You can walk from Cape Town, South Africa to the port town of Magadan in the Far Eastern Siberia region of Russia, a journey of 22,387 kilometers. You cannot walk the 1.5 kilometers from the Starbucks at Caticlan Airport to Boracay Island. Does that seem fair?
But “fair” is a matter of comparison. Is it fair that the bridge from the mainland to Thailand’s most famous island resort, Phuket, needed to be 660-meter long and a bridge to Boracay would have to be 1.2-kilometer long?
Comparisons are valid and important when attempting to make decisions about similar items. My dentist buys a particular tool from China because it is less expensive. But the quality is not the same. He told me the performance is exactly the same but that the Chinese product has a useful life that is half of the European brand. However, he can purchase three of the Chinese tool for the same price as the “higher” quality tool from Europe. Therefore, with a complete comparison, the Chinese product is much better. One-third the price: one-half the life expectancy.
We cannot find any more ridiculous comparisons than from the “thought leaders” and pundits when speaking of the Philippines.
How many pundits have written volumes of articles about how Filipinos proudly taught Asean neighbors, particularly Vietnam, how to produce rice and now we must import massive amounts of rice from Vietnam. What is wrong with the Philippines and its governments?
If you are going to compare the Philippines to another country, at least make it mangoes to mangoes and not to apples.
Why must we import rice from Vietnam? Rice requires approximately 2,500 liters of water to produce one kilo of harvestable rice. Vietnam has 41,000 kilometers of rivers. The Philippines has less than 5,000 kilometers of rivers and in case the experts need to be told, rivers are the most efficient and cost-effective source of water.
In 2021, Saudi Arabia imported $1.05 billion of rice for its 36 million people. Do Saudi “experts” ask why on a per capita basis their country spends three times as much to import rice as the Philippines?
If you are going to compare the Philippines to another country, find that nation where you cannot drive from the largest metropolitan area to the second largest Metro like the Philippines. Even in the archipelagic state of Indonesia you can drive from Jakarta to Surabaya.
Also, to be fair, compare the Philippines to another country that ranks high (the Philippines is number one) having increased risk to natural disasters and not Thailand (163) or Vietnam at 174. Major natural disasters—volcanoes, earthquakes, typhoons—tend to negatively impact economic growth.
Speaking of Indonesia, disaster risk #2, there is a comparison made between the disparities in foreign direct investment to Indonesia versus the Philippines. Let’s look at a deeper comparison.
Recent comments pointed out that the Philippines needs more investment as well as more money to fund social services. Maybe we could get the funding from a larger economy, i.e., Gross Domestic Product. As a percentage of total GDP, Vietnam’s mining sector contributes approximately 2.6 percent of its total GDP, amounting to $6.3 billion. In contrast, Indonesia benefits from its mineral wealth, accounting for 1.1 percent of its GDP, which equals $14.9 billion. The Philippines, on the other hand, derives 0.659 percent of its GDP from mining, totaling $690 million, which is about 10 percent of Vietnam’s mining output.
Looking at Indonesia and its $14.9 billion in GDP from mining, foreign investment in Indonesia in 2022 was dominated by the metal mining and mining sectors, which saw more than $16 billion in FDI combined. Indonesia’s basic metal industry sector received the most foreign investment in 2022 with $11 billion worth of FDI or some 24 percent of the total FDI the country received in 2022.
While it is true that Indonesia possesses a significantly larger mineral wealth compared to the Philippines, one might wonder why we are not reaping any benefits from it. But we know why, having been told constantly over the years that Filipinos are incapable of running a mining industry, much like how we are perceived when it comes to nuclear power generation.
I said last week that there is neither an economic nor a scientific basis for opposition to nuclear energy, which is the single most efficient source of energy known to man. It is 8,000 times more efficient than fossil fuels, which are already much more efficient than wind and solar power.
I was promptly informed that the Philippines lacks world-class institutions with the capacity to regulate and manage nuclear power plants. In contrast, certain countries that apparently are “world-class” have established a notable number of nuclear plants for electricity generation. These include Argentina (3), Mexico (2), Pakistan (6), South Africa (2), India (19), and Bangladesh (soon to have 2).
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.