The Trust Me Bro School of Economics Has Proof Econ Cha Cha Will Worsen Inflation, Please Read
The IBON Foundation has rightly pointed out that if foreigners dominate our educational institutions, media, utilities, and other essential needs such as food, energy, and resources, it will not only infringe upon our fundamental rights but also jeopardize our ability to ensure our own interests are protected,” Castro said.She also stressed that the cost of living is already high, even without foreign dominance in the economy.The public should also be wary of pro-big business and pro-foreign policies such as privatization, deregulation, and liberalization, which, according to Castro, burden poor Filipino consumers.“We also cannot overlook the potential consequences of foreign goods and services flooding the market, displacing our local producers and consumers who have been neglected for far too long,” she added.
Once again, Castro is quoting from the IBON Foundation. That's why I've run into some business administration students on Facebook and mocked them, "Seriously? You're a business administration student and you believe them? You believe in Sahod Itaas Presyo Ibaba?" Sahod Itaas Presyo Ibaba (read here) means increasing salaries while lowering the prices. I even talked about basic accounting and only got a Haha reaction, meaning they found it funny. Come on, basic cost accounting is that simple. To have higher salaries, you need to raise the prices of goods because businesses will need more money if they need to raise salaries. I'm not surprised that restaurants have raised their prices the moment their services improved.
I refuse to take the IBON Foundation as a real economic think tank (read here). That's why I even wrote an article about how the IBON Foundation possibly represents FDI in their articles. I recalled that article and I wonder if Castro herself thinks that FDIs involve Filipino women having sexual relationships with foreigners, more foreign debt, and OFW remittances. How can I take economic thinking that believes in the late Carlos P. Garcia's Filipino First Policy, which has no place in the rising Asian Century (read here)?
Solons that actually blasted the Makabayan bloc
Fortunately, some representatives blasted the ridiculous claims of Castro. Here's an excerpt from Manila Bulletin:
The claim of the Makabayan bloc that economic Charter change (Cha-cha) would worsen inflation in the country simply doesn't add up, House of Representatives members have said.
These solons include House Majority Leader Iloilo 1st district Rep. Janette Garin, Quezon City 4th district Rep. Marvin Rillo, and Lanao del Sur 1st district Rep. Zia Alonto Adiong, who faced House reporters in a press conference Thursday, March 7.
“Will economic Cha-cha cause an increase in inflation? Ang sagot ko po, pasensya na po sa mga nagsabi, pero isa po yang malaking kalokohan at kasinungalingan. Bakit? Tila binibigyan natin ng maling pag-intindi ang taong-bayan,” Garin said.
(My response to that, and I apologize to the one who said, but its a big ruse and lie. Why? We're seemingly giving the wrong interpretation to the people.)
“Kaya kung mayroon man nanlilinlang sa atin na economic Cha-cha ay tataas ang inflation, pasensiya na po but it’s a big lie,” she added.
(If someone is trying to deceive us that economic Cha-cha will drive up inflation, I'm sorry but it's a big lie.)
Garin says the primary objective of the economic amendments to the Constitution is precisely to encourage the influx of foreign direct investments (FDI), which will result in competition in the market.
“Napakasimple lang noon eh. Kapag may kompetisyon, bababa ang presyo. It’s as simple as that. Huwag na natig linlangin ang taong-bayan. Siguro iyong iba, hindi naintindihan anong meaning ng inflation. Ang ibig sabihin noon kapag tumaas iyon tataas ang mga bilihin, ganon iyon, tataas ang presyo,” she explained.
(It's very simple. If there is competition, prices will go down. It's as simple as that. Let's not deceive the people. Maybe the others don't understand the meaning of inflation. What it means is, if it goes up, then prices of goods will go up.)
“Paano tataas kung marami ang nagbebenta? Kapag may economic Cha-cha, ang ibig sabihin ay bukas at magkakaroon ng kompetisyon,” she added.
(How will prices go up if there are many players? Economic Cha-cha means openness and presence of competition.)
Rillo and Adiong echoed the stance of Garin.
The challenge should also include getting support for their claim from first-world countries
Years ago, there was the Heneral Luna page that said something ridiculous. The claim was that first-world countries didn't progress through accepting FDIs but through the national industrialization program. If that claim were true, why are uncharted islands, still underdeveloped? Some claim that FDIs have ruined this and that country even if it was a foreign loan or a lack of restraint. Singapore's secret to its success isn't just about the country accepting FDIs. It's also about the Green Singapore Policy. They say that they've got evidence? However, all the "evidence" that opponents of econ cha-cha have are more concentrated on the development economists of the Philippines, who just talk and talk without proof.
That's why I love to tell them "Go tell that to Singapore!" Why do I say that statement? Lee Kuan Yew School of Public Policy (LKYSPP) founder Kishore Mahbubani doesn't just say things. Mahbubani, a faculty member of the National University of Singapore (NUS), has been a United Nations (UN) diplomat and long-time participant in the World Economic Forum. That's something I believe that Atty. Hilario G. Davide Jr. didn't participate at all during his tenure as a UN diplomat. I want some NUS faculty members to be invited to the Philippine Senate hearing. If possible, invite Mahbubani to a Senate hearing and make sure Davide Jr. also joins it.
On the contrary, after reading From Third World to First (which is often used to criticize the Marcoses), has LKY give this good advice:
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.
Singapore's rise from a tiny slum into one of the best cities today is an economic miracle. Other countries soon followed such as Vietnam and China. Some say Singapore only opened to FDIs because of their lack of natural resources. Guess what? Vietnam is rich in natural resources but followed Singapore economically, even if it remains a Communist state. Vietnam's success with Doi Moi gives the University of Economics-Ho Chi Minh City (UEH) its credibility. China followed and created Socialism with Chinese Characteristics, under the regime of the late Deng Xiaoping. What became an excuse for the Philippines not to learn from Singapore even before the execution of Flor Contemplacion?
I'd like to add that I'm skeptical whenever people say the phrase, "Study shows." It's effortless to stay studies show and the studies cited need to be revised. Anybody can say studies show and cite examples from organizations like the IBON Foundation and the League of Filipino Students. Anybody can say that studies show and cite examples backed up with credibility. That's why this challenge is if those who claim that econ-cha cha can worsen inflation, can back it up with studies from the best universities from first world countries.
