The Nationalist Cause

(Responding to Herman Tiu Laurel.)

There are many ways to think about what being nationalistic means.

Some serve their countries with a gun in their hands and others hold peace rallies denouncing the brutalities of war. Others insist on using the native tongue (whatever that may be in an archipelago with several languages/dialects) and others call for he removal of 'Filipino' language classes, stressing the bigger pay off from gaining proficiency in English.

Still others believe that nationalism is best manifested in protecting Filipino businesses and compelling Filipinos to buy nothing but Filipino products - regardless of quality or cost.

But, what is a nation? How does one become nationalistic?

It would be surprising to figure out just how nationalistic Jose Rizal would be in the context provided by Manuel L. Quezon. Rizal wanted representation in the Spanish Cortes, Quezon wanted independence.

On one hand, Rizal's nation was the Philippines as a province of Spain. Quezon's nation was what he and other landed caciques negotiated with the American Congress.

The nation, as rendered by so many politicians after Quezon, is basically one where their interests and wealth were protected.

If you had asked the sons of people who toiled in their land, the workers in their factories, and the servants that cleaned their out houses, their definition of what a nation is would probably be vastly different.  It would probably be closely linked to their physical communities, just like the ancient Muslim Kings conceived of their settlements.

(However, imagining an alternate Philippines as a proletarian Utopia gives me the same shivers as the Behavioralist Heaven of BF Skinner.)

Regardless of how nation would have been conceived, I think that we are at the cusp of redefining it and it has never been completely defined.

In this age of social networking and BPOs, I think the very idea of where one's community is and where one actually works has changed for a few million Filipinos.

Of the infinitessimally small portion of Filipinos who earn a living online, a number might come to the realization that it really doesn't matter what nationality is paying for your work.  The only thing that matters is that the money comes in and projects are turned over on time, according to specs.

If you take it further and imagine what they do with the money they earn, you'd probably be shocked by the anti-nationalistic spending that they do.  Most of what they buy is probably imported, with a few exceptions.

Even if they wanted to buy all Filipino, they'd have a tough time doing so.

Just consider Coca Cola or San Miguel beer.  You'd think that Coke actually has Philippine sugar in it, but it doesn't or at least, not as much as it should have. And then consider San Miguel Beer, does the Philippines produce barley or hops?

Have you ever eaten Jollibee Palabok? The three or four shrimps they have there most probably come from Thailand.

When you flip on a light, do you think that the power coming through it comes from Philippine coal burned in Philippine made coal plants?

The point is, the things that make our lives as Filipinos living in the Philippines convenient or enjoyable are all imported completely or are made from imported components.

What most people aren't aware of and what most very rich people aren't willing to state plainly is that more Filipinos could actually have more of these things if there weren't constitutional provisions that barred the 100 percent foreign ownership of capital.

The kernel of the idea is simple, if we didn't have such a restriction on foreign capital, we'd probably see a bigger influx of foreign business here in the Philippines. More businesses equals more people employed, higher demand for goods and services, more people with purchasing power, better prices for goods, etcetera.

If, for example, more foreign businesses set up shop here, perhaps there'd be a greater demand for power and the ordinary consumer wouldn't have to be burdened with paying for the over capacity of power producers.

The way things are, foreign businesses thinking of setting up business here probably encounter the 60/40 ownership limits and try to figure out what it will really cost them.

Most foreign businesses balk at the idea of either ceding control of their business to Filipino counterparts or look for partners to put up the 60 percent stake that's needed. The result? Well, fewer foreign businesses coming in, less people being employed, fewer people with purchasing power, and the cost of goods being higher than it should be.

How many Filipinos do we know of can really afford to have a 60 percent stake in any major, multi-billion peso enterprise?  I have no idea, but if the pareto theory holds true, then perhaps 20 percent of Filipinos own 80 percent of the capital. 

So, a foreigner coming here wanting to invest cannot do so unless a Filipino or several Filipinos can put up a 60 percent stake in the business.

The thing is, the typically overly shrewd Pinoy will probably look at the foreigner and figure that he has the upperhand, then try to put one over the foreigner.  How?

Well, it can happen in a number of ways and the simplest example is this:

The Filipino investor will probably tell the foreigner that he doesn't have enough capital to put up 60 percent, but can manage only 10 percent. Granting that the foreigner has some strategic interests in the Philippines and really wants to set up shop here, the Filipino investor could tell the foreigner to put up 90 percent of the capital but on paper make it look like a 60/40 split. Now, arrangements can be made internally for splitting up the profits, but instead of the Filipino earning just 10 percent (the proportion of funds he invested) he could probably play his upperhand and demand more than 10 percent of the profits for his trouble.

But getting 20 percent for 10 percent of the stake in the business is even small in some cases.  Some are even just nominal stakes.

Now, how's that for entitlement?

That, my friends, is how the rich get richer here in the Philippines.

Can anyone say PLDT? How about TV5? Ayala? SM? Cojuanco? Aquino? Marcos? Ramos? Macapagal?