Business blows in the wind

The Philippines in 2015 and beyond sits at the center of a page, with four dog-eared corners serving as markers. The markers can help make or break – or keep at a standstill – the country’s economic momentum in the next half-century. These four markers are the China-led Asian Infrastructure Investment Bank (AIIB), the USA-led Trans-Pacific Partnership (TPP), the ASEAN Economic Community (AEC), and the new Silk Road funded by China.

Such seems to be the gist of the Pandesal Forum held last Wednesday at the 76-year-old Kamuning Bakery and Café owned by the famous Philippine STAR columnist Wilson Lee Flores. The panelists included Ambassador Donald Dee of the Philippine Chamber of Commerce and Industry; Mr. Henry Lim Bon Liong, whom Wilson called the “Paper King” but not the “Paper Tiger”; Professor Benito Lim of UP and Ateneo de Manila University; and Atty. Jemy Gatdula of University of Asia and the Pacific. Reactors included Professor Bobby Tuazon of the Center for People’s Empowerment and Governance (CENPEG) and the eloquent businessman Mr. George Tiy.

Ambassador Dee said that what we need to do is to link more sectors together. To do this, we need to focus on infrastructure, business processing (ease of doing business), manufacturing and agriculture, with increased yield for rice. He also scored the present administration for its failure to put the Public-Private Partnerships in place—and moving fast.

The topic of rice energizes Mr. Henry Lim Bon Liong, who champions the use of hybrid (not GMA) rice seeds in the country to triple rice harvest per hectare. If the country is to do well in the AEC, it has to lower its agricultural costs. The cost of our palay is P18 per kilo; in Myanmar, it is P8 per kilo. He continues, “Only five percent of our one million hectares of agricultural land is planted to hybrid seeds. Our aim is to produce 10 tons per hectare. I’m willing to have my head chopped off if we do not become self-sufficient in rice through hybrid seeds.”

This reminds of an international conference of educators that I attended in Vietnam eight years ago. We were having lunch when one of the Vietnamese hosts asked me, “Professor Remoto, where does your country sell its rice?” I told him that, no, we do not export rice; instead, we import them from Vietnam and Thailand. The Thai delegate beside me said that their farmers learnt rice technology from the International Rice Research Institute in Los Banos, Laguna. And the Vietnamese? Well, he did not need to remind me that after his country suffered from three decades of war, it is now a powerhouse in rice production – and indeed sells its produce to a country that did not suffer a civil war.

Shrewdly, Professor Benito Lim laid the parallel tracks of AIIB (with $100-billion funding from China) and the International Monetary Fund and the World Bank (funded mostly by the USA and its allies, verily a Cold War creation). This is not only a financial operation, but one that is tinged with politics as well, with China flexing its muscle in the global arena. But he added that unlike the IMF and the WB with its impositions on the economic policies of its borrower-countries, AIIB will not meddle in the internal affairs of its borrowers. In fact, the more countries that join the AIIB the better, because it will dilute China’s influence in the group, since China has no veto power in the AIIB.

Professor Tuazon seconds this point. “These agreements,” he said, “are not purely economic roadmaps. They have geopolitical implications. But China, which introduced the AIIB in 2013, is itself unevenly developed. There is a big gap between the development between the rural areas and the coastal, urban areas.” The Silk Road, also called the One Belt, One Road initiative, will be funded by AIIB to the tune of $50 billion. “It is China’s Great Leap Outward. It will link China to 65 countries, in four continents, with a timeline of 35-40 years.”

Where lies the challenges? It will compete directly with the Asian Development Bank and the IMF-WB. The areas covered by the Silk Road will also cut through terrorist areas, i.e., in Afghanistan that used to be traversed by the old Silk Road. And how, he echoes Professor Lim, will China address the unevenness of its own development?

The ASEAN Economic Community, for its part, should first address the worsening poverty and income disparity among the member-nations of the ASEAN.

For his part, Mr. George Siy said that, faced with this menu of options in technology, financing and economic cooperation, what should we do?

Like the rest of the panelists, he said we should focus on what we can get from all these agreements. We need access to financing and infrastructure, i.e., the AIIB just funded the building of railways in Indonesia and Thailand. Do we want to be left behind? We should also capitalize on converting all these gains to competitiveness. We are now 20 years behind Malaysia, he reminded us, and in my mind rose images of Kuala Lumpur where I lived for one year: its wide boulevards shrouded with trees, its bustling factories, its healthy and well-educated workforce.

Atty. Jemy Gatdula also lamented the fact that the Philippines does not take advantage of its free trade agreements (FTAs). He noted that “We only optimize only around 20 percent of what these FTAs offer to us.” He also said that there is still fat in the bureaucracy; it should be sliced. Well, we cannot even optimize the billions of dollars donated to us by foreign governments and private sectors for the Super Typhoon Yolanda rehabilitation and reconstruction, what more the FTAs? We are not efficient in parlaying already allocated money into projects that are planned and implemented well, monitored and evaluated, and whose best practices are replicated throughout the land.

All the panelists agreed that what is needed is political will – strong as steel, and focused like a laser beam. Are we going to have this in the next leadership? The answer, my friend, is blowing in the wind.

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