• Which is which – pack up and go, or come and invest?

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    The question must be asked because many international businessmen and prospective foreign investors do not now what is really the policy of the Philippines on foreign investments.

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    The other week, just before he left for Tokyo for an official visit to Japan, President Duterte declared that businessmen or business who have been made uneasy by his inflammatory speech and his war on drugs, should pack up and leave. That appeared to close the door on foreign investors, especially Americans who tend to be squeamish about human rights and the rule of law.

    While the President was in Tokyo, his chief economic advisor, Finance Secretary Carlos Domiguez, told a gathering of the Japanese business community that the Duterte government has crafted a business-friendly socio-economic agenda that reflects the Philippines’ readiness to host foreign investments and enable them to do good business in the country.

    Dominguez declared: “This is a fine time for looking at the Philippine economy as an investment destination. The opportunities are many and the possibilities are large.”

    These two statements are contradictory and do not cohere into a whole. They make for a confused and confusing investment policy. They scare away investors, instead of attracting them to come. And worst of all, they unsettle longstanding foreign investors already in the country, whose operations have enhanced the national economy and our relations with the world.

    Instead of allowing the confusing situation to fester, we believe it’s imperative that the government hammer out quickly a coherent and consistent policy on foreign investment. It should not let the matter rest on the often whimsical and impulsive statements of President Duterte.

    It should emphatically declare that our country welcomes and supports foreign investments as before.

    The best way to do this is to place the policymaking in the hands of Congress and the government’s economic managers.

    We should learn from the fact that Duterte issued the “pack up and leave” statement without proper study, and in irritation over the comments made by US assistant secretary of state Daniel Russell about how the President’s recent foreign policy pronouncements have made many countries, not just the United Sates, nervous about where our country is headed.

    That the muddle has come at this time is unfortunate and regrettable, because the Philippine economy is enjoying a spell of stability and dynamism, a condition that is conducive for both investments and trade. This should be a time to build on gains, and not a time for retreat.

    One now wonders what has happened to the great acclaim our economy was receiving as the “success leader” of East Asia that foreign countries and world economic bodies had been about the Philippines before Mr. Duterte’s assumption of the presidency.

    The good economic prognosis was matched by growing international recognition of the strategic importance of the Philippines in the Asia-Pacific, and its emergence as a new Asian growth dynamo.

    The solution to the conundrum in foreign in vestment policy and foreign policymaking, is a more surefooted approach to statecraft.

    Statecraft has been well defined by one international expert as follows: “Statecraft is the use of the assets and tools (economic, military intelligence, media) that a state has to pursue its interests and to affect the behavior of others, whether friendly or hostile. It involves making sound assessments and understanding where and on what issues the state is being challenged and can counter a threat or create a potential as opportunity or take advantage of one.”

    State craft, as Walter Lippmann so well stated, is best placed in the hands of people who are professionally trained for the work, or who have spent their lives in the study of the work of nations, and how the world works.
    We hope that, despite the words from President Duterte that confuse and discourage foreign-investors, his economic team succeed in encouraging foreign investors and the world market to continue dealing with our country positively and optimistically.

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    5 Comments

    1. The PSEI does not create jobs.

      Cheap cost of production- efficiency: labor and tech know-how, energy, materials, corruption free governance – removing paralyzing impediments from red tapes, unfair laws protecting the oligarchs, laws for extortion and worst bantay-salakay government institutions, are the keys to productive economy.

    2. As an investor, what Duterte administration is doing is EXACTLY what I look for. In terms of economics, you should be proud to have him as your president.

    3. Cannot see inconsistency in the pronouncements of the president. Drug problems and economic strategy are supposed to be moving on parallel track. Not crossing each other. It was the US official who merged the two to weaken the president’s resolve to finish drug problem. So far the world has not seen much economic policy shift that should make the potential investors worry. All the noise are related to drug problems. It was premature judgment on the part of US UN and EU which made the remarks of the president vulgar as they are necessary to be heard and listened to.

    4. Every investors main goal is to maximize profits. That is Economics 101. The second is the investors wants their money in safe condition, no crimes, no government red tape, less or no taxes. It is very clear that investors money will earn good returns in the Philippines but the problem is Dutertes attitude in dealing with investors. It is also very clear that foreign investors are pulling out of our stock markets. The proof is the steady downward decline of the value of stocks in PSEI. There is the migration of the dollar to other countries, evidence is the rapid devaluation of the peso. Whatever the Cental Bank says, they are now selling their dollar reserve to protect the decline of the Peso. I pray that we reach the rock bottom by early next year. The biggest problem is if the US starts to pull out their businesses here. Unemployment will increase. Poverty will not stop. Crimes will surely go up.

    5. Or, it may be very possible that a focus on fundamentals is what investors really want to see. What has kept the Philippines behind? A lack of statecraft or too much?

      Here’s what an investor probably wants to see. A huge reduction in corruption and crime. A reduction in red tape. Serious investments in infrastructure and education. Seriousness in bringing peace to the country after decades of internal strife. Seeing the country emerge as an economic doorway to SE Asia, China, Japan and Korea.

      Enough of parading statesmen with fine speeches. It’s about time for statesmen who know how to roll up their sleeves and get the right jobs done … and right now. Get the fundamentals done right and odds are the investors will come.