President Aquino trumpeted his administration’s economic gains at the World Economic Forum in Davos, Switzerland. I admit he has good reasons to do this. Our economic indicators truly suggest that there’s an economic turnaround.
While I have been critical of many things about the Aquino administration, I must admit that the President and his economic managers have made some level of economic success.
Sad to say, economic indicators are just that—the benefits have not trickled down to the jobless and the poor.
That’s the change President Aquino had promised. That’s the change which remains a pie in the sky.
Nothing could be more telling than an open letter to the President sent by the Foundation of Economic Freedom last year. According to the FEF, the growth bruited about by the Aquino administration had been propelled mainly by consumption spending fueled by OFW remittances, and not by any action by government. Certainly, the government has not attracted foreign direct investments.
The bull run at the stock exchange is propelled by so-called hot money that comes and goes but doesn’t provide jobs and put food on the table.
The strong peso also does not bring any relief to the poverty-stricken. In fact, it is prejudicial to exports. Business process outsourcing companies, which now employ over 600,000, are also being affected. What we need most at this point in time are industries that provide jobs for the poor. That’s the only way to go, Santa Banana!
President Aquino need not go too far for direct foreign investments. In fact, the country has attracted droves of foreign investors, like in mining. But they have been let down.
With so many self-styled environmentalists and do-gooders, contradictory government policies and regulations (like the freeze on new mining contracts) we are actually strangling the development of our rich mining resources. The Chamber of Mines has predicted that less than half of the $12 billion investments cannot be realized given these existing government policies.
I blame the Aquino government’s lack of political will for having squandered such golden opportunity. Malacañang is talking loudly about attracting more foreign investments, but in my opinion it should focus more on keeping them once they set foot on our shores.
It’s an open secret that the mining industry is so disappointed with the turn of events. Industry investors feel that they have been virtually lured into a trap, with most of them investing millions of dollars in the form of Corporate Social Responsibility activities for communities and even indigenous people. But these investors find that they would be left alone to fend for themselves.
One glaring example of how the government is mishandling the mining industry is the difficulty of the Norwegian-based Intex Mineral Resources ASA of getting back its ECC (Environmental Clearance Certificate). Intex is developing Mindoro Nickel, which could well be one of the largest mining operations in the country.
Then-Environment Secretary Lito Atienza granted Intex its ECC only to revoke it when a local priest led a hunger strike in front of Atienza’s office. The Mangyans of Mindoro to be directly affected by Intex wrote the Catholic Bishops Conference of the Philippines to protest what the local priest did. The latter, handwritten in the vernacular and signed by their respective leaders, disowned the priest, saying that he was not authorized to represent them in whatever capacity. But the CBCP ignored the letter.
Intex has already invested over $50 million since it started 12 years ago under a technical agreement with the Department of Environment and Natural Resources, and based on a mine life of 20 years, intending to produce no more than 53,000 metric tons of nickel a year through responsible mining methods. Latest additional exploration indicates that the potential mine life could easily be doubled to 40 years. Not only that, discoveries in the surrounding areas could extend the mine life by yet another 20 years for a total of 60 years – more than half a century of nickel production and sustained income windfalls for the local and national economy.
Jon Steen Petersen, chief executive officer of Intext, told me that “Mindoro Nickel therefore, avoids selective high grade mining, which will potentially leave lower grade ore behind as waste, valueless. Nickel also plans to process its own by setting up its own refinery, which would product final LME-grade nickel metal, which can be sold to end-users internationally. When completed it will be the first nickel refinery plant. All it needs is consistent government policies.”
It would indeed be a pity if Intex leaves the country simply because the Aquino administration cannot seem to rationalize and sustain its investments policies on mining. This industry provides jobs to reduce the incidence of poverty in the country.