Monday, March 29, 2004

Foreign investment and Foreign aid

Dear Mouse, This is my opinion, mouse. Agree or disagree,wala silang magagawa dahil wala akong comment box. hehehe Every time I read about presidential candidates wooing foreign investors and blaming the flight of many of these business firms to China due to the country’s peace and order and unfriendly business environment, I feel like becoming a tomato again. A tomato is a fruit but is always mistakingly categorized under vegetable. (labo noh). I remember my professor in Economic Development talked about pre-EDSA 1 days when real estate in the vicinity of EDSA dropped considerably low due to political instability of the nation and the place has always been were the action was in terms of demonstrations. He said many people were contemplating on selling the properties and leave. He said, that was the best time to buy. He added that the best investment is done when the “blood is still in the street”, when there is chaos, when there are threats. He was right. Bloodshed did not stop the group of American construction executives in going to Baghdad and start the reconstruction of war torn country. This will be a verrrry lucrative business. Bakit kaya sa Mindanao,walang nakikidnap na mga expats o kaya mga big businessmen. Kasi escort nila yong mismong mangingidnap. There is such a thing as dowry for women who want to marry. Dowry is an offering. So read between lines. The pioneering MNCs in China faced all the obstacles offered by a Communist country for investment with rules and regulations in favor of the latter in exchange of educated manpower and cheap labor. If people think that foreign investors help in the economic development of less developed countries,think again.It is true they may pull the GNP growth rate up but one should realize that small countries that are foreign investors-dependent will show a fluctuating GNP growth parallel to the profit-maximizing wolrldwide operations of the huge business firms centrally controlled by the parent company that is located in the highly developed economies.Pag nagkasipon ang malaking bansa, lagnat ang maliit na bansa. Some look at the ideological side of the foreign investments, but take a look at the economic side against the private foreign investments and the activities of the business firms in particular: 1. extractive industries = they focused on mineral and raw material production 2. oligopolistic market positions=they can manipulate the price and restrict entires of potential competitors that may provide new technologies, special skiils and products 3. they buy from their overseas affiliates; the importation of which may impose high interest costs on the capital borrowed byh host governments 4. the impact of the MNC investments on foreign exchange is short run. As they repatriate overseas profits, they also affect the capital account of the host country. The Current account may likewise deteriorate as a result of importation of intermediate products and capital goods. 5. they may pay corporate taxes but they also enjoy liberal concessions, investment allowances and disguised public subsidies. 6. Some MNcs use their power to influence government policies that result into negative social and negative benefits to host country. When presidential candidates say that they will attract more foreign investors by providing them friendly business investment atmosphere, I do not know how low they can go… Will it be a 60-40 or a 50-50 or a 40-60? Another source of foreign exchange is foreign aid .I remember Poe saying about opening the windows for loans to small businesses from foreign aid. He should be informed that not all foreign aid come in the form of grants and loans and if ever they are, there are long strings attached to them. Although the objective of the donor country is to help less developed countries, one is not naïve to realize that it is economic self interest in the end that motivates them. Take for instance a loan at a lower interest rate with the condition to buy a capital intensive equipment being phased out from a donor country and is being replaced by a low maintenance –more efficient machines. Nagkaroon na sila ng market sa kanilang obsolete power guzzling machineries, nagkaroon pa sila ng pautang na loob. Saan kukunin ni Poe ang loan para sa small businesses. Nakatali na ang mga loan na yan. When he said that he will not resort to foreign borrowings, he did not realize that foreign aids nowadays are 70 per cent loan with softer interest rate and 30 per cent grant. Grants are earmarked for specific projects with nominal values that may include the cost of technical assistance in the form of manpower sent to assist in implementing the projects. Sa totoo lang, walang himala oops. Minsan walang nagaganap na lipatan ng ng pera sa donor country at sa recepient country. May papeles ng pagpapautang, pero ang pera ay hindi dadaan sa atin kung hindi diretsong ibabayad sa mga kumpaniyang nakalagay na sa kontrata magiging supplier. Ang tatanggapin natin ay mga goods na. May mga foreign aid din na hindi utang. Kagaya ng magdodonate sila ng mga equipment o mga sasakyan. Pero ang condition ay bibilhin ang spare parts doon sa donor country. Shi….kanyo. OO Virginia. Ganyan talaga ang buhay. Kaya noong bagong dating ako rito sa Estet at binigyan ako ng mga second hand na sweater, at mga gamit sa bahay, nalaman ko bandang huli na ang sweater pala ay kung hindi makati ay masyadong expensibo ang pagpapadry clean. Ang mga gamit ay mga recalls ng kumpaniya dahil may hazard. Oh well, malaki raw ang utang na loob ko sa kanila. Oo na nga. Galisin sana rin sila.Ang pusang walang utang na loob. Kung magbibigay sila sana ay yong talagang gustong makatulong at hindi dahil may gusto silang idispose na hindi na nilang kailangang magbiyahe sa Goodwill at Salvation Army o kaya ay magbayad sa landfill ng garbage fee.Sandali nasaan ba yong exercycle ko? Kanino ka nga ba ibinigay iyon? The CA t


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