Tom,
Agree that RP needs foreign investment, but getting it in - and keeping it in - is going to be difficult, and not only because people don't see the differences between here and the rest of Asia.
I'm not so convinced that many of the reforms you cite were ever effectively implemented, even under Ramos. Many of the right choices were made, but turning policy into activity has always been a weak point here. A lot of people suspect that the pace, and more importantly the thoroughness, of the reforms will drag even more now. I'm not convinced that the banking sector is really that sound, either. The bubble here never reached the size that it did elsewhere, mainly because of a late start. But I suspect that any investigation (and there won't be one unless a real collapse comes) into the ties between local banks and the local corporate community would reveal ties very similar to those being dragged into the light in other Asian countries.
I'm also inclined to wonder what happened to all the money that was raised when Manila companies were going public a few years back. I have a feeling that a lot of it was not invested in productive activity, and the same could be said for a lot of what was borrowed. Bringing money in is only half the problem. Putting it to productive use is another story, and politics (and simple greed) often get in the way. We saw this with foreign aid in the 60s and 70s, foreign loans in the 70s and 80s, and now with direct investment in the 90s. Until local corporate managers place the building of shareholder value above personal gain - the local private sector is afflicted with much of the same nepotism, cronyism, and cash-milking that is so obvious in the public sector - it will be very difficult to attract and hold foreign investment.
As I'm sure you've noticed, it's difficult to base assessments of Asian economies on press reports. The difference between what is said and what is done can really be quite extravagant.
As always, the greatest potential economic constraint is politics. Still, I'd try to be guardedly optimistic (how's that for a disclaimer), provided that Estrada does not make a total fool of himself. I hope he can keep his mouth shut and let the people he's appointed handle things. Still, when the time comes to bite some bullets that must be bitten, leadership will be required. Some question now over whether it will be available. Many, many rumours in the air of plots to unseat/kill/embarrass/etc. Estrada, none very credible at the moment. I'm sure it's been discussed in many quarters, but the time would still be poor. Hope it doesn't happen. Even one coup attempt would put us right back in the dark ages - which weren't so long ago.
Steve |
