February 6, 2008

Live Blogging at Bridges: Dialogues Towards a Culture of Peace

I'm live blogging at the Bridges: Dialogues Towards a Culture of Peace forum at the SGV Conference Room at the AIM Conference Center where Nobel laureate Prof. Finn E. Kydland is giving a talk on globalization and economic development.

Bridges is a series of talks organized by the International Peace Foundation and this talk today is the first of a few talks here in the Philippines. This event is part of our Asian Business Systems (ABS) class and counts as one class session.

The audience is filled with prominent business and political figures, such as Senator Loren Legarda, AIM governors Washington SyCip, Luis Cuisa and former AIM president Dr. Roberto De Ocampo. Also present is International Peace Foundation founding chairman Uwe Morawetz.

The forum kicked off a welcome remark by current AIM president Francis Estrada and followed by the introduction to Prof. Kydland by WSGSB Dean Victoria Licuanan. Our Human Behavior in Organizations (HBO) professor, Prof. Jun Borromeo, is the Master of Ceremonies.

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Prof. Kydland's talk has started and here are some points I found interesting. (Pardon if some of them do not make much sense, I'm still getting the hang of live blogging:)

  • Prof. Kydland starts his talk by showing some GDP graphs of Asia and Europe;
  • GDP graphs of Europe show a steady rise, Africa's on the other hand is "falling apart"
  • Government is inconsistent over time due to its objectives and budget constraints
  • Moreover, governments planning are not optimal, and does not take into account its effects of future policies
  • There is great temptation to tax physical and human capital for governments
  • Government is notorious in reneging on debt via "surprise inflation"
  • Prof. Kydland seems to use Argentina (1980-1990's) as an example for this bad governance
  • On the other hand, Ireland in the 90's is a good example of government with credibility and forward-looking policy
  • Prof. Kydland recommends this book by Parente and Prescott (Barriers to Riches) and paraphrases the conclusion: "With good policy, there is a potential in poor nations for not 1-2 percent, but 1000-2000 percent income increase."
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First reaction to the talk is by Bangko Sentral ng Pilipinas (BSP) governor Amando Tetangco, Jr. He is agreeing to the policy of "inflation targetting" that Prof.Kydland posited. Gov. Tetango sees this a commitment mechanism for the government and central banks.

Next reaction is by AIM Board of Trustees member and former Philippine Finance secretary Dr. Roberto De Ocampo. His main points focused on credibility and knowledge productivity. According to him, there is a big movement from a "brawn" to a "brain" economy on a global scale. Dr. De Ocampo also stressed some of the missteps of the Philippines in terms of economic policy.

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We're having the question and answer portion and this is where my live blogging of the Bridges forum ends. The talk has been very in-depth in discussing government policy's role in economic development and globalization.

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