German smear
Market Files
Lito U. Gagni

IT would seem that German Ambassador Axel Weishaupt has committed an undiplomatic move when he was cited in a business story in another paper as saying that German infrastructure investments into the country will not be forthcoming until after the Naia Terminal 3 compensation issue is resolved. Assuming he was quoted accurately, this should not be allowed to pass and the government must register its protest.
       The Naia Terminal 3 issue which essentially boils down to the issue of compensation that Piatco and Fraport AG are seeking from the government for the latter’s takeover of the facility goes beyond the ambassador’s rhetoric. More than the compensation angle that is now being heard at the International Center for the Settlement of Investment Disputes, the issue has gone into the realm of construction methods used in erecting the airport terminal. For there have been questions raised on the shortcuts that were implemented that raise safety issues on the terminal building.
       While Ambassador Weishaupt only zeroed in on the nonentry of German investors into infrastructure, the fact remains that the envoy is using the Naia 3 foil to force the government to pay up. The same business story, though, said that German firms would still be open to investing in other sectors. What the good ambassador failed to grasp is that investment is a function of the money one can make.
       When an investor sets up shop in the Philippines, it is because that investor foresees making money in the future. Regardless of the form of government, or dominant creed or prevailing culture, an investment comes in because of the profit motive. This is true also of the investors in the stock market who are governed in their investment decisions on the possibility that they have a greater chance of making money than losing them. That’s that.
       It is ironic that Ambassador Weishaupt seems to have a myopic view of investments, more so that his views carry the imprimatur of his country. But if the good envoy would just read Tuesday’s news carrying the big story in China marking the visit of German Chancellor Angela Merkel, he would note that investments is not a quid-pro-quo thing. One invests because of economic considerations, not because of a hanging issue on compensation such as that of Piatco and Fraport AG.
       International papers carried on Tuesday the signing of a memorandum of understanding between Germany and China to allow technical cooperation on Chinese plans to build train engines. The cooperation pact has been valued by Siemens at $1.5 billion for a 500-locomotive contract and is seen as part of China’s ambitious plan to upgrade its passenger rail systems by 2015 at a cost of $250 billion, about a quarter of China’s reserves. That investment agreement arose because of economic considerations and not on other issues similar to what Ambassador Weishaupt has raised.
       While the Philippines cannot afford the $1-billion tab of the Mag-Lev train from Pudong to Shanghai that has top speed of about 400 kilometers an hour, still it can get investments on other aspects of its infrastructure development program. We are sure that when a German company sniffs a possible opportunity to gain, it would plunk its money without regard for the outcome of the Naia Terminal 3 compensation question.
       Lufthansa Technik, Siemens and other infra-biased German companies would still invest in the country’s infrastructure facilities even with the German envoy’s comment. Economic considerations transcend even other economic issues, and for the ambassador to insist on his myopic view is downright disheartening. As a love song in the ’50s say, the German ambassador’s love is verboten.