I Wonder How IBON Foundation Plans to Improve Philippine Agriculture
Feeling the heat wave today is really something. I tend to take antihistamine tablets every now and then due to prickly heat. The post above was towards the end of the year. As a business school graduate (and with an MBA on top of it), I feel the need not to heed the IBON Foundation (read why here). I even wrote a post as to why I can't take their executive director Sonny Africa's statement about FDIs seriously. Their continued quest for national industrialization, their destructive obsession with ayudas meaning cash handouts (read here), and the Filipino First Policy make me cringe.
The recent narrative on agriculture is this. Just reading Africa's statement reminds me I wrote an article about eating rotten meat. The question that I asked is would anti-business, anti-FDI Filipinos want to eat rotten meat in an isolationist Philippines. I shared the comment on the now-defunct Philippine Anti-Fascist League Facebook page (they made a second one but it's so inactive). Some people were calling me heartless when I asked the question. In truth, they need to think if they'd rather eat rotten meat than open up the economy. Meanwhile, Venezuelan Nicolas Maduro ate expensive steaks at Salt Bae's restaurant while Venezuelans starved.
Whether we like to admit it or not, importation is a necessary element
Sure, overreliance on imports can't be good. However, we need to review history namely the Great Depression (read here). Protectionist apologists tend to say that first-world countries were once protectionist, and only opened to FDI after they became first-world countries. The idea was long shot down by the late great Lee Kuan Yew in his book From Third World to First. I do observe how often Singapore is still demonized by groups like Migrante International because of Flor Contemplacion's execution there. Now, for some words of wisdom from LKY:
Pages 57-58After 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.
Africa then recommends protecting the local farmers from imports. We seldom need to import based on supply and demand. For example, if there's a drought, it should be practical to import rice from other countries than to overwork Filipino farmers. There are also times when the land needs to rest to recover its nutrients. Nations tend to export their surpluses. If there's excess rice from Vietnam and Thailand, wouldn't it be better to import rice than not to have rice at all? The scarcity of agricultural goods would be a bad thing. This makes me wonder if they'd rather starve than eat imported rice.
What would be hypocritical is that I'm seeing some Apple products used to spread anti-FDI agenda. I wrote an article where I blasted the idea of wanting imported luxury products but not wanting FDI. I also wrote an article where I addressed the hypocrisy of using foreign platforms and imported devices to write anti-FDI rants. For all I know, a lot of anti-jeepney modernization rallies, anti-FDI rallies, etc. were uploaded using Apple products. They say that they're simply forced to participate in capitalism to survive. They could've purchased more affordable brands such as Huawei and Xiaomi. Did capitalists even force them to buy Apple products? That would be another good question to blast at them.
How does the IBON Foundation propose to improve agriculture?
Investing in sustainable farming methods costs money. Even worse, you've got people who say that FDI will automatically destroy resources (read the refutation here). However, protectionist countries have shown worse signs of degradation such as North Korea and Venezuela. What's next? Are they going to blame the poverty of North Korea on China and South Korea? Are they going to blame the poverty of Venezuela on the USA? It's the same ond blame game. To have sustainable farming methods, there needs to be money. If the people in IBON are indeed an economic think-tank, where will they get the money?
If they propose that the Philippines should do everything by itself, think about the Great Leap Forward. Some bozos on social media insist that the late Mao Zedong wasn't at fault for the failure of the Great Leap Forward. They need to try telling that to any survivors of that fiasco, who are still alive and healthy-minded, despite their old age. The whole plan to try and self-industrialize China landed in failure. The results were so substandard even Mao abandoned it. Eventually, the late Deng Xiaoping took over and helped reform China from the 1970s.
