Solving world hunger and implementing world peace
July 7th, 2009 by benign0I doubt if resident politico-socio-economic “expert” Abe Margallo has had the experience of going out for the night to pick up chicks. Because if he did, he’d probably appreciate the notion that you don’t get the good ones by using lines like “please hang out with me ma’am, it’s for a good cause”, or “please have a drink with me, ‘coz I’m feelin’ really lonely tonight”.
Pick-up lines like any tool applied to mating, offer the best results when wielded in a way that broadcasts the heritable or acquired fitness properties of the flirter to the flirtee. An effective pick-up line is likely to reveal some underlying wit or strength of character that comes across — on the first impression — as sexually attractive to one’s prospect in a joint crowded by equally savvy competition.
As such, I find quite disturbing the sorts of appeals some of our “experts” make to our esteemed industrialists and capitalists for a bigger chunk of their hard-earned money to be channeled back into the domestic economy.
After reading a lengthy copied-and-pasted “on-line exchange between a UP-based community leader, a tsinay activist posting from New Zealand and [Mr. Abe Margallo] that took place about a decade ago” here I can assure everyone that the following snippet pretty much encapsulates our esteemed “expert”’s view on the matter of Big Bad Business’s role in “national development”:
What would have happened if about three decades ago the Yuchengco group of companies took the risk of competing in the electronics and semi-conductor industry instead of, say, buying up just another rent-seeking enterprise, or the Lopez, Aboitiz and Lucio Tan conglomerates together ventured into shipbuilding? Such productive enterprises would have been too adventuristic but where fortunate and successful, won’t they have hastened economic growth and other value-added benefits, driving industrial development in the country and providing fuller employments, possibly greater distributive justice and material prerequisites for civic responsibilities, and other socio-economic advantages to a good portion of the citizenry?
If we remove all the poetic fat from the above blurb we will find that Margallo lists the following “favourable” outcomes in the hypothetical scenario of the Yuchengcos’ “[taking] the risk of competing in the electronics and semi-conductor industry instead of, say, buying up just another rent-seeking enterprise”:
- hastened economic growth and other value-added benefits [to society];
- driving industrial development in the country;
- providing fuller employments [sic];
- greater distributive justice
- other socio-economic advantages to a good portion of the citizenry
Favourable for who exactly? I’ll tell you:
A bunch of people who’ve pinned all hopes for a prosperous future on the altruism of the resource-rich.
Loser mentality, to put a bit of elegant simplicity to the concept.
All the above reads out like the kind of platitudes you’d expect to hear from a hapless candidate in the usually laughable interview portion of a beauty pageant — well to be fair, beauty pageant contestants, and Governments worth their salt. But by no stretch of the imagination would you be able to find a capitalist or a cashed-up investor looking to invest in shares who would be even remotely amused by a prospectus or business plan that lists any of the above items amongst its key business objectives.
![hitchhiker[1]](http://filipinovoices.com/wp-content/uploads/2009/07/hitchhiker1.jpg)
A business enterprise can profit mightily in an impoverished war zone or a society of starstruck ignoramuses as much as one could in a stable prosperous society of highly-educated, creative, and productive citizens. Why else would major Western European, North American, and Northeast Asian enterprises be allocating precious capital to mount money-sniffing safaris in sub-Saharan, Middle Eastern, and South/Southeast Asian basketcases if “social justice” were such a conducive factor to making money?
In its decision to put its capital at risk in, say, a basketcase like the Philippines, a business’s getting involved “directly in the politics of the nation” is as much an investment decision as, say, choosing the right Mercedes Benz model to include in the expat package for the executives it will field there. The prospect of manufacturing two-dollar tennis balls in a country where workers are paid $4 a day is worth the trouble of getting involved in the politics as much as it is worth the generous perks it will be providing its top honchos there (in an effort to mitigate the misery of their two- to three-year tour of duty). But doing so on the part of a Taipan would not in any way be motivated by Margallo’s list of “favourable outcomes”.
Yet Margallo carries on along the same lines of thinking …
Thus when “Big Business has refused to reinvest substantially” or, as Bocchi [whom he quotes earlier] puts it, when politically-connected economic elites and corporate conglomerates in the Philippines find it convenient to not invest or invest only a portion of its revenues in-country, while sending considerable portions offshore, [...]
Note the words I set in boldface.
Abe seems to be implying that business’s decisions to invest are based on some kind of social obligation metric underpinned by some kind of moral responsibility expected of our business captains.
Here’s a reality check though. To the latter, he adds a “warning” that…
[...] the consequence is slower economic growth in the country and less inclusive than it could potentially be.
… with my shareholder hat on I’d say this:
So what?
Would you invest your hard-earned cash in a company whose decisions to allocate capital are based on a fetish for sorry-arse appeals-to-altruism?
The onus to address the failure of Abe’s position to pass the So-What Test rests on Government. Government’s role is to regulate, stimulate, and induce; in effect, counter-balance shareholder greed. Put on your shareholder’s hat, and you are motivated by cold returns on your investment. Put on a regulatory hat, and you are motivated ideally by a warm social agenda.
If Abe was describing Government’s role in the chronic failure-to-launch syndrome that grips the Philippines, then I can agree with that to some extent. But the above excerpt which he quoted (presumably to emphasise his point), says something different.
Having decided that Big Bad Business had failed to own up to its “responsibilities” to uplift the lives of our hapless lot, Margallo then proceeds to pitch the mediocre output of Filipinos as outstanding and admirable “achievements” that one can be “proud” of.
Why, for example, …
[...] does the Philippine economy, while not taking off, manage to chug along somehow? Well, it is because of the extra hard work of non-elites or “the poor masses.”
Right. Blame the Taipans for not sharing their hard-earned money and then in the same breath put the “victimised” masses on a pedestal for churning out world-class mediocrity.
I’d rather state the quaint issue of our chronic impoverishment this way, Mr. “expert”:
We expect heroic efforts from the few and continued mediocrity from the majority. We expect the low product of the majority to be subsidised by the execptional output of the minority.
It’s simple, really™, Mr. Abe.
- Job creation is NOT a business objective. So don’t go around waving this flag at prospective investors.
- If capital is not parked in the Philippines, it means that there is something about the Philippines that is not attractive to capital. It’s nothing personal.
Some people who cannot rely on any wit or gift for gab on their part get a bit of plastic surgery done to increase their chances of getting laid.
Maybe the Philippines should be a bit more open to more creative options.
============
Join us on Facebook!
July 7, 2009 at 1:04 pm
I’m not sure I understood the $2 tennis ball argument. It makes sense to make tennis balls in the Philippines at 25 cents a pop and sell them in the US for $2. The problem is that the Philippine government wants to carve out $1 in materials import customs duties, and another $1 in export fees, plus do a headache worth of paper, so why bother.
The $4 a day labor is an asset in the international markets, but is being suppressed by agencies hacking at trees instead of seeing the forest.
Joe
July 7, 2009 at 7:57 pm
For manufacturing industries, Philippine labor costs are high by Asia standards. Add the cost per kilowatt-energy and the Philippines has a competitive problem.
July 7, 2009 at 9:50 pm
plus the fact that foreign manufacturers issues with the philippines constitutional limitations on foreign equity and ownership of lands.
July 7, 2009 at 1:22 pm
Manong Benigs,
Binasa mo ba yung sinulat ni Bocchi? Also, Manong Abe doesn’t say anything about altruism or spreading the wealth or anything that might be remotely misconstrued as charity.
You of all people I expected to latch on to Bocchi’s and thump it like the bible.
Ay, I forget. You don’t think elites in the Philippines have done anything wrong. All the blame should be placed on the rest of us sorry non-elite sods.
July 7, 2009 at 9:10 pm
Reading is one thing. Understanding what was read is another thing.
It is one thing to say “increase competitiveness”.
It is another thing to say “we don’t need to increase competitiveness, we don’t need FDI, we just need to convince the local elites to increase their investments”. Which is diametrically opposite the Bocchi’s position of reducing rent-capture. :)
July 7, 2009 at 4:42 pm
I think Benig’s point is this: everyone is to blame for something. Whether poor, squatter, elite, businessman, military man, politician or what have you, everyone is to blame. If this is the point, I agree with this.
Benigs is warning against putting the blame only on the rich businessmen and “rich” foreign investors. This is the line that the Erap administration pursued – and it was a disaster. It was one-sided blame, used by people who want to tell others of the speck in their eyes while forgetting the plank in their own. This is what he probably sees in Mr. Margallo’s previous article. Although I assume Abe has more in mind than that. I do agree that big business has big faults, but it isn’t only them.
I think big business is a bigger villain in the U.S., thanks to what happened.
This is a good argument to make us think, though.
July 7, 2009 at 5:38 pm
benigz,
magsasara na daw geocities,ilipat mo na yung mga archives mo na nadon.
July 7, 2009 at 6:33 pm
Abe likes lying prostate and kneeling before the local elite and begging them to be altruistic – parang nation of servants begging before their local master.
If all Pinoys thought that way, PI will be hopeless.
July 7, 2009 at 9:42 pm
i know this is a typo but Abe lying with his prostate must do something than beg. he can start with herbal medicine than be a victim of big pharmaceutical conglomerate whose prime is to make more money and not to create jobs for the masses.
in fact a poor country is a prey for vultures otherwise known as “captains of the industry”. oh boy, we are totally screwed if they become “generals of the industry”.
July 7, 2009 at 7:11 pm
With all due respect, I think Mr. Margallo has gotten “simple” mixed-up with “simplistic”. What Bocchi is criticizing is the economic structure that permits economic elites to function. Components of an economy will always behave in predictable ways given a particular set of conditions, and to expect them to behave differently is simply irrational. Bocchi really sums up the theme of his paper in one glib statement that didn’t quite fit into Abe’s “Ha, I finally got one on Begnign0″ theme:
“To reach speedier and more inclusive growth and sustain it in the long term, the country needs to address its lack of competitiveness.”
It’s on page 6 of the paper, if you’re wondering.
July 7, 2009 at 7:28 pm
But… but Abe Margallo seems to say “….. forget competitiveness!!! We’re talking about the excess profits of the local elites, so competitiveness has nothing to do with this. To add “competitiveness” to the discussion is simply to complicate the picture. To reach speedier and more inclusive growth,” Abe would probably say, ” the local elites should put 90% or more of their profits back into Pinas economy, and please, no more shopping malls but into world-class industries like cars or electronics or tourism!!!”
The rationality of the decision is based on the results — and the desired results include more jobs for the classes A-B-C, prestige (world-class industry) for Pinas. “Competitiveness” of the workforce? Reward-to-risk ratios? Bah, those are just minor details.
Survival of the firm? What is that?
July 7, 2009 at 8:05 pm
Several months ago, I posted a blogcomment about kilowatt-energy cost for Pinas, and Pinas is very uncompetitive. The rate charged to Pinas businesses per Kilowatt-energy is practically the same as the rate charged to Pinas households (10% discount or less). ON THE OTHER HAND, the rate per kilowatt-energy charged to businesses by Australia, Singapore, India and others are 30% or more lower than the residential rates. [I guess their logic is that the policy is net-net positive since the lower energy costs to businesses result in more jobs. ]
Now, imagine Manny Roxas campaigning for 2010-Malacanang making that (lowered energy costs to Pinas businesses) one of his promises.
July 7, 2009 at 8:30 pm
UP,
The root cause of the energy cost problem is the Bataan Nuke plant. When they mothballed it, nothing else was put in place. FVR had to pay through the teeth just so we could get more than 8 hours of power a day.
We are still paying for that mistake today.
————
The contemporary stupid move is shelving the ZTE project. The need for the project, the benefits it would bring, the leapfrog of technology in the most critical (non-educational) infrastructure…all of these could have been met.
We will still be paying for this mistake tomorrow.
————
There is no reason to kill whole projects when dirty monkey business is suspected. Investigate…but operate.
July 7, 2009 at 8:53 pm
Raising residential-electricity rates by 9% and lowering business-electricity rates by 20% is pricing that Pinas governmnt can decide to do if it had the political will. The decision-making is no different than raising VAT to fund construction of an extra 20,000 public school building.
July 7, 2009 at 8:59 pm
It is one thing to read Bocchi.
It is another thing to understand what Bocchi wrote.
You can take the horse to the water – but can you make it drink.
While it is true that there are excess profits – there is no incentive to diversify for one simple reason – people will buy lousy products because there is noting else. Abe is an apologist for the local elite and protectionism.
July 7, 2009 at 8:00 pm
Abe’s prescriptions (Bocchi’s) are:
1. New Exportables
2. Increased revenues for infrastructure development
3. Gradual reforms to reduce the elite’s rent-seeking
Ok…
1. BPO services, Mining, Tourism (in a way) — legislation
2. VAT — inescapable tax
3. ChaCha, esp re FDI — elite-busters
——————
Actually, many posters here are basically on the same page.
July 7, 2009 at 8:25 pm
to RealityCheck: A big difference between Abe and benign0 lies in this sentence. One of them would say it and the other one would sneer.
“Pinas would do better,
(a) if them
(b) would do this
(c) out of the goodness of my heart.”
July 7, 2009 at 8:40 pm
UP,
Oh, I noted the differences. But after all the rhetoric, I still noted Bocchi’s solutions/recommendations…they were pretty much a description of GMA’s mainstream liberal reformist policies.
The only unpassed legislation is the foreign ownership/ChaCha one.
The prescriptions are not new or unique. They are mostly universally accepted (except by communists) as proper medicine (and no, they are not “Washington Concensus” ideologies).
July 7, 2009 at 9:20 pm
i thought u were a big fan of japan. business and govt are cozy over there…
July 7, 2009 at 9:22 pm
dont u wish all the elected officials will commit hara-kiri, one less piece of trash people have to be concerned about … :D
July 8, 2009 at 5:00 am
Now that’s a thought.
July 8, 2009 at 7:13 am
to BongV: Be careful what you ask for because Abe, Patricio and Honasan will like that thought. Except both will say surge-the-gate PeoplePower-the-brand, then apply PolPot terminal tactics. I mean, why bother to give the politicians the choice, right?
July 8, 2009 at 7:14 am
to BongV: Be careful what you ask for because Abe, Patricio and Honasan will like that thought. Except all three will say surge-the-gate PeoplePower-the-brand, then apply PolPot terminal tactics. I mean, why bother to give the politicians the choice, right?
July 7, 2009 at 11:23 pm
When 85-90% of the resources of a nation is concentrated in the hands of a very few, a homogeneous few, their vision necessarily defines the future of that nation. Thus, it helps to understand the orientation and character of this few, their attitude and ways and means as far as business is concerned, the area of human activity where they reign supreme, importantly, how their vast holdings originated, plus those unwritten codes they have drawn to mark the boundaries where no intruders could enter, etc.
If you could know the origin of a family’s wealth, how these great resources have come to be under its control, for example, you can predict with a reasonable degree of certainty the direction it will take, where such wealth will bloom, by the hint of the character of its possessors. I suppose there isn’t a chance you ever see risk takers and great industrialists (shipbuilders, car manufacturers, makers of machines) emerging from a family that earned not by force of industry or innovative mind its wealth, say, a vast track of land stretching from horizon to horizon in all four directions, but by other deeds and qualities better unsaid. They go where business is safe, naturally; their sons and daughters will grow to be doctors, senators, presidents
I often wonder if not the circumstances of our history have ultimately produced an elite adept at “panggugulang” more than anything else because it was the only skill or quality necessary to get to the top of the heap. Or am I blaming history too much?
If a young Henry Ford had the resources of a Lucio Tan, would he go the way of Lucio Tan? Nah. Lucio Tan goes where he goes because it is where he’s good at.
Abe Margallo begs for a Henry Ford or a Rockefeller we do not have.
A more dispersed resources should have had the effect of a more vibrant elite class. But how?
July 7, 2009 at 11:59 pm
“…a Henry Ford or a Rockefeller we do not have.”
Hhmmm.
Who was it who said? Behind every great fortune, there is a crime.
These oligarchs have been called several names: robber barons, land grabbers, etc. Haven’t you noticed, today’s gambling and drug families become tomorrow’s elite.
Well, Godfather III tried but failed. :)
July 8, 2009 at 12:02 am
Is “pang-gugulang” what it took and what it takes to get rich in Pinas? No wonder there are so many poor in Pinas —- too many skilled fighting for such a small pie that does not grow from value added.
July 8, 2009 at 1:42 am
simple, ricelander, by EVERYONE of us aspiring and striving to become part of the “elite” through personal responsibility.
July 8, 2009 at 1:43 am
SMEs – Small Medium Enterprises can provide a more vibrant and more diversified economy instead of putting all eggs in one basket owned by the local elite.
The more entrepreneurs, the better.
“small is beautiful”
“lean and mean”
“Global paradox: the bigger the world economy, the more powerful its smallest players”
- J Naisbitt
***
We are moving in telecommunications to a single worldwide network of information networks, with everything linked to everything else, he remarks. This change has important consequences for democracy worldwide — it can be likened to the shift from sluggish, centralized mainframe computers to interlinked PCs. “As the power and reach of the communications infrastructure expands, the tools needed to harness that capability shrink.”
Consequently, the idea that the central government — “one huge mainframe” — as the most significant part of governance is obsolete, he says. In fact, traditional representative politics is coming to an end for “now citizens who live in representative democracies have the power to radically decentralize and to evolve into direct democracies.”
- J Naisbitt: Global paradox
—
Only 7% of U.S. exports are by companies with 500 or more employees, and the Fortune 500 now accounts for only 10% of the U.S. economy, compared with 90% for small and midsize companies.
- J Naisbitt: Global paradox
—
Open up the Philippine economy, get more SMEs – domestic and foreign, bust the unproductive and lousy rent-capture practices of the local elites and their groupies.
July 7, 2009 at 11:24 pm
Economics is now global. Globalization is the trend of our times.
Companies will not invest on countries that are politically unstable.
We dont have a sizeable middle class. Our country is polarized not
only politically, but economically. Our country has rampant corruption problems. This is also one of the problems that
discourages investors. The World Bank Corruption allegation case is an example.
July 8, 2009 at 1:34 am
emphasis on “allegation”, toro.
July 8, 2009 at 12:33 am
Hyden,
There’s no reason any of us have to be polarized. We’re actually all part of the same bet — this country. We all have our skin in the game (as they say nowadays)…how about we come up with a rational plan?
July 8, 2009 at 11:16 am
Why the title benign?