Cha-cha bloc told: review liberalization

By Max V. De Leon
Published on Page A1 of the July 17, 2006 issue of the BusinessMirror

DON’T mix up fact and fantasy.

This was given by the Fair Trade Alliance(FTA) to Charter change advocates who, the group said, appear to be confusing the public with spurious claims that further liberalization of the country is the way to go to rev up the economy.

Wigberto E. Tañada, FTA lead convenor, said a look at the facts would prove otherwise, with economic laggards like Bangladesh, Indonesia, Nepal, Pakistan and Sri Langka as clear examples.

“These countries have liberalized land ownership, natural resource exploitation and foreign entry into any area of the economy, he noted. “But like the Philippines, these are at the bottom rungs of both the competition and investment ladders. Most of these countries also happen to have a parliamentary system, which our ‘bright boys’ in the executive and legislative branches claims is the ultimate solution to all our economic woes,” Tañada said in his speech before members of the Philippines Chamber of Commerce and Industry (PCCI) on Friday.

On the contrary, countries with protectionist and nationalist policies have been doing far better.

For example, Tañada said China’s economy remains highly regulated and even protected, with its Constitution stating bluntly “all land is owned by the people.”

While it is export-oriented and welcomes foreign investment, Tañada said, China protects domestic producers by maintaining tariff rates that are three to five times higher than that of the Philippines.

It also has customs policies and procedures that make it difficult for foreign imports to come in just like in Europe, America, Australia and Japan, Tañada added.

Japan and Korea, he said, maintain very strict rules on landownership, while in Malaysia, foreigners can own a residential house and lot but not commercial, industrial and agricultural lands

In Thailand, he added, the Alien Business Law regulates foreign investment in natural resource exploitation and in areas reserved for the Thais such as agriculture, transportation and construction.

“India and Vietnam also have restrictive policies on land and imports, and yet, these countries are growing much more rapidly than the liberalized Philippines and attracting more foreign investment,” he said.

The Philippines, Tañada noted, is not new to protectionist policies, and in fact, it was during the nationalist regime in the 1950s and 1960s when the country had its economic peak.

Still, Tañada said liberalization advocates are still spouting the same old mantra – liberalize and you will grow!

“But have we not liberalized the entire industrial sector and opened it up to full foreign ownership? Have we not liberalized the entire financial sector, making it one of the most open in Asia? Have we not liberalized the trade sector, exposing our domestic industry and domestic agriculture to the full brunt of foreign competition, most of which is subsidized foreign competition? Have we not liberalized the agricultural sector, drastically reducing in the name of agricultural deregulation the support the government used to extend to small farmer development?” he asked.

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