Yesterday the international investment house Goldman Sachs forecast that crude oil will reach as high as $200 per barrel within the next 24 months.
This might be dismissed as typical investment-market chatter if not for the fact that these same oil analysts at Goldman predicted in 2005 that oil would breach $100 a barrel. That would put the price of a liter of gasoline at P100 just in time for the 2010 presidential election.
And having to pay P100 for a liter of gasoline might just be good thing for the Philippines.
When, two years ago, oil was $50 and Goldman forecast $100, the Philippines’ political leaders did nothing to prepare for $100. Now they have the opportunity to prepare for $200 a barrel.
Who wants to be the next president? Raise your hand. I have the guaranteed political strategy for making you the overwhelming landslide choice in 2010. Tell the people what you are doing today to handle a doubling of oil prices in two years. Because all the other contenders are going to tell the people what they will do after they take office and after gasoline doubles in price. It will be too late, then, to take action, just as it is now.
Here’s another thing to consider for your political campaign. If conditions continue unchanged, you may not be able to afford to give away that T-shirt and can of sardines to win a few extra votes. And your provincial political sortie might have to be on the back of a carabao instead of a Ford Expedition.
People worry about how much it costs for a tank of gas while Dubai, using our Filipino workers, is spending billions of dollars, some of it ours, to build artificial islands as playgrounds for the rich and famous.
However, no one is confident that solutions will be sought until the problem grows bigger. And that is why P100 gasoline might be good for the country. At P50, the pain is still bearable. When the situation deteriorates and the pain hurts badly enough, then the leaders might finally take some constructive action. We have seen this happen before.
Eight-hour brownouts apparently were not a major problem for the government to solve. Just declare every Monday a nonworking holiday. Only when there wasn’t any electricity for 12 hours or more (and Fidel Ramos became President) was substantive action taken.
Look at the current situation and certain political leaders’ responses to it. It would be funny if it were not so tragic for the country. One politician demands that the government increase the rice-price subsidy now that rice is nearly P50 a kilo. Does that idea keep us from importing even one extra grain of rice? No. Another wants to stop charging the expanded value-added tax, or EVAT, on gasoline. Does that increase the Philippines’ oil production by one drop? Of course not.
There must be something in the air inside government offices and legislative halls around the world that causes political leaders to lose their common sense. Ideas and policies they would never apply in their own occupation—be it in commerce, education, medicine and media—are often the standard when they enter politics.
Virtually every government leader has, directly or indirectly, engaged in wealth creation in the private sector. They built something, taught others to build or found the capital and noncapital resources to create wealth. But when they join the government, they suddenly forget how to create national wealth.
Sure, some of our leaders come from wealthy families, but in every one of these families, someone sometime started with very little and created wealth that survived and thrived through generations. Others not born into such rich families began with very little but went on to succeed financially.
We should be fortunate in the Philippines because we do not have professional politicians like in the United States, for example. Al Gore worked four years outside of politics as a part-time newspaper reporter. Barack Obama worked two years of his life in the private sector and as a part-time college lecturer and part-time lawyer. Hillary Clinton worked a total of four years as an attorney.
You want more and cheaper rice? Grow it. You need domestic oil so as not to be hostage to the Middle East oil sheiks? Dig it up.
No nation taxed, untaxed, subsidized, politicized or legislated itself to prosperity. They created wealth. Why is Vietnam now a net rice exporter? When I last visited it in 1990, this was the only national rice policy: “Everybody grow rice!” Every square meter of usable land in rice-friendly areas was planted. The monthly salary of the hotel night manager was $5.
We have huge mineral wealth. Do we dig it up? No. We may have enough oil for self-sufficiency. Do we exploit it? No.
Find a leader who applies the same wealth-creation techniques and policies in government that they do in the real world. Maybe P100-a-liter gasoline will bring that person to the top and something might be accomplished.