October 10, 2004

The Philippine STAR, Opinion Page

Re-inventing Ourselves

By Babe Romualdez

At the Philippine Business Conference held at the Manila Hotel the other day where I was invited by PCCI's Mike Varela to be one of the members of the panel, there was a 5-minute blackout right in the middle of former Malaysian Prime Minister Mahathir's speech.  At the open forum, I opened my question by jokingly saying that I hoped the black-out had nothing to do with the Supreme Court's voiding the sale of the Manila Hotel to the Malaysian firm Renong Berhad in 1997.  

I asked former Malaysian Prime Minister Mahathir about that Malaysian investment that turned sour in 1997.  Like a true statesman, he diplomatically answered that we should be fair if we want to attract foreign direct investments. 

In the first place, if there was such a patrimonial law then we shouldn't have invited investors to bid for the Manila Hotel.  That single infamous act cost us billions in potential foreign investments.  Not contented with that, we repeated it one more time with the aborted PEA-Amari ideal.  To ensure that we keep investors away, we did it again with the Fraport-PIATCO NAIA3 deal. 

Today, it stands as the greatest symbol of Philippine corruption for everybody to see every time a plane lands.  Hopefully, the government's move to settle it amicably will be done quickly so that MIAA General Manager Cusi will be allowed to go inside.  He should have brought Scout Rangers to help him force his entry.  

It is no wonder the Philippines has lost so many opportunities in attracting investments.  We need to revise the protectionist provisions in the 1987 Constitution.  Even NEDA Secretary Romulo Neri earlier said so.  Built-in constraints in the Constitution limited foreign ownership of local businesses in key sectors to a maximum of 40 percent and barred foreigners from owning land. 

It is really high time for us to move forward in creating the right investment climate.  Just recently, Japanese firms threatened to pull out of the country because of high labor costs and the generally bad business climate.  We need to come out with creative solutions to pay back our foreign debt and it can be done.  For starters, the Constitution's economic provisions definitely have to be amended quickly. 

When Senator Johnny Flavier linked the growing problem of hunger in the country to rapid population growth, in not so many words, Health Secretary Manuel Dayrit contended that the economy is the problem, not the high population growth.  Now that is the most stupid comment coming from a cabinet official!

It is the height of medieval quackery!  The World Bank's new Country Director Joachim von Amsberg repeatedly stressed that population policy should be a part of fiscal reform.  As I recall, he said, "The Philippines has one of the highest population growth rates in the .world and that's the real obstacle to the country's economic growth.  It's important for the government to give families the options to improve their choices." 

On the sunny side, our biggest assets today are our natural and human resources.  And I subscribe to Sunshine Joe de Venecia's 12-point wealth generation program, whose proposals include the revival of the mining industry.  If fully utilized, mining will create wealth of approximately $l-Trillion for the country. 

We should now seriously consider reviving and opening up our mining industry.  In fact, GMA adopted five strategies from the 12-point wealth generation plan of JDV in her core development thrust to solve the fiscal crisis. 

Certainly, the mobilization of investors for Mt. Diwalwal gold mine and the building of massive reclamation projects to create Hong Kong-type enclaves to capture long-term investors will bring about the second wave of Build-Operate-Transfer (BOT) investments for infrastructure.  Ever the wily businessman, Joe de V's creative ideas can help solve the fiscal crisis. 

To reinvent ourselves, we must fully develop our human resources.  They must regain their proficiency in English.  We have to come up with schools for specialized training for seamen, cruise ship crew, entertainers and animators.  Even PAGCOR Chairman Ephraim Genuino wants to develop a school for casino dealers to man the casinos that are sprouting all around the Asian region. 

Ambassador Amable Aguiluz's AMA Computer College is certainly doing a better job than its competitors in churning out competent world-class IT professionals.  It has produced about 200,000 computer professionals employed by various companies all over the world.

Of course, tourism has the biggest immediate potential.  Every other foreigner who has seen our islands has been awed by the beauty of this country.  They keep raving about Palawan, Bohol, Boracay and many other places.  In fact, the Shangri-La chain is putting up a 6-star hotel in Boracay.  

Our international hotelier-businessman friend Arthur Lopez, who is very close to Malaysian investors, pointed out that tourism if developed properly will be our number one biggest revenue potential and job creator.  Tourism Secretary Ace Durano has asked Arthur to come out with some creative ideas in attracting more tourists. 

In comparison, Malaysia has attracted 13-M tourists as of today.  I don't see any reason why we can't do the same thing.  The Malaysia, Truly Asia positioning worked very well for them.  And yet, the Philippines, as reported by a world tourism journal, has one of the highest number of potential tourism spots in the world. 

To move forward, we now have to re-invent ourselves by moving one step further—Developing the right business climate.  Before Dr. Mahathir stepped down, he batted for reforms in foreign investment policy through the relaxation of capital control measures for short-term investments.  Dr. Mahathir steered Malaysia to where it is today. 

We should learn from our neighbors' successful experience of re-invention.  If we begin this process of change, I have absolutely no doubt this country will be prosperous.  

Let's not even consider manufacturing because China moved from a backward communist state to become the powerful manufacturing biceps of Asia. 

India has assumed the role of the brain-churning-out-software and other IT innovations.  The Philippines can choose to be the heart of Asia—the service and tourism hub in this part of the world. 

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