We need more than foreign investments

Every country has its rich and poor, and as I once read, the creation of wealth by some is not the cause of the poverty of the many. Indeed as some would say, unless we create wealth there is nothing to distribute. But that wealth must trickle down. But how do we make it trickle down? Indeed the term has come under fire as a big joke. For instance it is expected that more tax breaks given to the rich would ultimately benefit the whole economy, and that includes the poor.  The theory has been discredited. And as an entry in Wikipedia says,

“The term has been attributed to humorist Will Rogers, who said during the Great Depression that “money was all appropriated for the top in hopes that it would trickle down to the needy.” The term is mostly used ironically or as pejorative.”

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Economic Planning Secretary Arsenio Balicasan recently unveiled the Philippine Development Plan for 2014-2016. The plan is directed towards finding why despite the high growth, at least a fifth of the population is poor.  This is the economic blight that showcases this administration’s “accomplishment.” In other words, the high growth is not trickling down.  I don’t think it ever will under the present set-up. But this is a personal opinion and one from an ordinary layman without economic expertise.

Happily, Balicasan made a pitch for more foreign investments. He said poverty in the Philippines will continue “unless the government creates a better economic environment that could lure local and foreign investors to set up businesses in critical areas of the country.”

That is a hopeful start. But is the President listening?  The fact that the constitutional restrictions on foreign investments have to devise a tortuous route of legislation to remove these says more than it does any economic theory.

“Creating jobs and lowering the cost of doing business, he says, are the keys to reducing poverty.“ Accelerating job creation requires building up of capital.

Investments must continually rise for the economy to continue to grow and this requires a stable and predictable market environment,” says Balicasan.

Words, words, words. Three thousand employees recently lost their jobs when multibillion Sagittarius Mines Inc closed shop in Tampakan. It was not investments that were needed.  Money was being poured in to develop the god-forsaken villages around the mining site and the company complied with every requirement necessary for responsible mining but still “no can do.”

I visited the site myself and I saw development – roads, schools, hospitals. The group had distributed thousands of seedlings of fruit trees, one of which proudly stands in my farm – a guyabano tree. These were being given away free to visitors to encourage more tree-planting anywhere in the Philippines.

I was in Singapore for the Asia Mining Congress and heard both from SMI and Philippine officials that the venture was ready to proceed with just a few more hurdles. Well it seems the few more hurdles were just impossible to do.

A bill is now languishing in Congress that would have put a compromise agreement in the joint venture between SMI and the Philippines. The President also promised it will be done, soon, soon.  Well, its 2014 and that soon never came.

Even then in Singapore, I already heard investors saying that the SMI case will be a benchmark for other groups on whether to pursue foreign investments in the Philippines. So to Secretary Balisacan all I can say is with policies from a government like this, I cannot be optimistic. There will be hot money of course and a hyperactive Philippine Stock Exchange, but development that will bring jobs and food on the table for the poor, I rather doubt.

Something indeed has to be done and I am afraid development plans cast in the old mold will simply not do.

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It is good that Speaker Feliciano Belmonte Jr. gave seats in major house committees to independent members of Congress. At least we can hope for a more effective opposition in the House. We can only hope because it takes very little to nudge these lawmakers to agree with the majority. But hope springs eternal.

The appointment of former President and now Pampanga Rep. Gloria Macapagal Arroyo to two committees smacks of black humor or irony. I think it is rubbing salt to a wound with the appointment while she remains  imprisoned needing medical care. For whatever reason, it has to be explained why she should be given congressional duties she cannot perform.

Of course the minority members were thankful, but what about the public or their constituents? What about lawmaking as an institution of government? Does it mean that we can expect more spirited debates?

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Miscellany: From the German-Philippine Chamber of Commerce and Industry comes this notice that World Bank Lead Economist, Dr. Rogier van den Brink, will give “an overview of the Philippines’ promising potential in including the idle population to its workforce through the creation of job opportunities within the different Philippine sectors.”

He will give an in-depth analysis of the “What, How, Why” of the Philippines’ job market expansion, its challenges and inherent benefits. He will also give an overview of the Philippines’ promising potential in including the idle population to its workforce through the creation of job opportunities within the different Philippine sectors.

Dr. Günter Matschuck, GPCCI, president, Christof Wegner, German Embassy, commercial counselor and Thorsten Franz, German Club, president advised its members and guests to make early reservations.

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And as a final word, here is a gem:

It is Leo Tolstoy’s concept of the freedom of choice. “Each man lives for himself, uses his freedom to achieve his personal goals, and feels with his whole being that right now he can or cannot do such-and-such an action; but as soon as he does it, this action, committed at a certain moment in time, becomes irreversible, and makes itself the property of history, in which it has not a free but a predestined significance, ” from War and Peace.