Foreign direct investment: Are Filipinos up to the task of seizing opportunities served up to them?

Seeing foreign direct investment, cash handouts, and subsidies as the silver bullet that will cure chronic Filipino poverty? Think again. Lots of lessons are to be learned in what former Malaysian Prime Minister Mahathir Mohammad said in a speech at the Harvard Club of Malaysia dinner on 29 July 2002 about how the presence of opportunity does not necessarily guarantee that said opportunity will be seized by those it is presented to…

Former Malaysian Prime Minister Mahathir Mohammad

When I wrote The Malay Dilemma in the late 60s, I had assumed that all the Malays lacked the opportunities to develop and become successful. They lacked opportunities for educating themselves, opportunities to earn enough to go into business, opportunities to train in the required vocation, opportunities to obtain the necessary funding, licences and premises. If these opportunities could be made available to them, then they would succeed. ……

…. But today, the attitude has changed. Getting scholarships and places in the universities at home and abroad is considered a matter of right and is not valued any more. Indeed, those who get these educational opportunities for some unknown reason seem to dislike the very people who created these opportunities. Worse still, they don’t seem to appreciate the opportunities that they get. They become more interested in other things, politics in particular, to the detriment of their studies. In business, the vast majority regarded the opportunities given them as something to be exploited for the quickest return. …… They learn nothing about business and become even less capable at doing business and earning an income from their activities. They become mere sleeping partners and at times not even that. Having sold, they no longer have anything to do with the business. They would go to the government for more licences, permits, shares, etc. …. [boldface added for emphasis]

Full article from which the above and other snippets quoted below were taken can be found here.

Filipinos are culturally similar to the Malay bumiputras of Malaysia. Ethnic Malays in Malaysia constitute about 60 percent of the population there. Yet, like the Philippines, the economy is controlled by the non-Malay, mainly ethinic Chinese minority. Indeed, in Mahathir’s description of the majority Malay population of his country, he may as well have been describing Filipinos…

They are laid-back and prone to take the easy way out. And the easy way out is to sell off whatever they get and ask for more. This is their culture. Working hard, taking risks and being patient is not a part of their culture. It should be remembered that in the past the Malays were not prepared to take up the jobs created by the colonial powers in their effort to exploit the country.

Mahathir’s lamentation of his compatriots’ lackluster take up of opportunities to prosper and its possible link to their cultural character as he describes it above stems from the Malaysian government’s New Economic Policy (NEP) which kicked off back in 1971 and was “an effort to level the playing field across the entire population and help those who are poor and marginalized particularly members of the Malay community to catch up economically with the more entrepreneurial minority, the Chinese and Indian migrants.”

Among other things, the policy gave Malays preferential access to public contracts and university scholarships. It also required companies who are listed on the stock market to sell 30% of its shares to the bumiputra (Malays and indigenous peoples of Malaysia). Malaysian leaders have even reinforced the preferential treatment of their ethnic identities for the past 40 years by doling out special privileges to one community, which is the majority of the Malays.

Although to some degree parts of the program have been “softened” or eliminated in the last two decades, many of the pro-Malay privileges are still intact. Resentment stems from the fact that like any affirmative action programs, there will always be a member of a group who has to bear the burden of being out of the loop — those who do not make the cut in the racial quota. Just an example of what can be considered “unfair” is the practice of awarding certain government contracts to bumiputra controlled firms. It’s been said that Malays even receive special discounts on home purchases.

In her article Filipino tragedies: Is incompetence in our cultural DNA? (from which the above last two excerpts were taken), blogger Ilda highlights the parallels of the Malaysian experience with the plight of Filipinos in how they now gaze starry-eyed at the promise of bounty that a flood of “foreign direct investment” could bring should restrictions to foreign ownership of Philippine assets be relaxed…

It is therefore evident that ethnic groups in the Philippines and in Malaysia (or possibly Indonesia), tend to have the same nature, which is entirely different from that of other ethnic groups like the Chinese, for example. Whereas the Chinese tend to be entrepreneurial and hard working, the average Malay needs a few more incentives to be able to work harder in order to advance his economic status.

Could it be that there are ethnic groups who are naturally more industrious than others? It would seem so with the Chinese people being one such industrious group who appear to thrive anywhere in the world no matter what kind of environment they live in. Given the same environment and the same privilege like in the case of the Malaysian program, there are some ethnic groups who just don’t thrive even if the opportunities and privilege are just short of being shoved down their throat.

This theory could in fact silence those groups in Philippine society who insist that it is the lack of opportunity and privilege that hold majority of the native and indigenous Filipinos from becoming self-sufficient and economically progressive. Of course access to better education and special aid make a big difference but there are members of society who are not really into improving their lot despite the assistance given to them. A classic example of this is Filipinos who have gone to perfectly good schools but do not perform well at school and who have lackluster professional careers.

In short, will throwing money at The Filipino Condition generate results?

Whether said money is local or foreign-originated, the above question, it seems, is the million dollar question.

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Post Author: benign0

benign0 is the Webmaster of GetRealPhilippines.com.

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18 Comments on "Foreign direct investment: Are Filipinos up to the task of seizing opportunities served up to them?"

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Jason Banico
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Foreign direct investments aren’t silver bullets. No one claimed they would be. But they are a critical component of the solution to unemployment.

I don’t see how they can be equated to dole-outs or subsidies. People have to work to earn them.

Jason Banico
Guest

“Working hard, taking risks and being patient is not a part of their culture.” –> We have lots of OFWs who exhibit these traits. If we have enough FDI’s to just bring most of them back, I can already consider that a major improvement.

Jason Banico
Guest

Obviously not, but they are many enough to challenge the generalization being claimed about Filipino work ethic. Sure there are those who seek the easy way out, but opening up the economy will at least create good opportunities for those who deserve to take advantage of them.

bp
Guest

i don’t think the article is saying that we have to do away with fdi. it’s merely pointing out in a general sense that most filipinos don’t know what to do with an opportunity or worse recognize one even when it’s staring them in the face.

Parallax
Guest

or even when they do recognize an opportunity, they still choose to waste resources (that could have been capital) on all sorts of crap they don’t need.

Frank
Guest

That’s where the media comes in via your last article. Yes, the “natives” will need incentives to work harder but that doesn’t mean they all won’t actually be more productive and capitalizing (rather than consuming).

The media – whether through public initiative or otherwise – should look upon those that are actually taking the incentive to capitalize and use them as the role models. The use of the term “role model” of course refers to those whose behavior are to be emulated rather than heroes, who are depended on.

Hyden Toro
Guest

Partly, it may be our Filipino DNA is at fault. However, it is more of the Culture and the rearing up we have grown to…If you are born in a society, where political patronage is the way to riches…then, throw away your entrepreneural talents. It si easier to get rich in the political field.

Joe America
Guest

Ambition is a peculiar thing. It is different than wanting. It is attached to discipline and commitment and a desire to win, almost like sports competition.

I find it interesting that basketball here is also undisciplined and ego bound. Kids work on showboat dribbling to make an impression, but can’t hit a bank shot from 15 feet. They think a pick and roll is something you do with your nose.

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ricelander
Guest

I do not follow. If the Malaysians are just like us, then Malaysia should be in the same boat today as we are. So what explains why Malaysia is more advanced now, wheezing by some decades ago?

Ilda
Admin
The Malaysian government introduced economic and social reforms that helped the Malay ethnic group: I wrote about it in my blog here “In 1971, they introduced the New Economic Policy (NEP) in the hope of raising the majority group’s or the Malay’s share of the economic pie. The policy was an effort to level the playing field across the entire population and help those who are poor and marginalized particularly members of the Malay community to catch up economically with the more entrepreneurial minority, the Chinese and Indian migrants. But critics argue that the pro-Malay program only benefits the connected… Read more »
Clueless
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Being a half malay and chinese malaysian and someone benefited somewhat directly from the NEP, there is always a price to pay for everything. On the one hand,the NEP helped to fast-track the economic development of the malays in Malaysia. At the same time, it made the malays complacent and bred a new class of “elite” malays.As a beneficiary of the NEP and one who had worked with the “Council of Trustee for the Indigenous People”(the main vehicle for the NEP), it boils down to 3 words “Gratitude & Appreciation” for the program to work. If you take the NEP… Read more »
Ilda
Admin

thankfully most of the officers in charge of the funds are honest and not corrupt.

That is something that Filipinos cannot even imagine saying one day. Obviously the NEP initiative worked because it was implemented the way it was supposed to be. The attitude of some of the beneficiaries is something else though. But there will always be people with “squatter mentality” anywhere you go. It’s just that in the Philippines, there are plenty of them.

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