Let’s face reality

(Article written by Peter Wallace, president of the The Wallace Business Forum)

The President gave a speech to the business community
on Monday – 26
business organizations were represented. And even then
the Intercon
ballroom (not a big one anyway) was only full because
a lot of media were
there. That must tell her something. What it tells me
is that she’s got a
lot of work to do to woo and win the businessmen and
women. And she’d
better do that work because jobs are needed. Mind
you, she said
employment was up – yes it was but so was
unemployment. More people
entered the workforce than there were jobs available
(the official
statistic is 11.7 percent unemployment in first half
of 2000, worsening
to 12.1% in first half of this year).

What’s hard to understand is why she requested (it was
her request) the
audience in the first place. Normally when a president
wants to speak to
a group of business leaders, it’s to announce
something of considerable
importance. There was no important announcement at
this lunch.

I don’t know who wrote her speech but it’s full of
such distortions as
the one on employment. Another example: “Tourism is up
13%.” Indeed it
is, but Thailand attracted six times more tourists
than RP in 2004. And
15.7 million people visited Malaysia compared to the
paltry 2.3 million
that came here. Instead of boasting of a modest
increase she should be
expressing concern at how poorly we’re doing compared
to our competitors –
and saying what was being done to correct it.

“The malls are full.” Indeed they are, it’s a cheap
way to cool down, and
be with friends. People aren’t buying: The CPI (a
measure of spending)
was up only 3.8% in the first eight months. In
Thailand, it was up 5.4%
and in Indonesia, 13.2%. And 3.8% is a sharp drop from
6% last year.

“The airports are jumping” (but Naia-3 is still not
open and payment to
the original proponents hasn’t been made). “We are
busy,” “The economy is
poised for takeoff.” I don’t wish to denigrate the
President, I’d
actually like to see her succeed, because the
alternatives all seem so
much worse – at least at the moment. But she can’t if
she doesn’t face
reality. As I said in an earlier column, I like to
know what I’m doing
wrong so I can correct it.

Well, the President is painting a rosy picture of a
bush that is full of
wilting flowers. Someone needs to tell her to cut them
off so new roses
can grow. She needs to know, and admit what’s wrong so
she can fix it.

The economy is not poised for takeoff. For an economy
to takeoff,
investment must be growing at double digit numbers and
be in large
amounts. In 2004, about $469 million of foreign
investment came into the
country. Less than half of what our neighbors
captured: Indonesia
received $1.02 billion, Thailand $1.06 billion, while
even Vietnam
captured US$1.6 billion. China, of course, gobbled up
most of it – $60.6
billion.

Domestic investment was little better – some $600
million to $700
million, up only 0.2% over the same period last year.
That’s no
improvement at all.

There’s no economic takeoff with numbers like that.
With numbers like that
I’d be worried, say so. And then do something about
it.

I took the liberty of drafting a speech last week that
I imagined she
might like to give. Here it is:

“We’ve had an uneasy relationship, you and I, in
recent times.

I’m here today to see if there’s a way we can work
better together.

I admit I’ve been too distracted by all the political
events that have
been going on to be able to focus where I really
should – on establishing
a truly sound economy. And stable foundation for
business.

I am particularly worried by the low levels of
investment and recognize
that much of this is due to the poor image we’ve
projected overseas – and
domestically.

Well I want to ask your help to change it. The
American Chamber
prepared a Roadmap sometime back, and I’ve read it.
I’d like to take it a
step further and ask if you’d form a small group
representative of
yourselves to develop for me a more comprehensive,
doable plan for the
next five years.

I’d like specific suggestions, not the generalities
even I, I admit we too
often fall into.

We need to concentrate our efforts on five core
sectors: agriculture,
mining, ICT, tourism and health care.

There are other sectors of course that are also
deserving of our support,
and they’ll get it. But we can’t do everything. And we
have limited
resources, so the bulk of those resources will go to
these five sectors.

And because they are so important to our economy, I’m
going to request
Congress for high priority to create Departments of
Mineral Development
and of Information and Communications Technology. If
these are to be our
future they must get the high-level attention and
support only a Cabinet
secretary and his staff can provide.

I’m also mandating that at the start of the next
school year all education
will be in English. Patriotism is not defined by
language, but future jobs
are. IT requires English. We are a leader today, but
won’t be soon if we
don’t graduate more students with a sound grasp of
English. It’s equally
important in our development of tourism (two areas the
President lauded in
her speech, but overlooked this crucial point for
their future).

I recognize that much of the uncertainty today has
been attributed to me,
so I must change. I think I’ve been doing the right
thing, I’ve certainly
tried to. But it hasn’t come across that way. So, as
of today you’ll see a
new me. I will no longer intervene in the work of my
secretaries. I have a
good, experienced, professional team. They know what
to do, they’ll be
left alone to do it. I’ll just establish the general
guidelines, the
vision, the direction I wish them to take. Now I know
it’s easy to say
things but the proof of the pudding is in the eating.
So the proof I offer
you today is as follows:

There has been some talk of a new commissioner at
customs. I’m not sure
where that comes from, but let me assure you I’m
pleased with Balong
Arevalo and will be keeping him as commissioner. I’ll
be expecting him to
seriously address the high level of smuggling that
still continues today –
some P90 billion is estimated to be lost in potential
government revenues
because of smuggling.

I’ve also instructed the secretary of justice to move
much more swiftly on
the 27 tax evasion and corruption cases the Ombudsman
has sent to him. I
expect at least six of those cases to be in court
before year-end.

We will pay Philippine International Air Terminals Co.
$300 million before
Nov. 30, and then argue the rest. The airport will be
opened and fully
operational by July 1 next year – see I’m being
realistic now in my
promises.

We urgently need more power plants. I’ve instructed
Secretary Lotilla to
fast-track these, after all, power plants are pretty
standard things these
days, and privatize NPC power plants through a “Fire
Sale.” Let’s get them
off our books. And we will provide purchase contracts.
I’m aware of the
reality that we’re not going to get anyone to invest
in a merchant plant.”

And so on, specifics of what will be done, and then do
it. And get the
leading businessmen actively involved in helping
achieve a truly growing
economy. I had hoped that that would be what the
speech would be all
about, it wasn’t.

How can you help when it seems help isn’t wanted?
Worse, it isn’t
recognized as being wanted.