BEIJING, China – A recent World Bank study tested how geoeconomics can reshape the geography of foreign direct investment (FDI) and, in turn, how the fragmentation of FDI can affect the global economy. The Organization for Economic Co-operation and Development describes FDI as the center of globalization and is a vital channel for the movement of capital, goods, facilities, and data between economies.
The rise of geoeconomics in an interconnected world has brought more opportunities for greater prosperity and economic festival between countries. This is exemplified through China’s Belt and Road Initiative (BRI), as well as the United States’ “Creating Useful Incentives for Semiconductor Production” or CHIPS and Science Act.
The BRI followed in 2013 through the Chinese government under the leadership of new President Xi Jinping as a global infrastructure progression strategy that makes investments in more than 150 countries and foreign organizations. The CHIPS Act of 2022 signed by U. S. President Joe Biden is a great legal investment. to bring to life the studies and production of semiconductor tissues and devices. Both policies are brilliant geo-economic strategies.
Two Beijing-based institutions have very significant investments in the Philippines: the Asian Infrastructure Investment Bank (AIIB) and the State Grid Corp. of China (SGCC). The AIIB headquarters is in Chaoyang district, home to Beijing’s main foreign embassies and a developing central business district. SGCC is headquartered in the neighboring Xicheng district, home to China’s regulatory agencies and major banks along Beijing’s monetary street.
The AIIB began work in 2016 as a multilateral progress bank with a project to finance the so-called “infrastructure of tomorrow” with the aim of ensuring prosperity and economic progress in Asia. Since then, the organization now has 109 accredited members worldwide. , adding non-Asian countries and multilateral organizations that represent more than 80 percent of the world’s population and two-thirds of the world’s gross domestic product.
Among its 59 founding members is the Philippines, which joined the AIIB in December 2015 when President Benigno Aquino III approved the country’s club on the recommendation of the Ministry of Finance. Let us remember that in 1965, another multilateral monetary institution, the Asian Development Bank (ADB), chose Manila as its headquarters after beating Tokyo, Bangkok, Kuala Lumpur, Singapore, Kabul, Tehran and Phnom Penh in the tender that was held. took place in the last weeks of President Diosdado Macapagal’s mandate in December 1965.
In less than a decade of existence, the AIIB has surpassed the half-century-old AsDB in terms of members. So far, eight projects have been approved in the Philippines, including the Metro Manila Flood Management Project worth $207. 6 million, five Covid-related systems worth $2. 5 billion, and the first span of the upcoming bridge. of 350 million dollars Bataan-Cavite interconnection.
On the other hand, SGCC has a 40 percent stake in National Grid Corp. The Philippine Electric System (NGCP), the personal transportation service provider that has a franchise in Congress to manage, maintain, and expand the country’s power grid. SGCC is part of the consortium that won the auction of the national company National Transmission Corp. in 2007. Philippine companies jointly owned 60 percent of the NGCP through the Taipans Henry Sy Jr. and Robert Coyiuto Jr. , with a concession consistent with the period. which will end in December 2058.
Founded in 2002, SGCC is the world’s largest electrical utility with total assets of more than $500 billion. It represents 80% of China’s entire national grid, while the remaining 20% is under the jurisdiction of China Southern Power Grid Co. In addition to NGCP and SGCC’s other investments include stakes in China’s domestic power grids: Portugal, Australia, Brazil, Chile and Italy.
To discuss the difficult situations facing the Philippines amid a changing regional order, German think tank Friedrich Ebert Stiftung (FES) brought together a diverse organization of policymakers, academics, industry unionists, society representatives civilian, retired diplomats and former members of the army. of workers in 2021. The workshop was facilitated through the Lee Kuan Yew School of Public Policy at the National University of Singapore.
“The archipelagic country is at the forefront of many key dynamics that will shape the long term of the Asia-Pacific region in the 21st century,” says the FES report, titled “Philippines in Asia’s New Geopolitics. ” Economic geography places the country at the center of the geoeconomic evolution of trade, supply chains and maritime routes.
With such an important role to play in the coming decades, our country’s leaders will be able to navigate geoeconomics and geopolitics so that the Philippines can grow and succeed in the global marketplace.
Joseph A. Gamboa is Vice Chairman of the Ethics Committee of the Institute of Financial Executives of the Philippines (Finex) and a Director of Noble Asia Industrial Corp. The perspectives expressed here necessarily reflect the perspectives of Finex and BusinessMirror. #FinexPhils www. finex. org. ph.
Joseph Gamboa is co-chair of the Finex annual conferences for 2020-2021, chairman of the Finex business columns subcommittee, and director of Noble Asia Industrial Corp. The perspectives expressed here necessarily reflect the perspectives of those establishments and BusinessMirror. Formation
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