When Lego Chose Communist Vietnam Over Democratic Philippines As Its Asian Home

-
Vietcetera International Edition

It's something when the Philippines says it's a democratic country but it's got very restrictive economic policies. Meanwhile, Vietnam which also calls itself the Socialist Republic of Vietnam is actually embracing free markets (read here). Like the Chinese Communists of China, the Communist Party of Vietnam has decided to embrace foreign direct investment (FDI) as part of its policy. It can be said that the Philippines still embraces it but as what? Unlike the Philippines, Vietnam ironically doesn't place the 60-40 nonsense policy where FDIs can only own 40% of their shares. Besides, it's really very stupid to expect an inflow of FDI while saying that FDIs will need a Filipino partner and they can only own 40% of their net profits (read here). That's why I even wrote an article where I called the 60-40 arrangement to be nothing more than overpriced rent (read here).

What's with Communist Vietnam, really, that Lego chose to establish their factory there? I'd like to mention these words from Vietcetera International Edition. These words truly make me realize how the Philippines (as a democracy) has lost an edge against Communist Vietnam:
Danish toymaker Lego Group officially began the construction of the Lego factory on Thursday, following a momentous groundbreaking ceremony held in Binh Duong Province in southern Vietnam. The factory is estimated to cost $1 billion, the largest-ever investment by a Danish company in the country.

His Royal Highness Crown Prince Frederik of Denmark and Deputy Prime Minister of Vietnam Pham Binh Minh led the ceremony at the 44-hectare site. Lego’s Chief Executive Officer Niels B. Christiansen and Chief Operations Officer Carsten Rasmussen, as well as national and provincial officials, were also present at the event.

“We are grateful for all the support we have received to realize our manufacturing ambitions and look forward to working with authorities and partners to build our factory and have a positive impact on the local economy and community,” said Christiansen.
I still remembered how the late Lee Kuan Yew highlighted Vietnam in one of the chapters of From Third World to First. The great Communist, the late Nguyen Duy Cong (aka Do Muoi), decided to modify the economic model. Like Deng Xiaoping who died in the late 1990s--Do Muoi was the founder of the Doi Moi movement. I really commended the meeting of Lee with Do Muoi. Do Muoi, though a Communist, saw the beauty of the free market. It can be seen how Vietnam is now a manufacturing hub in Southeast Asia. A shame, really, that the Philippines has missed that opportunity as a supposedly democratic country.

Economist Andrew J. Masigan also wrote for The Philippine Star on why he felt Vietnam overtook the Philippines. Sure, I have differing political views from Masigan. However, Masigan has been making sense with how he gives criticism. I would like to share this excerpt from his opinion regarding how Communist Vietnam overtook the democratic Philippines:
The unfortunate reality is that our economy is not structured in a way that allows 7 percent growth. Ours is an economy driven by consumer demand and government spending, not by production. Thus, government needs to spend more to squeeze more growth out of the economy – but doing so would mean acquiring more debt.

However, our economic managers are not inclined to increase the country’s debt stock, as doing so may compromise our investment grade status. The last the Duterte government wants is to end its term with a credit rating inferior to what it inherited from PNoy.

It therefore comes as no surprise that despite an anticipated economic contraction of 9 percent this year, government allotted the lowest stimulus package in the region amounting to just 5.83 percent of GDP. For context, Vietnam’s stimulus package amounts to 10.12 percent of GDP. This means the Philippines will be left further behind in 2021 and 2022.

Our hope is that the leaders elected in 2022 will make that long overdue shift in economic policy.

The new leadership must curate the conditions to allow the millions of low income workers in the agricultural, hospitality and retail sectors to migrate to more sophisticated jobs in the manufacturing or technical services sector. When this is done, the country will naturally shift from being an economy driven by consumption and government spending to one driven by production. A national program must be carried out to widen our industrial base and expand the range of products we can competently produce. We must then climb the value chain in technological complexity, uniqueness and quality.

In short, the next leader must foster an era of rapid industrialization and it must be made a national priority. It starts with fundamental reforms to make our environment more conducive for manufacturing. Unless we pivot to industrialization, we will soon find ourselves falling further behind the development race.

Speaking of Vietnam, I did write about how Jollibee ended up opening its 150th branch in Vietnam. Good News Philippines had given these words regarding Jollibee's expansion in the Communist state:

Jollibee’s opened its first store in the country 15 years ago, one of the first international markets entered by the successful Filipino restaurant chain. The Filipino brand is the only QSR brand to have built and operated its own commissary in the country.

“Vietnam is one of the most important markets for us as it is among the fastest-growing economies in Asia and has a huge young and vibrant population. It is also one of the first international markets we entered in the earlier years of Jollibee. Even if the pandemic sparked many challenges, Jollibee Vietnam has managed to sustainably grow and exceed our expectations. The opening of our 150th Jollibee store is a testament to the special place this country holds in Jollibee’s history and heart,” said Ernesto Tanmantiong, Chief Executive Officer of Jollibee Group.

Jollibee has successfully captured the local market in Vietnam over the years, with 100% of its customers being Vietnamese. Alongside its bestselling crispylicious juicylicious Chickenjoy, Jollibee’s Sweet Chili Chicken has become a hit among the Vietnamese people, with its savory, sweet and mildly spicy Chili Glaze. Another fan-favorite is Jolly Spaghetti, served with its signature sweet-style sauce and beef sausage topped with generous cheese.

The Philippines has so much potential. Once upon a time, the Philippines used to house Vietnamese refugees. However, the great Communist known a Do Muoi made Do Moi. I guess the whole economic movement was named after him. Vietnam began accepting FDIs. Meanwhile, the Philippines was stuck for a long time with the "Filipino First Policy" which I call to be almost identical to Mao Zedong's failed economic policy. The aim of the Filipino First Policy was to make Filipinos hold the majority of the economy. That was also pretty much what Mao wanted--the Chinese to own the majority of the economy. However, the big problem is Filipino First Policy only caused the Philippines to fail. China tried it and the Great Leap Forward was a failure. Deng's economic liberalization and new Chinese socialist mindset worked. Deng got rid of the victi mentality and ended up saying, "Poverty isn't socialism. To be rich is glorious." Hence, began the movement called Socialism with Chinese Characteristics.

Now, it's left behind because of that--not because of corruption, political dynasties, or because of Ferdinand R. Marcos Jr. won against Maria Leonor Gerona-Robredo. It wouldn't matter if Marcos Jr. or Mrs. Robredo won if the Philippines will place remove the excessive restrictions against FDI. If only the Philippines decided to remove the negative list entirely. The Philippines will have more investment which means more income. It will also mean local businesses will have more opportunities to grow. It's time to let the Philippines be more than just a democracy--let it become an economically free democracy. It doesn't matter if the investors in the Philippines are Filipino or foreigners. What matters is that the investors provide jobs, teach new skills, and taxes for the country. 

References

Books

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

Websites

"[OPINION] Vietnam overtakes the Philippines. How did this happen?" by Andrew J. Masigan (November 5, 202)

"Business Times: Vietnam – A New Asian Tiger" by Rosy Huong (February 15, 2022)
https://vietnamtimes.org.vn/business-times-vietnam-a-new-asian-tiger-40033.html 

"$1-Billion Lego Factory Breaks Ground In Vietnam" by Agnes Alpuerto (November 4, 2022)

Popular posts from this blog

The "Kahit Konting Awa" Attitude Wouldn't Help Alleviate Anyone from Poverty

-
Image
  As the countdown to Christmas continues--it's easy to expect the toxic Filipino trait that I'll dub as "Kahit Konting Awa". The literal meaning is "Just a Little Pity". I named it after that song by Nora Aunor, the theme song of The Flor Contemplacion Story . I wasn't a bit surprised when the hit movie was uploaded on VIVA Films' YouTube page last 2013 (read here ). Back on the topic, I noticed it's easy for people to desire to reconcile because it's the Christmas season. The Philippines has the longest Christmas season. However, people love to do last-minute Christmas shopping presumably due to their poor budgetary habits. Ever heard of the one-day paycheck pandemic in the Philippines? It's a common abusive trait in the Philippines to have that "Kahit Konting Awa" attitude. There's the problem of "Utang (debt) is life." It's no surprise that financial literacy is that low in the Philippines. A not fun fact a
Read more

The Philippines 60-40 Equity Scheme Doesn't Prohibit FDIs But It's Still VERY DISCOURAGING for International Business

-
Image
First and foremost, I'd like to tell people that I don't believe that the Marcos Years were the "golden years". I still agree with economist Cielo Magno that land ownership isn't a factor, since some countries without equity restrictions, don't allow foreigners to buy land. In contrast, inflation and the like were rampant during that time. However, we need to realize that any gains after EDSA 1986 weren't realized. As I was looking at Facebook, a page called Punch the Lies by Atty. Mike Navallo stated this:  FACT: The 1987 Constitution does not prohibit entry of global investors into PH. What it regulates is foreign investment in areas deemed critical such as public utilities; exploration, devt and use of natural resources; and certain investments as determined by Congress. (Art XII)   Public utilities (water, electricity, petroleum distribution, seaports, PUVs) are considered vital to socio-economic devt that's why they're subject to foreign owner
Read more

The Irony the Philippines Starts the Christmas Season in September BUT Many Filipinos Love Last-Minute Christmas Shopping

-
Image
  Uproxx As Christmas is just around the corner--I feel more stress coming in! It doesn't help when people try to use the late Andy Williams' "It's the Most Wonderful Time of the Year" to try and skip the problem. It's already known that most Filipinos love to start Christmas in September . However, the irony is that Filipinos start Christmas early but do their Christmas shopping late. If they began the Christmas Season early, shouldn't they think about what to do before December strikes?  Two years ago, I wrote a post discussing last-minute Christmas shopping . Many Filipinos tend to do last-minute Christmas shopping. They had all of November (when the Christmas sale usually begins) but why do the Christmas shopping in December ? One of the things I blame is the one-day paycheck lifestyle (see here ). It can be observed that many Filipinos never learn to prioritize more important things . One can get their stars when they see their paychecks. However, the
Read more

If You Want to Make the Philippines Better, Study... HARDER?

-
Image
I grew up complaining and complaining about stuff. I always looked at the Philippines as a hopeless case. I hated studying the Tagalog subject--which was mandatory by the DepEd. I was told, "Look lazy bum! If you want to make the Philippines a better place--study harder!" In college, I began to apply myself more seriously even if I didn't graduate summa cum laude. I felt a sense of achievement when I won a commerce award for making an outstanding difference. What I never thought was that during the practicum--it was working smart and not working hard. Sure, hard work is there but smart work allows more hard work to be done at a better pace. Not long after, I took my MBA course but it was also at that time, I was scammed . I discovered I wasn't alone in being scammed--many MBA students were scammed during the same time I was scammed! However, what I discovered was the problem of saying, "Your grades will determine your future!" It was typical in Philippine sc
Read more

Hussam Middle Eastern Restaurant: A Trip Into Authentic Syrian Cuisine At Ayala Center Cebu

-
Image
  The last time I ate at a Hussam Middle Eastern Restaurant branch last year, I couldn't give a good assessment. I haven't been to Hussam's main branch at Il Corso, so I didn't formally meet its owner, Hussam Alfakeh Alkourdi. The branch I ate was in Ayala Center Cebu instead. This is the interior of the restaurant. Ayala Center Cebu has Persian Palate on the third floor, above Timezone. Hussam is near one of the entrances of Ayala Center Cebu--near a Chinese restaurant. Persian Palate was my entry point to Middle Eastern cuisine.  Hussam serves authentic Syrian food. There are dishes similar to those from the Persian Palate. They serve Syrian bread, different from my favorite Pita bread served at Shawarma Gourmet (read my review here ), a Lebanese restaurant. So far, I tried their mixed meat platter with Syrian bread. My second dish there was actually baked Arabic rice with grilled beef kebab. I love their tomato sauce (which I mistook for ginger sauce) and garlic sauc
Read more

The Philippines will NEVER Get Richer by Blaming Its Richer Asian Neighbors

-
Image
iStock It would be nice to talk about the typical blame game in the Philippines. I could rememeber that, as a child and a teenager, I had this habit of blaming people I dislike that I failed an exam. The reasons are mostly imagined. What I remembered in my later college years was when I met a couple of super irresponsible students. They had this attitude to say something like, "My parents don't care if it'll take me 20 years to finish my bachelor's degree." Some people even say something like, "It's the fault of the rich that we are poor." It was a backfire when I told such people, "Isn't it any wonder why your finances are down? It's because your parents don't even value the money when they don't care if it'll take up to 20 years to finish college!"  Understanding the blame game and why it feels so good Psychology Today presents this on why some people will always blame others . These findings can help understand the st
Read more

Can Diehard 1987 Constitution Defenders Prove Their Claims to the Lee Kuan Yew School of Public Policy?

-
Image
It's not enough to say something. The question is, "Where's the substance or the empirical evidence?" When I start quoting from the late Lee Kuan Yew, these diehard 1987 Constitution of the Philippines defenders start diverting the topic by pointing out my errors to spite me than to correct me. They would ask if I know the Deming Theory of Management which talks about quality management in the company culture. Okay, that was something worth asking but as said, can these people really understand the problem of the Philippines has been more systemic (that is, within the system ) than just the people running the system? What allowed the legislative to be filled with people who know-nothing anyway? That's why I didn't want to vote for Senator Robin Padilla (who ironically understands the need for reforms, read here ). Unfortunately, so many Ad Hominem attacks have been done.  A past article I wrote was Should you  listen to either Davide Jr. or Kishore Mahbubani
Read more

My Experience With Delicious ITealicious' Filling in the Milk Tea Demand in Cebu City

-
Image
It's been some time since I did a food review, right? Back then, I remembered how my first love with Taiwanese milk tea was Chatime. Though. when I went to Chatime--I usually ordered fruit tea since I was trying to lose weight. I ended up trying Tiger Sugar which ordering something without sugar doesn't make sense. So, another milk tea I decided to try (via delivery, haven't gone to the branches yet since the pandemic) is ITealicious. ITealicious is founded by Taiwan-born Yuwen Chiu (who's also a Chinese teacher in Cebu Eastern College). It was founded in 2018--the time when I was so devoted to weight loss that I didn't try it until I lost some pounds. In trying to renew my driver's license--I discovered I went from 85 pounds to 79 pounds since I've been doing a lot of cardiovascular exercises during the pandemic. I decided to give ITealicious a shot after I had tasted the food at Jolly Bubble. Jolly Bubble is pretty much the ideal place to get a delicious m
Read more

It'd Be Stupid to Continue Using Obsolete Chinese Language Textbooks to Teach Mandarin Chinese

-
Image
I remember writing about how to make Mandarin Chinese more accessible in the Philippines . I remembered the day when I ended up not liking school not because I didn't want to learn. I was eager to learn. Science and history are interesting subjects. However, mathematics is taught in such a way that it's almost irrelevant. "You just need to study it, it's required by the DepEd and you can't graduate without it!" was the only reason. You're not allowed to think, just be a robot, and then parents get mad about why their children have almost no initiative and need to be programmed like robots. It's because the school system kills initiative and nobody does a robot's job better than a robot .  Bahay Tsinoy, museum of Chinese life in the Philippines I just found this photo shared on Facebook. It was the picture of childhood trauma that I'd like to talk about. The standard Chinese textbook. At first, I was excited to learn Chinese but that excitement
Read more

Red Lizard: Wrestling With Your Taste Buds With Delicious Mexican Food

-
Image
During the late 2010s, I remember one of the greatest things I got into was Mexican food. I remembered a delicious Mexican restaurant opened in I.T. Park Cebu but it was later closed down. From what I heard, the owner closed it down out of grief and I don't blame the person for it. Years later, there was El Taquito at SSY which I also enjoyed. However, El Taquito is now located on Governor M. Roa Avenue in Cebu City. I would like to talk about the Red Lizard--Taqueria which has branches in SM Cyberzone, IT Park (where I usually get my deliveries), and Ayala Center Cebu.  I had quite a wild imagination thinking the restaurant was founded by a retired wrestler. I thought Red Lizard was a real luchador or Mexican wrestler. On the contrary, the character of Red Lizard is as fictitious as Jollibee's mascot, an anthropomorphic bee named Jollibee. Further research showed that Red Lizard belongs to the Abaca Group of Companies founded by Jason Hyatt and his Chinese wife Anna (whom he m
Read more