I RECENTLY gave two interviews with the later one airing live with Mimi Ong on “ANC Market Edge” and the earlier taped one with Richard Heydarian airing a week later. My thanks to both for continuing to find me worth their time. I got many direct messages thanking me for making my views clearly but also correctly noting my agitated demeanor. Why was I that way? Upon reflection, it was probably my frustration on how we keep arguing over things or missing points that are already settled in most other places and definitely in all the countries I covered in Asia. My apologies for manifesting that frustration that way.
Before I get to that, I am worried about all these school and work cancellations due to rain and flooding. How can we properly educate and be productive if there are increasingly numerous and lengthy suspension of classes and work? I understand the safety issues, but surely, we need to do more than just suspend classes and work, and do something like guess what? Flood control! The suspension is usually for schools and government, and it is up to the private sector to decide for themselves. I can understand the safety of children, especially preteens, but why can the private sector continue to work much of the time government work is halted? Are the former such superior beings or the latter so delicate? We are the most typhoon-affected country, but this is not exactly news. In spite of all those thoughts and prayers, address this concretely the way similarly situated countries like Cuba have done. Instead, it has just gotten worse, and the suspensions more frequent. Good luck getting more investment with that productivity and education.
To my topic, I was aghast at both the wrongheadedness and harm that will arise if one takes some of the comments of Caritas head Bishop Alminaza on Pax Silica seriously. I have no problem with the usual lofty but empty motherhood statements, but there are two points where I think real harm is possible. Let me quote from The Manila Times on Aug. 4 — “Caritas said it opposes the 1,620-hectare technology zone in its present form, citing unclear answers on who will manage the facility, where its massive energy and water requirements will come from, and which communities will bear the environmental and social costs.” What is the present form? Nothing. It is a nonbinding memorandum of agreement that is a preliminary concept paper that has yet to be ratified. Don’t shoot the horse before the race starts. I want a robust analysis, too, but wait for something specific to be proposed, then debate and discuss. To use another metaphor, don’t poison the well.
Then he adds, “Genuine development should build Filipino ownership, technology and manufacturing capacity rather than extract resources for foreign-controlled supply chains.” Kumbaya bro! This is so naïve and misinformed. What does he mean? By that standard he should throw out his cell phone and computer, and all his appliances as the only finished products that are Philippine-owned, made using our technology and for manufacturing — I am already kindly including licenses or acquired technology — are in cement, food and limited levels of pharmaceuticals, with some other tiny exceptions. Let’s assume we are talking about complex and proprietary processes whether at the proposed Pax Silica site or elsewhere. Do you think any company would even contemplate transferring what they spent possibly billions of dollars on developing, improving and patenting just to open a factory here? Most Apple products are made in China, you think the intellectual and proprietary information were transferred to Foxconn? One naïve person posted on my YouTube interview that China got technology transferred in the past. As I explained to him — they are a 1.4-billion-person market, and it was for legacy industries and not cutting-edge technology. That was the one exception. No one else has the clout to even get that limited exception. Get real. The advantages are export revenues, employment, taxes, follow on investments, robust supply chains and so on. Not proprietary technology and processes. Let me give you a stellar example of a country that understands foreign investment pragmatically and is very nationalistic. From Google AI here is what Samsung Electronics, the biggest single foreign investor, invested in Vietnam over about a decade or so and its impact. Note it is all foreign direct investment, technology and ownership, not Vietnamese, so the opposite of the bishop’s demands. Result?
– Total commitment: Reached $24 billion by late 2025, up from $22.4 billion in 2024.
– New outlays: Planning major expansions, including a phased $4-billion chip packaging project in Thai Nguyen province and a $1.5-billion semiconductor testing plant.
– Facilities: Operates multiple manufacturing complexes (primarily in Bac Ninh and Thai Nguyen), a massive research and development (R&D) center in Hanoi, and several local subsidiaries. (My note: This R&D is primarily to train employees for the advanced work they undertake).
– Economic impact: Generated $64.9 billion in revenue and $57.1 billion in export turnover out of Vietnam through its major local entities in 2025.
Same with the other side: the Washington Consensus, fully open economy and no industrial policy crowd which is a foundation for economic servitude. Look at the evidence and results of all our successful neighbors. That group of stuck-in-the-1980s economists repeat the shibboleth that we failed at industrial policy previously. Then what is their solution? The opposite of Nike’s slogan — just don’t do it. After 40 years, massive underperformance resulted. We should do industrial policy better instead. Even United States national security adviser Jake Sullivan said — “The Washington Consensus is a promise that was not kept.” (From the speech “Renewing America’s Economic Leadership,” April 27, 2023.) Want more proof? What did the West do when they had their crisis in 2008? The opposite of what they told us to do in 1983 and 1997. Wake up and stop arguing about things settled decades ago elsewhere like the nature of foreign investment and industrial policy. Base decisions on facts, results, and not preferences and out of date, wrong and lazy thinking. These types are proof of the definition of futility and that it is easier to be fooled than convince someone he was.
The author is an independent director of the state-run Maharlika Investment Corp.
