Hi Webby,
Free market reforms are the boogyman here. Take the Power Industry reform Act. It sought to privatize the state monopoly on power and sure enough a shadowy entity with mystery owners sought to take the transmission corporation off the government's hands as the SOLE BIDDER in a murky transaction. Some senators are saying that this is just another ploy to keep power transmission monopolized and centralized in the same hands that keep power rates in Manila the second highest rates in Asia (next to Tokyo!).
Many of the people that complain against economic liberalization are the cement producers, flour millers, car assemblers, and other corporate entities that survive only because of high tarrifs. Almost all are extremely inefficient and are MORE EXPENSIVE than their import competitors (even after slapping on the tarriff!). Of course, to abolish these tarriffs would "destroy" local "industries". Are these really industries? I define industry as some enterprise that survives because of market dynamics not because of market distortions imposed by government fiat and protectionism.
Indeed, in the CONSTITUTION of the Philippines, foreign ownership and participation in certain parts of the economy are severely restricted. End result: monopolistic practices, high prices, crappy selection, and stunted economic growth.
BUT THERE'S A SOLUTION...... read below
That's one of the dillemmas facing Filipinos--constantly eroding purchasing power. This only gets worse because of the protectionist economy. The Philippines could do well learning from when it deregulated FIRE INSURANCE in 1997. Before 1997 there were only a handful of big family-owned fire insurance companies. Prices were ridiculously high. Not too many people could afford such policies. Claims were problematically and crappilly settled and adjusted. After 1997, due to government pressure, the insurance companies were free to set their own rates. Moreover, foreign companies can come in to set up shop. Now in 2006, there's MANY fire insurance providers, prices have shot downwards, there's TONS of differing packages to choose from, people who used to NOT buy fire insurance now customarily buy it since it's so cheap, and the companies make more money cuz of volume. PLUS, claims adjustment is quicker and more satisfactory because if one company bungles your claim they are under pressure that you might switch to their competitor. Indeed, Fire insurance is one of the FEW things that is cheaper now in the Philippines than 20 years ago. Everything else...food, fuel, land, you name it, is more expensive.
I am not saying that Capitalism fixes everything BUT..... it sure is better than a closed MONOPOLIST system that benefits only a few and erodes and punishes the purchasing power of the majority for the benefit of a minority.
What do you think?
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Originally Posted by Webby
Curious $5... Do you see any slight reluctance, or some suspicion, to having more free markets where you are, particularly depending on who wants these free markets?
Definately get that "aura" in Latin America at this time. But that probably stems from NAFTA which did nothing for Mexico, but benefitted the US. With the prospect of, now CAFTA, - in general, it appears to be appreciated, but with great reservations on the detail of this agreement.
Flip side is also that other countries are opening up to possible trade deals with other than the US to avoid being burned by having only one girlfriend.
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