What Filipino Middle Class?

While trying to figure out why the middle class in the Philippines was so small I stumbled across this fantastic opinion piece in the Philippine Star newspaper. The author, Nelson Navarro, makes it clear that the Philippines wasn't always the impoverished economic basket case that it is today and that 30 years ago the neighbors of the Philippines used to welcome affluent tourists Filipino with money to spend. Today countries such as Thailand, Malaysia, Singapore and even China are modernizing and have thriving economies. The Philippines has slums, barefoot feral children, beggars and so many excess people that according to Navarro’s piece 10% of the population of the Philippines lives abroad as OFW’s doing manual labor or are domestic servants. Philippine government officials and their cronies make money off of the export of laborers and maids.

The Philippines attracts call centers because Filipinos speak English and work much cheaper than English speaking Singaporeans or English speaking North Americans but attracting other foreign investment where the Philippines has to compete with their neighbors is hard. Really, why should multinational businesses invest here? Infrastructure has been neglected, there’s almost no public transportation so employees can’t get to work on time, electricity costs more than anywhere else in Asia and is undependable so brownouts and blackouts are a regular occurrence due to inadequate grid, bribes are required at every stage of business, squatters are rife and the underpaid police and low level government officials augment their income with bribes. Why not have your office in places that have a modern infrastructure and that work better such as Kuala Lumpur, Bangkok or anywhere in China?

According to one of our hosts he fully expects that politicians to take bribes and steal from the public purse. That’s normal behavior in the Philippines and many other places in Asia. “But do they have to take it all?”, he said. Evidently they do and citizens mostly tolerate it. Manila’s public transportation consists of light rail lines (no municipal buses). The speed of the trains is held to around 20 mph due to a problem with the rails and the lack of spare parts due to a lack of money. New rolling stock is needed but a Czech supplier of rail cars was solicited for a 30 million USD bribe to get the business.

So what about the politicians? Ferdinand Marcos and his shoe collecting wife were the very models of kleptocracy but he's dead (but she lives on as a powerful elected senator as does her son Bong Bong). Current President Aquino has an actress sister named Kris who is all over the country on billboards as the official spokesperson for a fast food chain, Chowking. Her and a basketball player have a son named "Bimby". President Aquino also has a sister named, I kid you not, "Ballsy". Shockingly Ballsy was recently accused and cleared in a bribery scandal. It's that kind of country and will probably stay that kind of country.

Phnom Penh – Where Old Camrys Go to Die

What do you call a country where everything is priced in US dollars, where a beer costs just $1 (.75 during happy hour) but signs in English warn you to not patronize the country’s infamous child sex industry? Here’s a hint, I found it in my hotel room but I’m seeing it all over town:

Cambodia is still recovering from wars involving the United States, its neighbor to the east Vietnam and a civil war which culminated in a genocide that wiped out a generation and targeted anyone with any knowledge (doctors, teachers, engineers) about anything beyond day to day farming and peasantry for death.  2 million Cambodians perished at the hands of their countrymen.

Here's a story that ties obvious corruption and a convicted Russian pedophile in one nasty little package: Pedophile Was Permitted To Leave Prison  Why?  To go visit one of his many investments,of course.

The present government of Cambodia is a corrupt mess but I’m sure that most Cambodians find that preferable to the genocidal government that it replaced.  So Cambodia is a land of dollar beer and no local industry to speak of other than tuk-tuk taxi driving and child prostitution.  So why are the streets choked with Lexus cars, motorbikes and tuk-tuks?  And why are a majority of the cars I see in Phnom Penh Toyotas and why are the lions share of those Lexus SUV’s and Toyota Land Cruisers and Camrys yet there are no Honda Accords (but plenty of Honda CRV’s)?  

But wait, it gets stranger.  The Camrys are all American spec with US 2.5 MPH bumpers and I’d bet every last one of them popped out of Toyota’s assembly plant in Georgetown, Kentucky.  They look very different from the Thai assembled Camrys I saw in Bangkok and that Toyota sells in most of the world outside of North America.  I rode in one from the Phnom Penh airport to my hotel and noticed that the speedo showed MPH, not KPH.  Then I started noticing that some of the Camrys on Phnom Penh’s streets carried stickers on their rumps from dealers in places like Miami, FL and Norman, OK.  A few had California license plates, one a Colorado tag.  I’ve combed through the Internet and other travelers have noticed the dominance of the Camry here but nobody has an explanation why. 

My best guess is that these Camrys were indeed built and bought either new or more likely used in America by Cambodians or Cambodian Americans and sent home to the rest of the family. That would also explain the Toyota Tacomas I’m seeing.  Outside of North America the Toyota pickup is known as the Hi-Lux and I’ve seen a few of those along with a few other North America only models such as the Toyota Matrix.

I have no explanation for all of the Toyota Land Cruisers I see in Phnom Penh in both Toyota and Lexus dress.  Most are late model and the Land Cruiser sells for around $65,000 new in the US, the Lexus variant costs around $76,000.  They have big thirsty V-8’s, all of this in a country with next to no economy and no Lexus dealers.