HERE are the opening lines from Hamlet’s soliloquy (it goes on much longer and is worth reading, and the play is worth watching).
“To be, or not to be, that is the question:/Whether ‘tis nobler in the mind to suffer/The slings and arrows of outrageous fortune,/Or to take arms against a sea of troubles/And by opposing end them.”
Substitute “to be, or not to be” with “to think or not to think,” and I think we may capture the problem with more than a smattering of our economists, policymakers, and commentators on any pressing issue. Instead of taking arms against a sea of troubles and by opposing end them, they rely on the old, tried and proven failures like that of an over-40-year-old “Washington Consensus” that Washington has abandoned as “a promise that had not been kept” (Jake Sullivan, National Security Adviser on April 27, 2023), and bromides like leave it to the private sector and the best government is the least government (yet complaining where is government when they want something). Add their abandonment of industrial policy for laissez-faire, as it failed in our iteration and is too hard.
That is the equivalent of being an economic Pontius Pilate washing one’s hands of policymaking and execution and taking the lazy and unimaginative way by chickening out and leaving it to the magical private sector, even though it is public policy of the highest order and necessity that we are dealing with.
They lament we are at crisis on cost and availability of oil, fertilizers and more. Their solution is — no surprise — no regulation, as the government is too lousy and our politicians too populist and most naive, run to our taipans to save us? As if governance, rather than profit, is their reason for being. I am happy many taipans do CSR and are responsible players, but they are not policymakers or government! Nor their mission to engage in public policy. It is like asking a cardiologist to be an oncologist. Now what? Nothing except incoherent babble and not worked out thoughts, like defaulting to leave it to the private sector as always on any issue. It is clear that the times transcend the ability of what the private sector is equipped to deal with. We face daunting regional and global issues that even sovereigns are incapable of handling individually and are scrambling to work on collectively. Yet here we want to ask the private sector and taipans to take care of it! It is not easy public policy that is needed, but these are times and issues that demand it.
Yet that is not all, horrible as it is. They all trot out another cliché that a crisis is a shame to waste or some platitude to that effect. OK, what is their prescription of dealing with it? Some vague tired reform dating to the 1980s like open the economy to foreign investment without limits and remove restrictions on land ownership? Ano? How does that provide energy and food security? Didn’t that lead to shutting down of refineries and further imports of food staples? We have even less industry now, but lots of warehouses, cold storage, and logistics companies to feed the families of OFWs who hopefully don’t lose their jobs. The biggest job openings domestically will be delivery personnel in their “hugas kamay” vision for the Philippines. Brilliant.
If we are incapable of original and critical thinking, can our economic Pontius Pilates at least learn from what our immediate neighbors successfully did? And without being the teacher’s pet, to a multilateral panacea of removing any safeguards for local industry, and just open everything to unrestricted foreign investment. I need to remind readers of something I have previously written.
When these teacher’s pets and hugas kamay economic Pontius Pilates say look at say the US, Europe, Hong Kong and Singapore — they say they have no statutory limits on foreign investment and show how naïve and uninformed they are. First, there are limits, like transportation is limited to 40 percent foreign ownership in the US, and within EU to members in Europe. In all of them, regulators are allowed to disallow foreign investment if against national interest. Please look up CFIUS and their record. Even in the all-foreign- investment-allowed Hong Kong, regulators decide on your fitness, for example, to own a bank or open an investment bank or asset manager. When Cable and Wireless sold HK Telecom (their PLDT) in 2000, who could buy was vetted, and it was sold to PCCW (owned by Richard Li, son of Li Ka Shing). In 2006, when a group led by Macquarie wanted to buy it, they were told you are not going to get approval, as we are not convinced of your commitment to Hong Kong, given that you are relatively new to investing in Asia. That is reality versus accepting propaganda and marketing like the limited thinking teacher’s pets are.
On industrial policy, all countries got it partly wrong (even Japan and Korea), but stuck with it and improved as they knew manufacturing had to be developed and nurtured for sustained and broad economic growth and prosperity. You think Japan became successful at cars, appliances and electronics because they left it to the private sector and foreign investment? It was government policy set and implemented by the powerful MITI (Ministry of International Trade and Industry) and its successors. What they did was protect them as they grew, but made them grow to be globally competitive and abandon those which did not measure up, given a timeline to improve quality. You think China just let market forces and foreign investment make it the dominant player it is in processing rare earth minerals, renewable energy, batteries and electric vehicles? If you believe that, let me sell you some VHS tapes and Nokia phones. Or even the EU when they decided to challenge Boeing with Airbus?
To those who worry about capitulation to China on the Spratly Islands, well, what these economic Pontius Pilates are doing with their naivete and lazy reliance on failed over 40-year-old solutions that even its originators have abandoned is to me, the economic equivalent of surrender. Grow up and think critically with love of country and patriotism rather than be Pontius Pilates engaging in economic psittacism. What a kakistocracy among many of our supposed thinking class.
The author is an independent director of the state-run Maharlika Investment Corp.