The head of a Swedish business delegation said the Philippines had remained a “complicated” nation to engage in trade with, notwithstanding its robust economic growth.
This observation was aired by Oscar Stenström, state secretary to the minister for European Union (EU) affairs and trade, in an exclusive interview with the BusinessMirror on Wednesday.
He is in the country for two days, accompanying “Swedish Business,” offering transportation and air traffic control and management solutions. These are only two among dozens of Sweden’s business expertise.
Stenström is making the rounds of top government offices not only to market their products, but also to express concern about the way the Philippines conducts business internationally.
“My discussion tomorrow [November 23] with government officials is also about the obstacles and the hurdles to trade. The Philippines is still seen as a rather complicated nation to do trade with,” he said.
“The transparency index, ease of doing business, level of problems of corruptions and also the question of human rights are the concerns of Swedish Business, putting economic and political risks by being engaged in the Philippines,” Stenström said.
The official noted that, while human-rights violations have existed in previous administrations, the situation in the Philippines has “considerably worsened” in the second half of 2016, as a consequence of President Duterte’s violent war on drugs.
“The second half of the year was marked by a serious deterioration in respect for the right to life, due process and the rule of law,” the EU stated in its annual report, entitled “Annual Report on Human Rights and Democracy in the World in 2016,” published on October 16.
The government, however, consistently denies the existence of extrajudicial killings in the Philippines, even rejecting calls made by United Nations member-states for in-depth and impartial probes.
For the EU, however, the Duterte rhetoric against individuals involved in illegal drugs contributed to the killings in the country.
The Swedish trade minister said the country’s 60-40 sharing scheme with foreign business is also one of the issues Swedish businessmen are also concerned about.
He said he hopes that this can be addressed when the Philippines and the European Union has finalized a free-trade agreement.
“We hope that we achieve [a] free trade agreement with the Philippines and the EU and, hopefully, that issue could be solved, for the future,” he added.
Stenström said there have been two rounds of talks so far, but its realization, he noted, depends on the political developments in the Philippines.
Told that the Duterte administration has a different version of what is being peddled outside of the country, Stenström disagrees, saying, “The political uncertainly on where the Philippine government is going, if you read about the Philippines in the European press, it’s the uncertainly of the political forecast [that is alarming].”
He added everyone is aware that the Philippine economy is growing as a sign of confidence to the Duterte administration, but “the main risks regarding political human rights is the most sensitive.”
According to the minister, he will bring up with the Department of Transportation Sweden’s offer of buses and related infrastructure “because we have many Swedish companies that are well placed in the market.”
“We offer our BRT [bus-rapid transportation system], because I have seen with my own eyes the great need where I see the congestion in Manila. The ability to commute in big cities is crucial for safety and sustainability, but also for the long-term economic performance,” Stenström said.
“If you’re stuck in the queue, you don’t contribute to the economy,” he added. “The Swedish government also provide credit lines for our companies [where] you can [also] access the export credit guarantees and that’s important to finance this system solutions.”
He added: “You can alleviate 95 percent of the substance value of the contract through the export credit system, you have to take a 5-percent risk yourself but you are guaranteed 95 percent, if you wish. That’s already used by many Swedish companies, already up and running [as a] kind of security.”
Stenström said that when the current Swedish government took the helm in 2014, it adopted a new export strategy: “That Sweden should be more active in growth nations and countries where the growth is high.”
He added they pinpointed the Philippines as one of the 26 markets where Sweden would like to be more active and to promote sustainable solutions.
“We are not starting from scratch, our trade [with the Philippines could be worth] 1 billion Swedish krona, or more than $100 million,” Stenström said.
Sweden’s trade with China, he added, is 50 times higher than the Philippines, “but China is not 50 times bigger than the Philippines.”