Posted tagged ‘development finance’

ASEAN BETTER LAUNCH THE ASIAN MONETARY FUND NOW!

November 23, 2010

Erle Frayne D. Argonza

Buoyed up by the positive economic performances and regional integration efforts of ASEAN member-states, let me ensue with the ASEAN agenda, and articulate this time the matter of the Asian Monetary Fund or AMF. What makes the urgency of constituting the AMF even more exigent is the recent pronouncement made by the Asian Development Bank or ADB about the same theme: launch the AMF now!

The idea of an Asian Monetary Fund actually began with the late strong man Ferdinand Marcos of the Philippines. Awash with colossal hoards  of gold, Marcos vouched for the creation of an Asian Monetary Fund that shall function as monetary stabilizer, steward of an Asian currency, and financer of bold development projects.

As per note from some of his own former close supporters (they were my fellow economists in the Independent Review, c. 1998 to 2000), Marcos was very eager to back up (securitize) the Asian currency with his very own gold hoards (they amount to hundreds of trillions of US. $ today).

It was too bad that Marcos had downside images among the global financiers, who conspired behind the scenes to overthrow him. They never liked the idea of an AMF that will compete with their stooge thug bank International Monetary Fund, and they were salivating to control his gold hoards. The Trilateral Commision in fact undertook steps toward aiding the process of social turbulence to unfold in the Philippines, turbulence that eventually overthrew the dictator.

It took some time before the AMF idea would resurface. The opportunity for resurfacing came with the Asian financial meltdown of 1997. That crisis saw the region’s currencies attacked by an insidious cabal of Western oligarchic financiers fronted by George Soros, who all rested happy from their criminal currency attacks that fattened their coffers by the trillions of dollars.

Thus came the technocratic and public policy responses to the crisis of that time, with the Asian Monetary Fund idea floating to the surface as a viable option. Necessarily, the stabilization of currencies will come with the institution of an Asian currency, which came alongside the AMF idea.

It then took many years of haggling and bargaining before a continental resolution was finally signed into a sort of a memorandum of undertaking. To recall, the former Speaker of the House of Representatives (Philippines), Hon. De Venecia, took much pains to legwork Asian leaders into finally signing the concordat and presenting the same to the Philippine state leaders for immediate action after accomplishing his mission.

This time around, it is the Asian Development Bank that has taken the cudgels for pushing for the urgent institution of the AMF. As articulated in a previous article, the ADB is among the continental institutions that can aid in launching an ASEAN central bank (circa 2015) as well as an Asian Monetary Fund.

Since the ASEAN is the most actively engaged regional formation among Asians, it is the most logical body that can facilitate the launching of the AMF. Its country members could easily role play the core membership of the AMF, with the quid pro quo that the latter will aid ASEAN in forming its regional central bank comes 2015.

As early as the late 90s yet, this analyst was very highly supportive of the institution of an AMF and Asian currency. The launching of the currency alone will catalyze the stabilization of monetary-fiscal environments, and can even out the very uneven cost of living situations across countries.

AMF would surely be of great help to insulating Asia’s emerging markets versus the destructive undercurrents of the economic crises of North America, Europe, and Japan. It can likewise aid enormously in regional trading efforts, precisely by securitizing and/of directly financing the pioneering and expansion efforts of exporters.

I would, however, add a caveat to the AMF’s formation: securitize the operations via a gold reserve standard or equivalent. The eradication of the gold standard in 1971 is among the factors behind monetary-financial instabilities and emergence of criminal financial predators over the last four (4) decades, predators that were responsible for de-industrialization, agricultural decay, and economic decline altogether.

The launching of the AMF shouldn’t be delayed a day longer. The global economic roof is collapsing due to the structural defects of the northern economies, and so as a measure of mitigation the region’s own economies be insulated from that crash through launching of the AMF, buffering financial collapse via collective money reserves for contingency uses, and instituting the Asian currency very soon.

To re-echo the theme: there is no better time to constitute the AMF than now. Act now, before it is too late!

[Philippines, 17 November 2010] 

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]

BOOST PHILIPPINES’ BUDGET TO 2ND WORLD LEVEL

July 3, 2010

Erle Frayne D. Argonza

I wish so much to write notes about the planet and all the world’s regions, but I surely find it so irresistible to write reflections about my own country. I’m sure my friends and readers will understand this, me being a patriotic lover of my country and people despite our collective imperfections.

That said, let me focus this time around on the matter of budget. We have a new presidency, a new set of leaders from national to local levels, and I don’t want to miss out on delivering unsolicited advises to our new government concerning budgets.

By the end of this year 2010 our Gross Domestic Product or GDP will hit P8.25 Trillion more or less (it was P7.67 Trillion in 2009). That’s roughly U.S. $183 Billion (nominal value). Add the $18 Billion forecast Net Factor Income from Abroad or NFIA (read: overseas remittances), and the total figure yields $201 Billion.

$201 Billion national income is a 2nd World or ‘middle income’ country level of wealth. Let us stick to the figure and level so we won’t get detracted by the Gordian knots of discourse. This being so, the Filipinos deserve to see their state funded at 2nd World level and not any level otherwise.

Let us, for the sake of minimalist discourse, peg an annual budget at 30% of the GNP. The 30%-50% figure is known in scientific parlance as ‘critical mass’. To simplify our discourse, a ‘critical mass’ of budget will provide ample space for fiscal maneuverability, fund social services in fat sums, build more infrastructures, and pay up for state debts.

Any budget that is below ‘critical mass’ is direly undernourished, even as it could jeopardize our way to development ‘maturity’ and higher incomes for our households by 2016. Remember, we can no longer go back to the days of austerity that kept us mired in poor country status for a long time, so let’s better spend—with the expectation that spending will stimulate other sectors to grow.

The budget allocation for this year is a measly P1.5 Trillion. Measly in that it only grew by P100 Billion, or 7.14% from the P1.4 Trillion budget of 2009. A budget, to make sense and impact, must grow by at least 10% ever year.

30% of GNP means that our budget should not be lower than $60 Billion to qualify as ‘middle income’ country budget. Using the P45.50 to the dollar as our conversion rate, the expected budget should be Philippine P2.73 Trillions. That indexical calculation instantly renders RP’s 2010 budgetary appropriation short of P1 Trillion to make sense and impact at all.

Another unsolicited advise is that education, my favorite sector being an educator (teacher & social scientist), should get the largest share of the pie. And this should be at least 5% of the GNP. Let me stress that the benchmark should be GNP and not GDP since the latter unjustly leaves out the overseas workers & entrepreneurs in the equation.

The annual budget for education should therefore be at least U.S. $10 Billion, or Philippine P455 Billions. Contrast that figure to the P150 Billion allocated for education in the 2010 budgetary appropriation, and one can easily see why Philippine education is mired in cesspools.

The P455 Billions could be split up into the following: P250 Billions for primary education, and P205 for tertiary education. The total figures don’t include yet those budgets allocated by local governments for education, which when added to national appropriations could yield a figure much higher—at past 7% of GNP—appropriated for education alone.

Where to get the funds is another question for that matter. Let the question be tossed to the legislature, treasury/finance departments, and central bank to settle. It is important that I have delivered the message here very clearly: that a second world economy must affix budgets at figures befitting a 2nd world budget.

[Philippines, 30 June 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]

ASIA & PACIFIC UPDATES

August 9, 2008

Erle Frayne Argonza

Good morning from Manila!

Let’s see what we got across Asia and the Pacific recently, concerning development engagements, relief and humanitarian activities. Below are news captions about Australia, Bangladesh, Burma, China, India, Indonesia, Mongolia, Nepal, North Korea, Japan, and Sri Lanka.

[31 July 2008, Quezon City, MetroManila]

Asia & Pacific

 

 

Australia

A draft blueprint of Australia’s emissions trading scheme will include fuel, but is unlikely to recommend what the country’s key emissions cap should be. The blueprint’s government-backed architect, economist Ross Garnaut, is due July 4 to release a plan for how emissions trading could operate, likely suggesting that government force companies to bid for emissions permits at auction, a perceived failing of the EU scheme. But inflating already record-high petrol prices could fuel a backlash against the government’s pledge to cut emissions with a trading system by 2010. (Reuters)

Bangladesh

Obtaining food remains the biggest priority for Bangladeshi families living in areas still devastated by Cyclone Sidr last year, the United Nations World Food Program (WFP) said July 1, announcing it will continue its aid operations to the affected region. The next major harvest in the delta country is not due until November or December, and many households lack sufficient food reserves to last until then, according to a press release issued by WFP. (UN News Service)

Burma (Myanmar)

At least 7,000 cyclone survivors sheltering in three temporary camps in Laputta town, in the Irrawaddy delta, are under renewed pressure from the local authorities to return home, according to sources there. About 10,000 refugees are still living in Laputta’s five refugee camps, supported by local authorities and nongovernmental organizations. The 7,000 now urged to return to their home villages have been warned that unless they leave the camps they can expect no aid next month, said one local source. (ReliefWeb)

China

The UN expects China to be at the forefront of efforts to tackle the world’s biggest challenges, such as the global food crisis, climate change and the quest to slash poverty, UN Secretary-General Ban Ki-moon said July 1, calling on the Asian nation to step up its contribution in international affairs. Addressing students at the Foreign Affairs University in Beijing, at the start of the second leg of his East Asian tour, Ban said China is already playing an important role as a permanent member of the Security Council and as a growing contributor to peacekeeping and the UN budget. (UN News Service)

India

The Jammu and Kashmir state government should protect Parvez Imroz, an award-winning human rights lawyer who survived an armed attack on June 30 in Srinagar by alleged security forces members, Human Rights Watch (HRW) said July 1. The state government and Human Rights Commission should launch an immediate and thorough investigation into the attack and take criminal action against those responsible. “All members of the security forces found responsible, no matter how far up the chain of command, should be prosecuted,” said Meenakshi Ganguly, senior South Asia researcher at Human Rights Watch. (HRW)

Indonesia

Indonesia’s anti-terrorism police unit has found assembled bombs and detained suspects during a raid on a house in Palembang in South Sumatra province, the national police spokesman said on June 2. The detentions came as President Susilo Bambang Yudhoyono was visiting the area in the west of Indonesia on Sumatra Island. Earlier, Metro Television reported that seven suspects had been detained, but a police source involved in the raids told Reuters that more than seven were being held. (Reuters)

Mongolia

The president of Mongolia has declared a four-day state of emergency in the capital amid violent protests over claims the general election was rigged. Crowds torched the HQ of Mongolia’s governing party – the former Communists – and attacked a police station. Over 60 people were hurt – around half of them police – as officers used tear gas, rubber bullets and water cannon against stone-throwing protesters. The unrest went on into the night, with reports of bank robberies and looting. Rioters set fire to the Cultural Palace, home to a theater, museum and national art gallery in the capital, Ulan Bator. (BBC)

Nepal

Nepalese police have detained more than 40 Tibetan monks and nuns near the country’s border with Tibet. The group was planning to protest at China’s policies in their homeland. The demonstrators were halted several kilometers from the frontier after marching through the mountains from the Nepalese capital, Kathmandu. Tibetan exiles in Nepal have protested almost daily since China suppressed violent anti-government demonstrations in Tibet that broke out in March. (BBC)

North Korea (DPRK)

A new agreement between the UN World Food Program (WFP) and the Democratic People’s Republic of Korea (DPRK) paves the way for the agency to step up its food assistance to more than five million hungry people in the country. The agreement, which was signed on June 27, was hailed by WFP as a significant breakthrough in its long-standing efforts to ensure that all those in need of food aid in the DPRK are able to receive it. (UN News Service)

Japan

UN Secretary-General Ban Ki-moon met Japanese leaders in Tokyo on June 30 and praised the “immense contribution” Japan has made to the work of the United Nations. Speaking to the press after meeting Prime Minister Yasuo Fukuda, Ban said that “Japan should be proud of being ‘a peace-fostering nation’ and its commitment to multilateralism,” Ban added. “The Japanese people should know how much Japan’s global role is appreciated in the United Nations and worldwide.” (UN News Service)

North Korea (DPRK)

The UN World Food Program, which has warned of a humanitarian crisis in North Korea due to a food shortage, said on June 30 it reached a deal with Pyongyang to rapidly expand aid, and that a US ship carrying wheat had arrived. Flooding last year, higher commodity prices and political wrangling with major donor South Korea have pushed North Korea to a food shortfall similar to ones it faced about a decade ago when famine killed an estimated 1 million people. The WFP said the agreement it reached with the North will allow it to expand its operation, previously aimed at feeding 1.2 million people, to feed more than 5 million in the country of about 23 million. (Financial Times, UK)

Sri Lanka

For thousands of Sri Lankans without easy access to potable water, a low-tech filter has provided them with a convenient source of safe water, saving on fuel costs and cutting disease. The water filter was first mass-produced in Nicaragua and used in emergency relief operations. It is essentially a clay pot fortified with ground paddy husk and coated with colloidal silver that strains out virtually all harmful bacteria and parasites. The American Red Cross (ARC) began production of the clay filter in Sri Lanka in January 2007 and has distributed some 10,000 units so far. (IRIN)

 

AID FUNDS FOR AFRICA, ANYONE?

August 7, 2008

Erle Frayne Argonza

Magandang araw! Good day!

Aid commitments to the south by the more developed economies of the North have been among the news trends recently. There is, for instance, the commitment of $25 Billion per year for the whole African continent, a commitment that hopefully won’t fly in the air as mere political promise.

A relevant news concerns IMF-World Bank actions about the matter.

[30 July 2008, Quezon City, MetroManila. Thanks to DevEx database news.

 

IMF, World Bank & IFI Round-Up

Leaders of the Group of Eight rich nations are set to backtrack on their landmark pledge at the Gleneagles summit in 2005 to increase development aid to Africa to USD 25 billion a year. A draft communiqué obtained by the Financial Times, due to be issued at the group’s July summit in Hokkaido, Japan, shows leaders will commit to fulfilling “our commitments on [development aid] made at Gleneagles” – but fails to cite the target of USD 25 billion annually by 2010. This goal – which was repeated at last year’s G8 summit in Germany – was seen as an important boost for Africa. The ambitious plan was a cornerstone of former UK prime minister Tony Blair’s G8 presidency and championed by his successor, Gordon Brown.

Warning that rising food and oil prices pose a crisis for the world’s poor, Robert B. Zoellick, the President of the World Bank, is calling on President Bush and other leaders convening in Japan next week for the G8 summit meeting to make new aid commitments to avert starvation and instability in dozens of countries. Zoellick’s letter, obtained by NYT, came with a lengthy study of the impact of rising prices for food, fuel and commodities on the world’s poor. Zoellick said in his letter that the World Bank, the International Monetary Fund (IMF) and the World Food Program (WPF) had short-term needs of USD 10 billion. Zoellick’s letter calculates that, for the world’s 41 poorest countries, the combined impact of high food, fuel and other commodities is a ‘negative shock’ to their economies, reducing GDP by between 3 and 10 percent, causing ‘broken lives and stunted potential’ for millions.

The World Bank gave the go-ahead at a board meeting July 1 for the creation of a pair of global investment funds to back developing nations’ efforts to curb greenhouse gas emissions and adapt to the effects of climate change. The Climate Investment Funds, led by Japan, Britain and the US and to be administered by the World Bank, are expected to start with total initial funds of USD 5 billion and become operational by the end of the year, it said. The approval of the Clean Technology Fund and Strategic Climate Fund comes days before a summit of G8 in Hokkaido, Japan, on July 8 where climate change issues are on the agenda. ‘The G8 is likely to broadly support the establishment of the climate investment funds,’ Warren Evans, Director of the World Bank’s environment department, told reporters.

A new IMF study, looking at the impact of soaring oil and food costs, said many poor and developing countries will likely have to change their economic policies in response to soaring commodity prices, AFP reported. The IMF Food and Fuel Prices–Recent Developments, Macroeconomic Impact, and Policy Response report found that poor households are most affected by food price inflation and “warned that the share of undernourished (people) in developing countries could rise rapidly above the current 40 percent of total population.” Energy and food values are still rising and the IMF said its research suggests the “problem is worsening.”

The World Bank’s private sector arm has launched a new fund it hopes will unlock as much as USD 5 billion in infrastructure investment for the world’s poorest countries. As part of its drive to reach deeper into some of the most forbidding markets, the International Finance Corporation (IFC) will use a pot of USD 100 million to cover the initial costs of power, logistics, and transport, ports and communications projects. Once a project is shown to be viable, it will be tendered to other investors, the Financial Times (UK) reported. Working with an initial partner, the IFC fund – known as InfraVentures – will cover start-up costs such as feasibility studies and legal fees. Half of its resources will be devoted to sub-Saharan Africa, with the remainder spread across Latin America and Asia.