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Why I Can't Take Sonny Africa's Latest Statement About Foreign Investments Seriously


I guess I can't always engage in direct debate especially if these protectionist think tanks belong to elite schools. Sadly, I wasn't qualified to enter the University of the Philippines (UP) or Ateneo De Manila University (ADMU). I was reading through IBON Foundation and found this statement about foreign investments by its executive director, Sonny Africa:

Investors

The obsession with foreign investment as if it’s some kind of magic bullet for development is also expected. Even as BSP governor, the incoming finance secretary has been among the strongest advocates of the Retail Trade Liberalization Act (RTLA), Foreign Investment Act (FIA), and Public Service Act (PSA) amendments. He echoes relentless hype that these are somehow “game-changing” reforms. He also recently gushed about how these will make the country a “preferred investment destination” and “sustain growth”.

The rest of the team are of the same mind. The incoming planning secretary, trade and industry secretary, and BSP governor have all lauded these investment liberalization measures. Yet for all their expertise, this is based on dogmatic belief more than evidence.

There’s more than enough evidence that hyped foreign investment hasn’t developed the Philippines and that it isn’t decisive for national development. Just here in Asia, the last real industrializers, South Korea, Taiwan and China, actually had less foreign investment in their periods of economic take-off than the Philippines does today.

I really find the statement idiotic especially since I've read From Third World to First. It's indeed a marvelous book by the late Lee Kuan Yew. Reading through the book and the history of other countries will prove Africa wrong. I wonder where did Africa get its data namely "There’s more than enough evidence that hyped foreign investment hasn’t developed the Philippines and that it isn’t decisive for national development. Just here in Asia, the last real industrializers, South Korea, Taiwan and China, actually had a less foreign investment in their periods of economic take-off than the Philippines does today."? I read the post where he said it and wonder if he has any empirical data to back up his claims? Seriously? Where did he get his information? It might be from some falsified evidence for all we know. Granted, Africa is an economics graduate so it's possible he's using his degree to promote his blunder. 

The big difference between Lee and Africa is empirical evidence. Lee himself went all the way for 31 years to build Singapore into the way it's now today. What about Africa? I feel like the guy is just into mindless ranting. Lee's book had shown much evidence of how foreign direct investments (FDIs) had helped develop countries. That's why I previously wrote an entry devoted to Lee's proving the economic protectionist "economists" wrong. On the contrary, South Korea, Taiwan, and China were welcoming foreign investment as part of their development. Reading through pages and pages of Lee's book really disproves Africa's current statement. It's not because Lee is way older and died at a ripe age of 91. It's because Lee established a country and wrote a real success story over a fabricated one. An old man can either be a testament to glory or a testament to stupidity. Some old men can't be taken seriously because they lived their youth wantonly and still do in their old age. Old people who lived their youth wisely and still live wisely in their old age are the ones whom the youth should listen to. 

Besides, another person worthy of attention is Kishore Mahbubani of the National Singapore University (NUS). I always found Mahbubani's statements to be strong, especially with how he described third-world country economists. The strong language in the video The Singapore Economic Model by VRPO is that third-world economists say foreign investment is bad and that it will rape the country. Yet, Mahbubani can speak from experience that foreign investments create jobs, bring capital, teach new skills, and help the country. I wonder if Africa is ever open to proving Mahbubani wrong? The empirical data of the NUS and the Lee Kuan Yew School of Public Policy would blast off claims made by Africa regarding foreign investments. It's because Singapore has proven that accepting foreign investments is part of developing the national economy. 

That's why I wrote why I can't even take IBON Foundation as an economic think tank. Since when did presidents even have the power to alter the prices of gasoline? The world market problems such as the War in Ukraine are contributing to the increase in gas prices. Outgoing Philippine President Rodrigo R. Duterte had to borrow a lot of money for COVID-19 expenses too aside from infrastructure for future use. Some of the late Benigno Simeon C. Aquino's projects had to be completed or they would go to waste. Yet, these same groups are seriously asking for more cash handouts while complaining about increasing national debts. I don't expect them to come up with a sound solution either. Yet, some people still believe them and quote them. That's why I feel like writing posts like these every now and then. 

References 

Books

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

Videos

"The Singapore economic model - VPRO documentary - 2009"  by VRPO Documentary (September 8, 2018)

Websites

"Miracle on the Han River Part II, or Regression to the Mean? South Korea’s Economy in Transition" by Yoon-shik Park (December 2014)

"No Mavericks Among Economic Top Guns" by Sonny Africa

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