Should CEOs Worrying About Business Survival Be a Good Reason to Oppose Economic Reforms?

I read through some arrogant fat guy's Facebook post. As always, I will not openly or directly mention him. He shared a post from the Philippine Star which mentioned that more than half or 54% of chief executive officers (CEOs) are worried about the viability of their business beyond the next decade without implementing changes to their business model, according to a PwC survey. He wrote and said that the solution for tangas (inattentive in English) is for open FDI. I wonder if that arrogant fat guy ever bothered to read the article? PwC means PricewaterhouseCoopers International Limited, which the survey was conducted, is a multinational firm. The arrogant fat guy hates FDI but when he's confronted about his use of imported stuff, stuff made by capitalists, etc.--he always has his arrogant answers such as, "Oh no! Not the imported stuff card again!" I believe the fat guy believes that he and his kind have "no choice"--because the foreigners "unfairly" own the means of production (read here).

From the Philippine Star article, here's an excerpt I'd site:

Based on PwC’s 27th Annual Global CEO Survey, which covered 4,702 CEOs from 105 countries, almost all or 97 percent of CEOs in the Philippines have taken steps to change the way they create, deliver and capture value in the past five years.

Over the same period, 86 percent said they have taken at least one action that had a large or very large impact on their company’s business model.

Despite actions being taken, 71 percent said the lack of workforce skills poses a challenge to reinventing the company’s business model.

Lack of technological capabilities in their company (69 percent) and competing operational priorities (75 percent) were also cited as challenges.

While the viability of their business is a concern, 57 percent of CEOs in the Philippines believe global economic growth will improve over the next 12 months, higher than the Asia-Pacific average of 40 percent.

It's going to be effortless, "See I told you Hilario Davide Jr. was right you (insert bad word)." However, no amount of insults will ever help them defend their false sense of victory or even make their facts right. I could cite different studies from better countries like Singapore and expect the usual "Oh never forget Flor Contemplacion!" reaction. I can cite the studies of the great UN diplomat Kishore Mahbubani and I can expect all the stinky armpit Bumbay jokes thrown at him. However, there are more lessons from a Bumbay (which is often used by Filipinos to describe Indian people, whether as a slur or a friendly gesture) than there will be from Davide for the Filipino people (read here).

Listen to him and those who think alike, not the social media gossipers!

If they did a careful reading, notice that one of the biggest problems is the lack of technological capabilities. I can't imagine if Mahbubani visited the Philippines, went to Cebu for a vacation, and met with Davide, who I assume he met way back then. I can't imagine that Mahbubani would meet Davide and say, "Davide, I'm afraid that your constitution is too restrictive. You should've joined the World Economic Forum. Foreign investors create jobs, bring in capital, and new technology." "Well, at what cost? The Philippines will become a colony of foreigners! I didn't join the World Economic Forum because the Philippines isn't for sale!" Mahbubani might reply, "Davide, that's a third-world mentality, hence the Philippines' development during Aquino's reign, couldn't be sustained that well! Who said about giving up sovereignty in exchange for economic development?" That's why I even want to see Davide and Mahbubani debate it out. Both know legal matters and are policymakers. The difference is Davide is outdated, and Mahbubani is updated. 

What the arrogant fat guy and his peers may have also missed from the Philippine Star article is this:

“The Philippines has undertaken efforts to improve its investment climate and attract foreign direct investment. This sustained growth and the positive investment climate could have promoted optimism among CEOs regarding both local and global economies,” PwC Philippines deals and corporate finance managing partner Mary Jade Roxas-Divinagracia said.

To say that the Philippines should become more protectionist and implement more Filipino First Policy--should be considered outright ignorance. I'm not going to mince words especially when it comes to the need for constitutional reform. People should view the Constitution as a school of thought or the nation's operating system. If there's a programming bug--the program becomes the problem. If there's a problem in the school of thought--the students and teachers both get affected. Teachers are just doing their jobs and students are only required to submit to the teachers. If the teacher is under a faulty school of thought--it's not going to be good.

To further add some more, this should make people ask if the Philippines really has the technology and resources for these:

As for the progress in commitments to climate action, 75 percent of CEOs in the country said they have started or completed steps to improve energy efficiency, while 74 percent report having made similar strides in new, climate-friendly products, services or technologies.

The survey also found that 68 percent have made progress or completed initiatives to protect their physical assets and/or workforce from climate risk impact, but 26 to 31 percent have no plans to pursue other types of action related to just transition and nature.

Philippine-based CEOs said regulatory complexity (54 percent) and lack of climate-friendly technologies for their sectors (54 percent) are some of the biggest challenges.

This presents the dilemma if the Philippines should start from scratch to make these technologies, instead of accepting such technologies from FDIs? It's a shame really that a Communist nation led by a president who shamelessly ate a gold-leafed steak--is doing better than the Philippines (read here). I assume President To Lam's budget at the Nusr-Et, must've been more expensive than Gloria Macapagal-Arroyo's expensive meal in the USA. Can the Philippines have the capacity to create environmentally friendly technology that's all proudly Pinoy mode (read here)? To be pragmatic, one should practice Deng Xiaoping's principle of black cat-white cat. It doesn't matter if the equipment or technology is Filipino or foreign--what's important is that it helps the Filipino progress. Just think about how GrabFood and FoodPanda are two imported delivery services--have helped local Filipino restaurants survive during the pandemic (read here). 

Instead, one must look at open FDI as how it can help Filipino businesses instead of destroying them (read here). We can get new technology and new customers. It doesn't matter if the buyer is a Filipino or a foreigner--as long as they pay a good peso. I've seen foreigners eat at Filipino restaurants and they still must pay for the meal. I've seen foreigners buy stuff at a local grocery and they still pay for the groceries. The concept of a fully Filipino-owned, fully Filipino-run economy in a Philippines isolated from outsiders wouldn't work. One needs to take a look at where Venezuelan pride took Venezuela (read here). 

It's more than time to stop quoting the late Lee Kuan Yew about the Marcoses and quote him too when it comes to economics. Listening to LKY's bad comments about the Marcoses isn't enough. What about recovering from the damages of the first Marcos Administration? Hopefully, the son, Ferdinand R. Marcos Jr., will take heed never to repeat the same faulty policies of his late father. What I'd like to cite are these lessons written by LKY in his book From Third World to First:

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.  

LKY opened Singapore to FDIs when their local companies were still struggling. That's what the Philippines should do now. Good businessmen will take advantage of competition to build better networks. If your customer has a competitor, that competitor of your customer is a potential customer. Even the basic good sector such as selling rice, can benefit. Why would an MNC want to import all the raw materials if they can get good ones from the Philippines? People who laugh at the idea are just either xenophobic or may have their own agenda. Are we just going to let Pinoy Pride be the reason?

In fact, further implementing protectionist measures may eventually destroy the businesses. Sure, it's effortless for commie hippies to dance to that. However, there will be inflation and unemployment. Blaming richer nations will not make the Philippines richer (read here). Blaming the rich for your poor financial decisions leading to further poverty or for one's poverty doesn't work either (read here). It's effortless to brag. However, it's not easy to back up one's bragging.