This blog is officially closed.

Friends: This blog is officially closed.

For now.

I'm on vacation.

Pilipino versus English: A continuing debate

The debate on the use of English and Pilipino as medium of instruction is a hot topic among the middle class in the Philippines. Lately, I found myself engaging in a nice discussions with learned persons online. Excerpts (unedited):

GERONIMO SY (Lawyer and columnist. Manila Times): It is equally true that speaking English cannot be the end all and be all of our education system, that not to churn out good English speakers condemns the entire learning apparatus to hell and hence the fate of our nation. If it were so, then how do we explain the ascendancy of Japan, the rise of China, the emergence of Korea and the fast coming Vietnam—all with kindergarten English?

Studies now point to the use of the vernacular as a medium of instruction in the early years to facilitate teaching and learning. Media has long embraced Filipino as our lingua franca that sends the message home. It is acceptable and downright fashionable to speak deep and high Tagalog in political circles. It is time we take English what it is - a tool to communicate. Stop the circular arguments on which language comes first.

TESSY ANG-SEE (famous civic leader): Master our own first languages first and we can master the second language better!! In our case, we mastered Tagalog first, then learned Hokkien (our local dialect, lingua franca of the Tsinoys here), then learned English and then learned Mandarin!! We are able to master the first three, mandarin is something else because there was no speech community to support it and it is more alien to us, being a language of the north while Hokkien and Tagalog belong to the austronesian linguistics group.... [i managed to pick up mandarin much later in life while doing research]

DAVE LLORITO (journalist, researcher): Would anybody hire a graduate for her/his "mastery" of Tagalog? (I dont call it "Filipino" because its really is Tagalog.) as English-Tagalog translator maybe, or a Tabloid reporter, but not much else. Should we master Tagalog so that in the real world, in the world of jobs, entrepreneurship and business we are going to use English as the medium of communication? But that's my dilemma. But maybe there is no conflict here. but how do we translate that to policy? Maybe we should learn the basic dialects/language from the first and third grade then shift to English later until college. so we will have Visayans or Tagalogs, or Ilocanos using their languages first in early elementary before they eventually shift to English as medium of instruction. Sounds good to me. But Tagalog should never be imposed. But hey, isn’t English also part of our Filipino heritage as a nation? I'm just sharing my random thoughts here, actually.

ADDIE SUZARA (Finance expert, technopreneur and computer geek): I was born in a large family where Tagalog, Bicolano, English and some Spanish were spoken. I then went to schools where English was the medium of instruction but where Pilipino was taught as a subject and I learned grammar and read literature. I also took up formal Spanish in college.
I can now speak and write English well, speak Tagalog well but write with a little difficulty only due to lack of practice, speak Bicolano with a little difficulty because of lack of practice, haven't tried writing in Bicolano, and can't do much oral and written Spanish. I think it worked out OK for me.

DAVE: Addie, You are a very good case study. The fact is you enrolled in schools using English as medium of instruction and where Pilipino is taught as a subject and it worked well for you. Pilipino only as one of the subjects, and not as medium of instruction! I like that. And I guess no one could question Addie's nationalism, identity and patriotism.

ADDIE: Thank you Dave but let me hasten to add that, until I went to Kindergarten at age 6, Tagalog with a Bicolano flavor was my primary spoken language.

TESSIE: [We are] missing the point entirely when we insist that to find jobs we should know English. We miss to consider the fundamental role of language in establishing identity and ethnicity…

DAVE: I was raising a practical, real world perspective. The job market, the world of entrepreneurship and business, are using English and in that world mastery of this language, plus skills in the math and science are what really matters. I know because I have lots of friends who are nationalistic but who actually enroll their kids in exclusive schools that are teaching purely English. Most of those who actually argue for Tagalog, ehe Filipino, are doing their finest points in English. And they use English extensively at home.

TESSIE: For people from educated families, lower middle class and above, there's no problem using English as a medium of instruction. These are people who have access to other media, books, newspapers, adult conversation etc. Being a nationalist Filipino or not has nothing to do with it. No one becomes less Filipino just because he learns English or another dialect first and not Filipino as a first language.

However we are speaking of 60 percent of our population who live below the poverty line who should have a good grasp of a national language before a second language is forced on them. If you go to Malaysia and Indonesia, what welcomes you at the airport are all Malay greetings and Malay music ..It is a language that binds the nation. Contrast that with what greets us and our kababayan at our airport!

ADDIE: While I do come from the 40% of the population who live above the poverty line, I would not say that those from the 60% did not have all the opportunities available to me in terms of learning other languages.Let us not forget that most of us grew up in at least a two language environment - the local dialect and Tagalog. I spoke Tagalog and Bicolano because my mother was from Taagalog soeaking Labo while my father came from Bicolano speaking Daet. Both these towns are in Camarines Norte. I agree with Dave that the gut issue is when to use English as a medium of instruction. I say "a" instead of "the" because I think we can have more than one medium of instruction. I think our kids wherever they may be can easily absorb a third language. The areas of improvement are in the school system.

DAVE: Again, the question here is translating this to policy. If you are in the Visayas, you certainly will feel that Tagalog or Pilipino is being "forced" on you. If "promotion" of the national language is the Tagalogization of the entire country, that will surely fail and it has failed since Marcos.

The promotion of the local Bahasa language was done under authoritarian regime. It was imposed on them. Example: During the days of Suharto, the Chinese were barred from learning the Chinese language/dialects; they were not allowed to open up Chinese schools in the name of national unity. It's only after the fall of Suharto that the Chinese started putting up Chinese schools. This is what my Indonesian friend told me. Well, it seemed to have worked well for them, given their historical circumstances.

Marcos actually tried the same approach through the imposition of Tagalog, and we called it Filipino, and that policy failed. Maybe Marcos was not ruthless enough? Not really. I think one reason is that English is also part of our national heritage. And it's no brainer why we cling to that language despite the Marcos policy: it has become a ticket out of poverty for many Filipinos. It has become a ticket for many to escape through the claws of the monopolists and the vampire elite of this country. That 15 billion dollars that buttress the economy, that prevents the economy from total disintegration, that has become a safety valve against a Marxist socialist revolution, is the offshoot of our capability to speak and use the English language.

A case for political fact checking in the Philippines

I was wondering how social media or the new media could help improve the debates in the 2010 Philippine presidential elections until I came across Factcheck.org. This site, being run by a non-partisan and non-profit group from the Annenberg Public Policy Center of the University of Pennsylvania, monitors the factual accuracy of the statements, ads, speeches, interviews, and news releases by major US political players. The g goal is “to apply the best practices of both journalism and scholarship, and to increase public knowledge and understanding.”

It's motto: "Holding politicians accountable."

Recent example: “Obama says his health care plan will garner large savings – $120 billion a year, or $2,500 per family – with more than half coming from the use of electronic health records. And he says he’ll make that happen in his first term.” The group says that statement is “overly optimistic, misleading and, to some extent, contradicted by one of his own advisers. And it masks the true cost of his plan to cover millions of Americans who now have no health insurance.” Then the group proceeds to explain and analyze why Obama is wrong.

There’s also a lot fact checking stuff on John McCain, and Hillary Clinton policy pronouncements.

We need something like this for the 2010 presidential election. In fact, we need it to enhance and advance democracy in this country. Who should do this? Suggestion: why not our universities like UP, Ateneo, LaSalle, UST and others form a consortium for this? They should gather a pool of experts, researchers and a secretariat for this effort as soon as possible. Local and multilateral institutions who care about “governance” may contribute money to finance its operations.

This way politicians and decision-makers would be forced to study and think through the issues before they could even think about opening their mouths.

What do you think?

Obama is a free-market guy after all!

US presidential candidate Barack Obama after all “loves the market,” contrary to his earlier posturing as a protectionist. On CNBC, courtesy of Paul Krugman’s blog “Conscience of a Liberal,” he said: “Look. I am a pro-growth, free-market guy. I love the market” to the dismay of globalization hater Naomi Klein who castigated Obama for appointing in his policy team Chicago School economists who are supposed to be disciples of free market guru Milton Friedman.

Says Klein: “Obama's love of markets and his desire for "change" are not inherently incompatible. "The market has gotten out of balance," he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counterrevolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama—who taught law at the University of Chicago for a decade—is thoroughly embedded in the mind-set known as the Chicago School.”

Politics and politicians—they are the same all over the world. I wonder if his sentiment extends to international trade, say the Doha Round of trade talks where American leadership is sorely needed. But who knows, he might just change his tune again once he feels it’s necessary to do so just to get the votes? It’s really all about political marketing, if ever there is such a thing. And by the way, if John McCain loves the market and Obama loves the market, will anybody tell me who is who?

The old narrative about OFWs is passé

We usually think of OFWs as “modern day heroes” and it’s so easy to see why. The dollar they send back home is the linchpin that’s preventing the Philippine economy from disintegrating. They work so hard in foreign lands, suffer loneliness and isolation, and some got abused by their employers—all in the name of the dollar or euro that they desperately need to feed their families, send their kids to school, build dream homes and ultimately prop up the economy. But blogger and writer Jessica Zafra has an interesting counterintuitive take on this in her review of Chito Rono's film "Caregiver":

“Hey, we’re not exactly sitting by the pool sipping banana daiquiris either. Most of us work, all of us have problems. It is also possible to experience alienation and isolation in your homeland. How about a little respect for the Pinoys who stick around and do the best they can in truly trying circumstances? No one has a monopoly on suffering, but everyone has a unique story. We need fresh insights on the Pinoy experience at home and abroad, ...”

Oo nga naman.

What social observers often miss is the fact that the narrative about OFWs may have changed. We often refer to OFWs as economic refugees driven to foreign shores by want and desperation. These days, however, a significant proportion of OFWs are high paying professionals (medical professionals, engineers, software engineers, artists, skilled workers, among others) who are attracted by a host of factors other than economic. It’s the brave new world of globalization and our professionals, the crème de le crème of society who may actually have lots of opportunities here, are exercising their options to enrich their lives by experiencing how it is to live in foreign cultures and climes. It’s a decision no different from those Americans, Koreans, and Europeans who settled here in the Philippines for the love of the warm weather and the beautiful beaches.

With the advent of technologies like Internet chat, global roaming, SMS, video conferencing, voice-over-internet calls, it’s possible that the imagined negative social impact of labor migration on family cohesiveness may not actually be that alarming. Maybe, maybe not. But what I'm trying to say is that the old story line by now should be passé and we need to appreciate that.

The secret sauce for progress: lessons from 13 economies

If you want to lick poverty, it’s necessary to achieve high economic growth. That’s commonsensical, right?. But how do you achieve high economic growth and sustain it? Experts say there is no silver bullet. But in a latest study by the World Bank on 13 fast growing economies, experts say they were able to identify the ingredients of a secret sauce. These fast growing economies fully exploited the world economy; maintained macroeconomic stability; mustered high rates of saving and investment; let markets allocate resources; and had committed, credible and capable governments.

These 13 countries are Botswana, Brazil, Hongkong, Indonesia, Japan, Korea, Malaysia, Malta, Oman, Singapore, Taiwan, and Thailand. These countries posted 7 percent growth rates over 25 years or more after World War 2.

How to sustain high growth? Says the Report: “For growth to be sustained, it must be growth that takes into account that we are living in a more and more globalized world,” says Danuta Hubner, European Commissioner for Regional Policy. “We need growth that is using all the opportunities that are offered by the global economy.”

There you go! Globalization, and making the most out it, is the key.

The Brits to burn their trash!

We are suffering from the garbage crisis (trash are everywhere) and yet, we don’t seem to know how to deal with it effectively. Why not recycle it by burning the stuff to generate power? I’m not talking about the old clunky incinerators here but gasification. Britain has recently decided it’s the way to go to deal with its own garbage crisis. Says the Time Online Report:

“Gasification mixes waste with small amounts of oxygen, then heats it at a high temperature — around 1,830 degrees Fahrenheit — in an air-tight chamber. The resulting syngas — a cocktail of light gases, including methane and natural gas — is burned, boiling water into steam to run a turbine. Gasification is an established technique, already used with fossil fuels, particularly coal. Applying it to rubbish opens a new and abundant fuel source. "As a waste-disposal method, it seems to make a lot of sense," says Jonathan R. Gibbins, an energy expert at London's Imperial College.”

Why don’t we consider this type of technology here? The most environmentally conscious countries like Norway and Germany have been using this type of technology. Says the Report:

“Energos — which operates five gasification plants in Norway and one in Germany — says that on balance, the plant will shrink the island's carbon footprint. It will emit the about the same amount of greenhouse gases into the atmosphere as does decay from the landfill. "The benefit is, we're producing electricity" from a renewable source, Grimshaw says. Because those 2,000 homes won't be getting power from a fossil fuel plant, Energos estimates that will cut carbon emissions by 2,000 tons.”

Technologies like these are probably expensive. But who says that caring for the environment is cheap?

Boracay, party island

Even at midnight, the green tea at Lonely Planet Cafe near the Regency Hotel in Boracay looked too green for comfort. A feet away, tourists—mostly girls from as far as Korea, China, US and Europe— in tight minimal summer clothing were grinding their hips against the frenetic urgent beat, their hands raised up high swaying like tree branches being battered by the monsoon winds. Lumen, Kathy and I were not daunted. After all, neither we were there for tea nor the humanly distraction, but a place to sit, chat, breathe fresher air, and feel the white powdery sands push up through our toes. We just had a long walk along the shorelines under the gaze of the distant stars. We needed the break to clear our senses overwhelmed by the discussions that never seem to end.
 

Surveying the scene, I realized how Boracay has become a place of Becoming, where souls regulated by social mores and expectations could be what they want to be. Then they return to their prim-and-proper selves once they get back into their natural abode.

 

“It has become a place to get laid,” says one inebriated soul whose identity I cannot recall. “It's more like a place where predators of all types converge—sexual, corporate, or commercial or the combination thereof,” says another intoxicated "social philosopher."

 

Harsh assessment, shall I say. Unfair.

 

Despite the overcrowding, there are still some nooks an crannies in the Island where one could enjoy solitude, a corner to write poems and contemplate the meaning of life and the universe. For the right price, of course.

World Bank: from the outside coming in

Stan Grant introduced himself in a voice that reminded me of those gritty CNN reporters doing business in time of war. In fact, Stan was a former CNN reporter who recently joined the World Bank to do communications work. He used to cover the Asia-Pacific and most of the political hot spots in the world. I asked him why he left his exciting career for a less adrenalin-driven one at the Bank. It's because, he said, he wants to see and learn from the inside how the Bank works. “How about you?"

Tough question.

I joined the Bank about two weeks ago, the reason why I'm here in Washington DC. I'm on training. Some friends and colleagues who learned about my decision had mixed feelings. Ping G (my editor in chief) and Leah D (managing editor) at Entrepreneur magazine/Summit Media congratulated me. But there are those who gave a disconcerting, even hostile, reaction. It was as if I'd betrayed some unwritten code or sold my soul to the devil. “I always thought of you as a non-conformist who might get bored working for a rigid and formalistic organizations like the WB,” said another.

I answered Stan: “There are so many opportunities for learning new things; that really excites me. I had a glimpse of how the Bank works when I joined a team of researchers who did the social assessment of Mindanao in 2003 to help families displaced by the war recover their lives. Since then, I was wondering how interesting it would be to become part of a global institution that is doing lots of things in areas like poverty alleviation, governance reforms, infrastructure development, the environment, among other things.”

And indeed, there is so much of such learning opportunities here in Washington DC. There would be much more when I'm back in Manila.

Japan and the English language: a view from Washington DC

“Seeing my country Japan from the distance, from here in Washington DC, I could see it as someone who is aging and tired, less aggressive, insular.” That comment came from my friend Nobu Saito, business journalist par excellence, who is based here in Washington DC. That really surprised me because I always knew Japan as a technology advanced country and a leading producer of electronic gadgets, cars, machines, and high tech.

“That is just my opinion, anyway,” he said.

Nobu picked me up last week from my hotel, Windsor Inn, at 16^th Street Washington DC, so we could have some catching up. Nobu and I became friends during the Jefferson Fellowship where we traveled through the US, China and India together with a dozen other journalists from the Asia-Pacific. This guy has a great sense humor, quick wit, and deep intelligence that could easily reveal through the fog of beer, red wine, and the spirited laughter.

If there's one country to watch, he says, that should be South Korea. It's high tech industries is conquering global markets and the young Koreans are going out into the world, into the United States, Australia, Europe and the Philippines to learn the English language and other things that the globalized world can offer. It's so aggressive, dynamic and innovative, says Nobu. “The Japanese people should do the same, should go out into the world.”

“But the Japanese is still the leading producer of cars, photocopiers and leading edge technologies,” I countered.

“Yeah, but you should take note that companies like Toyota, Canon and other big firms from Japan are no longer “Japanese,” he said. “They are now global companies,” he said, apparently implying that the identity of these firms are no longer linked to the Japanese flag.

I don't understand why companies or corporations should have definite national flag to look up to. It's the brave new world of globalization and the borders have become meaningless. But certainly, Nobu's take on the need to master the English language is something that resonates with me. Despite all the obvious economic and probably social benefits of learning English, there are still in our midsts those who think that going native, or going “Filipino” for “nationalistic” reasons” at the expense of English is the way to go. That probably explains why we can't seem to muster enough political and public will to bring our knowledge and use of the English language up to a higher level.

Well, that's just my opinion anyway—to use Nobu's words.

Thanks for that meeting, Nobu. I really appreciate our exchange of ideas!

The DC as Obama country?

If it's only Washington DC that determines the fate of America, Barack Obama should be president this coming American presidential elections. I don't know but most people I've met here are all crazy about the audacity of Obama's presidential hope. Obama T-shirts are selling like hotcakes. Or so it seems.

Over brunch, Mara, a DC-based journalist friend asked me how I think an Obama presidency would impact on the Philippines. And how Filipinos perceive him.

"I really think most Filipinos do not really care who sits at the White House," I answered. "Of course, Americans don't care what Filipinos think either. Obama or McCain or Hillary--America will always pursue her own 'national interest' and it would be good it that interest would converge also with our interest, whatever that is. But one thing is certain: Most Filipinos would always be pro-American for historical and many other reasons."

I added: "But in general, many Filipinos seem to like Obama, maybe because he looks cute, talks smoothly, and appears different from the typical American politician. Just like in the Philippines, people who want "change," whatever that means, would always vote for a politician who looks and talks quite differently from the usual, typical politician."

Yeah, we want a duck that doesn't quack like a duck.

Personally, I'm concerned that an Obama presidency would drift towards protectionism. That's would be bad for the trade-oriented Southeast Asia, given his tendency to pander to local protectionist passions. But I could be wrong. His anti-free trade and anti-outsourcing tirades are probably just political marketing, and its something that he cannot enforce anyway given that American businesses are able to maintain global competitiveness because of outsourcing.

But his foreign trade policy statements suggest that an Obama presidency would never be expected to lead the push for a global free trade deal the way Bill Clinton did,or tried, when he was at the White House. That would be bad for developing countries. But then again, neither Hillary nor McCain are probably inclined towards a new and better global trade deal. So let's see.
Anyway...

Hey Mara! Thanks for that really nice chat and brunch. Really love that we were able to catch up. And oh, Busboys and Poets [the restaurant] is really great. I enjoyed being there a lot! See you next year, my friend.

End of domestication?

So the superstition is not true after all.

No one gave me any travel bag last December so I thought I was in for a life of total domestication in 2008. I really thought so when I won an electric flat iron during the company raffle. Nothing beats a flat iron as a symbol for domesticity, right?

Well, I was probably wrong because I'm now on a journey back to Washington DC to attend the World Bank communicators' forum. (I'm at PAL's Mabuhay Lounge, enjoying the free Wi-fi). I'm excited because it will a great opportunity for learning new things in the field of communications. Also, I'll probably be seeing some relatives and friends: Judith Kliks and David Pitts from the IVP [International Visitors Program, State Department] as well as Mara Lee and Nobuhiro Saito, all DC-based journalists, from the Jefferson Fellowship last Spring 2007.

Of course, I just love DC! I just can't get enough of its historical monuments, museums, huge public buildings, and wide open spaces for the public sphere. In May, the temperature there ranges from 11-21 degrees C, probably just like Baguio City. It's perfect for an occasional visitor like me. I'm not sure though if I would have the chance to go around.

So friends, wish me good luck!

Who's afraid of the "organization of rice exporters"?

Who’s afraid of Orec or the supposed “organization of rice exporting countries”? Well, importers including the Philippines seem to have been rattled by the news but the fact is that Orec is a dumb idea. We should better laugh it off. Why?

First, those countries on the Mekong like Thailand and Vietnam just cannot store rice forever. Unlike oil, rice deteriorates in just a few months of storage in the warehouse. And the Thais and the Vietnamese could eat only so much rice.

In fact, forming Orec is counterproductive for these rice exporters. When they hoard their own rice, local prices decline, thus hurting their own farmers. If they want to benefit from the current situation, it’s in their best interest to sell rice and not hoard it.

Besides their geographical advantage of having the Mekong River and extensive sources of irrigation water, the main incentive why farmers are producing more rice in these countries is the fact that they are able to sell in the global market place. There’s money in rice exports. Once their governments remove that incentive through export restraint, that incentive would be gone and farmers might just shift to other more profitable crops.

Forming that cartel would be tantamount to shooting themselves in the foot. The only real beneficiaries of Orec are the rats and bugs that will have an ample supply of rotting rice in Vietnamese and Thai warehouses.

Could we still achieve rice self-sufficiency?

“Now that the price of rice is increasing and our government is having a hard time securing enough imports, I think you should reconsider your position...” That’s one comment I recently got in reaction to my blog on rice self-sufficiency. My answer: my view hasn’t changed.

But first, allow me to highlight the good news. The news says rice prices are about to drop due the onset of the harvest season. This must be a dampener for those who are conjuring a Malthusian scenario lately. These guys just don’t understand the power of price signals!

Now back to the issue.

Could we really achieve “self-sufficiency” in rice? Could we really produce all the rice that we need? Some experts doubt it given geographical constraints and rapid population growth, but I say why not? If we could only have rapid adoption of high-yielding varieties, especially hybrids, we might yet lick the issue or address a critical part of it. About 60 percent of China’s rice fields are planted to hybrids (that’s according to SL Agritech); no wonder they are not losing sleep about the supposed “rice shortage.” Why can’t we do the same especially in irrigated areas?

But how do you promote hybrids or even just high-yielding open pollinated varieties? It’s not through government seeds subsidy that will only be dissipated in corruption. The money is better spent on irrigation and other rural infrastructure. If there’s one disincentive to agricultural productivity, it’s the lack of adequate farm infra.

The way government is subsidizing certified seeds is one sure way of destroying the seed industry that is crucial in agricultural growth. Why? It’s because when government dangles the money, some unscrupulous rice seeds suppliers who simply want a fast buck come in, many of them selling low quality seeds (low germination). The farmers naturally get burned and wouldn’t use certified or hybrids next cropping season. Result: the market for these high-yielding seeds shrinks. This is actually happening these days.

Solution? No subsidy; just allow the private seeds producers to come directly to the farmers and offer their wares. Surely, any seeds producer trying to develop the seed market for his business would make it a point to provide the best seeds so that he would have repeat orders. That way, farmers would also have a choice on what rice seeds and technology to employ. And there’s no place for fly by night seeds producers under this policy environment.

But hey, we are funny! We want to be “self-sufficient” and yet we want our rice so cheap that farmers are not making money. So actually we want them to remain miserable while we urbanites enjoy the cheap rice they are producing. Crazy!

On the food crisis: Poor and hungry cannot afford to wait, World Bank President says

Friends, please allow me to publish this statement by World Bank president Robert B. Zoellick after a meeting in Berne, Switzerland of the United Nations System Chief Executives Board for Coordination (April 29 2008).

The next few weeks are critical for addressing the food crisis. For 2 billion people, high food prices are now a matter of daily struggle, sacrifice and for too many, even survival. We estimate that already some 100 million people may have been pushed into poverty as a result of high prices over the last 2 years. This is not a natural disaster. Make no mistake, there is nothing natural about this. But for millions of people it is a disaster.

Donors must act now to support the WFP’s call for some $755 million to meet emergency needs. Roughly $475 million has been pledged, but pledges won’t feed hungry mouths. Donors must put their money on the table, and give WFP maximum flexibility – with a minimum of earmarking – to target the most urgent needs.

This crisis isn’t over once emergency needs are addressed, as critical as those are. Though we have seen wheat prices fall over the last few days, rice and corn prices are likely to remain high, and wheat relatively so. The international community needs to commit to working together to respond with policy initiatives, so that this year’s crisis doesn’t become a generation’s fact of life. Already hunger and malnutrition, are the underlying causes of death of over 3.5 million children every year, robbing the future potential of many millions more.

Many donors, governments and international agencies have plans and policies. Over the last days we have seen pledges of financial support. The key now is to work together so that we can have an integrated international response.

So I thank the Secretary General for convening this session of UN Chief Executives to help organize the UN response.

Ministers from over 150 countries have endorsed a New Deal for Global Food Policy. We must turn these words into action.

As we discussed here in Berne, a New Deal must embrace a short, medium and long-term response: support for safety nets such as school feeding, food for work, and conditional cash transfer programs; increased agricultural production; a better understanding of the impact of biofuels and action on the trade front to reduce distorting subsidies, and trade barriers.

The World Bank Group will work with the UN agencies represented here to identify countries most in need so that, with others, we can provide concessional financing and other support. We are already working closely with the IMF and regional development banks, to integrate our work.

At the World Bank Group, we are exploring with our Board the creation of a rapid financing facility for grant support to especially fragile, poor countries and quicker, more flexible financing for others. To address supply issues, we are doubling our lending for agriculture in Africa over the next year to $800 million.

We are urging countries not to use export bans. These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves.
Ukraine set a good example last week by lifting restrictions on exports of grains. This had an immediate effect by lowering prices in the markets. Others can do the same.

As we co-ordinate action, we must bring in the private sector and agri-business.
These are all critical issues for international action that must be fleshed out in the coming weeks so that millions do not find themselves in this same position next year.

But first and foremost donors must act now to meet the emergency and raise the $750 million for the WFP. The world can afford this. The poor and hungry cannot.

Rice supply crisis: another policy swindle?!

I thought all along the government has lifted the quantitative restrictions for rice, thus allowing the private sector to import the commodity whenever they want and at whatever quantity provided the appropriate tariffs are paid. Now, based on Business Mirror reports, its seems Malacanang is simply telling the private sector to import what is allowed under the minimum access volume (MAV). See http://www.abs-cbnnews.com/storyPage.aspx?storyId=114569. Crazy!

The fact is that the MAVs have been there all along and no one dared importing much lately simply because tariff is high (50%). Who would be encouraged to import rice that are already expensive in the world market and pay 50% on top of it, thus making the landed ones so expensive? If I’m the importer, I’ll wait for local prices to really move up the heavens before I even thought about availing of the MAVs. That’s what is happening now.

So the supposed policy pronouncement about “allowing the private sector to import rice” was a bogus one—a deception. Or probably it was real, only that government, as usual, simply backtracked, nay backslided. My goodness! Now, the private sector is saying they will only import rice at zero tariff, and given the government’s very slow decision making process, we might end up having those imported rice landing our shores when the farmers are already harvesting their palay. Some of them has actually started harvesting now. That will be tragedy.

But that’s the tragedy about maintaining the QR on rice. Unless, we remove it and replace it with tariffs, a low one if necessary, all these problems about supply shortages will always be there no matter how much rice stocks are available out there in the global marketplace. Timing is important and historically, government bureaucrats always act when its too late. Solution: we need to remove the QR, replace it with tariff, and if necessary a low one. And of course, we need to rev up our production capacity.

"Rice crisis": this palay seeds subsidy could be counterproductive!

Government is set to give a P1,500 subsidy per bag of hybrid rice during the wet season (May-Oct) this year supposedly to boost rice production. Hmmm, sounds good at the surface, but I have this feeling this subsidy might actually stunt the growth of the rice seed industry in the long run, an industry that you need to nurture if we want to have a vibrant rice industry. How?

One effect is corruption. Under the government’s rice subsidy program, farmers only pay about half the price or P1100 per bag per hectare for a hybrid seeds that’s supposedly would cost P2,600 since the government, through the Department of Agriculture, provides the subsidy amounting to P1500 per bag per hectare. So farmers get cheaper seeds, right?

Yes, but it doesn’t follow that the seeds will be there when he needs it. Why?

This is how the whole thing works: the seeds are distributed by the municipal agricultural officers (MAO). They also serve as conduit of the government subsidy amounting to P1500 per bag. Once the farmers give the “farmers equity” or his payment for the seeds that comes from his pocket to the MAO, he gets the seeds, and the seeds producers/suppliers then collects the payment—P1100 from the farmer and P1500 subsidy per bag from the government through the MAO/LGU—totaling P2600 per bag per hectare.

But in reality, many of these MAOs, once they got the cash both from the farmers or the money from government subsidy simply keep the money. That's why I heard anyway from lots of seeds producers all over the country. And sometimes, the subsidy money is not there so the seed producers ended up collecting nothing. Many of the seed producers these days still have collectibles worth millions of pesos from the MAO/LGUs from the last crop. Now, they are being requested to provide the seeds again for a government programs that has not been up to date in payments. Do you think they will deliver the seeds this time? Your guess is as good as mine.

This subsidy program is so complicated that it’s so prone to corruption!

Rice crisis: why are we not mobilizing Ding Panganiban or Dr Emil Javier?

So by the looks of it, it seems that President Arroyo has finally come to her senses. Based on reports from the Inquirer, the private sector can now import rice, although the government still maintains high tariffs for it. High tariff for rice means we are likely to continue having expensive rice, but that policy move is good enough to remove the discretion of bureaucrats in rice importation. In the past, only the NFA could import rice, giving only small volumes to the private sector to bring in grains through “minimum access” importation. If I’m not mistaken, the new policy changes all that, thus allowing everybody else to bring in rice. Traders would be discouraged to hoard, since any sign of “scarcity” (through hoarding or real scarcity) would immediately trigger others to import from global sources.

Having said that, there’s no substitute for an honest-to-goodness government program for rice increased production. We need to because global stocks are low; the Chinese, the Indians, and the Indonesians have been buying lots of grains in the world market. And why don’t we tap the experts in our midst? Ding Panganiban for instance is the best when it comes to expertise in rice production. So is Dr. Emil Javier, Asia’s foremost agriculturist. Why is the government not mobilizing their expertise?

"Rice crisis": government is doing everything except the right thing

Oh this rice crisis! It seems to me that the government is doing everything except the right thing: threatening economic saboteurs and hoarders, raising palay price buying subsidy, and more funds for the DA, I suppose. These are fine, except that they are not going to address the supposed “rice shortages.”

Rice shortages certainly has speculative element into it, especially in such a time when global food prices are rising. And speculations are necessarily rife in a policy environment where government restricts the global trade in such a political commodity either through quantitative restrictions or very high tariffs—which we do. Maintaining such protection system for rice makes us vulnerable to speculators who are inclined to hoard when buffer stocks are low or going down, and they will pounce on every opportunity, knowing that the government or bureaucracy would always act (say import) when its too late. That’s what is happening right now. For all we know, those guys from the NFA might even be collaborating with those hoarders to make a fast buck out of the situation. I’m speculating here, but that’s highly possible given the culture of corruption in the bureaucracy.

Solution: Why not open up the Philippines to global trade in rice? Why not reform the NFA? That’s the only way one could prevent hoarders from hoarding knowing that imports would always come at the right time when someone starts the nasty business of hoarding rice. An open trading regime should effectively deal with the speculative element that distorts prices.

You might say freer trade in rice might cause the collapse of the entire Philippine rice industry. That’s crap. The fact is that even right now, even under the current policy environment, lots of rice farmers especially in Mindanao are shifting to the more profitable crop like bananas and other high-value crops. Smart farmers, shall I say! There’s no sense planting something that won’t make you real money.

Under a freer rice trade environment, lots of farmers are going to adopt shift to high value crops. That’s good for them. But many are also going to stay in rice business but are going to innovate to lower their cost. Some might just focus on planting those fancy varieties that command high prices in the local market.

More on this next blog post.

Will Playboy (Philippine edition) fly?

On 3 April 2008, Playboy magazine will hit the Philippine streets, promising to be an engaging read for the “mature” audience. I’m intrigued how “mature” it would be. If it could capture the essence and spirit of the old Playboy I knew, it would be interesting.

The Playboy I knew had investigative reports on politics and economy, poetry, short stories, and really very, very good essays by good writers. The quality of its fiction and poetry was a blast. Could the Philippine version deliver on those types of content as well? If not, there’s really no sense buying a copy.

Way back in college, I delivered a crisp but really juicy political science class report on Chilean politics, including the death of president Salvador Allende and the assassination of his finance minister, Armando Letelier. Our professor was impressed.

“What’s your main reference, Mr. Llorito?,” he asked.

“Ah, uhmmm, sir, Playboy magazine, sir,” I answered meekly expecting a negative reaction. But the class erupted in appreciative laughter.

“Really?” His eyes shone like a hundred-watt incandescent bulb. “Could you please hand it to me?”

“Yes, sir.”

“Thanks. I’ll return it after a week,” he said, smiling.

I never heard anything from him about that magazine again.

That was in the mid-80s. In this day and age of the Internet, I’ve read lots of reports about Playboy’s declining circulation. FHM and its copycats emerged and it seemed Playboy was destined for the dustbin of journalistic history. Launching a Philippine version at this time therefore is a courageous decision for its financiers here. I’m intrigued how it’s going to differentiate itself in a niche market that is too crowded for comfort. (Photo credit: http://www.acmewebpages.com/graphics/playboyjune1962.jpg)

The demise of social networking?

Nah, I don't really mean that. What I'm saying is that social networking sites really have to evolve innovative revenue models to keep on thriving. Right now, many of them, according to the Economist are not making money.

Consider the premise behind these social networking sites: it’s all about profits, about making big someday, by getting being purchased by the big shots like Rupert Murdoch. And the likes of Murdoch are buying these sites by the billions hoping that someday, they could earn more billions from online ads. But it seems the premise or the assumptions about the business potentials of social networking are not necessarily accurate. Says the Economist:

"The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's “social networking inventory as a whole” was proving problematic and that the “monetisation work we were doing there didn't pan out as well as we had hoped.” Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either."

Same with Facebook. Economist observes:

"Facebook, now allied to Microsoft, has fared worse. Its grand attempt to redefine the advertising industry by pioneering a new approach to social marketing, called Beacon, failed completely. Facebook's idea was to inform a user's friends whenever he bought something at certain online retailers, by running a small announcement inside the friends' “news feeds”. In theory, this was to become a new recommendation economy, an algorithmic form of word of mouth. In practice, users rebelled and privacy watchdogs cried foul. Mark Zuckerberg, Facebook's founder, admitted in December that “we simply did a bad job with this release” and apologised."

“So it is entirely conceivable that social networking, like web-mail, will never make oodles of money,” says the Economist. And if they couldn't make lots of money, what’s the incentive of maintaining them? Are we going to see consolidation, of one site being gobbled up by the other? Scary thought, isn’t it.

Holy week hibernation

I practically hibernated in the last four days, doing nothing except reading, sleeping, and transcribing some past interviews for the Entrepreneur Magazine. Yeah, I finished two issues of The Economist, digested various topics like "economics and rule of law," China’s global quest for raw materials, and fund management. I also started getting back to some old Jonathan Franzen titles. I should have done some writing but my son was reviewing for his final exams (Calculus, and Physics); I had to yield the best working space in the house up to him. No worries there. Especially after waking up to a headline like this: “Filipina wins science award for ‘black holes.’”

Who says jobs are scarce?!

Indeed, jobs are not hard to find, if you have the skills. Writing skills, for instance. I mean, if you think you have the passion for writing, and some skills, and the right attitude for that kind of work, you may contact me. There's one lifestyle magazine for instance that is looking for one full time writer. I also need some part time writers for our magazine, Entrepreneur.

See? Life is not hopeless, ZTE or not! lol!

Let's tax the Church!

Should we tax the Church? Why not? It’s high time!

Church officials—bishops, ulamas, pastors, priests—based on their rhetorics, are always holier than thou, especially when it comes to failure of government to provide economic opportunities for the poor. But does the Church really do something about it besides prayers and few charities? If they want to help the country, the poor, the best thing they could do is pay taxes for the Church properties, lands, and universities to generate resources for economic and social development. Church-owned schools charge the highest tuitions fees in the land, thus accumulating so much money. Since they don’t pay taxes, they hardly give anything in return to society.

The premise about separation of Church and State, about religion and politics, has always been fiction. The Church—be it the Catholic Church, Iglesia ni Cristo, El Shaddai—has always been a very active political animal in the country. When told not to meddle in politics, the Church authorities would say, they can’t help it because the realm of politics has moral dimensions, which the Church has a lot to say. Well, every thing has moral dimension.

Barack Obama's "Asian problem?"

Does Barack Obama have an "Asian problem?" I think so, given the huge support Asians are giving to Hillary Clinton. Is it racism, as what some “analysts” would like to think? I don’t think so.

This is my take: the rise of China, India, and the rapid economic growth of countries in the Asia-Pacific region, including the Philippines, is significantly caused by foreign policy pursued by the Clinton administration. It was Bill Clinton’s leadership in the Asia-Pacific Economic Cooperation (Apec) that led to the Bogor Declaration envisioning a global free trade by 2020. That one really pressured the Europeans to relent on the Uruguay Round of trade negotiations, thus paving the way for the birth of the World Trade Organization. WTO is not a perfect treaty but that one really opened lots of markets for Asia’s exports, this boosting the economies in the Asia-Pacific region. Globalization in general in which the Asia-Pacific region is a major beneficiary accelerated during the time of the Clintons in the White House. So Asians have a generally warm view of the Clintons, including Hillary.

After Iowa, Obama issued statements against “the violence of outsourcing” and swore to adopt measures against the practice, a move that drew criticisms from the Asia-Pacific region. Hillary of course also seems to pander to the protectionist sentiments among the American electorates, but given the Clintons’ track record, Asians tend to look at those pronouncements as a message addressed largely to the home political market.

Plus Asian's in general don't have hang ups about having females as top political leaders.

Middle class getting back to the protest business?

I just had an hour or two with finance guys this morning in Makati and know what—they are joining the anti-GMA rally in Makati. I thought all along these money guys hate joining such activities. But they are and, I guess, it all boils down to what I call “middle class values.” The core issue of course is corruption that reaches up the highest echelons of government, and corruption is certainly bad for business. Yeah, its high time the middle class should be part of this struggle for a better society. Mabuhay kayo!

Rethinking John Rambo

It’s easy to think of John Rambo as a brute who does the dirty work for America, someone whom the types of George Bush would send to fight in Uncle Sam’s crazy little wars. I used to think that way. But hey, that’s actually not an accurate description of the character.

In fact, Rambo—at least the one I knew in First Blood, the first Rambo movie—was more of a victim. In First Blood, he was an ex-Green Beret guy with post-traumatic stress disorder in search of peace and quite in small town America, until a power tripping Sheriff treated him badly. In Part 2, he was stupid enough to agree to go inside Vietnam to take photos of supposed POWs only to be abandoned by the US Armed Forces when politicians realized the mission would have political repercussions. He was captured, tortured, survived and ended up saving some of the POWs. Since then he never returned to America.

He stayed in Thailand among the simple folks to live a humble and quiet life, only to be deceived once more into going inside Afghanistan (in Part 3), not for America, but for his friend and mentor who was captured by the Russians. In Part 4 entitled John Rambo: To Hell and Back, he went to Burma from Thailand to help his friends who were captured by the Burmese military (although I’m simply too busy to watch this one).

He hates politicians. He hates the military top brass. His actions were always about his friends. He had to do it because others wont.

Philippines "rejoins" the Asia-Pacific region

I was in Laguna Technopark last Thursday when the government announced the Philippine economy grew by 7.3 percent in 2007, boosted by the 7.4 percent fourth quarter surge, the highest rate since 1976. I say not bad! Finally, we have “rejoined” the Asian community of fast growing countries.

I say “rejoined” because analysts always thought the Philippines seems to have been behaving like a Latin American country, with our politics prone to coups attempts and instability and economy that tended to enjoy sudden boom and busts. Now, we have reached a new level, 7 percent, after starting at a 5-6 percent GDP growth band from 2003 until 2006.

As expected, some practitioners of the Dismal Science were quick to downplay the numbers, saying the country’s economic performance this year might not be sustainable given the continuing risks posed by rising crude prices and the looming economic recession, an economic slowdown, in the US.

There is this economist from the UP School of Economics who has been going around since 2004 that the country could never achieve beyond 4 percent. He has been proven wrong all the time, but this time after hearing that the country’s GDP reached 7.4 in the fourth quarter, he stressed the country would achieve just around 4 percent in 2008. Here we go again!

The matter about economic recession in America is certainly a serious question. Unfortunately, even economist in the US are at a loss whether or not there is indeed a recession, how serious is it going to be, and whether or not it’s going to bring the global economy down. “When America sneezes, the rest of the world catches cold,” says the old dictum. And it was true then because when Americans stopped buying shirts, food, cars, gadgets, or just about anything, the factories from the rest of the world stopped humming, thus rendering thousands, if not millions, of workers jobless.

That nugget of wisdom, however, may not be true today because the world is no longer the same place that it was two or three decades ago. Now, analysts worldwide talks about “decoupling” or the capability of other economies in the world, including emerging economies like China and India, to growth despite the weak American economy. These countries could take on the role of growth drivers in the same manner that China has been boosting the economy of Japan and Australia through her rising imports of machines and raw materials iron ore, petroleum products, coal and other commodities. China now has also become a major destination for Philippine exports, a market that has become almost as huge as the America.

And more importantly, while emerging economies are riding on the wave of global trade expansion, many of them, including the Philippines, has been growing largely on the strength of domestic demand. It’s even true for China and India as much as it is for the Philippines. So the conclusion here is that, the recession in the US may or may not cause colds in the Philippines, and if it does, it might not be so severe co cause serious complications.

Realistically though, the number crunchers at the National Economic and Development Authority (Neda) believe that a full-blown recession could indeed affect us significantly. Augusto Santos, acting director general of Neda, says should America suffers a one-percentage point contraction from its current growth rate, the Philippines gross national product will shrink by 1.764 percentage points. That is huge.

But that’s assuming that neither America will do anything to lick the recession nor the Philippines address to boost the local economy and cushion the impact. But who knows, US President George Bush’s $150 billion stimulus package, wherein government will mail checks to Americans for them to spend it and prop up the American economy, might just work? And if we do our homework here, say continue spending for badly economic infrastructure, as we should, as we are doing right now, the Philippine economy might just get out of this in a decent shape.

One interesting thing about recessions is that statisticians, and therefore policy makers and the general public, know about it only when it’s long underway. It’s because of the time lag in the collection of statistics. So if there’s a recession in America, the Philippines should already feel it.

The GDP figures seem to show that with the 3.7 percent contraction in exports from a growth of 2.2 percent last year. “Net factor income from abroad” that measures remittances of Filipino expatriates working abroad also has declined. And yet the Philippine economy managed to surge to a 7.4 percent growth rate in the fourth quarter, on the strength of other sources of growth (eg., domestic demand, mining, construction, agriculture and fishery, outsourcing, among others). There are even signs of recovery in investments from the private sector as shown by the rise in fixed capital formation—an indication that business are constructing buildings, buying machines for the factories, and upgrading their equipment.

So let’s see!

America sneezes—are we supposed to get flu?

Are we going to get hurt badly because of US recession? It’s so easy to worry about that especially that we sell lots of stuff to the US market. But time has changed.

Ten years ago, electronics and semiconductors accounted for only 42 percent of the country’s exports with farm-based products like coconuts, pineapples, bananas, tuna, seaweeds, and baskets having significant percentages. Today, manufactures account for 86 percent of the country’s exports, the bulk of which are electronics and semiconductors. Farm-based products now account for only 4 percent.

Ten years ago, 36 percent of our exports were purchased by the Americans, such that we would always a catch cold, nay influenza, when America sneezed. When combined with our exports to Japan, Netherlands, Hong Kong, Great Britain and Germany, more than 70 percent of our exports were purchased only by seven countries. China and India were not even listed among our markets.

Today, America only accounts for 18 percent of the country’s exports. China is now our third largest market next to Japan. Suddenly we can see our friends in the Asean buying about 17 percent of our products. The rest are accounted for by Europe and the rest of the world.

What we see here is a diversifying export market for Philippine products, a trend that should lessen our vulnerability to external shocks. And yes, the World Bank, it seems, has taken an optimistic note on the Asia Pacific Region, including the Philippines.

I’m trying to be optimistic here, of course. China ultimately sells to the US. Once the American orders for Chinese goods are down, so the Chinese orders from us will probably be. This is still an interconnected world.

But let us see, because even in the US experts don’t agree on the extent of the recession. And here in the local front, the National Statistical Coordination Board has yet to report to us the whole 2007 performance. The numbers would surely be good, considering we had good numbers from the farm sector. But the enthusiasm will surely be dampened by the sobering thoughts about the recession. So let’s wait on January 31, the official announcement of the 2007 growth rate, what the experts will say.

Meantime, you may read the take of Finance Secretary Margarito Teves by clicking here.

After the Neocons: America at the Crossroads

Review
After the Neocons: America at the Crossroads
By Francis Fukuyama, 2006
Profile Books Limited, 226 pages

“Neoconservatism” as a way of thinking is a mishmash of contradicting social and foreign policy ideas originated by some New York City intellectuals who used to worship Leon Trotsky, Vladimir Lenin’s buddy who espoused “world proletarian revolution.” How these once communist intellectuals and their thoughts permeated into America’s foreign policy during the administration of George W. Bush and brought the world’s superpower to a disastrous misadventure in Iraq and the Middle East, therefore, is a very compelling story. In his latest book After the Neocons: America at the Crossroads, Francis Fukuyama, political scientist and a former neocon himself, tells us this story with great depth and forceful insights, then proceeded to disavow and castigate the movement that he was once a proud member of.

Fukuyama traces the origins of neoconservative thinking to a group of working class intellectuals studying at the City College of New York in the 30s. They were once Marxists who turned to the right shade of the political spectrum following Trotsky’s exposes of Joseph Stalin’s brutality. Thus from being ardent supporters of socialism, these intellectuals, mostly Jews, became haters of communism and bitter critiques of “social engineering” programs and social planning that they thought tend to create unintended social consequences that make societies even worse off. When America joined the Allies to defeat Germany and Japan during World War II, the neocons started to see American military power as a force for good, something that America’s leaders should use to transform the world in an exercise of “benevolent hegemony.”

Neocons, having taken some pages from Plato and Aristotle, believe that “regime” or the internal character of states matter in foreign relations. “Rogue states” are likely to become a destabilizing force in global affairs, as “regimes that treat their own citizens unjustly are likely to do the same to foreigners.” America and her allies usually deal with these totalitarian and tyrannical states through carrot and stick but said measures are likely to be ineffective, according to the neocons. The best way out therefore is through changing the “underlying nature of that regime,” a phrase that translates into what is known as “regime change” under the Bush administration.

Prior to the collapse of Berlin Wall, foreign policy circles in Washington DC didn’t really take the neocons seriously even if their views fitted well with Ronald Reagan’s Cold War rhetoric about the Soviet Union as “evil empire.” The more credible voice then were the “realists” in the tradition of Henry Kissinger who respect power, downplay human rights as well as the internal character of states. For the realists, all states whether liberal democratic or authoritarian, seek and power and America and other democratic societies have to accommodate them.

After the collapse of the Soviet Union, however, the influence of neocons soared, vindicated as they were with the fact that the communist threat didn’t vanish through containment and détente as proffered by foreign policy “realists” but by the transformation of Eastern Europe and Russia into “democratic states.” It was a profound lesson Fukuyama thinks that Neocons—deeply ensconced into the mainstream foreign policy establishment under George W. Bush—wrongly applied in a world that has drastically changed since 911.

For Fukuyama, the Neocons, in a rapidly globalizing world, have failed to appreciate the growing influence and power of non-state actors (e.g. terrorists groups like Al Qaeda and Hamas) that couldn’t be deterred by conventional military forces. They have overestimated the capacity of the American military that, while unmatched in the conventional and high-tech warfare, was not prepared to deal with insurgency and the task of nation building. Neoconservatism, he argues, has proved contradictory in the real world in that, while neoconservatives loathe social planning and “nation-building,” measures toward these ends are necessary if Bush’s democratization project in Iraq and Middle East has to succeed.

The Neocons assumed that the world will buy the idea of America’s “benevolent hegemony” and confer her actions—clothed with scary rhetoric about preemptive wars against the axis of evil—with legitimacy, unmindful of the fact that anti-Americanism had been brewing all over the world decades prior to the American invasion of Afghanistan and Iraq. Anti-Americanism—Fukuyama contends—came about as a result of several factors, among them the American-led IT revolution and globalization that are perceived by Europeans as threats to the European welfare state system, the uneven result of “Washington consensus” (i.e. structural adjustment loans that tried to foster market-driven policies) in Latin America, and the Asian financial crises precipitated by American pressure to open up financial markets without adequate safeguards.

This book is Fukuyama’s way of explaining why he turn-coated on the neoconservative movement. And yet, he remained a Neocon in essence, warning against the greater dangers of American isolationism following the debacle in Iraq. This time, however, he labels his new advocacy as “realistic Wilsonianism” characterized by the greater reliance on soft power, the promotion of economic and political development worldwide, and the creation of legitimate international institutions that could respond effectively vis-à-vis global threats and issues emerging out in this brave new world of globalization and technological change.

Readers won’t probably agree with all the things that Fukuyama say in this book, but this piece of work once again seems to prove why many think Fukuyama is one of most engaging thinker and analyst of this era. It’s his finest piece since his equally controversial work, The End of History and the Last Man, came almost two decades ago. It’s a must-read for all those who want to understand the nature of America’s foreign policy after 9/11 and figure out where it is heading for.

Will the US recession hurt the Philippine economy?

America is definitely in recession. Lately, US president George Bush has lately called on the US Congress to give tax relief to consumers and business to boost the American economy. Many of us are probably wondering how it will impact the Philippine economy.

When America sneezes, the Philippines catches cold. We used to say that to highlight the Philippine economy’s dependence on the America economy. It’s a relief therefore to learn from experts from the World Bank that emerging economies including that of the Philippines could actually deal with this recession in America quite well. The reason? The continuing rapid growth in the Asia-Pacific region, particularly China, is going to cushion impact of the US recession. Says the World Bank lately:

“Resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1 percent in 2008, while high-income countries are predicted to grow by a modest 2.2 percent."

The World Bank adds:

"GDP in East Asia and the Pacific is expected to grow about 10 % in 2007, with China expected to grow by more than 11%. Growth for the region should ease to 9.7 % in 2008 and to 9.6 % by 2009. The effects from the turmoil in the world’s financial centers may be small in most economies in the Region. Except for China, direct exposures of financial institutions in the region to mortgage-based securities (or sub-prime crisis) are limited.”

The Bank has a favorable prognosis for the Philippine economy in 2007 and expects it to grow by a decent 6.2 percent in 2008. What explains this trend? Simple: these trends are a part of the economic and social transformation obtaining in the Philippines, a trend I call the “Revolution from Beyond.”

Is the Economist pricing itself out of the Philippine market?

I went to the National Bookstore a few hours ago to check on the latest issue of my favorite economic magazine and was shocked to learn it’s now priced P250 pesos a copy (more than 6 US dollars). The last time I bought a copy it was less than two hundred bucks and I was agonizing whether or not to buy. Now, I feel it’s way too expensive for my limited budget. It means I’ll only buy it once in a blue moon when the issues covered are really so compelling.

One thing I like about the Economist is its intellectual courage. It’s the only magazine that takes positions on issues, usually reflecting its free-market orientation. You may like its arguments or not but it’s never afraid to draw the line. And it does prescribe solutions to issues or problems, unlike most publications that only present contending views without stating its own position.

That’s the true mark of intellectual courage. It’s so easy to criticize and analyze issues or problems, but it’s so difficult to propose solutions, essentially because alternatives could be lighting rods for scrutiny from others. And it’s in proposing solutions where we are shown whether or not we really have the discipline to think through what we offer in the market place of ideas.

But I’m digressing here too much. The fact is that I could no longer afford my favorite magazine. Oh my!

Reducing oil tariff: just another misguided policy

The other day, the government announced that it has reduced tariffs for oil products by one percentage point supposedly to cushion the impact of rising crude prices. Sounds good except this policy might end up becoming a subsidy to oil companies without achieving the social objective of “cushioning” the rise of oil products like gasoline, diesel and LPG.

The fact is that the industry is deregulated and movement of prices is determined more by global trends and the nature of local competition than government actions. Lower tariff for oil products simply means that importers are going to enjoy lower import costs or charges. Whether or not they are going to pass the lower import costs to consumers in terms lower prices is another matter. They probably won’t as they always did in the past. Market competition should theoretically force oil companies to go easy on raising prices but that’s only possible in a competitive environment. Right now, the local market is still dominated by the big three (Shell, Caltex, and Petron) and it seems the newcomers, the so-called independent oil producers, are simply taking the cue from actions of the Big Three.

The new policy therefore is another populist measure that may end up achieving nothing. The best thing the government could have done therefore is to maintain the current tariff levels and continue collecting the money to improve government finances. If policy makers suspect that oil companies are colluding, they might as well look for effective ways at bringing greater competition in the oil and energy sector.

Barack Obama is an enemy of outsourcing

What?! Outsourcing is “a form of violence similar to the Virginia Tech killing?” That’s crazy, but Barack Obama, fresh from winning the Iowa caucus, thinks so. I thought all along he has the most realistic view about globalization and outsourcing among the US presidential candidates. Now he is pandering to the mob to fortify his lead over Clinton and Edwards who are both protectionist in their rhetorics. In his speech lately, courtesy of the Texas Rainmaker, Obama said:

“There’s also another kind of violence that we’re going to have to think about. It’s not necessarily the physical violence, but the violence that we perpetrate on each other in other ways,” he said, and goes on to catalogue other forms of “violence.”

There’s the “verbal violence” of Imus.

There’s “the violence of men and women who have worked all their lives and suddenly have the rug pulled out from under them because their job is moved to another country.”

I don’t have to react to this, for the blogosphere has plenty. Consider this one by Radley Balko of Reason Hit and Run :

"No one has the "right" to be paid by someone else for their labor. Employment in a free market is peaceful and voluntary, on both sides. So is the decision to stop that agreement, both for the laborer, who may find a better job, or for the employer, who may find someone who can do the job better, or cheaper, or both. There's nothing remotely violent about any of it. To compare a business decision to employ cheaper labor to the senseless slaughter of innocents--even if by way of tortured, nonsensical metaphor--is really reprehensible. It reeks of exploitation."

Ah politicians. They are the same all over the world. Now, surely this statement may have sent shivers down the spine of the American corporate economy that is benefitting immensely from global outsourcing.