Business Bureaucracy 8: Exchanges at Imperium et Populi (Philippines)

A friend, Rev. Ruel Chavez, posted my article from the lobbyist.biz dated January 23, 2013, Personal and economic freedom, Philippines and rest of the world, in one of his facebook groups, Imperium et Populi (Philippines) (Government and People, Philippines) last Saturday, June 8, 2013.

There were several comments and exchanges among members. Some members requested Ruel to bring me into the group so I can reply to their questions and additional comments. I was added (I seldom join discussion groups in facebook as my fb wall and that of my friends’ are already my discussion platforms, usually I am added by some friends) yesterday.

Below are the relevant exchanges. There were other minor comments and digressions, but I won’t include them here. This is long already, six pages, 2,400+ words. So get your coffee or soda and enjoy the ride. I am also posting the two tables in that article for additional guidance to the exchange. Despite our debate, I am happy that Kensi gave me implicit permission to blog this exchange. Enjoy!

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Ruel Chavez "The bad news is that economic freedom remains rather restricted in the country until now. The local and national governments here tend to think that entrepreneurship and job creation is a potentially criminal thing to do, so they imposed plenty of business permits, taxes and fees, that sap significant time and resources of entrepreneurs and investors. This is on top of a very protectionist Constitution that prevents foreign competition to many local business elites and oligarchies." - Nonoy Oplas

http://thelobbyist.biz/index.php/perspectives/less-government/item/146-personal-and-economic-freedom-philippines-and-rest-of-the-world

Kensi Blye-Two This would BOIL DOWN again to "EASE of DOING BUSINESS..." The SMALL PEOPLE are HEAVILY TAXED but the BIG COMPANIES can get away with almost anything...

Imagine this:

( 1 ) Corporate Tax 30%
( 2 ) VAT 12%
( 3 ) Withholding Tax
( 4 ) Business Permit from the LGU
( 5 ) BOC - Duties and Taxes for Imported Goods
( 6 ) Other Taxes from other Agencies...

What's left of the MICRO and SMALL Enterprises...?

Ruel Chavez Meron naman daw 2 good news base sa report...1. mas mataas ang ating personal at economic freedom kung ihahambing sa maraming mga bansa at 2. at mas mataas din ang ating personal freedom kung ihahambing sa mga karatig bansa sa asya tulad ng Singapore, Malaysia, Indonesia, India and China. Vietnam, Laos at Cambodia...

Kensi Blye-Two Ruel Chavez: FREEDOM is very important, yes... However, you can have FREEDOM and yet DIRT POOR, what would happen to you...? Singaporeans and Malaysians RETIRE Millionaires...

In Indonesia, India, and China, Vietnam- citizens are going up the ladder and there's a significant burgeoning sector... Well, we can say that we're on par with Laos and Cambodia in terms of FIGHTING POVERTY...

Ruel Chavez actually, yan din ang tanong ko...matanong ko nga yong nagsulat ng article na yan kung ano ang isasagot...

Ruel Chavez Sorry Kensi, matagal yong response ng sumulat ng article...only this morning at pasensiya medyo strong yong dating niya...this is his reply:

"It is obvious that you just open your mouth without reading what you are commenting on. Check again Table 2 of that article, Singapore has very high economic freedom than the Philippines, 2nd to HK worldwide. So more economic freedom, more prosperity. Philippines which has more business bureaucracies (about 16 procedures just to start a business vs. only 4-5 in HK and Sing.) has more poverty. Malaysia has about similar econ freedom score as the Philippines.

"What the article discussed is the Index of Human Freedom, which is composite of economic freedom + personal freedom. In Singapore for instance, one can criticize the government in private occasions, say within dinner table, but not in the newspaper, not in rallies of even 10 people, not in blogs, not in public seminars, not in public concerts, so many NOs and prohibitions. Besides, it is one (pol) party system there. The same in Malaysia where almost all the TV stations, almost all newspapers, radios, are owned by the government. They held several elections, only the last one, the 13th General Elections (GE 13) that there was a credible political opposition to challenge the administration for the first time ever, and the opposition was clubbed with various cheating.

"Freedom means absence of coercion. But freedom is not absolute, one cannot stab or shoot people simply because he does not like their faces, so such freedom to harm other people is restricted and prohibited. So freedom means people can do whatever they want, except harming other people. When government puts up various bureaucracies and imposes various taxes, fees, penalties and mandatory contributions if people would put up a barber shop or bread shop or clothes retail shop as if entrepreneurship is a criminal thing to do, then that is restricting freedom."

Kensi Blye-Two Ruel Chavez: Perhaps you can INVITE the Author in here so that he can further ENLIGHTEN us with his Article... We might even learn a thing or two from him...

Here' my reply to his comment:

Foreign Aid 15: Shrink the IMF

I forwarded my article in interaksyon, Why the IMF is irrelevant in thePhilippines, to Dr. Josef “Jop” Yap, the President of the Philippine Institute for Development Studies (PIDS) because it was the PIDS that sponsored the forum where the IMF regional officer, Dr. Anoop Singh, spoke. Jop replied that he shared my article with the PIDS staff, thanks Jop.

He added that the IMF need not be dismantled, that it only has to refocus and should have been done in the past, but the Fund has no clout over the major country credits including the US.

I replied to Jop saying that when the IMF is into solving inequality and ensuring inclusive growth, it is simply feeling hollow and shallow and tries to step into WB and ADB forte just to make itself feel relevant in countries that do not need it. IMF should make its presence be felt strongly in Europe and North America where current account and BOP problems are annual if not daily realities.

When an economy is bleeding in its current account and overall BOP, its monetary and fiscal authorities panic and engage in heavy currency, interest rates, and capital account manipulations, plus tinkering with their taxpayers' level of patience or anger.

So I think the IMF is abolishable, or at least shrinkable. Say, dismantle their country offices even temporarily, in countries like the Philippines and many Asian economies where they are not needed now and in the short term. 

Europe and even North America are staring them in the face point blank. The bank run in tiny Cyprus and public anger over the bailout conditions, a high tax on bank deposits, is challenging the IMF to address problems on huge BOP imbalances. Uncertainty in that tiny European economy (1 million people and now needing $10 B bailout money from ECB and IMF) even has negative repercussions in the PH stockmarket. 

It is simply lousy for the IMF to announce its migration of function to solving inequality and "non-inclusive" growth, when many European economies are wobbly precisely because of their very expensive welfare system to solve inequality and non-inclusive growth there.

In the said interaksyon article, some comments were posted. I am reposting the more substantial comments and my reply to them.