BBM's travels and the new bromance with China Featured

I WILL not begrudge BBM's traveling all over with his barkada, the latest of which was to Davos with an entourage of 70, including several two-faced businessmen prominent in financing the People Power Revolution that booted the Marcos père out. But then again, it is the nature of the beast to kiss the ass of the powerful. And they are critical components in BBM's rebranding of the Marcos name to the international community, which could be the underlying purpose of these sorties.

His gallivanting — seven trips in 8 months ostensibly seeking investments from abroad — would be forgiven if he can truly get foreign direct investments (FDI) to flow in. Reportedly, he got pledges from Jakarta ($8.50billion), Singapore ($6.54 billion) and China ($23 billion). But China's pledges are suspect. We had similar ones during Duterte's presidency when he vouchsafed fealty to Xi in that famous "I simply love Xi Jinping" trip to China in 2018, conceding our negotiating advantage on the arbitral tribunal ruling that negated the nine-dash line, and the subsequent humiliation our fishermen suffered, prevented from fishing on their traditional fishing grounds in the West Philippine Sea. Our country lost its collective hymen, with nothing to show for it in return.

And now we have another president declaring a naive foreign policy — "friends to all, and enemies to none"; touting another set of pledges. We lost our virginity during Duterte's watch. This time around, it's rape.

This article hopefully reorients BBM on the political economy of his travels and the cost/benefit of his relations with China. This is not to belittle BBM's grasp of economics and foreign relations, having imbibed some sort of expertise during his stint at Oxford and Wharton.

Belt and Road

These pledges are China's come-on to the Belt and Road Initiative (BRI), one which likewise enticed Duterte despite some counter-voices in his cabinet. BRI was Xi Jinping's bold foreign policy scheme launched in 2013 with China underwriting billions for infrastructure development in countries along the old Silk Road or Silk Route linking Europe to Asia. This ambitious plan was China's middle-finger gesture to the United States and the West that there was a new kid in the block presaging the rise of a hegemon in the East — using its economic and financial clout. This coming out was a turnaround to the architect of modern China, Deng Xiaoping's dictum to "hide our capabilities and bide our time; never try to take the lead." This time, the BRI was Xi Jinping's attempt for China to claim global leadership as the world's second largest economy.

The Duterte-Xi Jinping bilateral cooperation produced agreements amounting to $24 billion as part of the maritime Silk Road — although the Philippines was really nowhere a part of the old Silk Road. We don't exactly know if these pledges were delivered. (For the curious, the Old Silk Road was a network of routes when China opened trading with the West in 130 BC until 1453 AD, when it was closed by the Ottoman Empire.)

Stark lessons learned

By 2019, China had 3,000 BRI projects with 68 countries. These were an easy way for China's state-owned enterprises (SOE) to secure contracts abroad. Massive capital flowed to partner countries in the form of loans. Eventually these resulted in unmanageable debts. An added enticement to BRI partners in securing loans is China's "no strings attached" model, unlike the loans from the West that were conditioned on extraneous terms — human rights, environmental concerns, pollution footprints, etc. China's loose stipulations are suited to the psyche of developing countries' corrupt bureaucracies — just like the Philippines.

A case in point is the Hambantota Port in Sri Lanka. With unethical practices, mismanagement and corruption, even the interest on the $8 billion loan remains unpaid. China converted this into a debt-for-equity swap with a 99-year lease for China to manage the port. China now has a foothold on the region — not unlike what the US had with the Philippines at Subic.

Malaysia had the audacity to cancel a $23 billion rail and pipeline deal with China after Prime Minister Mahathir Mohammad in 2018 attacked it as a "new version of colonialism." Even the China-Pakistan Economic Corridor (CPEC), touted by both China and Pakistan as a flagship project, had to be renegotiated with a $6 billion bailout from the IMF.

PH economy under BBM

Now, seven months into his term, BBM may lay claim to some successes although many of these are derivatives of Duterte's policies. But the recent sugar crisis is solely BBM's — attributable to the hoarding and procurement scandal that resulted in the resignations of the officials of the Sugar Regulatory Administration (SRA) and the eventual firing of the executive secretary. And now another problem in the agricultural and food sector, symbolized by the shortage and inflated prices of the lowly onion, should give the footloose traveling president second thoughts about his continued tutelage of the agricultural department. As things are perceived, he is either incompetent as aggie chief or as president or both. Either way, he needs to give up the former and leave this to some real agriculture expert.

But despite his presidency, surprisingly, things seem to be looking up. Latest multilateral pronouncements identified the Philippines as one of the 10 newly industrialized countries. It seems that our economic growth is outpacing many developed countries and are among the five Asian "risers in the coming decade," including our neighbors — Indonesia, Malaysia, Thailand and Vietnam.

But the Philippines' $100 billion annual exports comparatively lack economic similarities with the other four with annual exports along the range of $200 to $400 billion. But one thing going for us are two distinct advantages: the OFW remittances that stabilize our balance of payments and growing our external reserves, and more importantly, the service exports — the business process outsourcing (BPO) industry. Ours has emerged to be the world's largest, competing with behemoth India.

However the multilaterals have decreed further that unless we loosen our anti-FDI provisions in our constitution, we may not be able to catch up in fulfilling our potential. A menu of reforms has been suggested. One is to ease environmental restrictions on mining. We sit atop billions of dollars of copper, nickel, cobalt, gold and iron. Another is to rethink our policies on joint ventures in the WPS for oil and gas. And encourage more competition in the domestic markets by continuing to break monopolies. We did well with opening the telecommunication industry but allowed cronies a stake in. And more importantly, reform the bureaucracy where corruption is endemic, applying the rule of law. But drastic reforms on easing constitutional limitations are a sine qua non.

Overall, we have one huge advantage in the long run over the other industrializing economies. Our education system with the biggest budget is excellent but our demographics are superior. We have the lowest median age, 24.6 years, compared to Malaysia, 28.5; Indonesia, 30.2; Vietnam, 30.5; and Thailand, 37.7.

Perhaps BBM may dwell on these points while en route to another exotic place. Or, he may just have to grow up, jettison his barkada and hunker down to business.

Read 134 times Last modified on Wednesday, 01 February 2023 09:45
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