Post 3 of 20: The Basic Mega Co-op Movement Anti-poverty Thesis

    Here's how common logic upon logic formulates a Philippine anti-poverty tactic whereby no class struggles occur, even elites participate, and everybody wins:

(1) To raise the teeming bottom masses, millions of jobs must be constantly created.

(2) Only the skilled masses (employees and managers) and their corporate, State and institutional allies can simultaneously and endlessly create millions of jobs thru perpetual set-up of broad-owned corporate businesses that together serve world markets. 

(3) Retired Filipino corporate, Academe and State officers, managers and specialists in their millions have the time, capital, skills and confidence-building 'names' to lead employee masses towards set-up and management of broad-owned businesses.

(4)  Corporate joint ventures between 3rd World State-aided companies and 1st World techno corporations are the historically-proven fast-track ways towards set-up of large and small businesses. Here's the history: (a) In 1860s to 1920s, Japan industrialized by importing entire factories, engineering trainers included, from leading companies in the USA, UK and Germany largely thru technology licensing contracts.  The State provided financing by using imperial funds and borrowings from over a thousand local banks and the upper/middle classes thru taxation and sale of bonds.  As local employees learned the necessary industrial technologies, the State sold the industries on installment basis to local oligarchs (who can afford them).  By 1920s, each oligarch family had set up a group of 20-30 companies (zaibatsu) that raised Japanese industry to Western (rich country) levels.  In post-war 1950s, the zaibatsu morphed into keiretsu (group of companies that own each other) to comply with US occupation requirements for democratic business.  By 1960s to '80s, each of the top keiretsu owned or controlled 80-200 giant companies operating mostly parts-making and assembly factories worldwide on joint venture terms with local companies.  Less than a hundred keiretsu groups together sold $4-$7 trillion worth of consumer products plus oil refineries, consumer goods factories, steel mills, infrastructures, ships and shipyards, vehicle factories and other giant industries worldwide on average each year.  The keiretsu companies did it by sub-contracting parts manufacture to hundreds of local & foreign companies & setting up assembly plants in regional markets worldwide.    Financing came from keiretsu banks (each group with its own multi-billion dollar bank) and Japanese State banks at interest rates so low and at decade-payment terms which Western companies could not compete against.  Consequently, the Japanese masses as employees of keiretsu groups and their upstream and downstream industries became richest in the Pacific Rim, at 5 to 10x 3rd World salary rates. (b) In 1950s, South Korea copied the Japanese joint venture way (usually thru parts-making) and added production technology licensing by Japanese, US, German, and UK companies.  By 1980s, South Korean corporate groups (chaebol) numbered 50 or so companies per group, all selling at world scale at nearly 100% local content.  SoKor masses consequently enjoyed 1st World middle class living standards all the way to the present.   (c) In 1970s-80s Philippines, combined Jap, US & World Bank advice & financing set up the same Japanese joint venture wealth-making system in the country, with locals providing 60% of capital. The scheme: help the Marcos dictatorship to create jobs & expand the middle classes versus Communist recruitment of bottom masses. Unfortunately, some $40 billion in international bank loans within 20 years to help finance infrastructures and joint venture factories in their thousands failed to industrialize the country.  Instead, the system built a small politics-based elite popularly believed to have grown out of 20% commission cuts out of loans to State-aided companies.  In the '80s, constant petrochemical price rises worldwide bankrupted Phil. joint venture markets in various countries, dragging with them their dependent industries in the Philippines.  The resultant massive unemployment and double-digit inflation helped create the crises that brought the 20-year Marcos dictatorship down. Marcos was later found to own some $10 billion in local & foreign assets, including majority stock shares in 300 local state-aided companies. These days, Philippine industry has not survived its 1980s death throes and almost all manufactures offered in local markets are imported in whole or in major part.  Philippine labor exports & 1st World corporate labor outsourcing now largely pay for imports; (d) In late 1970s, China opened up to joint ventures complete with gargantuan State loans per company.  Consequently, 1st World companies attracted by the 1.4 billion-strong 'untapped' Chinese market and the country's ultra-low labor and energy costs flooded into Coastal China.  Within 20 years, the joint ventures with their latest 1st World-supplied technologies dominated world markets thru their bottom-priced consumer and producer products. By early 2000s, some 600 million Chinese employees (out of 1.4 billion population) enjoyed some of the highest income rates in the Pacific Rim, and Chinese dollar billionaires were highest in number worldwide.  The lesson?  Traditional joint ventures do build large middle classes but fail to narrow down wealth gaps.  Our Mega Co-op Movement remedy? Enable the Philippine employee masses to co-own (with State & private corporations), co-ops that each builds and runs 20-50 world-marketing joint ventures with 1st World techno corporations.  As capital stock owners of corporate groups, said masses should then acquire endless billion-dollar dividends plus rises in value of their share certificates.  Concurrently, the mega co-ops will endlessly create millions of jobs for over 60 million Phil. bottom poor.  It's now a matter of cloning Pacific Rim joint venture success stories, but this time the skilled masses, not old elites & traditional politicians will perform the wealth-making games.

(5) Management, technology and long-experienced 'names' inherent in joint ventures should build the local and international investor and creditor confidence towards mega co-ops' fast-track big-business formation.

 (6) Thousands of co-ops worldwide have built and operated million to billion-dollar businesses.  In 2020, US co-ops numbered around 29,000, had assets worth $3 trillion and membership at around 100 million.  One US dairy farmers' co-op owned $14 bn in assets, and the largest US agri co-op managed assets worth $75 bn.  In end 1990s, Philippine co-ops numbered 19,000 with 9,000 regularly reporting to the Co-ops Devpt Authority.  Phil. Army Finance (a credit co-op) assets totaled P8 bn while co-ops within private and public corporations as well as electric co-ops reported assets at P4.8 million to P1 bn per co-op.  Such statistics prove employee and managerial masses' ability to set up and profitably run large-scale business enterprises.

(7) Global warming as planet extinction-level hazard has lately created green funds and development Aid funds that lend trillions of dollars to world businesses that address global warming.  By setting up all-green projects, Philippine mega co-op joint ventures may borrow billions of dollars from such funds for purchase of equipment and materials at 60-75% project cost.  Approvals may be facilitated by Philippine government guarantees of repayment in the highly unlikely case of bankruptcy, since top local and 1st World corporate skills will be running the described joint ventures.

(8) The world's elites are elites because they have been owning majority capital shares in corporate groups of 50-400 giant companies per elite entrepreneur or family.  Philippine mega co-ops should copy the tactic by setting up 20-50 joint venture companies per mega co-op within a decade or two.

(9) To build a corporate group, the mega co-op must act as billion-peso investment house or holding company by providing just P10M to P50M in capital per joint venture.  For multi-million dollar joint ventures, scores of mega co-ops may invest as consortium.  A mega co-op can build scores of companies even at pre-operations stage thru agroforest contract growing or processing, foreign resort school site leasing, factory production contracting schemes, etc. For hundred-million dollar industrial projects such as mini steel mills, alloy parts-making plants, geothermal and hydropower facilities, etc., hundreds of mega co-ops may contribute a few million dollars each to form half of capital.  Several 1st World techno companies and parts suppliers as joint venture partners may similarly invest 50% of capital as well as provide technology and trainers.  60-70% of project cost may be financed by world Green Funds under Phil. gov't guaranty.

(10) To acquire bulk (billion-peso) capital from scores of local private companies, Movement members who are employees must persuade their companies to invest in said employees' mega co-ops at multimillion-peso levels per company.  Said employees must also recruit their company's hundreds of suppliers and customers to invest in the same manner.  To acquire additional hundred-million level capital, every mega co-op should persuade scores of State corporations, agencies, and local governments to invest tens of millions of pesos each. 

(11) The Phil. govt's ages-long ill repute as part of the world's 'top corrupt' have since 1950s scared off armies of foreign investors that could have created jobs and wealth for the country.  How to end the poverty-maintaining 'tradition'?  The Movement has to dominate government thru constitutional change, after which a 10,000-strong Bid Awards and Controllership Body composed of retired Purchasing or Operations officers of State agencies and largest private companies (having been exposed to all types of corrupt practices) must be set up.  BACB members as thousand-voter committees should vote via internet websites on all State bids based on 'too many to bribe = no bribe' principle.  Indeed no supplier or contractor will afford bribing thousands of approvers voting thru the internet.   Concurrently as Controller, the BACB has to ensure no overbudget expenditures typical of past regime practices by limiting State budgets to no more than average GDP percentage rise the  past 12 years. The scheme prevents peso purchasing power deterioration (inflation) caused by 'traditional' State overspending. Lots more poverty-fighting political schemes are presented in this blog's other posts.

(12) If the masses co-own mega co-op corporate groups as previously described, wealth in trillions of dollars shall endlessly flow among the masses in the form of high salaries, bonuses, pre-need plans (pension, health, education, etc.) stock shares, stock dividends, rises in book value of shares as loans get paid, rises in market value of shares during favorable times, and profits out of co-op linked 'barkada' (small friendship groups)' small businesses financed by State loans.  The scheme should enable the Philippines' 60+ million Primary & Elementary level bottom poor as mega co-op corporate group employees to acquire good education for job promotion towards middle class incomes.  Filipino families will then become 99% well-educated middle and upper classes at 1st World standards, on permanent basis.

(13) The effects of current and future pandemics should be minimized as the Movement sets up 'clean and green' rural industries which will absorb inhabitants of crowded pandemic-breeding city districts into good-paying rural jobs.  Fresh air, powerful exhaust fans in all factories' roofs (to expel all viruses and germs 24/7), ozone disinfection facilities, and companies' ability to afford vaccines, protective equipment and hospital care for their employees shall ensure no more pandemics creating unbearable miseries among Philippine masses.  State & mass wealth will afford all pandemic prevention systems. 

    Read next post which shows how the Philippine employee masses and their corporate and State allies may set up  mega co-op corporate groups! (For Android cellphones, swipe screen up & down, tap arrow at left of title, and tap Post 4: It's Action Time!)  

    For Question & Answer procedure, tap Post 19: Time to Act! Help Promote Our Mega Co-op Movt!

    For comments: email fermin4megacoops@gmail.com