A discussion how international trade actually works against developing nations
|"It's a pity how you see this country, Archie. If your mother only told you more about..."|
"Mom loved the Philippines."
"Despite the useless government and stupid people? She loved this country unconditionally, I bet."
"Look-she and I would visit this place every year. She even suggested moving back permanently."
"And what would you do here, Archie-complain about everything?"
"Of course not. I'd do something productive, like... turning Villa Nuñez into a plantation, for a start."
A plantation... run by an American... Anna, you have found your mark.
"And what would this plantation of yours sell?" I said.
He grinned. "Why not coconuts. This place has lots of that stuff."
"How smart. You actually think you can sell that in the market."
"Not this market, Anna. The world market-obviously."
"Even smarter. You actually think you can sell that in the world market."
"And why not?"
"Everyone in Southeast Asia has coconuts, obviously. Supply is high, prices fall. Prices fall, profits wane, your business dies. Archie, you've already failed before you even started."
"Anna, trade's competitive, so you invest in what you've got. You train people, get equipment..."
"Archie-you're already broke, okay? You spent all your money building the plantation, the upkeep and maintenance, shouldering falling price..."
"Then take out a damn loan. I told you it's an investment. So you invest in..."
"Oh, they'll give you a loan alright. Anything to perpetuate your coconut exports. But like any good business, they'll require something... in return." I grinned.
He paused and eyed me cautiously. He finally realized where I was taking this.
"Archie-don't analyze it so much! It's simple: Sell what you have, and we sell what we have. You've got raw materials; we've got finished goods. To each nation's fair comparative advantage, right?"
He didn't reply.
"How about coconut oil. Can you make that? Or would you like another loan to..."
"What's your point, Anna."
"What do you think, Archie."
We stared at each other. He then looked away.
I smiled. "Oh, I get it. I just said oil and now you think it's some conspiracy to eventually bomb your country. Very clever. What on earth can take from this place? Nothing. Except your coconuts. So sell them to us, and we'll take it-all of it.
He didn't reply.
"You know what happens next, don't you. Leave the gates of your Villa Nuñez and take a good look at the impoverished countryside-that is what happens next!"
He was silent.
"Congratulations Archie Gallagher. You've just bankrupted the Philippines. Your mother would be proud."
An excerpt from ORANGE, the novel
by Joey Silayan