Monday, December 21, 2015

Profit, not ownership

Profit, not ownership

Some members of the Senate are again toying with the idea of amending the Constitution, particularly Article XII, Section 2, paragraph 1, on national economy and patrimony. Apart from Senate President Franklin Drilon and Speaker Feliciano “Sonny” Belmonte, lackeys of the administration have expressed their endorsement.   However, those who oppose say there is no such thing as self-limitation to the power of Congress to amend the charter that was ratified in 1987 with much fanfare and delusion.

Their opposition is not that they love to preserve a document that was drafted by bigots and hypocrites seething with hatred, but of their deep distrust of people who used the same document to capture political power and declare their position private.   They cannot even act on that simple mandate to enact an anti-dynasty law, and here they are, talking of giving investors the right to own what they are not supposed to own.  
Many suspect a sinister design by Malacanang to erase the provision that declared President Aquino’s doling out to his minions in Congress their annual manna called Priority Development Assistance Fund (PDAF) and of Abad’s syndicated idea of Disbursement Acceleration Program (DAP) unconstitutional.   Unless that is deleted, that now serves as the hangman’s rope that hovers above the head of their boss.  An amendment  could assure him he could not be charged for culpable violation of the constitution, plunder, and now of the serious crime of treason once he steps down.
Even if we are to remove the limitation on foreign investment in certain areas as Belmonte, Drilon and Recto would want to impress us, investment would not come in naturally.  Investors have their business acumen to know where they are going to make money, and it is almost innate to them.   They would not buy that retardate proposal of 100 percent ownership because ownership is not really the one that drives them to gamble their money, but on the greater chances of making profit.   It is not even employment that they care for; that did not work when we liberalized the banking industry and capital investments sectors.  
Once we give away our ownership of the remaining areas that are supposed to be owned by us as a sovereign state, we better forget the phrase “national patrimony” for clearly we have no more use for it.  To invoke that is to emphasize our stupidity.   It would have the effect of class legislation to make our own people second-class citizens. Clearly, aside from 100 percent foreign ownership of anything they could buy,  many of them enjoy privileges such as incentives and tax exemptions  that are not even given to them or that are unknown to most Filipinos.
Investors are not really keen on the issue of ownership.  For the fact that only a handful of them grabbed the offer after we liberalized our investment laws and taxation, we could well surmise that something is wrong in our approach.   We cannot go on giving away things just to bail us out of our predicament.  We should stop equating foreign investment with foreign aid.  We need only to look at our neighbors in Asia and examine what made them so successful.  They did not talk of ownership as their solution to their problem of poverty and underdevelopment, but simply conducted themselves properly to assure investors that doing business in their country would be most profitable. 
Unfortunately, the local oligarchy and the radical Left have both become greedy.  Their antipathy against foreign investors is not for the love for this country.  The Left would agitate the workers to demand wages increases, unmindful that it would add up to increase  the cost of production, and is likely to end up with them losing their jobs.  The local oligarchy takes in foreign investors if they could provide capital and are assured of greater profit with only their saliva and political connections as capital.  Both want to drive away competitors that threaten their financial hold while pretending to raise the banner of nationalism.
 We now have the lowest rate in commercial borrowings but that is only availed of by the local oligarchy to invest in non-productive ventures and money market placement resulting in what we might call financial cannibalism.  The privileges have only pushed  the oligarchy  to acquire and control the banking industry,  power generation and distribution, water supply and distribution, communications, mass media, expressways, mining, oil  exploration, construction, etc.  As a result, we created for ourselves a prosaic economy where we have the highest cost in electricity with some paying their monthly bill almost equivalent to their apartment rental; the highest cost in potable water that a bottled water is even more expensive than soft drinks; toll, just to pass roads, that exceeds the transportation fare of commuters; and fuel cost that ushers in a spin-off of wage increases.    
The unabated and unreasonable increases in the prices of goods and services exacted by the privately-owned strategic industries have deprived many of downstream and consumer–oriented industries of whatever competitiveness they still have.  To sustain themselves they resorted to importation, and invariably rid themselves the problems related to labor.  Despite that, we continue to legislate for higher wages thereby unleashing a chain of reaction of inflation. 
In fact, we are the only country in the world that has diametrically opposed economic indicators.  We give fairly high wages, yet we are ranked as the highest in unemployment rate.  In turn, we use that artificial high wage to point out we are not lagging in our per capita income.   We have sunk further from the practice of eliminating regular employees and substituting them with contractuals, but only to pay them below the minimum. There are no unions to protect our workers, and if they exist they are out to kill the goose that lays the golden egg than out to secure their employment.  We need only to ask why we rank as the least investment destination in Asia, and the only country that has a receding production of manufactured goods.
Our neighbors in Asia did not wrangle on what condition to impose in their constitution to attract foreign investors.  They simply zeroed in on how to lower their cost of production, and in assuring that their money will not melt  fast  for the holder to  be  proud only of its increased figure, but not of its value.
Many of them have organized their state-owned enterprises as their economic flagship.   Their motive has nothing to do with socialism, but to allow the downstream and consumer-oriented industries to remain competitive, especially in the export market.  This was noted by Michael Schuman who wrote the bestselling book “The Miracle: The Epic Story of Asia’s Quest for Wealth.” They created their respective SOE because they realize it plays a crucial role in the proliferation consumer-oriented industries that absorbs much of their labor force and in the creation of wealth.
In our case, after we sold the government-owned corporations, pray hard to attract foreign investors, export our surplus labor, and strip ourselves naked just to lure them.

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