Post 20 of 20: About Me, Fermin B. Francisco

    It's me, FERMIN B. FRANCISCO: Senior resident Filipino, poverty victim & hater, 50-year research addict on poverty solutions & elite ways to wealth.  Blog author: wealth2mass.blogspot.com (this promo blog); fermin4greenearth.blogspot.com (promo blog's details & more); povertyslayers.blogspot.com (early search for poverty solutions).

    My Bio Milestone 1 (1950s-60s): Makati Catholic School: Had a copious dose of 'God & others before self' doctrine; Paco Catholic High School, Manila: Learned in History class about the 'inevitability of class struggle' as solution to mass poverty.  Wondered however if class cooperation is a better option, or if it's even possible.

    My Bio Milestone 2 ('60s): University of the East, Manila, BSBA Marketing: Witnessed numerous activist student groups engaged in street battles with the police.  The issues: unending mass poverty, land reform, imperialist systems, corruption at State, etc. Preferred to look for answers the 'nerdy' way: books, magazines, and literature on 'hidden' poverty issues.  Research topics: how the few got so wealthy; world-scale business as creators of elites; how overseas Chinese dominated local businesses over 500+ years;  why the 'whites' have all the profit-making technologies; how Western colonialists used native allies to control everything, etc.  Sources of data: US Info Svc Jefferson Library (Manila), the National Library, UE university library, bookstore used book sales, newspapers and magazines, 'activist' literature.  Research issues: economic and political causes of rich-poor gaps, world economic history, ancient trading history, US & Euro inventions & industrialization, biographies of inventors and corporate entrepreneurs; corporate business tactics; State-elite business synergies, macroeconomics, corporate takeover battles, corporate finance, stock markets, 1st World R&D history, socialist, communist and free enterprise theories, ancient Greek political systems, historical effects of US gold-backed & fiat currencies, economic depressions & crises, etc.  Most significant findings: a) some 250 patented inventions & 300 applications more per day in 1800s USA and higher rates later, near-zero for 3rd World; b) just 6% or so of over 25 million US & Euro inventions since 1800s that were commercialized and sold in world markets created a 1st World of 99% middle & upper classes.  c) average farm sizes: USA @ 150 hectares, Phils @ 1.6 hectares (no wonder local farmers are so poor);  d) 3rd World peoples developed no world-scale markets except for metal ores and raw materials sold by 1st World companies operating in the 3rd World.  e) State-aided 1st World imperial business and trading systems that spanned continents and created colonies from 1400s to 1900s largely created history's stratospheric wealth and power gaps. f) 3rd World entrepreneur-elites never banded together to access world markets, and instead fought tooth and nail over tiny local markets;  g) the industrial revolution (development of large-scale factories, metal works, & world-scale shipping) + stock market financing of railroad nets + education based largely on engineering and business + endless invention of technologies thru corporate and State R&D labs + scores of other wealth-creating factors all occurred in the 1st World from 1700s onwards.  Nothing of equivalent scale happened in the 'sleeping' 3rd World from said period & up to the present.  h) Tragic results for 3rd World societies past to present can thus only be expected:  h1) 99% micro-scale 'native' businesses have yielded ultra-low rates of employment, sales, profits and salaries which all promised near-zero chances for business expansion. The consequence: mass poverty;  h2) High Phil. unemployment: 60+% of population unable to study beyond primary and elementary level; just 10% or so of Elementary students finishing College.  Result: poverty maintained; h3) almost zero State, Academe and corporate budgets for research and development  = no high-profit products created for world markets = poverty further maintained.  h4) General inability to form world-scale companies thru State-business synergies Japanese style = enduring poverty up to the present, with no end in sight.   Conclusion: Contrary to much of 3rd World people's beliefs, poverty is neither a consequence of 'God's test', nor unfortunate fate, nor divine punishment for sins, nor elite materialism, 'unholy living', corporate greed, absence of land reform, non-performance of religious rites, nor the prevalence of feudal systems. Neither is poverty caused by 'unjust income sharing', nor the helplessness of workers' unions, nor corruption at State, nor the machinations of self-seeking political parties.  As 1st World history showed, mass poverty is the inability of skilled masses & their allies (entrepreneurs, managers, employees, elites & State) to set up and run profit-making, broad-owned business enterprises from small to large to world-scale in sufficient volumes that are able to capture world-girdling markets. Indeed even if business incomes are 'unjustly shared', if the sales, profit & salary volumes of aggregate business overwhelm the working masses & their dependents, mass poverty cannot exist.

    My Bio Milestone 3: Credit Investigator, Progressive Commercial Bank (1970s); Learned that said bank's owners (3 old elite families) owned 14  other companies, including sugar plantations & centrals, real estate, commercial & entertainment centers, etc.  Observation: elites create multiple and large-scale sources of income while working masses earn out of a single source of income: low salaries incident to job competition. The tragedy helps perpetuate stratospheric wealth & power gaps.  Learned further from studies that 80 or so local elite families owned or controlled 20-30 companies per family.  The said corporate groups included the country's largest banks which in great part financed group operations by borrowing large slices of the middle classes' trillion-peso savings and time deposits.  With equipment, goods and service credits included, corporate group assets comprised 70%-98% borrowings.  In effect, elites' corporate groups were using their banks as 'milking cows'.  The lesson for the working masses?  Since they largely help set up and run elites' corporate groups, they know exactly how elites operate businesses on large scale.  Led by trusted retired managers, they may thus set up mass-owned businesses (mega co-ops) and adopt the very tactics that elite entrepreneurs use in building massive fortunes.  For working masses of developing societies, elite tactics are all too familiar: capital-sharing joint ventures with 1st World companies, licensing of 1st World technologies to set up local factories complete with engineering trainers, massive State loans thru 1st World corporate partner 'names', tax breaks, set up and operation of 'milking cow' banks, developing impressive credit worthiness through employee skills to acquire State and private bank loans at five times capital, and cornering of State loans & resources by helping finance  political parties to win influential State posts. Victory in elections can mean the retailing of billion-dollar proceeds of international State bond sales towards projects and loans to benefit sponsoring politicians & their election financiers.  The solution to mass poverty thereby revealed itself as rather simple and 'mass doable': employee & managerial masses should copy elites' familiar big-business ways!  

    My Bio Milestone 4: Marketing Section Chief, Natl Electrification Admins' World Bank/US Peace Corps-aided crafts co-ops as power use development program (1980s). Learned about the WB & Jap/Intl Aid agencies lending over $2bn yearly to the Marcos Martial law regime.  The rationale was not based on credit worthiness but on politics: business expansion as preventive against Communist rebel victory (more jobs = larger middle classes = less rebellion).  The loans & joint venture investments did build massive infrastructures (dams, road networks, ports, public works) plus thousands of export-oriented parts-making factories in low-tax industrial zones.  An integrated steel mill was set up as State/Jap joint venture (which later tanked).  Loans also financed retooling of factories, numerous rural co-ops and farm/fishery groups' equipment needs, an aborted nuclear power plant, timber export cos. (which reduced forest cover from 50% land area to just 15% or so), and scores of new Marcos cronies' mfg companies.  The rising industries did expand jobs & middle classes, although it also built a political elite that cornered major retailing portions of the State's international dollar loans. Additionally, 'facilitation fees' for State award of franchises & licenses shot up from 10% in 1960s pre-Marcos to 20% 'Marcos dictatorship rate' in the form of cash & capital stock.   

    My Bio Milestone 5: Bad debts collection staff, Silcor Group (1980s): Learned that Silcor comprised 20 giant companies (car assembly, appliances manufacture, timber, mining, electronics, etc.). All were under joint venture &/or technology licensing agreements with Japanese companies and fueled by State loans thru Marcos connections.  The Japanese partners provided all technologies and appropriate trainers.  Unfortunately for the economy at the time, the world oil cartels' jacking up of prices since the '70s dried up Philippine export markets.  The consequence: bankruptcy of almost all export-dependent Phil. factories and their upstream and downstream industries.  The resultant massive unemployment, price rises at 20-50%, rampant 'snap election' cheating, daily street rallies & a US-supported military putsch culminated towards Marcos' ouster in 1986 thru People Power.  The succeeding government subsequently discovered some 300 large local companies as Marcos-owned or controlled and around $10 billion in local & foreign real estate, gold, 'royal class' jewelries, world masters' paintings & offshore bank deposits all in Marcos family or crony names. Much of the 'royal class fortunes' were claimed to have come from 'contributions' made by grateful recipients of State aid.  Conclusion: Marcos' industrial-scale State aid (Japanese advisers' tactic) facilitated by total State control (martial law) can form a road to fabulous wealth.  The scheme should be a good copycat lesson for Filipino employee masses setting up mega co-op corporate groups.  Large-scale State-business synergies have in fact been demonstrated by Japan since mid-1800s as an effective road to the 1st World.  However, copycat Philippine employee masses these days have to  dream up corruption prevention systems for such anti-poverty tactics to succeed in favor of the masses, not elites as usual.

    My Bio Milestone 6: Industrial Ethanol Dept Secretary, Saudi Petrochemical Co. (4 yrs), and Director's Secretary; Saudi Ministry of Interior (4 yrs): Learned that the Saudis industrialized by simply importing entire petrochemical plants, metals and minerals processing plants, consumer goods factories, infrastructures, etc. Suppliers were leading US, Jpn, SoKor, and Euro companies that all included engineering & management trainers as part of their contract packages. Oil exports paid for the industries. Leading 1st World companies set up the industries as general contractors that hired sub-contractors that in turn hired engineers & personnel from India, Pakistan, Philippines & other 'lower skill' countries.  South Korean cos. however monopolized entire contracts turnkey-style including equipment supply, all facilitated by billion-dollar financing from the SoKor govt.  Filipino entrepreneurs hardly engaged in industrial contracting although 1st World firms hired Filipino engineers & professionals as 'top level skills'.  Filipino cos. were content with merely partnering with Arabs for supply of abuse-inviting bottom-level plant employees & housemaids. Not one elite Filipino company offered the Saudis such service contracts as planting green belts (Filipino agriculturists are world class, & certain Arab royals already hinted at the possibility). Nor did Filipino cos. offer sub-contracting infrastructure and industrial projects, although Filipino engineers & technicians are praised in the Middle East for their 'remedial' skills.  Filipino billionaire elites were unfortunately content with 'easy' local parts-making joint ventures, import-oriented businesses & politics-based projects.  All were apparently scared to death of fighting it out in international markets. Hindsight conclusion: Near-absence of large-scale, world-class Filipino entrepreneurship has been a lasting Philippine business feature from centuries past to present.  What should address the poverty-maintaining 'sleepiness'?  Nothing else but a Green Phil. MC Movt of 3rd World-1st World joint venture corporate groups expanding all over the tropics.  The aim: help redeem 5+ billion 3rd World poor of their ancient miseries.  The side effect: endless sequestering of mother Earth's greenhouse gases at trillion-ton levels versus global warming.

    My Bio Milestone 7: 1990s to present: 20-year researches on appropriate mega co-op technologies and political systems for the Philippine situation: Data sources: State agribusiness seminars & libraries, bookstore sales, magazine articles on local and world business developments.  Tested or searched several micro businesses (corn farm, fiber & fish fry supply for export, rural transport).  Conclusion: like a past bay fishing partnership with friends, said micro  business lines promise no feasible large-scale expansion, therefore cannot qualify for 'mass business'.  Prepared several agribusiness project studies for an NGO.  Edited College Accountancy theses.  Accessed thousands of internet websites on topics that hint at potential solutions to Phil. poverty & other related scourges. Lessons learned (which MC Movt members must imbibe as well) include the exciting history of the Phil. overseas Chinese.  Here it is: 1) In pre-Spanish 1400s, coastal Chinese junk (ship) traders plied coastal Phils to sell ceramic & bronze household items on 3-6 mos. consignment to local retailers who then sold the items in the hinterlands.  Payment after the long period were in gold dust, forest resins, shells, cloth & pearls. 2) In Spanish colonial Phils, (1600s-1800s) Chinese labor contractors supplied hordes of skilled craftsmen to build Spanish ships (galleons), buildings, churches, houses & carriages.  Every time Chinatown became too crowded with Chinese, Spaniards fearing Chinese-native rebellion (no year passed without rebellions in rural Phils) bombarded the district & initiated pogroms that murdered thousands of Chinese.  Spaniards however had become too dependent on skilled labor so the contractors always came back after the tragedies with even more Chinese in Chinatown. 3) In 1700s, UK traders imported shiploads of Phil sugar for European markets. US trading cos. followed suit for the US market.  Chinese entrepreneurs quickly dominated the colony's sugar industry by financing native cane farms (to corner supply) & engaging in brown sugar production for sale to US/UK exporters. US cos. copied the tactic but did not fare well. 4) In 1700s-1800s, Chinese traders went into direct sugar production by marrying local women to get Spanish permits to own land.  Their offspring (Chinese mestizos) who inherited large parcels of sugar farms became the 1st Phil. 'native' upper classes.  5) In early 1800s UK cos sold steam-powered mills on installment to large sugar farms, enabling buyers to greatly raise production, buy & develop more lands to thousand-hectare level.  The buyers became the 1st Phil 'native' elite. 6) In late 1800s, the colony's top elite was the Chinese Tua Son who cornered the crop advancing, processing & sales of sugar, coffee & abaca ropes to US export cos. as well as financing of mainland Chinese products to Mexican markets.  7) In early 1900s US occupation, the US govt set up a Philippine Commonwealth govt of natives.  Sugar elites quickly arranged to get top posts, then  used their clout to drain the Phil. National Bank of its dollars, for use in importing huge sugar centrals & plantation railways on installment from US suppliers, thereby further entrenching said sugar elite.  8) In 1950s the 'native' govt tried to break total Chinese domination of local consumer goods industries  by forcibly 'borrowing' the remittance dollars of local elites & US companies. The dollars were then lent out to local entrepreneurs for use in importing second hand consumer goods factories from the USA.  Several thousand factories plus an oil refinery did crop up.  Unfortunately, demand for Phil. sugar declined due to Cuban & Hawaiian competition.  Sugar-based dollars soon dried up, the 'State entrepreneurs' couldn't pay their imported machines & materials, forcing most of the factories to fold up.  Former Chinese 'dominators' of local industries, all with access to dollar financing from Hong Kong once again totally dominated local manufacturing industries. 9) In 1960s the Marcos regime tried to industrialize the country thru joint ventures between local & foreign manufacturing companies plus over $2 billion in World Bank & other loans for infrastructure projects & lending to the joint ventures.  Thousands of factories did rise & the middle class of employees expanded.  Unfortunately, 'endless' rises in petrochemical prices bankrupted Phil. export markets.  In late 1970s the world's 'joint venture fever' reached China, & Chinese factories soon dominated world markets, further drying up Phil. exports.  The resultant massive unemployment & economic crises brought down the Marcos dictatorship in 1986.  Chinese companies all the more dominated Phil. industries, especially 'importation of everything manufactured', retail trade (malls) & real estate (high rise buildings).  All the while, 'native' Philippines suffered 3rd World poverty.  The major lesson? It's Overseas Chinese inter-racial, world scale, mutual help entrepreneurial culture, something that Filipino natives from old times to present sorely lack.  How may the picture change?  Only thru mass entrepreneurship as described all throughout this blog.

    Conclusion: The Mega Co-op Movement tactics herein presented obviously cannot work unless implemented by a Philippine skilled mass majority each intent on earning great lifetime 'sideline' income while creating jobs for bottom poor.  Success in the Philippines should create the clones and adaptations tropics-wide that will in due time redeem the 3rd World's 5+ billon poor while helping end global warming on fast-track basis.   If the appropriate 'mutual help miracle' spreads out planet-wide, humanity should be enjoying the lifetime joys and spiritual fulfillment that the Creator designed for all humans both on earth and thereafter.

    Let's all fight the divine fight!