Quarks

The truly important news the past week was not the supposed crafting (finally) of a Philippine strategy to assert sovereignty over Scarborough Shoal  which the Palace chose to keep secret. Nor is it Carandang’s astounding idea to fly US spy planes over the shoal  a task feasibly accomplished by simply clicking on Google Maps/satellite view.

The truly important news last week was the confirmation of the Higgs boson, the particle that allows energy to acquire mass. The boson is named after Peter Higgs, the theoretical physicist who first published a scientific paper in 1964 speculating about its existence. The scientist was present at the CERN laboratory in Geneva when the earthshaking announcement was made.

As scientific rigor requires, the scientists operating the Large Hadron Collider (LHC) announced they were 99.999 percent sure they had found the boson nicknamed the “God particle” because it is the final elementary particle that enabled energy to become mass. There was less than one in a million chance their data produced a statistical fluke.

It was not cheap arriving at this confirmation.

The Europeans, bless them despite their financial woes, invested $10 billion to build the LHC  a 27-kilometer-long tunnel between France and Switzerland capable of accelerating particles to the speed of light. Since the facility began operation in 2008, scientists operating it managed over 800 trillion proton-proton collisions at a rate of about 40 million collision per second. Supercomputers processed the tremendous amount of information derived from this experiment.

A boson, according to the standard definition, is “a type of particle that allows multiple identical particles to exist in the same place in the same quantum state.” It enables quarks to be formed and hence the protons and neutrons that compose atoms.

The Higgs boson has no intrinsic spin, no electric charge, no color change and is extremely unstable, decaying a fraction of a second after its creation. It was so difficult to find, until the huge LHC was built, that one scientist preferred calling it the “Goddam particle.”

Confirmation of this boson is a major step towards affirming Einstein’s insight about energy and matter. It is a major step supporting the Big Bang theory of the origin of the universe. This was a theory that enthralled all of us in the late sixties. I recall a great number of my high school class, me included, wanted to get into theoretical physics in college. At the very least, we became very suspicious of creationist theory.

Last week’s announcement satisfies a lifelong curiosity for those of my generation. Although this is a great leap in scientific knowledge, it will not solve poverty nor produce peace in this world. These are intractable problems we leave, for better or for worse, in the hands of people who do not care about quarks, who would rather be fascinated with borrowing spy planes to assert our sovereignty.

Hollowing

More evidence our economy is inhospitable to industry: Ford Philippines announced recently they would cease operations in the country by December next.

Ford has been here through thick and thin for many years. The company’s decision to leave is sad commentary on the country’s policy climate for direct foreign investments in industry. At the very worse, this could signal a continuing exit of other industries.

Our policy architecture has produced a hollowing out of our manufacturing base, making us a predominantly service economy. Recent studies produced by international institutions rank us near the bottom in terms of attractiveness for direct investments as well as efficiency in making investments work for our people. The services sector cannot produce quite the quality of employment that the industrial sector might produce.

The Palace reacted to the Ford announcement with increasingly characteristic myopia. Instead of addressing the policy concerns leading to migration of industries, the Palace reaction was confined only to assuring the displaced Ford workers assistance in finding new jobs.

Ford, of course, might have its internal reasons for withdrawing from the country. It could be due to the global streamlining of its operations. Still, its withdrawal indicates the country has not been the most profitable place to operate from. We could not be the company’s manufacturing base for the Southeast Asian region.

Some of the reasons pushing industries away from our economy we already know. Our power costs are intolerably high. Infrastructure and logistics are inferior. Our customs services are often spotty. Corporate taxes are higher here than elsewhere. Our unions are sometimes unreasonable.

Our economic managers should ask Ford for an exit interview to help us understand the problems investors encounter here. That should help us correct the microeconomics shrinking our manufacturing sector.

Some of our recent policies appear to aggravate an already dire situation in manufacturing by favoring foreign-based competitors over existing local manufacturers.

For instance, in the case of the proposed increase in excise taxes passed by the House of Representatives, imported brands will enjoy a distinct advantage over locally produced brands. Under this proposed tax scheme, the increase in excise taxes for low-priced local brands will be 708 percent with mid-priced brands at 297 percent and premium brands at 150 percent.

Under this scheme, low-priced brands currently taxed at P2.72 per pack will pay P12 in 2013 and P22 in 2014. Mid-priced brands currently paying P7.56 per pack will pay P12 in 2013 and P28.30 in 2014.

Comparatively, premium imported brands will enjoy a tax holiday on the first year of the bill’s implementation. By 2014, they will be imposed a measly six percent tax increase.

Badly designed taxation schemes like this one contribute to the death of our manufacturing sector.