Former Senate President Whipps Sr. opposes ADB consultant opinion
By: L.N. Reklai
“I know that the issue of front business is an emotional one, but let me say that I do think front businesses are good,” says Paul Holden, Lead Economist for ADB Pacific Private Sector Development Initiative, during a panel discussion at the Economic Symposium yesterday.
Mr. Holden qualifies his statement by saying that the policy of reserving certain businesses to locals only creates an environment that encourages poor investor behavior. He states that an investment policy that would allow anyone to invest would help Palau grow its economy. [restrict]
Furthermore, people who are involved in front businesses bring skills and capital into Palau that local people cannot fill, he added.
Mr. Holden stated that Palau has had the means to enforce the laws but it had not.
Mr. Sam Scott of Sam’s Tours expressed a concern that enforcement of the revised Foreign Investment Law would affect a lot of businesses in Palau and would have major impact on Palau’s economic well-being.
“The law should have been enforced way back. Enforcing it now would have serious impact,” added Scott.
Surangel Whipps Sr. expressed his opposition to Mr. Holden’s opinion on front businesses stating that Palauans have the entrepreneurial spirit and skills to own and run businesses.
He stated that in the ‘70s they own and operated tour boats and their customers had no complaints. Using the example of boaters association, he stated that people bought boats but foreign boat operators banded together to keep customers to themselves.
“There are now about 40 boats owned by foreigners and so many local people are stuck with no customers,” asserted Mr. Whipps Sr.
9th OEK passed RPPL 9-64 last year amending Foreign Investment Act. The amendments sought to clarify and define terms and processes within the Foreign Investment Act. One of the key amendments defined a “front business” as an illegal act and expanded the definition of “ownership” in a business to allow for easier enforcement of “front” activities.
Regulations to implement these amendments to the Foreign Investment Act are still being developed. [/restrict]