Kabataan Partylist's Economic FALSE DILEMMA

This just in, Kabataan Partylist member Atty. Renee Louise M. Co says what the late Lee Kuan Yew would call third-world mentality. I'd like ot translate what Louise here is saying, because not everyone who reads my blog speaks Tagalog:

Don't use the West Philippine Sea issue to deceive the public into supporting Cha-Cha (charterchange) This this clout chasing at its worse.

We don't want foreign control of our seas. However, when charter change is passed, it will give way to 100% ownership to key industries, like utilities, land, schools, media, and other parts of the economy.

Economic cha-cha backstabs our national sovereignty.  

Kabataan Partylist is committing a false dilemma. A false dilemma is defined as: 

Description: When only two choices are presented yet more exist, or a spectrum of possible choices exists between two extremes.  False dilemmas are usually characterized by “either this or that” language, but can also be characterized by omissions of choices.  Another variety is the false trilemma, which is when three choices are presented when more exist. 

As I look into this, let me suggest that people first read my post on Pinoy Pride Economics committing the same logical fallacy. I must wonder if Kabataan Partylist understands international marketing (read here). This is a false dilemma at its finest. It's like saying, "If economic charter change happens, it will automatically mean that the Philippines will be sold to foreigners."

That was the economic false dilemma that LKY faced back in his day. It's a good thing that I bought the book From Third World to First. These are among the words that he said, as I read through the book, and this can describe Kabataan Partylist's economic views:

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.

It was an either-or fallacy. Isn't it possible that a country can allow foreigners to own 100% of their shares, all the while they will be regulated by other reasonable restrictions? Yes, it would be possible. However, it doesn't seem to be the case with Kabataan Partylist. A country can still prohibit land ownership, as part of the Econ Cha Cha. For example, Vietnam allows 100% FDI ownership on almost every sector, but land ownership is out of the question. However, it looks like Kabataan Partylist stubbornly insists that economic cha cha automatically means selling the Philippines to foreigners.

Once again, the Vietnam Youth Union wins over Kabataan Partylist

Vietnam National University, Hanoi

If there's one reason why I've been pointing to Vietnam, it's because the Ho Chi Minh Communist Youth Union, aka the Vietnam Youth Union, also wears blue, like Kabataan Partylist. It was easy to mistake the photo above to be members of Kabataan Partylist. The Youth Union is translated from Doan Thanh Nien. The Vietnam Youth Union reformed alongside the Communist Party of Vietnam during the reign of the late Nguyen Duy Cong, aka Do Muoi. In fact, the Global Asia reveals that Vietnam never enriched itself through protectionism first. Instead, this is what's revealed:

FROM ISOLATION TO PROSPERITY

 

By the mid-1980s, the development model Vietnam had borrowed from the former Soviet Union and its East European allies had revealed numerous flaws and was proving outmoded. On the political and diplomatic front, tense relations with China, the heavy burden of Vietnam's troop presence in Cambodia and strict sanctions imposed on it by the US placed Vietnam in a difficult bind. On the one hand, the country was blocked from cultivating new relations with other countries; on the other, it had become ever more dependent on the Soviet Union for political support and economic and military assistance. 

The turning point came with a dramatic reduction in Soviet economic and military assistance after the mid-1980s and the economic hardship this caused. For the sake of the country's survival, Vietnam's leaders were forced to adopt economic and political reform, or Doi Moi. In essence, Doi Moi in its early stages was focused mainly on the removal of self-imposed barriers to progress and the utilization of various market-oriented measures, including liberalization of the domestic market, encouragement of foreign direct investment, or FDI, and the private sector, and reduction in subsidies to state-owned enterprises (SOEs).

These steps quickly brought positive results. From a country faced with perpetual food shortages, Vietnam in 1989 for the first time exported 1.4 million tons of rice. It has since remained a rice exporter. In 2008, it exported 4.7 million tons, becoming the world's second largest rice exporter after Thailand. Indeed, Vietnam's exports were instrumental in stemming the threat of a severe international food crisis in early 2008.

What impresses most, however, is the continuous high economic growth rate that Vietnam has recorded in the 20 years since the introduction of Doi Moi. Vietnam recorded average annual economic growth of 6.5 percent over that period, one of the highest rates among developing countries. And with annual per capita income of $1,000 in 2008, Vietnam was removed from the list of the world's least developed countries. The high economic growth rate in turn helped reduce Vietnam's poverty rate from 70 percent in the mid-1980s to 37 percent in 1998 and 19 percent in 2007.

Vietnam's development from an isolated country (like North Korea) to open to FDI, has become a huge difference. That meant that the Vietnam Youth Union (which got dubbed as the Ho Chi Minh Communist Youth Union in 1976) was a huge step. The Vietnam Youth Union developed alongside its party, the CPV. It meant that under the new General-Secretary, Vietnam exercised Doi Moi, as its new policy. 

Unlike Kabataan Partylist, the Vietnam Youth Union ditched third world economics, when the CPV did the same. Not to mention, Vietnam's economic restrictions aren't hard-coded into the Constitution of Vietnam. Instead, it's passed through legislation. Overtime, Vietnam allowed easier time ot ease down key sectors, allowing more foreign ownership. However, some may have limited (but bigger than 40%) while a few are still overly restricted. For example, agriculture in Vietnam allows FDI but may require a joint venture, where the MNC gets the majority shareholding.

Right now, the Vietnam Youth Union might be getting more interested in how to attract FDI. However, Kabataan Partylist is still whining all day. Just looking at how the Vietnam Youth Union moves, they're much better than Kabataan Partylist. Honestly, Kabataan Partylist may want to consider booking a ticket to Vietnam and learn from the Vietnam Youth Union!