A New Philippine Economic Plan: “Get out of the way!”

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Let me offer up a negative characterization of the Philippines because it helps make some sense of the proposed economic solution that follows.

Outsiders observe that Filipinos are always fighting among themselves. The battles are merciless, from bickering over national artists to bitter personal arguments on the Senate floor to coups and impeachments galore.

The fighting has a dysfunctional outcome: there is so much in-country strife that the nation never manages to unify, to find its bearing and calling, and rise as a strong regional player. More typically, the Philippines is a pawn in the designs of other nations, and has been for its entire civilized existence.

I probably need not elaborate on the strife, but will for the sake of persuasion. We have dynasties like the Ampatuans fighting other dynasties for dominance, the left trying always to undermine and uproot the government, Muslim extremists taking civility apart one beheading at a time, Manila at odds with the provinces, revolutions, occupations and coups every 10 or 15 years whether they are needed or not, the corrupt doing battle with the non-corrupt, and with other corrupt who are moving into their territory. Catholics versus atheists. Pro-American versus anti-American. Enrile versus Santiago. Trillanes versus Enrile.

Down and dirty.

Because of this divisive strife, the concept of national unity is weak. There is no rallying cry. No common vision. No war around which to gather as a union. The natural forces against unity are too strong, different islands, different languages and cultures, different allegiances, and division seen as division rather than diversity. There is no unifying cry other than “do it like the Americans do it”, for government. And “do it like the Chinese do it” for the way things work in a culture of power and favor. The latter forms a well-fertilized bed for corruption.

The educational wizards think in terms of acts instead of concepts, of rote order and smallness of mind rather than aspiration and enlargement of values and disciplines. Each year repeats the previous year with little tweaks like adding classrooms – which do the same old thing. There is no grand innovative strategy, like putting Filipino educational resources into the cloud and tossing all the cockroach-infested text books into the Pasig along with the other detritus there.

Or teaching integrity as a discipline.

The nation’s natural resources are trashed, not preserved. There is a slight budging toward preservation since an American ship crashed into the precious Tubbataha Reef and the Chinese were caught stealing hundreds of rare turtles. It just has not reached the desperately poor who “will dynamite for food”.

So against that backdrop of divided, contentious, warring socio-economic factions, I have devised the perfect economic plan:

Get out of the way!

Rather than try to take proactive steps that never succeed because the forces of greed and division overwhelm them, adopt the plan of getting out of the way so the natural energies of Filipino profit-making can blossom just like the flora and fauna that thrive here. Abundantly.

The economic landscape is rich with resources and promise:

  • The people, the labor, the wide educational base.
  • The minerals.
  • The natural sources of electricity, solar and hydro and thermal.
  • The location, at the focal point of commercial Asia.
  • The seas, richer than any place on earth.
  • A land and climate that is made for growing.

This nation can absolutely shine if Filipinos will simply get out of the way. If they will simply tear down the self-imposed barriers to growth. The barriers are founded on tradition, superstition and fear more than anything else. And on greed. And on anger.

The defensiveness and bickering lead to bad decision-making.

But get past the barriers and even the greedy will thrive. Legally.

How does one go about this “getting out of the way” you may ask. Let me offer up some examples:

  • Stop charging application or processing fees as a source of revenue. They are a barrier to getting things done; they are self-perpetuating and promote processes that have no utility other than revenue generation. Use taxes taken as a share of profits, income or capital (real estate) AFTER the value is created. Stop taxing BEFORE that value is created. Get out of the way.
  • While you are at it, automate all taxation records. And other routine processes. Get the paper out of the way.
  • Mandate that government offices provide SERVICES, not wasteful runarounds that consume time by the hours-full and cost people money that could better be spent buying goods. Get out of the way. Cut red tape.  HELP OUT.
  • Stop banning foreign investment. That is the single biggest self-imposed barrier to jobs and competition imaginable. Out of FEAR of lost jobs and income. REGULATE the investment so that it does not unduly control any industry. But let the money and competition in and watch the economy sizzle. Foreign investment is an economic stimulant, the Red Bull of wealth generation. Wealth ENHANCES sovereign power.  Get rid of this misguided notion that intellectual sovereignty is worth more than the real wealth that gives the nation the ability to manage its own destiny. A pauper nation relegates itself to being a pawn; a state that generates wealth is a sovereign state.
  • Give the Ombudsman the right to levy punishment directly, as an ethics super-body, to remove suspected crooks IMMEDIATELY. Court action is not needed. If the evidence says government officials are doing ill deeds, cut that festering infection RIGHT NOW. Get it out of the way. Tainted people should learn to resign, but if they will not, yank them. Out of the way, scum!
  • Pass an anti-trust law. Get anti-competitive barriers out of the way.
  • Get land into private hands immediately and get rid of the barriers to trading real estate as a form of capital. Land ought to be more valuable than it is. Real estate value creation, which can be leveraged for additional investment, is being held back by a lingering socialist ideology that keeps land from being used well and increasing in value. Have confidence that economic well-being will filter down to laborers. Get outdated idealisms out of the way of wealth generation.

Are you getting the picture? Barriers have all been put in place for what SEEM like good reasons if one takes a narrow, expedient view and ignores the long term impacts. A fee for a new business applications SEEMS like a good way to get revenue. Unless it encourages the applicant to set up shop in Viet Nam.

So get out of the way, let the business succeed, and tap a reasonable share of value created.

The nation will unify around success. Bickering voices will no longer dominate and will find their rightful place as a low murmur of constructive guidance.

Perhaps you see other barriers that ought to be removed. If so, feel free to add to the list.

 

Comments
21 Responses to “A New Philippine Economic Plan: “Get out of the way!””
  1. jcc says:

    Nice proposal.. JoeAm for Finance Secretary..

  2. Micha says:

    Have we not been already treated to the spectacular results of a deregulated supply side economy?

    • Joe America says:

      You’ll have to elaborate as I don’t get the lesson. Philippines is supply side?

    • Micha says:

      And I thought Joe that was what the plan is all about : Get rid of red tape and regulations, let the businesses and investors set up shop and ply their wares unmolested by unnecessary fees or taxes, right?

      • Joe America says:

        That’s a part of it. Another part is to get kickbacks and excessive LGU permitting fees out of the picture; they kill deals or causing shoddy work. End NBI clearances. Anywhere inefficiency or discouraging acts arise.

  3. josephivo says:

    More than 7% growth, growth is not the problem, inclusive growth is. Only ‘Inclusive institutions’ create inclusive growth. The church doesn’t fight atheist but poor Catholics who intend to control the number of offspring. The economy has high barriers (meaning the wrong regulations) to promote rent seeking. Laborers are just a pair of (disposable) hands, not collaborators. The judiciary lives in an ivory tower well protected by greedy lawyers. A political party with party members does not exist. Only the ‘left’ tries to include people, all other parties are the exclusive domain of dynasties, buying votes but excluding involvement. Cooperatives live maximum a year until the money disappears. Sports are poorly organized. No youth organizations. Fiesta’s include, but only 1 day a year. An over-inclusive institution is the family and in some area’s the big man that can provide protection.

    How to facilitate the organization/inclusion of people? Robredo knew that the key word was politics, but politics opposite to trapo politics. How to identify and empower the ‘Robredos’ between us? What is holding them back?

    • Joe America says:

      There you go. Where are all the Filipino efficiency experts, the work measurement people, the applied technology people, the politicians who understand that time is value? I’ve been thinking of inclusion strictly in economic terms, but there is much more to it, isn’t there? Inclusion in the hope and opportunity for better things.

  4. manuel buencamino says:

    The first step towards ending the bickering and diviseness is, short of not watching tv news and reading the papers, is to stop believing what media tells you. The Philippine media is Fox News and TMZ combined; use it for enjoyment not information. Seriously.

  5. JM says:

    I am putting up a new business and I find parts of the article relevant. I had to go through a ton of paperwork just because I want to be legit and pay the right taxes while the people who don’t register their business gets away with it and earn more. You have to go through several government offices and provide a ton of documents before you can actually do business. What’s more frustrating is that most of them are still manual (except for DTI, you can get a business name in 5 minutes online) and redundant. You also have to pay fees each each time you process something. It’s small but I am already providing jobs, why do I have to pay for these fees?

    • Joe America says:

      EXACTLY to the point.

    • macspeed says:

      @JM
      That is hindrance to growth, barriers are required only for horses who has not run for several months, not applicable to human attempt to put a business and succeed in life…

      Anyways, I may face the same problem for my plan to put a coffee shop, pansiteria with OTB. I hope processing that time will be easier. I hope some of the government agency concerning this maybe able to READ the messages from JOE AM

  6. Jose Guevarra says:

    Wow! These are great ideas Joe. I know we have locked horns recently but I must admit you do have a great brain in your head. Now if only someone will have the balls to actually try getting these things done. Kudos!

    • Joe America says:

      Thank you Jose. I appreciate that you stop by now and then to read and comment. Locking horns is something we occasionally need to do, sharpen the debating skills and learn, too.

  7. macspeed says:

    @Joe,

    THE PRC should remove the BARRIER for other discipline such as Instrument Engineers like me. The PRC say, Instrumentation is not regulated hence not PRC requirement, but Society of Council Engineers requires me to have PRC before they can accept me as Instrument Engineer.

    But PRC has regulation for small category such as Beauticians and sort of, make me cry…

    This removal of Barriers from institution like PRC have and other government institution is required for future growth of Philippine in general. I am 57 years old and I am just hanging on with my company Worley Parsons till I can after this, no more work for me, but I will be happy to see these changes till the sun sets for me permanently…

  8. Micha says:

    Businesses can only thrive if it has customers. Customers will only be willing to spend for the products that businesses churn out from their factories and shops if they, customers, have enough leverage in purchasing power.

    Your plan is to make it easier for suppliers of goods and services to set up shop. That is all very well, except that that is only half of the equation. A planner on the hill must also ensure that the demand side is sustainable to avert a boom and bust cycle inherent in such macroeconomic model. Our impoverished population, mostly rural folks dependent on agriculture or whatever remains of it, might, maybe, perhaps, probably be able to find employment in the course of this plan’s implementation and will thus somehow augment demand but really, what’s the projected figure?

    Evidently, a sort of catch-22 is in the offing and the Chinese experience is not exactly something to swoon with delight.

    Instead of demonizing the government as somehow the antithesis of free market puritanism, I propose that it take a central, significant, and useful role in the economy just as what most of the western capitalist countries had or did.

  9. Barriers are being removed one by one, it may take a long time but the way I see it some of the bureaucratic redtape in the government is being address and the processes for business application are simplified or at least the government is trying to. Now the government is trying to modernize the BIR, computerize filing of tax is being implemented for faster transaction and to be more transparent. Yes there’s a lot to be done, but I think, although it is slow, the government is doing what its supposed to do. Doing business in the Philippines has improved a lot and the increase in peza registration and boi can attest to that. Political environment in the country has improved, yes, the bickering and mud slinging is still there but somehow more cooperation is happening now. For me the culture of the country should change for it to be a better nation.

    • Joe America says:

      Recognizing that substantial progress IS being made is a very important step in assuring it will continue, or even pick up speed. It is a step that we need to get the complainers to make . . . and I think I’ve got a good idea for a new blog. Thanks!!

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