Skip to main content

Foreign Direct Investment Doesn't Always Equal to Environmental Degradation

PH Antifa's big misconception

It may be several months past Earth Day already but I'll still write posts supporting eco-friendly capitalism. I did write a post on eco-friendly capitalism. Capitalism is a force meant for good only in the hands of good people. It was meant to fill in the supply and demand gap based on free market-friendly competition with a set of rules. Real competition has a set of rules such as no cheating. Another deadly misinformation sent by protectionist "think tanks" is that accepting Foreign Direct Investment (FDI) equals environmental degradation. It may seem true (at first) but one can't tell the difference between capitalism as a tool for good vs. capitalism being misused and abused. It's not like as if people who believe in socialism or communism have been better, right? 

If you think protectionism is good for your country's environment then think again

It's easy to blame FDIs for pollution. However, did you know countries with extremely high restrictions against FDI also suffer from pollution? It's true that South Korea has a pollution problem but don't blame it on FDI. I could blame it on if capitalism is poorly regulated. We can read the following about North Korea's air pollution problem according to The Diplomat:
According to the WHO, 89 North Koreans in every 100,000 died from ambient air pollution in 2016. China’s rapid industrialization and North Korea’s aging domestic thermoelectric power plants are mainly responsible for this health threat. Forest degradation is another contributing factor. In Asia, North Korea has become the country with the third fastest rate of degradation. From 1990 to 2015, North Korea lost the highest percentage of its forest in East Asia.

North Korea has taken very few steps to mitigate this issue despite its vulnerability. This vacuum of effective countermeasures exposes the North Korean population to the serious dangers of fine dust.

I think the problem with China is that it didn't decide to take heed of the late Lee Kuan Kuan Yew's advice to green up the country. The book From Third World to First also described greening up Singapore which helped maintain it as a clean and green country. High penalties for littering and the like helped control Singapore. China may have such policies but it seems the excessive obsession with progress may have allowed capitalists to cross the line. Capitalism is good only when there's restraint such as environmental protection. 

Meanwhile, North Korea has been the missing link. It's between China and South Korea. I guess South Korea also suffers from it as an effect due to the carrying over of pollutants. China needs to be more cautious about rapid industrialization (by making sure the environment isn't affected) and North Korea needs to cooperate. What can be seen is that North Korea (a protectionist country) has taken very few steps to help solve the issue. The aging thermoelectric plants are guaranteed to produce more pollutants compared to modern methods that would greatly decrease carbon emissions.

Venezuela's classic example may further explain things aside from North Korea

Mongabay

What doesn't surprise me is the horrid "protectionist paradise" known as Venezuela. I decided to get this excerpt from Mongabay to describe how Venezuela's protection had done very little to protect its environment:

While trying to put together a review of what happened to Venezuela’s environment in 2021, conservationists ran into a problem. The government publishes virtually no statistics on things like deforestation, infrastructure or mining, and it often actively blocks researchers from investigating threats to local ecosystems.

Last year, the government appeared to lean more heavily on the country’s natural resources, expanding mining activity and increasing oil production in hopes of creating some economic stability.

The result was another year of significant environmental devastation. Although there are few reliable statistics to show whether it was better or worse than past years, 2021 was marked by widespread tree cover loss, pollution, water shortages, and violations of Indigenous groups’ rights, according to a new report by the Political Ecology Observatory of Venezuela (OEP).

The organization compiled news reports, social media posts and research from local conservation organizations to fill the gap in data.

“There is a lack of official information on the environmental and social consequences of most issues,” said Elsa Rodríguez, a member of the observatory. “There are no statistics that allow us to know the dimensions and scope for many things.” 

Even worse, these words even appear to describe Venezuela's protectionist "paradise":

“Environmental crime enjoys extraordinary impunity,” the report said. 

I'm not surprised at the statement of extraordinary impunity. In short, protectionism is no guarantee that the environment will be protected. Protectionist think tanks of the Philippines such as IBON Foundation, Kabataan Partylist, Bayan Muna, etc. may want to insist that FDI equals environmental degradation. However, the evidence cited says otherwise such as how Venezuela's environmental devastation is so bad even without an influx of FDI. An influx of FDI can be bad if there are no proper regulations such as tax mapping, requiring them to pay rentals, labor laws, and environmental laws. However, FDI with proper regulations will give money that can be spent to maintain the environment. Money in its value is when it's put to use to make sure that there are still trees to produce money, there's a continuous supply of fish to buy, there's a continuous supply of fresh water to buy, and that the money is used to maintain the environment. Money's value is when it has something to buy it with. 

Venezuela may not be accepting FDIs but the environment there is really bad. What's really not surprising is how free market Communist China (though it better lifts its ban on Google and Facebook to be more investor-friendly). EPIC or the Energy Policy Institute of the University of Chicago even tells of the progress that Communist China has made in combatting pollution in contrast to Venezuela and North Korea:

By 2020, Beijing’s PM 2.5 levels had plummeted to 38, a 55 percent drop, according to the University of Chicago study. And the progress didn’t end there. In 2021, pollution levels fell further, allowing Beijing to meet China’s national air quality standard for the first time. (China’s standard for air quality are not as strict as the WHO’s.)

What China did was regulate the rapid industrialization--not get rid of the industrialization. I think Deng could've paid a little more attention to Lee's instructions on greening up Singapore. China should try to green it up by setting up more rules to regulate industrialization. It's like setting rules such as letting natural sources of raw materials recover for a season would help. Practices such as crop rotation and responsible forestry would help regulate the free market. Whoever says capitalism should be without regulations is also as misguided as the anti-capitalists. 

Lee Kuan Yew's policy to green up Singapore with foreign assistance

Lee didn't just open up Singapore to FDI--he also set policies to green up the city. Singapore has natural resources but not as significant as the Philippines. Yet, Lee knew what he had to do to make Singapore a good city. Chapter 13 of From Third World to First is titled "Greening Singapore". It's been one of the most enlightening chapters of the book I bought from Shopee after surviving Odette. I felt like the book would provide me insights into this business blog.

Singapore was a very polluted city when Lee took over. It had to be cleaned up. Many problems like pirate taxi drivers (illegal drivers without a license), squatters (and they too contribute to environmental degradation), and how Singapore created an anti-pollution drive. All these contributed to Singapore's progress and not just accepting FDIs. FDIs are good only if they provide employment, bring in capital, teach new skills, and create jobs that are all sustainable to the environment. The same principle goes for local investors--they need to follow environmental rules too. It doesn't matter who destroys the environment--that person should be punished whether a local or a foreigner.

Reading about Lee's plans made me think of how to implement them in the Philippines. One of the things I believe should be done is Lee's green revolution. Pages 175-176 also give this detail regarding Lee's Green Revolution:
We planted millions of trees, palms, and shrubs. Greening raised the morale of people and gave them pride in their surroundings. We taught them to care for and not vandalize the trees. We did not differentiate between middle-class and working-class areas. The British had superior white enclaves in Tanglin and around Government House that were nearer, cleaner, and greener than the "native" areas. That would have been politically disastrous for an elected government. We kept down flies and mosquitoes and cleaned up smelly drains and canals. Within a year there was a distinct spruceness of public spaces. 
Perseverance and stamina were needed to fight old habits: People walked over plants, trampled on grass, despoiled flowerbeds, pilfered saplings, or parked bicycles or motorcycles against the larger ones, knocking them down. And it was not just the poorer people who were the offenders. A doctor was caught removing from a central road diver a newly planted valuable Norfork Island pine which he fancied for his garden. To overcome the initial indifference of the public, we educated their children in schools by getting them to plant trees, care for them, and grow gardens. They brought the message home to their parents. 
Nature did not favor us with luscious green grass as it has New Zealand and Ireland. An Australian plant expert and a New Zealand soil expert came in 1978 at my request to study our soil conditions. Their report caught my interest and I asked to see them,. They explained that Singapore was part of the equatorial rainforest belt, with strong sunshine and heavy rainfall throughout the year. When trees were cut down, heavy rainfall would wash away the topsoil and leach the nutrients. To have grass green and lush, we had to apply fertilizers regularly, preferably compost, which would not be so easily washed away and lime, because our soil was too acidic. The Instana curator tested this on our lawns. Suddenly, the grass became greener. We had all schools and other sports fields and stadiums similarly treated. The bare patches around the goal posts with sparse, tired-looking yellow grass were soon carpeted green. Gradually, the whole city greened up. A visiting French minister, a guest at our National Day reception in the 190s, was ecstatic as he congratulated me in French; I did not speak it, but understood the word "verdure." He was captivated by the greenness of the city. 

What Lee Kuan Yew did wasn't to isolate Singapore. Instead, he requested an Australian plant expert and a New Zealander soil expert to help see how Singapore can be greened. Lee wasn't afraid to get two foreigners to help see how Singapore can be greened up. What was also amazing was the cleaning up of the Singapore River and Kallang Basin--two areas so polluted it may have been worse than the Pasig River is today. I might do a blog topic about it later on. What I want to focus on now is how Lee used foreign assistance to clean up Singapore. 

What the Philippines can also learn from Lee's greening-up 

PH Antifa needs to show this to Singapore's government

Above is another very misleading meme from PH Antifa. Those clowns have nonsense arguments from their Facebook page. I wonder if they even read Third World to First to see how open FDI had actually helped in greening up Singapore. Maybe they did but people with Dunning-Kruger Effect and cognitive dissonance treat the facts with contempt. Pretty much, the Philippines can also achieve this re-greening and rehabilitation. I believe following Lee's principles (with modifications) can a series of tasks such as cleaning up places such as Tondo in Manila, and finding ways to rehabilitate squatters (through employment opportunities) can the Philippines be rehabilitated. 

Lee mentioned everything about squatters and the bodies of water. In no time, the use of foreign investments also helped establish jobs that slowly gave people better places to live. Lee's program can be placed in the Philippines. If more jobs were available then squatters can slowly get out of their areas. More money from taxes might be best spent on cleaning up the slum areas. If squatters started getting employed then they can either rent or buy land so they can become formal settlers. I think the founders of the PH Antifa page may consider taking a vacation in Venezuela if they're so convinced in their beliefs. 

The big question is who will you listen to. Will you listen to a man who made a third-world country into a first-world country? Or will you listen to anti-capitalist, anti-FDI ranters on social media (an irony) who have done almost nothing to really improve the Philippines? 

References

Books 

"From Third World to First--The Singapore Story: 1965-2000) by Lee Kuan Yew
Harpers Collins Publishers

Websites

"From ‘Airpocalypse’ to Olympic Blue: China’s Air Quality Transformation" by Lili Pike

"HOW SEOUL IS STRUGGLING TO IMPROVE ITS AIR QUALITY" (February 17. 2022)

"New report pieces together toll of environmental damage in Venezuela in 2021" by Maxwell Radwin (April 20, 2022)

"North Korea: The Missing Link in Northeast Asia’s Air Pollution Fight" By Jihyun Cha and Taeheon Lee (June 11, 2019)

Popular posts from this blog

Get Stuck with EDSA, End Up Like Nokia

  Yes, we should never forget what history teaches us. A classmate of mine, back in high school, wrote a simple and blunt essay called "History: A Teacher". I doubt he still has a soft copy, given it was already more than 20 years ago. I'd like to quote Duterte critic Andrew James Masigan wrote this in  Philippine Star --something that should remain relevant: I would never undervalue the 1987 Constitution. It dismantled the legal framework of a repressive regime and established the democratic institutions we enjoy today. For this, I am grateful. The 1987 Constitution was crafted with the best of intentions. It sought to put the Filipino first in all aspects of governance and to level the playing field amongst sectors and peoples.  But it is far from perfect. It failed to consider the importance of foreign capital and technologies and the stiff competition we would have to face to obtain them. In short, its economic provisions were short-sighted . So despite the Constitut...

#SahodItaasPresyoIbaba Economics' Bad Accounting

I would like to apologize in advance to my readers. The picture I'm presenting is in Tagalog, and not all my readers speak Tagalog. I would translate the picture's text into English for convenience. It says:   "Ano ang bumubuo sa mga presyo?" means "What comprises the price?" "Gastos ng materyales" means materials expense "Gastos sa kasangkapan" means depreciation expense ""Gaston sa pasahod" means salary expense "Kapitalista" means capitalist Renta is well, rent "Kayang pababain ang presyo" means "Prices can be lowered". It says that capitalists (industrialists, landlords, bankers) and elitist governments are part in the gross profit. Get rid of excise taxes (either permanently or temporarily) for the prices of goods and services. In the times of crisis, in the burden of sacrifices, we need to be watchful for capacity. Whatever savings for times of difficulty by the workers and countrymen, the...

Past Chinese School Education in the Philippines was Based on "Sǐ Jì Yìng Bèi"

  Chinoys of my age (and older) may remember these textbooks. I called them as the "symbol of trauma". It was memorizing something without understanding it . One would just memorize (without understanding it) because it was typical. Not being able to memorize what was assigned? Get a bad grade? One can expect physical punishment like hitting the hand with a ruler or chili in the mouth. Chinese language teachers are stereotypically strict . The language textbooks (above) are what were used during the 1990s to the early 2000s. As I wrote it, the Sinjiang textbooks aren't effective in teaching Mandarin , in a world where Mandarin has over a billion speakers!  There's a Chinese proverb that says, "死記硬背 sǐ jì yìng bèi" or "Memorize to the point of death". That's exactly what those textbooks are. Memorize to the point of death! Okay, it may sound exaggerated. However, that's how Chinese language teachers in the Philippines were made to teach the ...

Migrante International's Really Bad Economic Literacy

March 17 (which is tomorrow) seems to be an unofficial holiday for some people, right? I'm sickened that the late Flor Contemplacion has been treated like she's some national heroine (and thankfully, tomorrow isn't a  holiday) even after Singapore had proven her guilt. A movie was made by Joel Lamangan called The Flor Contemplacion Story . The call for Migrante (Migrant) International has been to remember Flor even after several years. What's not too surprising was to learn that Flor's sons were all arrested for drug-related charges. Even her eldest son died while in prison. You have Migrante International wanting to end the labor export policy. However, a post by Migrante really shows how this group fails basic economics. I will not post the whole press statement but one part that made my eyes roll. >> Further opening the country’s economy to foreign ownership and control will worsen the exploitation of our people and the environment without creating a susta...

"Filipino First Policy" Has NO PLACE in the Rising Asian 21st Century

I guess nobody saw the Asian 21st Century coming, right? China was once a poor nation but look at it now. Vietnam was once a poor nation but look at it now. Singapore was once a poor nation but look at it now. The late great Lee Kuan Yew wrote his book From Third World to First . I'm afraid some people have been using it to go against the presidency of Ferdinand R. Marcos Jr. while ignoring what else Lee Kuan Yew had to say. Lee Kuan Yew described the Filipino press to be rambunctious on pages 304-305 which I agree. I'm afraid that the Filipino press may have had a hand in getting rid of any economic or political reforms that could help the Philippines. Yet, one policy has been holding back the Philippines for decades and yes, it's the Filipino First Policy .  Reviewing the Filipino First Policy and why it has no place in the rising Asian 21st century I remembered how the values education subject taught Carlos P. Garcia's stupid Filipino First Policy as a Filipino value...

Remembering the Late Jesse Robredo's Quote on Systems That Force People to be Good

It's been some time since Jesse M. Robredo died too soon. Hopefully, his wife Atty. Maria Leonor Gerona-Robredo is true to her word, in her willingness to amend the 1987 Constitution of the Philippines, for the sake of foreign investments. It's a shame I never wrote about the late great man. The CoRRECT Movement on Facebook gave this important note on Robredo's life. Robredo said, "It's not enough for an official to be good. There has to be a system that forces them to be good." Whether or not Robredo was for charter change or a few constitutional amendments, I can't tell. For some racists, let me remind them that Robredo's real surname is Lim  and his paternal grandfather is the late Lim Pay Co.  In terms of Robredo's credentials (and I tend to sometimes brag about the credentials of those I quote), here's what the City Government of Naga website says: He is an Edward Mason Fellow and a graduate of Masters in Public Administration at the John...

Filipino First Education Created the Fixed Mindset Over Growth Mindset Mentality

Tomorrow is Bonifacio Day. It's effortless to say that Filipino First Policy works. I wouldn't be surprised if Andres Bonifacio gets used as a poster boy. However, Bonifacio worked for British and German investors . I'd like to talk about how decades of Filipino First Policy compromised our education system. Some idiot on Facebook said which I'll paraphrase to avoid getting personal. The idiot said, "If you let foreigners invest here, can Filipinos afford it?" The same idiot also scorns the law of supply and demand (read my post discussing why that's plain silly  here ). People who believe in #SahodItaasPresyoIbaba must first prove it works by opening such stores nationwide, to show that the Philippines doesn't need FDI to succeed (read here ). Of course, I can expect them to say "It's the government's responsibility to raise salaries without raising the prices of goods." That's just plain bad accounting and finance too! Andrew Ja...

Refuse to Do Business with a Person Who Looks Down on Menial Work

If there's any reason why some people are angry with the rich--it's because of rich people who look down on the poor. Some people are born rich without knowing the struggles of the one who originally acquired the wealth. Some rich parents make the fatal mistake of making their children feel entitled. Meanwhile, some rich parents make their children do the right thing by not waiting until things get too far. Some rich parents end up making their children attend middle-class schools, do summer jobs, work as employees in their own businesses, and teach them the value of wealth, especially by narrating the struggles before they got wealthy. In looking for a business partner, I feel it's very important to look at the attitude of these people. How do they treat people who do menial work? I could imagine looking forward to a business contract. However, it turns out that the potential business partner is a spoiled brat . Maybe, it's already a red alarm if I'm invited to an ...

Dayang Daya: The Case of Five-Six Lending Services Roaming to Collect Christmas/New Year Debts by January

I remember during the late 1990s when the song "Dayang Dayang" (Princess of the First Degree) was played on the radio. The origins are often debated whether or not it was from Muslim Mindanao or from the other neighboring countries. The Philippines has had settlers also from Malaysia and Indonesia. A parody cover by the late Yoyoy Villame was called Dayang Daya or Cheating Cheating. It was probably making fun of the Indian five-six lending business. Indians tend to be called Bombay because of the location known as Mumbai. I even made the mistake of referring to Indians as "Bombays" more than once. The song "Dayang Daya" does talk about the five-six lending services. It does target a lot of gullible people. I even became nearly distrustful of Indians in college for quite some time.  I wrote how a Merry Christmas may lead to an Unhappy New Year due to debt burden (read here ). I tend to say to myself, "Somebody hasn't paid their debt!" every ti...

Will Opening the Philippines to 100% FDI Lead to Foreign Monopoly?

Monopoly - Hasbro I was looking at the CoRRECT Movement Moderated Public Forum on Facebook. I found more illogical arguments by a certain troll in the forum named Juan Dalisay Jr.--the writer of the Superphysics One website. However, this isn't the first argument I ran into as I've seen arguments from Kabataan Partylist and the League of Filipino Students on Facebook. They have claimed that foreign direct investments (FDIs) will lead to exploitation, only they will get rich, that they will rape resources, and an even funnier claim is that they will lead to monopolies . Some people, even fools, should be allowed to defend themselves at CoRRECT Moderated Public Forum than just live in their echo chamber of Facebook pages. However, Kishore Mahbubani and the late Lee Kuan Yew had long disproven that . The testimony is in the book From Third World to First by Lee himself. Mahbubani said foreign investors create jobs, bring capital, and teach new skills. I wonder if protectionist adv...