How can we in the Philippines translate the hosting of the Asia Pacific Economic Cooperation (APEC) Summit in Manila into genuine socio-economic development that will not only enrich the profit margins of our big businesses but also benefit SMEs and citizens, including the poor who are still waiting for the promises of so-called “trickle-down” economics? How can we woo more foreign investors and tourists to modernize our infrastructure, open factories, help modernize our farms and other industries?
At the summit, as expected, the international media focused on the actuations and actions of the world’s two economic superpowers, the USA and China, led by President Barack Obama and President Xi Jinping, while many in our local media and netizens lionized the telegenic leaders of Canada and Mexico, Justin Trudeau and Enrique Nieto, with the hashtag #APEChottie.
Latin America’s Fastest-Growing Economies
However, among the two most interesting and truly accomplished leaders in the APEC region are former military officer, Peru President Ollanta Humala, and former journalist/economist, Colombia President Juan Manuel Santos. Under these two leaders, Peru and Colombia have the highest economic growth rates in Latin America and are stalwarts in the four-nation trade bloc called “Alianza del Pacifico” (Pacific Alliance) made up of Peru, Colombia, Chile and Mexico. We in the Philippines should trade more with them!
Fortuitously, I was the only journalist invited to the Nov. 17 luncheon hosted by Colombian President Juan Manuel Santos for 40 business leaders of the APEC region at Diamond Hotel.
Among the business VIPs there included billionaire Jorge Araneta of Gateway Mall and Cubao’s Araneta Center; James L. Go of JG Summit Holdings; “ports king” Ricky Razon of ICTSI and Solaire resort casino; Miguel Aboitiz of the Aboitiz Group; Ambassador Francis Chua of the Philippine Chamber of Commerce and Industry (PCCI); Philippine Stock Exchange (PSE) chairman Jose T. Pardo; Bank of the Philippine Islands (BPI) president and CEO Cesar P. Consing; and the Mandarin-speaking Luis Virata of CLSA Exchange Capital. Seated on my left was Indonesia’s energy tycoon Wishnu Wardhana of the publicly listed PT Indika Energy, and on my right was Thailand’s retail and realty tycoon Suthipak Chirathivat of the Central Pattana Group (who speaks the Teochew or Chaozhou dialect of south China).
On Nov. 18 after the formal welcome dinner banquet for the 21 APEC leaders at SM MOA Arena, I was also the only newspaper columnist invited to interview the 2016 APEC host country Peru’s President Ollanta Humala at his suite in Diamond Hotel.
Good Socio-Economic Policies
What can we learn from Peru and Colombia, which were both Spanish colonies that share similar histories with us, including the legacies of Catholicism, the fun fiesta culture, corrupt political and oligarchic dynasties, and economies with wide rich-poor disparities?
1. Promote social policies. Economic growth is hollow or not meaningful if unaccompanied by genuine social progress, uplifting the lives of the less privileged masses and eradicating extreme poverty. Peru under President Humala and Colombia under President Santos have done well in promoting economic growth with social progress. In fact, Humala told me social policies are among his top priorities. He said, “Peru has assumed the regional leadership in social policy (implementation), which led us to create the Social Inclusion and Development Ministry.”
Under his Beca 18 program, the government has already granted 82,000 scholarships to outstanding Peruvian students for higher studies at top universities in Peru and overseas. His “Qali Warma” program provides free breakfast and lunch to students from underprivileged areas that attend public schools, especially those residing in indigenous or native communities. He also has the national program Tambos, which provides different services to the most remote and dispersed rural communities throughout the country.
President Santos said Colombia has reduced extreme poverty by 12 percent in the last four years, which he said “is unprecedented in Colombia and Latin America.” He said his target is “to eliminate extreme poverty in Colombia by 2015.”
2. Have pragmatic economic policies to woo foreign investors. Unlike our laws formulated by inward-looking political and landed oligarchs, which have barred foreign investors for decades from undertaking huge industrial estates or investing in strategic industries, Colombia has pragmatic economic policies.
JG Summit Holdings, Inc. chairman James L. Go asked Colombian President Santos whether his country allows foreign investors like factory operators to own land and Go’s second question was whether there are certain “strategic industries” in Colombia that foreign investors are not allowed to own.
The 40 APEC business leaders were very impressed when the dynamic Santos replied that foreign investors could own industrial lands under the British concept (similar to Hong Kong or China) of 60 years or more, that huge agricultural lands can also have long-term leases. He said there are no restrictions on so-called “strategic industries.” ICTSI boss Ricky Razon added that his company has 280 hectares of land in its Colombia business, which he said, “We own free-hold.”
3. Governments should lead nations to benefit from APEC, TPP, and FTAAP. Peru President Humala said that free-trade agreements or international conferences are not the be-all and end-all solutions to economic needs. He explained that these only provide countries additional economic opportunities, but said, “It is the duty of the state to make the nation benefit.” Humala cited the example of free-trade region agreements like TPP “like a big highway with eight lanes — those who want to take advantage of this can do so.”
How can developing societies like ours benefit from APEC, TPP, the proposed FTAAP, AIIB, and the new Silk Road or “One Belt, One Road” initiative? Our government leaders should work hard to upgrade our basic infrastructure like more highways, high-speed trains to rural regions, invest in more mass-transit systems like MRTs in cities, better airports, modern seaports, and lower electric power rates so that our factories can be globally competitive.
4. Have a win-win mindset and independent foreign policy. Both Peru and Colombia are similar to pragmatic, progressive Asian countries like South Korea or Thailand, not totally beholden to or pawns of any superpower. Peru and Colombia are equidistant friends and profiting from all the rival superpowers, whether the USA, China or Russia. Strategic economic national interests mainly guide their diplomacy.
Although Peru is a member of the USA-led Trans-Pacific Partnership (TPP) and President Humala told me, “It’s a shame the Philippines is not a member of the TPP,” Peru has a free trade agreement (FTA) already with China.
In fact, among the numerous economic projects uniting Peru and China includes the visionary $10 billion six-year grand plan with neighbor Brazil for the three countries to build a 5,300-kilometer trans-continental high-speed railway connecting the Pacific Ocean to the Atlantic Ocean. This project will spread economic and social development and trade opportunities to the vast rural hinterlands of Latin America.
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