As this is being posted, President BS Aquino I-I-I is arriving in Vientiane, Laos, at the head of a 60-member junket (at a reported cost of P9 million) to the 9th Asia-Europe Meeting, where, if the routine from his 21 previous overseas trips is any indication, he will again deliver his favorite “the Philippines is open for business” pitch with an enthusiasm that rivals the Sham Wow guy, a message that will likely be overshadowed by his doing or saying something embarrassing:
And that is probably just as well; the “open for business” schtick, which was once merely vacuous, has now become a cynical deceit. N/A is arriving at yet another economic summit on a wave of bad news that makes a mockery of his well-practiced pitch: the release last week of the annual World Bank/International Finance Corporation Doing Business Report, which revealed that for the second year in a row under Aquino, the attractiveness of the Philippines as a place to do business declined significantly, to the extent that the country now substantially trails places like Yemen, the West Bank & Gaza, and perennial ASEAN loser Cambodia on the world list of places for investors to spend money.
None of which is surprising, considering that at about the same time as the Doing Business report hit the streets it was revealed N/A managed to scuttle a $1.5 billion investment package (that’s roughly P69 billion, for those of you keeping score at home) by being rude to the visiting Emir of Qatar in April. And just as the President was packing his Gameboy and some clean socks for the trip to Laos today, a member of Congress called for a legislative probe of a soured deal between the PCSO and Malaysia-based Berjaya Sports Bhd., in which the latter is suing the government for breach of contract concerning the operation of the Lotto in Luzon. If that were not enough, N/A again dusted off his unilateral-contract-abrogating skills earlier in the week, dumping a reclamation/port construction/flood control project in Pampanga Bay initiated in the last weeks of his predecessor’s term in 2010.
The piece de resistance, however, the move that could easily lead one to conclude that the President is perhaps going beyond mere ineffectiveness and is intentionally trying to sabotage his country’s economic development was the signing of Executive Order 98, imposing further restrictions on foreign investment in Philippine business sectors. The EO, which as of this posting is not, oddly enough, published in the Official Gazette (make of that what you will), apparently increases the already unproductively-strict limitations on foreign participation in real estate, the psychology and respiratory health fields, and lending companies. Presidential spokesperson Abigail Valte, whose talent for verbally polishing turds is almost daily facing greater and greater challenges, suggested the new rules would not discourage foreign investors, but rather “serve as a reference point” for those interested in investing in the country.
“Reference point.” That’s a good one.
The reason why we might be led to suspect N/A is attempting to create a Philippine autarky is that any suggestion that tightening foreign investment restrictions now, when international attention of a very critical and rather unwelcome sort is focused on the Philippines’ investment environment, is in any way a good idea is frankly insane. Although there is a case to be made for maintaining some sovereign protections over the economy, globalization is a fact of life, and has been since the first humans walked out of Africa a couple dozen millennia ago. Trying to avoid it increasingly means that the rest of the world will simply bypass those who make doing business difficult – and if the rapid descent of the Philippines to being the region’s rear marker in terms of business attractiveness and FDI intake is not clear enough evidence that the current restrictions, which were already out of all proportion to the rest of the ASEAN countries prior to EO 98, are completely counterproductive, then there is little hope this Administration will ever “get it.”
Which is why we have to wonder if the leader of the Administration is even trying, or has more nefarious motives in mind. One way or the other, it works out the same. The Philippines remains no closer to rising above being a mendicant nation, and since the current President will probably outlast the current global window of opportunity to do so, looks to be condemned to the world’s economic backwaters for a long time to come.