OUTSIDE THE BOX
IT is turning out to be a most interesting Christmas season.
If the conversations I heard at the party I attended last Saturday are any indication, 2012 is going to be most interesting also.
Remember Christmas 2000? There was very little holiday cheer but there were heated political discussions as there are now. But what I bet you don’t remember about the year 2000 is the gross domestic product (GDP) growth rate. GDP in 2000 grew at 3.6 percent, exactly the same as for the first nine months of 2011.
I suppose it is merely a coincidence that after months of political turmoil and the Edsa 2, GDP grew at only 2.8 percent in 2001.
It would probably be unfair to make any further comparisons between now and then. Some would say the turmoil in the government then was because of government being “evil” and trying to protect itself. Now we are told that the government is “good” and is only trying to protect the people.
However, governments have a very difficult time at multitasking. You, on the other hand, can balance working, family life, social responsibility, and personal fun time. Governments by nature of their size and complexity have trouble doing the public-service equivalent of walking and chewing gum at the same time.
Governments tend to be able to focus only on one issue and let the others stay way on the back burner.
Shoemart, as all large retail establishments, has a problem with customers and employees stealing merchandize. Fact of life and prices are adjusted to reflect the company’s losses.
Imagine for a moment that the Shoemart group decided that it must close all of its stores to concentrate only on setting up a security system to stop shoplifting and employee theft. Any business owner would laugh at that foolish suggestion yet that is exactly what is happening in the government.
The Department of Energy and Natural Resources recognizes that there have been some problems in the past with the issuance of permits for the mining business. In order to make sure that everything is absolutely 100-percent proper, no permits have been issued for months and this policy will probably continue for another six months or longer. Meanwhile, literally dozens and dozens of major investments involving hundreds of millions of dollars have been put on hold.
Unlike Shoemart that knows if it closed its stores, you would shop someplace else, the government believes that these investments will wait patiently and not invest in Peru, Mongolia, Chile, Vietnam, Indonesia and Africa. Good luck with that idea.
Money is very smart and cannot be easily fooled and it tends to be able to look into the future.
While all the “experts” tell us that the prime reason for last year’s good GDP growth and this year’s poor growth was that 2010 was an election year. However, the elections or lack thereof this year may not have much to do with the fact that foreign portfolio and debt inflows to the Philippines have dropped nearly 20 percent year-on-year. In October the inflow was 78 percent lower than in 2010. I hate to mention this, but in 2000, $500 million went out of the country versus $370 million coming in during 1999.
It is very tough to concentrate on the economy when you have other priorities.
Since this current condition is only a battle between “good” and “evil,” it is probably unfair to mention the political aspect. But I will.
Poverty is an economic issue. The “fight against poverty” is a political issue. If the “fight against poverty” were only an economic issue, then it would not matter how many poor people there were. The objective would be to do everything possible insure that all citizens had a decent standard of living.
The government has just reduced the number of poor by 5.3 million. The government lowered the minimum daily subsistence level from P52 to P46 per person. Congratulations to the people earning only P50 a day. You are no longer poor and we don’t have to worry about better jobs for you.
Back to the Christmas party. Over fine wine and cheap brandy, I saw the same attitude and heard words similar to what occurred in 2000.
For the average business person, good versus evil is less important than revenues, bottom lines, and capital expenditures. GDP growth in 2001 was terrible because businesses took a cautious, wait-and-see attitude.
I am seeing that same kind of attitude and business planning now as in 2000. Companies are pulling back and conserving capital and that is not good for the future of the country. I hope Good knows what it is doing or there is going to be Evil for this economy.
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