Why PHL is not like Vietnam
ALL of us are different. Some are fun to be with. Someone else walks into a room like a storm cloud. One person you trust without much question; others you make sure that you have your cellphone with you when you leave them.
Everyone of us have good qualities as well as bad characteristics. A close friend might also be someone you don’t want on your group project team. You might go into business with people because they are sharp, except you won’t let them have easy access to the bank account.
Everyone is good at something and not so good at something else. Countries are the same.
Vietnam News Agency: “Philippines records FDI growth of 41.5 percent in January. Foreign direct investment poured into the Philippines in January increasing 41.5 percent year-on-year to 961 million USD.”
Global FDI went into a coma during and after the Global Debt Crisis in 2008. In the Philippines, FDI started picking up around the end of 2012 as the economy and political stability improved. This increasing trend continued until the last half of 2018 as it then decreased and leveled off until the 2020 global economic pandemic.
Everyone’s brother-in-law is an expert on foreign investment and what the Philippines should do to get more. FDI is important to an economy, and we look at the numbers from our Asean neighbors like we wonder how our neighbor can get a new car every year. And by “neighbor,” we mean Vietnam. How can we be like Vietnam?
The first big disadvantage the Philippines has is that we are in the middle of the ocean. That is a big advantage for Vietnam because sea shipping cost to/from the Philippines is high. Also being in the middle of the ocean, the Philippines gets an average of 20 typhoons per year. Vietnam is hit with 4.3 “Tropical Storms” each year. Typhoons turn off the lights, cost money, and disrupt business.
We can also lower the minimum wage to match Vietnam. As of January 2020, Vietnam’s daily minimum wage in US dollars is between $5.36 and $6.04. In our NCR, that wage is $9.81 to $10.54. Even in Region 4A the minimum is $6.22 to $7.85. Local activists and unions have been calling for higher wages. But that is not going to happen often in Vietnam.
“Labor unions that are independent of the ruling Communist Party” are banned in Vietnam, and by Communist Party, they mean “The Government.”
Vietnam does not have armed insurgents trying to overthrow the government. No foreign investor pays “revolutionary tax” to spare their equipment from being burned. You will never read this in Vietnam: “Surigao City Mayor Ernesto U. Matugas Jr. condemned the communist New People’s Army for disrupting a farm-to-market project by destroying the contractor’s heavy equipment.”
Vietnam has a law that allows the government to “jail people for abusing democracy and freedoms to infringe on the interests of the state.” Post comments that are negative about the government, go to jail for six months. Spread “anti-state propaganda,” it is 11 years in the slammer. International companies are not much into things like human rights. Just ask Apple, which is lobbying against a US bill aimed at stopping forced labor in China.
Vietnam has advantages over the Philippines in attracting FDI. We can change some of our “bad characteristics” but not all. Too bad everyone’s brother-in-law has no idea at all on how to promote our “good qualities.”