A fundamental pillar for the deepening of the global wealth convergence trend is that developing or emerging markets are likely to loosen up on their economies from politics as opposed to the financially desperate developed nations.
Sovereign Man’s Simon Black seems bullish with Georgia, (bold emphasis mine)
One of the biggest reasons for this is that there is hardly any natural wealth in the country. Like Hong Kong or Singapore, Georgia has figured out that it can’t get rich by becoming a resource powerhouse.
Consequently, the last several years has seen what they call the ’de-Sovietization and Singaporization’ of Georgia.
Georgia has shot up in the ranks of international business… from slumming with the likes of Pakistan just a few years ago, to besting places like Estonia and Switzerland.
They’re doing it by tearing down worthless, extractive economic institutions and making things easy for business and investors.
At a 15% flat rate, for example, corporate taxes are essentially as low as Singapore or Hong Kong. Capital gains, in many cases, is zero.
Regulation has been reduced dramatically– registering a property or starting a business, for example, are easier in Georgia than just about anywhere in the world.
And with both a US and UK comprehensive tax treaty (sorry Canada, Australia, and New Zealand), Georgia could make an excellent place to establish a tax efficient international business structure.
Ultimately, its ease of doing business is going to be one of the major growth catalysts for this economy– just like Panama, Dubai, or Estonia before.
Georgia is surrounded by places that are marred in obscene regulatory minefields, Byzantine tax codes, and corrupt officials. In the future, this will make Georgia the natural choice to do business in the region.
What’s the point: Prosperity does not emanate from sheer resources. To the contrary, resources may lead to a resource curse—where economic growth has been impeded by the abundance of resources due to lack of competitiveness. This has mostly been due to cronyism, economic fascism and or state capitalism.
This applies to the Philippines whom has been blessed by resources but has failed to take off economically. Yet instead of focusing on what is needed, politics keeps diverting people's attention to the superficial.
For instance, having Scarborough or Spratly’s has NOT and will not lead to prosperity. This only shows how such political controversies are really a waste of time and energy.
More, such disputes serves only to stir up nationalism and increase the risks of military conflagration at the expense of everyone.
In reality, territorial disputes over supposed resources (which is more a propaganda than reality) represents a façade meant to protect the interests of domestic cronies than of the average Filipinos. (Guess who will get the service contracts for resource extractions once the dispute is settled?)
Add to that the interests of foreign military industrial industries.
What truly is required are reforms ala Georgia: Economic freedom or the Singaporization’ of the Philippines.
