Bonifacio Global City and Competitive City-States

I go to BGC most times of the week for work and to be honest, as compared to other places I've worked before (Makati and Ortigas), there's something very different and refereshing about BGC in Taguig.

BGC Skyline (photo source: http://bit.ly/1k0KnzJ)

It's amazing how much investment, development, and job creation has been created in less than a decade. Around over a decade ago, this place was government owned, nothing but empty land with no use except for training (and allegedly hazing) of our military. You can really see how much more productivity can be created when property is in the hands of a competitive market as compared to a monopolized control of government.

The elites own most of it, sure: Ayala Land, Evergreen Holdings, Campos Group, Metro Pacific, etc. Bascially the oligarchs or the select few families that own and control most things in the country. Regardless of this unfortunate circumstance, the benefits of the development are undeniable. And what more if we allow more competitors to enter the market and go against the oligarchs?

But you see, as usual, this is a question and matter of policy.

Taguig Proud of Its Business-friendly Policies

I'm sure you've seen signs like the one above all over BGC. The two main points I love about them are lower taxes and business-friendly. This refers to taxation and redtapes that add cost and difficulty for competition to enter the market. Taguig claims that their policy with regards to these are better. This is reflected by all the businesses who have moved or are moving to BGC. People vote with their feet, said esteemed economist Milton Friedman (when asked about mainland China vs Hong Kong).

And so why don't we make policies more competitive? Why don't we decentralize power from the national government and allow for city-states to have more autonomy so that policy can be competitive? In this way, good policy will emerge and be contagious and bad ones that don't work will be scrutinized and demanded to be abolished by their constituents. We do it now with prohibition of plastic -- some cities do it, some don't. 

If we want development, if we want to alleviate poverty and create jobs, why can't we make business-friendly policies like lower taxes and streamlined bureaucratic red tapes more contagious? Why don't we transfer more government owned property that's not being utilized to the private sector? Better yet, why can't we let more foreign investors enter and compete against the oligarchs?

In BGC, you don't need no MMDA to regulate traffic (or make things worse). In BGC, most services and infrastructure are private and not eniterly a burden to taxpayers. And yet there are those who passionately argue that lowering taxes will mean that there will be no infrastrucure or that the economy will collapse. The role of the government should be to be profitable and not dependent on productive taxpayers because if so, then they have no incentive to improve since year in and year out, billions from productive citizens are coercively collected anyway.

And how do we allow more investment and development to commpete against the oligarchs? Let's look at the Index of Economic Freedom:


Above are the countries rated with the highest economic freedom, meaning less protectionist policy, less taxes and regulations, less barriers on trade, less red tapes to enter the market, etc. Just look at Hong Kong and Singapore that both have almost zero natural resources and yet have gained so much prosperity and have very little poverty. They both have the lowest and fewest taxes in the world. And as an archipelago, we have so many islands that could be potential Hong Kongs or Singapores. And how will infrastructure be created if there are low taxes and minimal government support? The same way it happened in Hong Kong and Singapore. Read a bit of their history and you'll see for yourself.

Another one is Gurgaon City in India, one of my most favorite real-world examples (see my blog post about it here) that has almost the same story as BGC only better because there was even more economic freedom. Infrastrcuture and productivity is not dependent on government, it is dependent and most effective in places where policies encourage a competitive marketplace.

But again, it's a question of policy. And so the system itself has to be changed so we can implement these policies. Our constitution, for instance, has the noble intention of making sure all companies are 60% owned by Filipinos, something that is masked with nationalism and pride -- but really, all it's doing is protecting the elites and the oligarchs. Look at the countries above that are the Index of Economic freedom or Gurgaon in India and compare the policies for yourself.

You see, one problem with arguing libertarain policies and Austrian School of Economics is that most of us root from the philosophy of praxeology. Basicaly, in Immanuel Kant's choice of words, we focus more on a priori knowledge than the empirical. Empirical data could easily be mistconstrued or misinterpreted and skewed to defend any political philosophy. I'm glad, though, that most times, emprical data solidly backs the libertarian's claims. The only problem is, really, that we have to deal with arguing against people who don't even take time to look into history and economics and jump right away to proposing policies they think will work.

One of my main motivations to write and analyze policy is because I know this is key in alleviating poverty and creating a more prosperous and sustainable future for our society. Most of my recommendations, at times, may sound against conventional wisdom. My only hope is that you take time to research and learn more about them because in the end, don't we all just want a better world for us and for the future generations?

Peace out,
@harryinitiative

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