• Let’s not get too nationalistic . . . Foreigners create decent jobs

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    Mike Wootton

    Mike Wootton

    I WOULD be the first to admit that what I am going to say next may well be just a product of my imagination, but . . . is there a growing antipathy against foreigners in the Philippines, I wonder? This comment is prompted by the recent law requiring foreigners who plan to marry Filipinas to obtain a home government certification attesting that they are of “good moral character” and another confirming that they have the financial means to support a wife. Whilst I can understand that in some cases this sort of requirement may be justified it seems highly discriminatory and I cannot imagine that any government would be interested in certifying either of the requirements. What measure would be used for a government to certify somebody as being of “good moral character”—in fact how would you define “good moral character?”

    In addition to the above there is also; the publicity about PLDT and Meralco’s dividend “exports” running contrary to the spirit and intention of the—unhelpful to many but very helpful to some—constitutional 60/40 rule [itself probably the biggest single barrier to the further development of the Philippines]; South Korea expressing diplomatic concerns over the safety of about 100,000 of their nationals here; and quite some news of various construction workers [usually Chinese]who are being deported for working without the necessary permits. Is nationalistic fervor being “stoked-up”? If so that would be a great pity, it would counter the widely held perceptions about the foreigner friendliness and welcoming nature of the Filipino.

    The UK on the other hand is a highly diverse society made up of many foreign cultures, largely from the old British Empire, which at one time encompassed about 30 percent of the world’s population. So the UK has in one way or another over time opened itself to absorbing different cultures and beliefs—one unfortunate result of which is the relatively high level of recruitment of UK immigrants as jihadists for the Islamic Caliphate, that very scary and highly competent semi-military force which is currently brutally terrorizing a large part of the Middle East.

    Insofar as the contribution of foreigners to the UK economy is concerned, the “corner shop”—a cross between a convenience store and a “tindahan” was most usually established and run by immigrants. The corner shop was and I guess still is, an institution; they stocked most of what you would need in the way of household items; food, cigarettes, newspapers, and were “open all hours” and there were/are lots of them. But in addition to the corner shop micro-economy immigrants have made a significant contribution to the growth and development of the small and medium sized business sector—they have founded or operate 1 in 7 of the UK’s SMEs, and out of the 4.9 million businesses in the UK, SMEs account for 99.9 percent and employ 50 percent of the workforce. Thus immigrant businessmen provide jobs for 7 percent of the workforce and that does not include the 3 million jobs created by the 45,000 affiliates of foreign businesses operating in UK, through their IFDI (inward foreign direct investment), which has now reached a stock of $1,199 billion, and which provide jobs for another 13 percent of the workforce. So foreigners provide jobs in the UK for at least 20 percent of the UK workforce, and of course they repatriate dividends which is a main purpose of business; and why shouldn’t they? The creation of employment need not and should not deprive investors of any part of their business dividends no matter where the business creator may be domiciled or whatever his nationality.

    Of course foreign companies provide jobs for about 20 or 30 percent of the Philippines workforce depending on which statistics you believe, but these jobs are in foreign lands, or seas (where the foreign investors can legally keep their hands on the dividends their businesses earn) and so do not make any permanent real development investment or industrialized nation building type economic contribution here in the Philippines, other than by stimulating consumerism which does little for the long term development of the nation. Interestingly by comparison with the UK with its 65 million or so population, the Philippines has about 820,000 businesses for its 100 million population, with SMEs comprising 99.6 percent of businesses and employing 70 percent of the domestic workforce. The IFDI stock of the Philippines is about $13 billion or slightly more than 1 percent of that in the UK even though the Philippines GDP is about 10 percent of that of the UK, so proportionately there is a lot of room for more foreign investment.

    So whilst some foreign influence can be bandit is mostly in fairly isolated cases, such as the destitute foreigner who marries a Filipina and leads her to a life of untold misery, in general foreign involvement is developmentally good and most of all it creates jobs directly boosting the economy, and stimulates entrepreneurship, technological improvement and industrial and infrastructural development. The Philippines however due to its rather lackadaisical approach to the Rule of Law [is there one!?]and endemic corruption is an attractive destination for some of the sorts of foreigners who would not be welcome elsewhere, but because they have in say the case of drug dealers lots of cash-money then the Philippines can be “paid” to host them and to a point to keep quiet about it.

    Now isn’t it ironic that the Philippines can attract undesirables [who obviously tend not to follow the rules]thanks to its very loose Rule of Law and the infinite range of things that money can obtain in a country beset with widespread grinding poverty, and yet can repel foreign investment [which does normally follow the rules]and foreign entrepreneurial energy and innovation thus losing domestic employment creation opportunities thanks mainly to protectionist regulatory requirements headed by a constitutional provision (which has the peculiar effect of compelling Filipinos to work overseas), the awful red tape, and of course the political stability and peace and order situations. And now to add to that barrier a perception of a growing nationalism which could alienate foreigners including investors further. The way things are its easier for the “bad guys” to do their business in the Philippines and considerably more difficult for the “good guys”! So let’s please not lose sight of the benefits of foreign involvement because of the wrongdoings of a few foreigners, those who will really contribute have to put in such an enormous effort and carry their own fight against corruption to create decent jobs for Filipinos need all the help they can get!

    Mike can be contacted at mawootton@gmail.com.

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    2 Comments

    1. You only have to look at the rest of ASEAN to see their more liberal FDI rules. The exceptions are those countries that are economic powerhouses that can finance their own businesses. The Philippines is far from being of that stature, despite what the ultra-nationalists like to proclaim (very loudly), and laying the guilt trip on anyone who tries to be realistic.

    2. No, it’s not your imagination; the antipathy towards foreigners has been increasing steadily. For one, it follows the pattern of former colonies that what was once embraced by one generation is rejected two generations later. Speaking of the 60/40 rule in the Cory Constitution, this is a product of the leftists who found new life when Cory Aquino released their leaders from Marcos’ jails, and since then the leftist polemic against foreigners has been unceasing. The last factor is Cory’s son in Malacanang who’s every policy is dictated by populist sentiment manipulated by selfsame militants.