin
local governments which are enjoying the successful experi-ence of talents gathering zones. There has been a practice of or-ganizing all related departments
such as personnel, foreign affairs, industry and commerce, tax and custom to carry out ‘one-stop’ service to high-level talents. Despite the successful movement of the Wuxi municipal govern-ment since the institutionalization
of STZ in 2006, the author under-lined some critical obstacles such as: talents flow, talents evalua-tion and talents incentive. He also pointed out a visible gap that has appeared between the Wuxi City local government and developed areas in terms of financial service
and innovation support. In order to address aforemen-tioned issues, the author recom-
mends to change local govern-ment roles from talent regulation to talent service strategy with distinct characteristics. It was emphasized that STZ is all about
finding the right people for the right job. It is a shift from eco-nomic management approach into government intervention for talent management. Finally, the author suggests that local gov-ernments in various regions can innovate talent management
mechanisms by creating dy-namic, efficient and more open talents environment at local levels. He concluded that geo-graphical diversities can be an advantage if local governments explore more flexibility and develop special talent policies
through talent exchange and cooperation programs.
Page 7
I N T E R - M U N I C I P A L C O O P E R A T I O N … ( C O N T I N U E D F R O M P . 5 )
B U I L D I N G A S P E C I A L T A L E N T Z O N E … ( C O N T I N U E D F R O M P . 5 )
that the national government tried to give incentives to mu-nicipal governments to promote inter-municipal cooperation. Nonetheless, municipal amalga-
mation did not attain all its promised sufficiency especially in rural areas. The author also tried to show international examples of inter-municipal cooperation citing examples of Europe and Asian
countries like Indonesia. He remarked that inter-local coop-eration scheme has been gaining momentum internationally as an alternative to service delivery. Dr. Kikuchi expressed his firm belief that decentralization gives
local government more discre-tionary power in the delivery of public services. In Japan, Inter-Municipal Cooperation was adopted as one of the strategic options towards collaborating with other municipalities for better services. Highly needed
critical success factors may come in the way of (great) politi-cal/administrative leadership.
Dr. Kikuchi explained three ways to innovate public service deliv-ery, namely: New Public Man-agement, Municipal Amalgama-tion, and Inter-Municipal Coop-
eration. He mentioned empirical evidence showing that collabora-tive management can yield great benefits for local governments. The author highlighted on what is often overlooked: that there are significant numbers of inter-
municipal cooperation cases in decentralization. He examined in his paper that inter-municipal cooperation in service delivery in Japan is a traditional collabora-tive public management. He also revealed the continuum of inter-municipal cooperation to collabo-
ration in Japan. An interesting point he mentioned is that as a result of Japanese local govern-ments recently experiencing mu-nicipal amalgamation, they (i.e. municipalities) dramatically dropped in number. It implies that local governments in Japan
still depend on inter-municipal networks in service delivery. However, he quickly emphasized
During the 2nd Asian
Leadership Forum, Profes-
sor Yasuyuki Kitawaki
from Josai University de-
livered a paper entitled
New Public Commons-A Financial Retrenchment Method in Japan. The talk
focused on Japan’s efforts
toward fiscal reconstruc-
tion, Kitawaki’s experi-
ence in fiscal retrenchment
during his tenure as Mayor
of Hamamatsu City, and
the New Public Commons.
Kitawaki began by provid-
ing Japan’s financial situa-
tion and how it compared
to the international stage.
According to the former
Mayor, Japan’s fiscal con-
dition was the worst
among major developed
countries. He added that
the problem of fiscal dete-
rioration could be traced
back to the continuous rise
of government expendi-
tures and revenue decline.
While he was a Mayor of
Hamamatsu city, Kitawaki
shared the need for fiscal
management in line with
the country’s midterm fis-
cal plan. Aside from intro-
ducing administrative and
financial reforms, Ki-
tawaki also shared that
public accounting methods
being used by the private
sector was also applied in
the local government.
(continued on p.9)
(ICT), and street-level bu-
reaucracies.
Dr. Asabere-Ameyaw said
that aside from the chal-
lenges, opportunities were
also present. With regard
to globalization, he said
that leadership barriers
which existed only some
decades ago had already
been broken. The advent
of ICT had also brought
University of Education
Vice-Chancellor Dr. Ak-
wasi Asabere-Ameyaw
from Ghana began his talk
by pointing out that public
administration had always
been met with challenges
in terms of globalization,
resource management, and
motivation, employment,
education, information and
communication technology
job creation while public
sector reforms were being
conducted in almost all
countries around the world.
Expounding further on pub-
lic sector reforms, Dr. Asa-
bere-Ameyaw highlighted
the need for better recruit-
ment of human resources
and finding ways of retain-
ing them. (cont. on p.9)
Page 8
A C A S E O F T H A I L A N D
THE ASI A N L E A DE R S H I P FORU M
D R . A K W A S I A S A B E R E — A M E Y A W P R O V I D E S W E S T A F R I C A N P E R S P E C T I V E
ment.
According to Sangsubhan,
the traditional Locomotive
-Wagon, paradigm
wherein surplus of U.S.
and E.U markets filled the
deficits of South America,
Africa, and Asia, was in
effect prior to the Asian
economic crisis of 1997.
That wagon, the director
explained, was virtually
reversed at the beginning
of the 2008 U.S. crisis in
the sense that Asia and the
Middle East began filling
the deficits of U.S. along
with South America and
Africa.
Director Sangsubhan, fur-
thermore, said that 2012 is
a very important year be-
cause various elections ...
(continued on p.9)
The paper A Case of Thai-land, prepared by Director
Kanit Sangsubhan of Fis-
cal Policy Research Insti-
tute, was delivered during
the Asian Leadership Fo-
rum. According to the di-
rector, the paper was
guided by the recent eco-
nomic downturn, its spiral-
ing effect in many coun-
tries, and Thailand’s ex-
perience in fiscal retrench-
Volume 1 , Issue 2
N E W P U B L I C C O M M O N S — A F I N A N C I A L R E T R E N C H M E N T M E T H O D I N J A P A N
Daily Bul le tin
would be held around the
world. This meant that in-ternational relations and
policies might be affected
with the pending change in
government heads.
Focusing on the Thailand
experience, Sangsubhan said that the government
employed a fiscal stimulus
package as well as a quasi-fiscal policy to counter the
global financial crisis. The
stimulus package aimed to
reduce the impact of the crisis and to improve the
country’s competitiveness.
Toward the end, Kitawaki
provided the audience an
overview of the New Pub-
lic Commons. In a nut
shell, the New Public
Commons represent in-
vigorating nonprofit sector
and developing social
capital; fostering social
and public human re-
sources; public service
innovation; utilizing local
resources under new ideas;
economic activities based
on sympathy and commit-
ment; and the private sec-
tor’s organized public sup-
port.
Aside from those, he also
talked about improving the
reward system for those
who were in public institu-
tions. He explained that
when these had been an-
swered, providing new
trainings and security to
staff members should be the
next priorities.
While improvements on
public policies should be
done, Dr. Asabere-Ameyaw
highlighted that strengthen-
ing civil society groups was
also an utmost imperative.
Page 9
N E W P U B L I C C O M M O N S … ( C O N T I N U E D F R O M P . 8 )
IN PI CT U R E S : TH E ASI A N LE A D ER S H IP F ORU M
On the other hand, the quasi-fiscal provided fast
track credit and another
monetary stimulus to re-duce interest rates and in-
ject liquidity to the econ-
omy.
A C A S E O F T H A I L A N D . . . ( C O N T I N U E D F R O M P . 8 )
D R . A K W A S I A S A B E R E — A M E Y A W ( C O N T I N U E D F R O M P . 8 )
will be hosting the EROPA
Conference this 2012!
The author found out that
the benefit of clustering not
only contributes as a tool to
increase competiveness but also enhances the ability to
innovate. For example, she
identified that the consum-
ers would pay special atten-
tion to fresh fruits and vege-
tables (particularly those
containing toxic residue)
because farm products are
usually consumed freshly,
rather than cooked or proc-
essed. As a result, in 2003, a group of small farmers and
exporters initiated the clus-
tering concept in order to
respond to and to adapt
themselves to meet custom-
ers’ needs and to be able to
survive and compete in the
market.
Dr. Phinaitrup also men-
tioned the strategy of boost-ing market competitiveness.
For example, her study cap-
tured how farmers learned
to apply the cluster concept
to their businesses and how
to grow vegetables safely.
She emphasized that cluster-
ing is seen as a tool for
competitiveness by setting
up a business cluster. She
further highlighted how the concept has helped entrepre-
neurs in the Western Region
Organic Vegetable Clus-
ter—for making better
awareness of and encourag-
ing them to study changing
market systems. The author
revealed the success story of
transferring knowledge to
and among farmers resulting
in the production of safe and high quality vegetables
meeting international stan-
dards.
Dr. Phinaitrup addressed
concerns surrounding
China’s dominance in world
vegetable production vis-à-
vis pricing sensitive mar-
kets. She countered that in
order for local markets to successfully compete in the
world marketplace, we need
to adopt the Porter Diamond
Model.
tures as democracy had
sometimes brought miser-
ies and troubles. Nepal’s
Dr. Kayo Devi Yami made
another interesting com-
ment when she discussed
how developed countries’
dictate emerging states in
terms of employing de-
mocracy. One representa-
tive from Turkey put for-
ward the idea that while
limited democracy, stable
government without de-
mocratic elements, hybrid
model, and even an
“other” category to truly
capture said continuum.
During the open forum, a
participant from Pakistan
agreed with Saye’s point
that democracy might not
be applicable to all cul-
democracy’s main goal was
to provide stability, dictato-
rial forms of government
could also do the same to
some extent.
Session moderator Sunhyuk
Kim commented that while
it was good to expand the
literature of public admini-
stration by borrowing from
other fields such as biology
Page 10
P O L I T I C O E C O N O M I C I N S T I T U T I O N S … ( C O N T I N U E D F R O M P . 4 )
E N H A N C I N G S M E C O M P E T I T I V E N E S S … ( C O N T . F R O M P . 5 )
T O W A R D D E M O C R A T I C - D I S T A N C E … ( C O N T I N U E D F R O M P . 4 )
that of comparing eco-
nomic growth of countries
with diverse political insti-
tutions. In this context, the
inclusion of China with the
rest of the East Asian
countries was cautioned as
an anomaly and would
possibly cause skewed
data.
for economic growth, and
that East Asia outper-
formed Latin America in
political institutions, while
Latin America outper-
formed East Asia in terms
of economic institutions.
An important issue raised
during the discussion was
“Democracy should
be the primary
measure of political
institutions.”
Volume 1 , Issue 2
and physics, doing so should
be from a philosophical per-
spective and not just in
terms of semantics.
“What we think as
the essential aspects
of democracy
actually differ from
state to state.”
EROPA is the
Online Regional
Center for the
Daily Bul le tin
‘cap’ system on the total of
debt service cost and capi-
tal expenditure.
Professor Kamiko’s obser-
vation on debt service cost
reduction program seems to
have a general application.
It might be a good practice
for most capital invest-
ments to be financed by
borrowing. This has
worked quite well in Japan
and generally none of the
local governments have
defaulted. \
Professor Kamiko stated
that according to the gover-
nor of Kyoto, they have
been quite successful in
trying very hard to squeeze
its budget; which the cen-
tral government has not
done in a long time. Con-
versely, he warned that
although Kyoto has
achieved a very good finan-
cial standing, problems still
lurk in the horizon. For
instance, there are no fur-
ther rooms for improve-
ment such as IT expansion,
and the Kyoto retrenchment
interventions have the ten-
dency to diminish the econ-
omy.
In conclusion, Professor
Kamiko asserted that Kyoto
prefecture government has
been doing very well. He
noted that in pursuing fiscal
retrenchment at the local
Page 11
market environment but are
different from small scale
enterprises (SMEs). The
objectives of social enter-
prises are in tune with what
the world needs today–the
promotion of education,
fighting social and financial
exclusion among others. As
a solution model, he stipu-
lated that both the local
governments, central gov-
ernments, and the people
have to work together.
To this effect he called for
policies that will encourage
a self sustaining social en-
terprise sector similar to
what is observable today in
Singapore, which has a gov-
ernment vision geared to-
wards helping the disadvan-
taged groups and increasing
public acceptance of social
enterprises. For instance,
they have the ComCare En-
terprise Fund (CEF) which
provides seed grants as op-
posed to loans for start-ups
for social enterprises.
Similar experience may also
be seen in the UK as regards
effort through the UK big
society bank where capital
funds are generated from
dormant private bank ac-
counts and used as equity
funds for social enterprises
at very minimal rates.
Dr. Hayllar emphasized that
the government will have to
play a critical role in speed-
ing up the growth of social
enterprises and that market-
ing is very important. In
conclusion, he stated that
social enterprises are here to
stay. However, much re-
mains to be done to build a
across the world and cited
the recent London riots and
demonstrations in Greece as
manifestations. There is a
ballooning number of youth
and a record of high level
record of unemployment.
He also pointed out some
interesting economic indica-
tors associated with social
unrest; for instance, in inner
London, only 20% of the
people have 60% of the to-
tal income.
Despite of all these prob-
lems, Dr. Hayllar sees op-
portunities from social en-
trepreneurs through pro-
grams like the 2011 Fight-
back UK as well as in Sin-
gapore, Hong Kong and
Australia. According to
him, social enterprises can
lead to economic fightback.
Social enterprises according
to Dr. Hayllar operate in a
W A Y S F O R L O C A L G O V E R N M E N T … ( C O N T I N U E D F R O M P . 3 )
However, it may forego
some projects since it is
based on borrowing.
He then zeroed in on the
case of fiscal retrenchment
through what he calls
“budget squeeze” in Kyoto
prefecture. Among the
strategies pursued include:
i) reduction of the number
of clerks in their own of-
fices; ii) taking advantage
of the high number of re-
tirees (due to high birth
rate after the war and
many were at their retiring
age) during the time of
retrenchment period to
further reduce the number
of personnel. Kyoto pre-
fecture also employed a
government level, some
expenditure items are not
possible to cut such as per-
sonnel. However, there are
items which can be
squeezed in the short term –
for instance the mainte-
nance of facilities can only
be put off for a while.
P O L I C I E S F O R S E C U R I N G S O C I A L E N T E R P R I S E S U S T A I N A B I L I T Y … ( C O N T I N U E D F R O M P . 3 )
more robust and cohesive
social enterprises sector.
Page 12
E RO PA 2 0 1 1 DAY 2 — I N P I C T U R E S
Volume 1 , Issue 2
Daily Bul le tin Page 13
E RO PA 2 0 1 1 DAY 2 — I N P I C T U R E S
National College of Public
Administration and Governance
Building
Raul P. De Guzman Street
University of the Philippines
Diliman 1101, Quezon City
EROPA Secre tariat
Administration, but also to
ensure the transfer of the
Organization’s values to the
next generation.
“Outstanding Young Practi-
tioner,” on the other hand, is
geared toward recognizing
the contribution of young
practitioners in public ad-
ministration. The award is
geared toward recognizing
one individual from each of
the 10 state members who
have made excellent contri-butions to the field of public
administration despite hav-
ing less than five years of
experience in the public
sector or academe.
Then there is the “Views
from the Frontlines: A Call
for Stories to Share.” Rec-
ognizing the power of sto-
ries in terms of sharing in-
sights and providing inspira-tion to people in the field of
public administration, the
Dr. Orlando S. Mercado,
from the moment he as-
sumed the Organization’s
Secretary General position, has one battle cry: transfor-
mation. Being a 50-year old
organization, he envisions
EROPA to remain relevant
in the field of public ad-
ministration and governance
not only in the Asia Pacific
region but beyond. This
aspiration is highly evident
in EROPA’s future plans
and programs.
One such example is the
“Online Youth Network”
which will provide student
groups and individuals an
online platform wherein
they can come together and
share knowledge and infor-
mation. Serving as an exten-
sion of the online presence
of EROPA, the Youth Net-
work not only aims to en-courage the youth to be en-
gaged in activities in Public
Call for Stories puts the
spotlight on real-life, actual
stories that are happening
around the region in the realm of public administra-
tion and governance told
from the point of view of
those in the frontlines of the
public sector and govern-
ance.
Aside from those already
mentioned, EROPA also
plans to continue expanding
its network. For instance, the Organization and the
Institute of Public Admini-
stration of Canada or IPAC
have recently entered into a
memorandum of agreement
that will enable the two to
share research, information,
experience, and skills.
E R O PA ’ S F U T U R E P L A N S A N D P R O G R A M S
Telefax: +632 929 7789
Email: [email protected]
Reaching Farther Moving Faster
Building a Community of Scholars and Practitioners
EROPA
www.eropa.org.ph
www.facebook.com/EROPA1960
Dr. Tippawan Lorsuwan-narat
Chair, Conference Orga-
nizing Committee
Rapporteurs
Dr. Suchitra Punyarata-bandhu
Head Rapporteur
Dr. Kasemsarn Chot-chakornpant
Henrik Thies
Coordinators
Amokwu I. Theophilus Chesca Sebastian
Fareedali Kanji
Jose Angelito Aurelio
Jose Tiu Sonco II
Mukunda Mani Khanal
Ryan Advincula
Team Members
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