Which Former Multi-Awarded U.N. Diplomat Grandpa is Worth Listening to About Economics?
Davide Jr.'s statement about foreign investment really feels out of place
MANILA - The provisions of the Constitution on foreign ownership should remain because amending it may lead to the Philippines being a "colony" of foreign investors, a former chief justice said Monday.The Philippines has "one-fifth of the richest natural resources" and it was "designed that it should only be for Filipinos," said Hilario Davide Jr., a member of the commission that crafted the 1987 charter.
"If you remove the Filipino citizenship requirement in the exploitation of natural resources, on the acquisition of public lands, or even in mass media, in education, you remove the solemnity of nationalism," he told ANC's Headstart.
Davide said lawmakers should be guaranteed to be incorruptible because Congress can be prevailed upon by foreign interests in order to favor exploitation of the country's natural resources."One country may have businessmen so strong because they have the money. If you are in Congress, there might be a temptation to agree to certain propositions, to reduce the limit, for instance, of Filipino participation and increase the participation of foreigners," he said."In the end, we will become a colony of businessmen of other countries," he added.Davide said the 60-40 foreign equity ratio should stay also because the Philippine population is growing annually and they should have food security."What will you feed the people afterwards if all our assets here, natural assets, would be [granted] to foreign investors?...Congress should stick to it [60-40] and fully implement the same," he said.The Constitution restricts ownership of certain areas of investments to firms with at least 60-percent Filipino capital.The restriction also covers exploration, development, and utilization of natural resources through co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations.
This is really something very contradictory. Reading the late Lee Kuan Yew's book From Third World to First--he not only wrote a book but a book that defended his legacy. I'm amazed the book is seldom used to discredit the Marcoses. It may be used again now because Ferdinand "Bongbong" R. Marcos Jr. will be made the 17th Philippine president soon. Yet, Singapore leaders (now under the leadership of Singapore Prime Minister Lee Hsien Loong) had congratulated Marcos Jr. for his victory against outgoing Philippine Vice President Maria Leonor G. Robredo. If they're serious about the whole book--don't cherry-pick. Take a look at what Lee Kuan Yew also had to say about foreign direct investments (FDI).
Pages 57-58
After several years of disheartening trial and error, we concluded that Singapore's best hope lay with the American multinational corporations (MNCs). When the Taiwanese and Hong Kong entrepreneurs came in the 1960s, they brought low technology such as textile and toy manufacturing, labor-intensive but not large-scale. American MNCs brought higher technology in large-scale operations, creating many jobs. They had weight and confidence. They believed that their government was going to stay in Southeast Asia and their businesses were safe from confiscation or war loss.I gradually crystallized my thoughts and settled on a two-pronged strategy to overcome our disadvantages. The first was to leapfrog the region, as the Israelis had done. This idea sprang from a discussion I had with a UNDP expert who visited Singapore in 1962. In 1964, while on a tour of Africa, I met him again in Malawi. He described to me how the Israelis, faced with a more hostile environment than ours, had found a way around their difficulties by leaping over their Arab neighbors who boycotted them, to trade with Europe and America. Since our neighbors were out to reduce their ties with us, we had to link up with the developed world-America, Europe, and Japan-and attract their manufacturers to produce in Singapore and export their products to the developed countries.The accepted wisdom of development economists at the time was that MNCs were exploiters of cheap land, labor, and raw materials. This "dependency school" of economists argued that MNCs continued the colonial pattern of exploitation that left the developing countries selling raw materials to and buying consumer goods from the advanced countries. MNCs controlled technology and consumer preferences and formed alliances with their host governments to exploit the people and keep them down. Third World leaders believed this theory of neocolonialist exploitation, but Keng Swee and I were not impressed. We had a real-life problem to solve and could not afford to be conscribed by any theory or dogma. Anyway, Singapore had no natural resources for MNCs to exploit. All it had were hard-working people, good basic infrastructure, and a government that was determined to be honest and competent. Our duty was to create a livelihood for 2 million Singaporeans. If MNCs could give our workers employment and teach them technical and engineering skills and management know-how, we should bring in the MNCs.
Page 66
Our job was to plan the broad economic objectives and the target periods within which to achieve them. We reviewed these plans regularly and adjusted them as new realities changed the outlook. Infrastructure and the training and education of workers to meet the needs of employers had to be planned years in advance. We did not have a group of readymade entrepreneurs such as Hong Kong gained in the Chinese industrialists and bankers who came fleeing from Shanghai, Canton, and other cities when the communists took over. Had we waited for our traders to learn to be industrialists we would have starved. It is absurd for critics to suggest in the 1990s that had we grown our own entrepreneurs, we would have been less at the mercy of the rootless MNCs. Even with the experienced talent Hong Kong received in Chinese refugees, its manufacturing technology level is not in the same class as that of the MNCs in Singapore.
Pages 68-69
If I have to choose one word to explain why Singapore succeeded, it is confidence. This was what made foreign investors site their factories and refineries here. Within days of the oil crisis in October 1973, I decided to give a clear signal to the oil companies that we did not claim any special privilege over the stocks of oil they held in their Singapore refineries. If we blocked export from those stocks, we would have enough oil for our own consumption for two years, but we would have shown ourselves to be completely undependable. I met the CEOs or managing directors of all the oil refineries-Shell, Mobil, Esso, Singapore Petroleum, and British Petroleum on 10 November 1973. I assured them publicly that Singapore would share in any cuts they imposed on the rest of their customers, on the principle of equal misery. Their customers were in countries as far apart as Alaska, Australia, Japan, and New Zealand, besides those in the region.
This decision increased international confidence in the Singapore government, that it knew its long-term interest depended on being a reliable place for oil and other business. As a result, the oil industry confidently expanded into petrochemicals in the late 1970s. By the 1990s, with a total refining capacity of 1.2 million barrels per day, Singapore had become the world's third largest oil-refining center after Houston and Rotterdam, the third largest oil trading center after New York and London, and the largest fuel oil bunker market in volume terms. Singapore is also a major petrochemical producer.
To overcome the natural doubts of investors from advanced countries over the quality of our workers, I had asked the Japanese, Germans, French, and Dutch to set up centers in Singapore with their own instructors to train technicians. Some centers were government-financed, others were jointly formed with such corporations as Philips, Rollei, and Tata. After 4 to 6 months of training, these workers, who were trained in a factory-like environment, became familiar with the work systems and cultures of the different nations and were desirable employees. These training institutes became useful points of reference for investors from these countries to check how our workers compared with theirs. They validated the standards of Singapore workers.
Davide Jr. may have had concerns about corruption. Some can laud him as a public servant. He's also my fellow Carolinian at the University of San Carlos (USC). However, I really must disagree with what he said about FDIs and the insisting on Carlos P. Garcia's "Filipino First Policy". After reading several pages of From Third World to First--Davide Jr. himself isn't right with what he said about FDI. Davide Jr. wasn't right either with what he said about the 1987 Constitution of the Philippines as the "best in the world". If it were the best in the world then why is the Philippines left behind with the other ASEAN countries?
Where Mahbubani practically proved Davide Jr. wrong
Kishore Mahbubani has dedicated five decades of his life to public service. In his 33 years as a Singapore diplomat, Kishore took on many challenging assignments, serving for example in Phnom Penh, Cambodia, in 1973/74 during the war. He also served two stints as Singapore’s Ambassador to the UN (1984-1989 and 1998-2004). He also held the position of Permanent Secretary of the Ministry of Foreign Affairs from 1994 to 1998. He was also conferred the Public Administration Medal (Gold) by the Singaporean Government in 1998.Kishore had an equally illustrious career in academia. He was appointed the Founding Dean of the Lee Kuan Yew School of Public Policy in August 2004. Despite his heavy administrative duties, Kishore proved to be a prolific author. He has published nine books, including Can Asians Think? and Has China Won?.Kishore has received global recognition for his intellectual contributions, having been listed several times in the list of top global thinkers by Foreign Policy and Prospect Magazines. The citation for the US Foreign Policy Association Medal he received in June 2004 said: “a gifted diplomat, a student of history and philosophy, a provocative writer and an intuitive thinker.”Kishore has held positions in several globally significant committees. He was the founding chairman of the nominating committee of the Lee Kuan Yew World City Prize (2009 to 2019). He has participated in the annual meetings of the World Economic Forum (WEF) in Davos twenty times, serving also in several WEF committees. In April 2019, he was the second Singaporean to be elected as an honorary international member of the American Academy of Arts and Sciences, which has honoured distinguished thinkers, including several of America’s Founding Fathers, since 1780.
What can be seen is that while Davide Jr. had his awards--Mahbubani was the one involved in economics more than Davide Jr. Though, I don't need Mahbubani's prestige to understand that Davide Jr. is wrong. Otherwise, I wouldn't be able to understand the basics that people need to know especially when viewing the news or understanding the stock market. Both men are awardees and received awards from the U.S. as well.
Though, what should be the focus is the state of Singapore now vs. the Philippines now. Maybe, we could also talk about Singapore back then and the Philippines back then. Both Mahbubani Jr. and Davide Jr. may have met at some point. Guess which nation became so progressive that it's become the target for sending OFW workers. Singapore has proven itself over and over again. Mahbubani could be multi-awarded for all we care. If Singapore didn't show itself as a country with better salary rates and better standards of living--everything Mahbubani would be saying is just going to be nothing more than empty words. Yet, Mahbubani in the documentary said, "We would be different." when it came to FDIs. Mahbubani didn't just say it--Singapore's status as a first-world country from a third-world is proof of it. Mahbubani called the idea that FDIs rape your country a third-world mentality. That's why third-world countries keep staying like that until that mentality is removed.
Actions speak louder than words. Results speak louder than words. That's why I choose to listen to Mahbubani over Davide Jr. in that regard. Mahbubani has proven Singapore to be what it truly is. Mahbubani spoke and provided evidence. Singapore is that evidence. Some people can go ahead and say that countries chose protectionism to develop before opening their doors to the world. Yet, they haven't provided evidence for it unlike the history of Singapore. Yet, they haven't shown the real gains of economic protectionism in the Philippines. Singapore has shown an economic boom and Lee Kuan Yew proved them wrong. The Philippines can only become another Singapore if it follows Singapore.
