LOOKING AT THE JAPANESE MODEL The Philippines has had so many versions of its Constitution. The 1935 Constitution. The 1973 Constitution. And the 1987 Constitution. On the other hand, Japan’s 1889 Meiji Constitution was amended in 1947. It has not been revisited since then. This accounts for institutional stability. The weakness of Japan is its lack of mineral resources. It imports raw materials from other countries. It also imports food. The Japanese economy owes its success to an effective bureaucracy, long-term investments and skilled labor. Industrial growth relies on tax breaks, import and export licenses, and direct subsidies. The lead agencies are the Ministry of International Trade and Industry (MITI), Ministry of Finance (MOF), and Bank of Japan (BOJ). Contrast this with the Philippine setting, where it is DBM that lords it over in budget preparation. In Japan, it is the MOF that initiates and takes responsibility for budget formulation. Here, DBM politicizes budget formulation, even to the extent of disbursing funds through fake SAROs. Japan subordinates short-term profits to company growth and market share. Businesses reinvest their profits in technological improvement for long-term rewards. Philippine corporations emphasize annual declaration of dividends. Japan continuously develops its skilled labor force. It guarantees lifetime employment, wage and salary increases based on seniority. It provides corporate welfare benefits. Here is the distinctive difference. Japan inculcates strong work ethic in avoidance of strikes or work stoppages. This means that KMU has no place in Japan. Japan minimizes judicial intervention in its economic progress by strengthening its administrative agencies like MOF, MITI and BOJ. In the Philippines, endless litigations prevented immediate use of NAIA 3. Japan has privatized Nippon Telephone and Telegraph (NTT) and Japan National Railway (JNR). Why not sell the Philippine National Railways (PNR)? This should enable PNR to be the exclusive hauler of goods overland, using private capital. This will also avoid or minimize the cost of repair of the national highway that is destroyed everyday by cargo trucks. Japanese citizens patronize their own products, in support of their industries. Here, we cater to imported products. Japan relies mainly on the United States for security needs. It spends less on its national defense. Contrast this with the stupendous feeble effort to modernize the military. Most importantly, Japan has built up capital through locally operated postal savings banks that channel deposits to the Ministry of Finance. MOF uses this capital formation for the use of the manufacturing sector. Contrast this to Philippine reliance on commercial banks that centralize capital access in Metro Manila. This will explain why Japan was able to build warships and warplanes which it used in World War II. This explains why Toyota is now the leading car maker in the world, followed by General Motors of the US, and Volkswagen of Germany.
Posted on: Fri, 24 Jan 2014 00:27:16 +0000
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