What is the real worth of the reported $2.2 billion in investment pledges that Mrs. Gloria Macapagal-Arroyo “brought” home from her weeklong trip to South Korea and Russia?
The reported amounts are “pledges”, a promise to invest and not actual investments. And investment pledges these days, at a time when old giants like General Motors are crumbling, are simply not dependable.
Indeed, many factors go against the realization of these pledges to become actual investments. The sectors where the committed investments are supposed to flow in currently face dim prospects amid a worsening global financial and economic crisis.
A case in point are the pledges made by South Korea in alternative energy projects, particularly biofuels. There is actually an emerging “biofuels bubble” as the largest biofuels producers in the US fold up one by one due to the combined impact of the global crunch, high cost of biofuels feedstock and substantially lowered global crude oil prices from record highs in the past years. American biofuels producers also saw their income drop by 89% between 2005 and 2008. So whatever promised investments in the biofuels sector made today are highly tentative.
Portion of the promised investments will also go to the construction of hotels and golf courses as government continues its aggressive promotion of tourism. But the outlook for tourism is also not as bright as economic managers hope it to be as relatively well-off income earners (the tourists) worldwide struggle to keep their savings, or whatever is left of it, amid the growing uncertainties in the global economy.
The World Tourism Organization already projected in January that global tourism this year may still grow but at a slower pace. This has been recently affirmed by the June forecast of the International Air Transport Association (IATA) that the airline industry is expected to lose $9 billion this year due to the global economic meltdown. The reason presumably is that less people will travel for business, much less vacation and pleasure.
Press Secretary Cerge Remonde, who released the official statement upon Mrs. Arroyo’s arrival at the NAIA last Sunday (June 7), wanted to highlight the investment pledges as the supposed “achievements” of the latest presidential junket. The idea obviously is to create an image of a hardworking president who delivers and is not at all distracted by threats of massive protests against her scheme to stay in power through Charter change (Cha-cha).
But the Filipino people have heard and seen enough to buy this deceit.