Ownership restrictions of no import to FDI
This is in reaction to Dr. Bernardo M. Villegas’ column titled “In defense of Charter change” (Inquirer, 8/11/12). He cites China, Vietnam and Indonesia as countries that have achieved much higher levels of foreign direct investments (FDI) than the Philippines, then quickly segues to the need to “remove from our Constitution the many restrictions against foreign equity investments in such vital sectors of our economy as media, education, public utilities, mining, and real estate.” By this closely-coupled sequence of topics, he gave the impression that because of our restrictions on ownership in the above-mentioned industries, we have a hard time attracting foreign investments.
The outlaw.com website of the international law firm Pinsent Masons, in the section “doing business in China,” states: “There is no private ownership of land in China… all land is owned by the state or by collectives…
“Foreign invested enterprises (FIEs) can own buildings and structures on land by (acquiring)… a right to use land for a specific purpose and period of time.” (Doesn’t that seem more of a lease?) “Land use rights do not include the right to use natural resources, minerals or treasure under the land.”
FactsAndDetails.com has this to say: “The Economist (7/7/11 issue) reported: ‘Foreign investors face problems with China’s ownership rules. Several Chinese industries, such as mining, steel, education, telecommunications and the Internet are both capital-hungry and politically sensitive. They need foreign investment, but the law bans foreigners from owning stakes in them.’”
It did not harm China’s interests to restrict ownership in mining and the export of rare earth metals. It must be more or less safe to surmise that the rules on ownership in Vietnam are similar to China’s.
As for Indonesia, www.renephilippe.com has this to say: “…3 countries do not allow at all foreign freehold land ownership. Those countries are Cambodia, Indonesia and the Philippines.”
FactsAndDetails.com enumerates several attractions of China that have nothing to do with the restrictions on ownership: “The mix of cheap labor and stable prices and stable politics is what foreign companies find appealing…. The Western companies who made the greatest profits are those that… have utilized China’s cheap labor. Many companies that have made money in China have used China as a platform for manufacturing or exporting.”
Based on what is actually prevailing in China, Vietnam and Indonesia, it seems P-Noy is right, in insisting that stable, corruption-free government policies and their steadfast execution will serve as more attractive lures to foreign investments.
We Filipinos should consider like scenarios. For instance, if the present ownership restrictions were to be removed, would not a massive foreign monopoly in Philippine media, as broad as what Rupert Murdoch wielded over high-level political leaders in the United Kingdom until recently, be able to similarly control the political system in our country to make us once again an easily exploitable colony of foreign interests that we were for 350 years?
—BENJAMIN B. AGUNOD,
