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Tuesday, September 13, 2016

To be an independent country, the Philippines needs to build an independent economy

September 12, 2016
by benign0
“No man is an island,” as the old cliché goes. On the back of that “wisdom”, it can be said that the Philippine government’s diplomatic posturings in recent weeks expose its people to the risk of being isolated — starved of the global trade and military umbrella they have grown dependent on forsurvival.
But, wait, the Philippines is an island! It just happens to be an island “strategically located” in one of the world’s busiest and most vital shipping lanes. It also has, within its territorial waters, a potential energy goldmine that, unfortunately, is also all but fair game to other claimants.
Just the same, the Philippines is pretty much on its own. Nobody will rescue Filipinos from their own poverty and abject weakness as a nation. Aid in any form, military or financial, merely exacerbates the very cultural traits that caused that poverty and weakness to begin with. And whatever “investments” and economic activity are spawned by foreign trade has, in the case of Filipinos, the unintended consequence of turning Filipinos into mere consumers rather than net producers of stuff.
Are Filipinos entitled to the United States’s (or, for that matter, any foreign power’s) altruistic good graces on account of its need for such? Not likely. Need has a poor record of standing up as strong value proposition to people with money to spare. People who have surplus cash do so because they made shrewd business decisions in the past. Giving that hard-earned cash to people simply because they “need” it is not something one would consider to be a shrewd business decision.
Thus, the Philippines needs to present itself as a sound investment and not just another sad Third World charity case.
To be a sound investment, the Philippines needs to prove that it can yield returns on those investments. For now, its only return on most foreign investment is the ability to provide a big market of warm bodies to (1) consume imported goods by the container load, (2) staff tennis ball factories and casinos on the cheap, and (3) work 24 hours a day answering customer complaints. Aside from being renowned for being big spenders (relative to their monthly paychecks) and patient English-speaking labourers, Filipinos are not really known to be great makers of cool stuff. Tatak Kalabaw is simply no match for Starbucks and Nike and, as such, a consistent failure to launch in the global market.
Filipinos need to abandon the old notion of the “blessedness” of poverty and embrace a more confronting definition of this condition:
Poverty is a habitual entering into commitments one is inherently unable to honour.
In embracing the above definition, we begin to see poverty for what it reallyis — not an ideological construct of emo activists but a basic resource management issue. Poverty is a symptom rather than the root cause of a society’s most fundamental problem: a lack of inherent ability to convert low-value input into high-value output coupled with a pathetic dependence on the low-value input component of this equation for livelihood.
Despite the Philippines being host to abundant natural resources, and now, an enormous supply of people, the society as a whole lacks a collective ability to apply this enormous number of people to the task of turning these resources into any sort of valuable economic output of consequence. Instead, natural resources are harvested raw and sold raw — mineral ore, logs, overseas foreign workers. Overseas, these then get turned into iPhones, karaoke machines, those shirts with the Philippine islands embroidered onto their left breasts, Honda Civics, Havaianas, and Starbucks tumblers after which they are shipped back to the Philippines to be purchased using OFW cash.
And so any discussion on “solving” Philippine-style poverty should begin with an honest regard for questions derived from key components of my definition:
(1) Why is poverty deeply-entrenched in the Philippines?
(2) Why is poverty hopelessly chronic in the Philippines?
To answer Question 1 requires an effort to understand Filipinos’ habitualbehaviours that exacerbate and deepen their impoverishment. To anwer Question 2 requires an effort to understand Filipinos’ inherent lack of collective ability to prosper.
One of the specific issues plaguing the Philippines is its commitment to its enormous population. Why did Filipinos multiply so virulently despite an obvious dependence on foreign technology to sustain these numbers? Much of what enables countries like, say, the Philippines to sustain their enormous populations is underpinned by foreign technology. Agricultural, economic, financial, and health technologies are at work helping the people of the Third World multiply and keep their offspring alive to sexual maturity (thus ensuring that population growth is sustained).
The offspring of people who lack these modern technologies are characterised by a high infant mortality rate — because lack of food and the impact on health this lack brings will kill most children before they reach reproductive age. So in pre-technological societies, population is kept in equilibrium with those societies’ inherent ability to capture energy.
The populations of “modern” Third World countries are not in natural equilibrium with their inherent energy capture capability. Foreign technology is an artificially-introduced variable in the resource management equations of such societies. Third World countries are entirely dependent on foreign technology to boost their energy capture capabilities to “modern” levels. In the Philippines, for example, the very research facility that developed farming technologies to increase the yield of the national staple — rice — is owned and managed by a foreign organisation. The International Rice Research Institute (IRRI) has been operating in the Philippines since 1960 and is credited with developing much of the high-yield rice crop varieties that are now cultivated by major rice producers around the world.
The IRRI case , by itself, is ample evidence that foreign influence and even direct intervention in a Third World society does not necessarily rub-off a weatlh creation ethic as a consequence. It raises questions around the whole idea that the Philippines needs America — or China — to prosper. This is because it has become quite evident that what is driving Philippine poverty is not external in nature. What drives Philippine poverty are internal forces. That is;
Philippine poverty originates from within.
Trying to solve a problem created by foreign technology and influence usingmore foreign technology and more foreign influence is like trying to pay off debt by borrowing more money. It’s a fool’s way of life.
Albert Einstein once said:
You cannot solve a problem using the same thinking that created it.
Foreign capital (of which “technology” as we define it is one form) will not cure the poverty of societies that remain inherently unable to embrace, absorb, and embed, foreign capital to productive (as opposed to consumerist) ends. Living within one’s means involves aspiring to a living standard commensurate with one’s inherent ability to produce economically valuable stuff to sustain that living. The Philippines, like many Third World countries aspire to live to a standard way beyond that inherent ability. And that is why the Third World remains poor despite the First World’s “best efforts”.

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