Going to market without the 'cow'

In the story of Jack and the beanstalk, Jack may not have had enough street smarts to know the comparative value of his cow versus a handful of beans. But he at least had enough common sense to bring a cow to sell at the market.

In the case of the Philippines, everyone from President Noynoy Aquino down to some of his cabinet members has at one point or another gone to the regional market without bringing a “cow”. If at all they seem to be the one selling the “magic beans”.

However, as you read on, you will discover that the fault is not with “government” entirely, but with our politicians who simply can’t let go of their power even in areas that should be left to the executive department.

In an article written by Elisa Osorio of our Business Section, entitled: “Lack of incentives driving away Japanese Investors”, Masahru Oshima, the Investment Adviser of the Japan International Cooperation Agency or JICA was quoted as saying that the Philippines is unable to offer flexible and responsive incentive programs because this requires the approval from the Senate and Congress.

“On the other hand, the Board of Investments in Thailand does not require legislative approval to change their incentive scheme that is why they can act swiftly”.

In effect, we are still paying the price for the institutionalized “protectionist” system that our Great grandparents put in place to protect their business interest. Because Congress continues to protect businesses, industries with vested interests, the country is losing out to its regional neighbors in its inability to offer better incentives to invest in the Philippines.

Meanwhile our growing population and increasing number of workers are forced to fight over very few jobs that pay peanuts.

As far as investment incentives go, the JICA adviser says, “we have to change our legislation system and consolidate all IPA into one strong Board of Investments which has a free hand to make incentive package”.

All this time, many of us thought that our inability to attract investments was because of lousy salesmanship on the part of government, but now we are discovering that PNoy can’t bring a “Cow” to the market because the greatest obstacle to National progress are the Senate and the House of Representatives.

While government has steadily pursued the course of devolution and decentralization, we discover that there are so many laws that have institutionalized congressional control or meddling in the day- to- day business of government.

In the end we discover that it is not the republic of the Philippines who is in Charge but rather the Landlords in Congress without whom no money can be apportioned, without whom no taxes can be imposed and without whom, no franchise, no incentive or business can commence either directly or indirectly.

As a result we are left with a government whose efforts have been confined to “speeches”, speeches, and more speeches”. On the ground efforts have been all about trips to other countries and the standard “marketing and promotions” or “official meetings” where government representatives try to entice prospective investors but have nothing new or better to offer.

They persist on going abroad without even realizing that their potential clients are in country. For instance, one cabinet member is set to travel to Japan to do another “song and dance” number to attract investors this week, while several high ranking officials in the regional automotive industry are coming to Manila to take part in the 7th Manila International Auto Show at the World Trade Center.

Rather than take risks with radiation exposure, government officials might be better off taking care of the people, companies and businesses that are coming to Manila or are already in the Philippines.

From what I know, the Regional Boss of Chevrolet will be in just for the opening ceremonies, some officials Hyundai are also expected to take part in the launch of their latest sedan, and Ford executives will also be in the same venue to present their vehicle line-up.

In just one day, under one roof, the Aquino administration could host a working meeting with the industry as a whole and find out what would “collectively” be attractive and beneficial to all parties concerned. This one-day opportunity could give life to the development of a Philippine based car parts industry at a regional scale or volume.

During the previous administration, politics and vested interest dominated government policies governing the automotive industry. The previous administration was “led” or influenced by one group of carmakers, to the disadvantage or exclusion of non-Japanese manufacturers as well as companies that directly imported CBUs or completely built up units from Korea and Europe.

While government recognized treaties with regional partners, no efforts were made to create a level playing field by pursuing similar treatise with countries such as Korea and non-Asean countries.

Because there is too much political influence on policies, and since there is no level playing field, many of the active and major brands in the industry continue to be susceptible to outright extortion, harassment and false accusation of unscrupulous lobbyists or officials.

On the other hand those who were politically astute or savvy went home with a much larger slice of the pie.

If President Noynoy can enlist Presidential adviser Mar Roxas or Executive Secretary Jojo Ochoa to round up the leaders of the industry, it would not be far from impossible to come up with an all new, no-bias, no vested interest plan that would bring investments into the country.

Since President Noynoy is the principal proponent of the PPP or Private-Public Partnership program, and since the President is also a car enthusiast, it might be a blessing if not an advantage to drive buy at the MIAS or invite the VIPS for a chat.

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