• Detroit of Asia: Attainable goal or just whistling in the dark?

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    If there is one thing that Mr. Aquino ever said that made the whole nation line up behind him, that was his ambitious plan to transform a suitable part of the country into what he calls the “ Detroit of Asia.” No single soul, not even the most rabid critic of Mr. Aquino, said “ nay” to that.

    It would mean many things to the nation, primarily:
    • The return of manufacturing jobs, the ones we lost when the following industrial sectors mostly vanished—steel, garments, chemicals and rubber—to create pockets of desolate industrial wastelands

    • We will get past the stage of exporting OFWs and electronic chips and will ship cars and trucks to overseas destination for a change. Plus car parts and parts for LCVs, or light commercial vehicles

    • The psychic income that will come from the possession of the bragging rights that—at last—we have built an industrial foundry that we can be proud of

    • The return of trade unions with powerful bargaining leverage. Mr. Herrera knows that the car industry of Detroit was associated with dynamic l trade unions

    • You may or may not agree with the fifth. It will be our sweet revenge on the Thais, who have been selling us their surplus rice, patis, toyo and bagoong for half a generation. The olive-oil using elite are not aware of that, but for us in the lower strata of society are painfully aware of that. Those stuff make up about two thirds of our daily dietary requirement.

    (Remember the dream of the old man Jacinto when he built the first integrated steel mill in Iligan? It was his dream to supply all the steel needs for a vibrant manufacturing sector. After the proclamation of martial rule, one of the first few acts of Mr. Marcos was to hunt him down and drive him out of the country.)

    But much as we want to see that day of manufacturing renaissance, we have to ask this question. Is it a realistic, perfectly-attainable dream? Only two are plausible answers. Maybe. Or, it is just plain whistling in the dark.

    To steal the thunder from Thailand, and initially grab a piece of the assembly business from the Thais, Mr. Aquino has to raise the ante on incentives—match, if not improve on, the tax and other incentives offered by Bangkok. The incentives should be radically attractive enough to lure in Toyota and the likes and the recent failure of government to accept the conditions for the assembly of the Innova here is a sign that, fiscally, the Aquino government would not bend over backward just to incentivize the vehicle assemblers.

    Even if it were all systems go on the incentive/fiscal aspect, there is another gauntlet to be hurdled— the emotional/psychic thing. Many Filipinos would be spooked with a red carpet treatment for vehicle assemblers and zero consideration, tax-wise, for the Pacman. Especially if he KOs Mayweather in the May fight.

    And the taxpayers levied a 32 percent tax, which is just about the majority of the fixed –income earners, would not look at a special fiscal arrangement for assemblers and zero consideration for them. That tax level of wage earners is the highest in the region.

    Before his trust and approval ratings nosedived, Mr. Aquino could invoke unchallenged leadership—in contrast to deeply-polarized Thailand—as part of the incentives. No more now, with his precarious trust and approval ratings. Mr. Aquino used to bend the country to his will. That is no longer the case as his critics and detractors have stepped-up on their boldness and courses of action. In late 2010, remember, the most rabid anti-Aquino activists did not dare burn his effigy as the general public would frown upon it.

    What if the next polling would show another steep drop in the trust and approval ratings of Mr. Aquino? Such occurrence would be a big negative on the campaign of Mr. Aquino to build thriving assembly enclaves for cars, pick-ups and light commercial vehicles here.

    The major assemblers will realistically look at the time constraints too. Mr. Aquino has just a year in office and he cannot guarantee— like Lula of Brazil—a smooth electoral victory for his chosen presidential candidate, one who will share his policy directions. In fact, the LP is now called the Losers Party, a party that cannot win the 2016 presidential election.

    All of the above do not mean that the Philippines has no major advantages over Thailand.

    The things going for us are twofold: a manpower pool that is either skilled or easily trainable. Nothing can beat the willingness of young Filipinos to land a decent job—and stay on that job with fidelity. The other is location. Luzon is blessed with the Sta. Rosa ( Laguna) to Sta Rosa (Nueva Ecija) corridor. The former Axis of the Hukbalahap movement, is now one of the most ideal location for business locators.

    The amendment of the Cabotage Law, which will pave the way for cheap carriers and reduced shipping costs, will be the third positive for us.

    Plus, the English language skills.

    But will Thailand just allow the Philippines to grab its niche without crafting new policies to make the assemblers stay put in Thailand? The Thais, fragmented though they now are politically, will not let the Philippines, or any country for that matter, take that niche in vehicle assembly. They will move heaven and earth to remain the “ Detroit of Asia.”

    For now, any claim that we will soon be the “ Detroit of Asia “ is more like whistling in the dark.

    mvrong@yahoo.com

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    16 Comments

    1. with very high cost of electricity it won’t be farfetch, ph would become a detroit of asia, where a sensible business conglomerate would dare to take a high risk in car making industry big time…raw material, bakal – hindi ito tsokolate na pwedeng tunawin sa pinakulong tubig lang. it requires huge consumption of e power to begin with..

    2. Detroit of Asia , Detroit of today is like the philippines dilapidated infrastructure , the big three of Detroit moved most of manufacturing the China , where they mainly make their
      Money . This is delusion of grandeur for Abnoy tulo laway .
      10 years ago there is no high speed train in China , today China is crisscross with high
      Speed rail , there was a north rail project started by GMA but was scrapped by abnoy
      Dahil sabi no Mar roxas We don’t need it . Sa PDAP may Pera .

    3. It’s not as easy as it seems.I have put into perspective some of the factors why the Philippines hardly prosper like other countries.Sometimes it’s the Malayan culture.Notice why mostly the Chinoys are the very successful entrepreneurs?Perhaps maybe because of discipline and devotion.The chinese,like the koreans have a habit of helping each other out when one is not doing well in business(e.g. lending that person monetary assistance in hard times).Filipinos do not trust each other-perhaps a bad Malayan trait.In America,they have a system of bank loans based on credit rating-proof of established trust unlike in the Philippines where you have to have a collateral to get something from the bank.Secondly, the government should establish programs that would open opportunities for everyone like school of entrepreneurship in many areas like poultry farming.Egg is a very basic commodity for everyone.In Israel,they encourage the entrepreneurial spirit a lot. I once read a article in one Philippine newspaper written by a very discerning writer.He said that why do most Filipinos go to college and train to become servants abroad instead of developing the passion to train as effective businessmen domestically thereby helping to create jobs for everyone?Lastly,there ought to be peace and stability in the countryside.The police and the military ought to do a better job in stabilizing and enforcing law and order in many parts of the countryside.Many potential business people and investors are uneasy to invest in many parts of the country because of social instability and fear of lawless elements.Peace and God bless.

    4. victor m. hernandez on

      Why not? We have the mines, the steel mills, the energy source, the manpower, the ports and airports. All other things must be imprved, policy making, laws on tax and incentives, upgrading of skills and technical competence, foreign investments and ownership level, labor laws, housing laws and benefefits. Improve utilities and infrastructure. It a vision that may be worth pursuing, which needs much thought and study. But, why not indeed?

    5. Detroit of Asia? Is this another April Fool’s Day joke? Doesn’t BS Aquino even read the news? Detroit is now a bankrupt, high-crime wasteland where thousands of houses had been abandoned due to lack of jobs. It is no longer the auto manufacturing center it used to be where GM provided tens of thousands of jobs for its residents. It is now a city where litter-strewn lawns are left un-mowed and where many jobless apartment occupants had been cut-off from city water for non-payment of their water bills. Many of the vacant houses had been vandalized. burnt or turned into crack houses.

      Please do not turn the Philippines into a Detroit of Asia, or we will be doomed as a nation!

    6. Bunganga lang yon. Ngayon pa na malapit ng matapos termino nya? Late na po kayo!! Haizzz parang niloloko nalang tayo..

    7. Ikabod Bubwit on

      Promises … promises … promises !!! That is the main trick of the imperialist US and comprador and reactionary class of the Philippines !!! After they get what they want they all forget about the past promises and think of new ones. The founding documents of the Communist Party of the Philippines in 1968 stated that the imperialist US and the local reactionary class has rendered the Philippines to be a supplier of raw materials and cheap labor and an importer of high-value added products. That the Philippines is to only have light industries and never heavy industries. The latter is what you need to create jobs in the first place. And where is the Philippines today ??? The answer is that it is nothing but an exporter of OFWs and cheap labor intensive products. So this talk of car manufacturing and heavy industries in the Philippines is nothing but cheap talk. Perhaps Mr. BS Aquino wants another big car assembly plant with all vital components imported from abroad and only to utilize cheap Filipino labor.

      It seems that the Communist Party of the Philippines was correct !!!

    8. Obviously, Mr. Aquino can’t keep up with the change of times. Does he even read or keep his knowledge updated at all? Doesn’t he know that for decades now, Detroit had turned into a ghetto? He must be thinking Detroit is still the motor/automobile capital of the world. Perhaps, he still thinks Detroit is still the Motown it used to be…known for motor manufacturing and music recording.

    9. Detroit USA is a wasteland, highest crime rate in the nation, highest unemployment, vast areas just abandoned to squatters. Detroit USA no longer produces anything. Please not not aspire to become the Detroit of Asia. In the spirit of the Easter observances: Forgive Pres. Aquino Father, for he knows not what he does.

      • victor m. hernandez on

        Detroit is a wasteland bdcause it was inefficient compared to what the Japanese have done to car manufacturing. But even Ford has learned a lot from the Japanese experience. Look at Ford now!

      • Yes, Noynoy doesn’t know what’s happening in Detroit! Truly Ignorant president!

    10. chthonic monster on

      what a joke! they couldn’t even put the Bataan Nuclear Power Plant operational! what a stupid waste! he forgot there’s a real tiger economy Thailand! there was a time when they even sent their students here to pick our brains. damn, even Rolls-Royce (Aeronautics) and Ducati have their plant located. and ours well as usual they are still studying the plan!

    11. Just as much we want to believe the opportunity to become Detroit of Asia, things that comes to mind are: we can not even compete with Thailand in rice production that price,quality and quantity wise. Our tax laws and regime are forever changing according to the whims of those who leads, the 60-40 ownership of business and law regarding the ownership of land to non citizens. In Thailand, Malaysia and other Asean countries they allow up to 99 years lease (extendable) to big business.On top of these the most expensive electricity in ASEAN, poor infrastructures. When starting abusiness in the Phils you have to deal from the barangay level up to wherever it’s required while in other countries an electronic filing is all that’s needed. I don’t want to be so pessimistic about our chances but we have along way to go if we have to be even incontention for ” Detroit of Asia” title.

    12. Dominador D. Canastra on

      Nevertheless, let’s pray that a miracle happens during these days of Easter week to suddenly make PNoy a good president–so that this dream of our becoming the Detroit of Asia happens, he leads to the dismantling of the illegal stranglehold of the fraudulent, inefficient, untransparent and manipulated the Smartmatic-PCOS machines Automated Electton System on the Commission on Elections.

    13. Clearly the President has not been to Detroit recently.But yeah he is turning our country into Detroit of Asia where everyone wants to leave because of poverty and unemployment.