Posted tagged ‘development sociology’

USA’S LEADERSHIP HAD EVAPORATED, WHY OUGHT STOCK MARKETS FOLLOW?

August 28, 2010

Erle Frayne D. Argonza

Good day fellow global citizens!

It’s late afternoon here in the Philippines, daylight is still around though quite faded a bit. The time of the day seems to be delivering the message that there is still some light in the global economy, and that is a feel-good ambience.

Light there may be for the global economy, but that light no longer comes from the Western economies. Definitely no longer from the once mighty ‘economic superpower’ USA that had lost the leadership leverage this decade when it suffered two (2) successive recessions within a short span.

I’ve already treated the matter of declining Western techno-economic power and hegemony over the rest of the globe in many articles. There is hardly any serious, highly-informed analyst in the world today who doesn’t share the same view, a view that Western (Caucasian) social forecasters do likewise hold even as they forewarned the West of the catastrophes that will confront them.

Stock markets across the globe, however, just couldn’t adjust to the new reality soon enough. They still behave like old hush puppies that look up to Wall Street for precedence in setting the trends of local bourses. That renders the local bourses as laughing stock dinosaurs that need to retool quickly, and the quickest that such retooling will be translated into practice, the better will it be for their respective stock trades and financial-monetary markets.

To reminisce a bit, America was the unchallenged global leader after World War II as it contributed 40% to the Gross World Product or GWP. Its European & Japan partners contributed another 20% to GWP, so that empowered the USA & partners’ (OECD) 60% contribution to GWP to exercise hegemony in all regions of the planet.

Today, the economic landscape had entirely changed. The USA’s $13+ Trillion GDP is down 22% of world income, while the entire EU’s $13+ Trillion is another 22%. EU + USA/Canada + Japan put together couldn’t even amount to 50% of Gross World Product, so the old partners may just have to metamorphose out of their old identities and retool quickly. They no longer hold the planet’s collective purse and should desist from bullying other nations with their economic clout that is pathetically a non-clout today.

Herd behavior, of course, is the least that we can make of the behavior of plummeting bourses. “Follow the leader” mindset of cave dwellers is still in, a mindset that is a messy sticking point for retooling purposes.

Why should local bourses refuse to see the new reality and dis-engage from the antiquated herd instinct? After all, stock markets are the exclusive games of the big corporate boys and consummate traders who have been addicted to the casino economy of antiquity. They hardly matter for the real economy sectors, such as those of Asia’s that have effectively built firewalls between the real economy and casino stock markets.

If to serve a bit of relevance to domestic growth at all, local bourses ought to look at the health of their own domestic physical economies and financial-monetary wellness.

Take a look at East Asia. The region has been driving the global economy beyond doubt, its average investments and savings rates are high, gross international reserves are equally high, and the physical economy as a whole has shown the way to high value-added production. Stock markets should better follow the lead of the healthy conditions of their domestic economies rather than look up to an offshore global leader that is now a chimera.

Or, if they can’t resist looking at offshore patterns, then they should look at their very own regional backyards for such models. Regional integration has been the strategy of the day, so why get fixated to a dinosaur fiction (USA as leader) when there are regional economic patterns that can show the lead.

USA’s lead will never ever return, this is a foregone conclusion. And Europe ought to rethink its integration efforts, as the Eurozone is now hotly burning, so Europe better not behave like a global hero that can  fill up the vacuum left by the USA. A continent that is perennially flat on its back and is now burning in financial-monetary flames can never fill up such a vacuum.

As already articulated by me in previous articles, the Western markets will decline progressively across time. Consumption from 2007 through 2015 will decline by as much as 30% of their pre-recession levels. In contrast, Asia’s consumption will more than double during the same period, thus rendering Asia the unquestioned driver of the global economy in terms of (a) technological cutting edge, (b) production levels of the real economy, and (c) consumption levels.

In closing, just like the pattern for mega-cities where no one mega-city can be considered a global center today, so is it with national economies. Economic leadership has already been de-centered, global hegemony had been erased, and there can only be inter-dependence between markets as the most viable option. That interdependence should find translations in the bourses and currency markets.

[Philippines, 13 August 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]

PAN-AFRICAN AWARENESS RISES: WILL IT BITE?

August 12, 2010

Erle Frayne D. Argonza

Magandang gabi mula sa Perlas ng Silangan! Good evening from the Pearl of the Orient!

Pan-Africanism seems to be getting sweeter an idea recently, so I chose to delve on the subject for this article. Pan-Africanism as a pathos (group feel & aware) seeks to unify the diverse ethnicities of the continent from southernmost South Africa to the northern Arab-Berber-Hamite territories, to indicate the contours of the emerging pathos.

Whether this pathos will gel in order to effectively create synergies among Africans of so heterogenous a composition remains to be seen. As a matter of development imperative, I’d encourage such a colossal effort myself, and I hope that the Africans would truly get together to solve their deep-seated social, political and economic malaise.

As far as I see it, the pathos was there from the time of the early pharaohs through the time of Carthage, but declined rapidly during the advent of the Hellenic monarchs of the northeastern region. When Cleopatra ruled Egypt, the fragmentation and decay of that unity was completed. Africa was thereafter subordinated to empires and potentates to its north (Rome and later empires).

For two thousand years such a pathos slept and lay dormant in the antechambers of the African psyche. Western powers arrived, occupied, and declared Africa and its peoples as their chattels, and that latter imperialist act of the West seems to have doomed any effort to revive pan-Africanism via a renaissance movement.

Thereafter, before and after the colonial periods for each of Africa’s regions, each nation waged its own version of nation-building and national renaissance. Sadly, the post-colonial period saw the nation-building efforts degenerate, with many African states cascading catastrophically down ‘failed state’ syndrome.

Africa’s nations were actually creations of the West, and they fail because tribes that were like oil and water just couldn’t get their acts together in the last instance in each nation concerned. They sold their sovereignty to warlordism and Anglo-European oligarchic moneybags. The superficial states just couldn’t hold water much longer, and so we witness fragmentation and balkanization till these days.

It seems that the last salvation for the end of the chaos and fragmentation is pan-Africanism itself. Africans are trying to construct a new center—not geographical but cultural-ideational—that could cement the diverse ethnicities of a chaotically decentered continent.

Pan-Africanism will have to compete though with other revivalist movements. Pan-Arabism, as represented by Ba’ath ideology, used to be a strong contender but is now on the rapid decline. Pan-Islamism is on the rise, though it has its own competing discourses—Sunni and Shiite. There is Christian fundamentalism that the Opus Dei, Jesuits, evangelical and Baptist groups are stirring up in a frontal clash with pan-Islamism.

Such revivalist movements tend to secure a region or select African ethnicities, such as the Arab-Berber-Hamite triad for pan-Arabism. They may get some pieces of the African pie with them, but they are narrow and parochial as they divide the continent and its component ethniticies. Pan-Africanism can therefore supersede all of them, though its maturation is a tenuous endeavor.

A very rough political-cultural ocean this pathos is surely confronting. Getting together hundreds of tribal and ethnic groups, with their own inter-ethnic conflicts raging till these days, is enormously enigmatic a goal to hurdle, with so many gourdian knots to cut.

Africans have no better choice but get together. Poverty, ethnic conflicts, bio-warfare ailments (AIDS & others), balkanization, and the looting of its resources by Western moneybags is leading the continent and its peoples to a cul de sac Hades.

Europe had been re-awakening the long dormant Roman pathos, and that “grandeur that was Rome” is running through the gamut of the European psyche on both sides of the Atlantic. Bonapartism is crystallizing rapidly as the state ideology of the emerging New Rome (EU-USA), its contours now forming though straddling sand dunes. Rome is re-acquiring its old territories as we’re now witnessing.

The subordination of ancient Africa (Egypt-Nubia leading) to Rome is again being revived. Such a revivalism would get expressed as an enchainment of pan-Africa to New Rome’s agenda of conflagration versus a renascent Persia (Shiite Iran). If the conflagration will ensue, pan-Africa’s gains will collapse under the roof.

So the question that we ask now is, will pan-Africa yield to the Anglo-European oligarchs and become canon fodders for the latter’s war versus Persia? Or, will pan-Africa truly unite the vast continent’s diverse ethnic communities and galvanize a sovereign continent that can’t be dragged into the ‘clash of civilizations’ madness of Western moneybags?

[Philippines, 30 July 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]

BRAZIL JETTISONS ECONOMICALLY: KUDOS, SUSTAIN & LEAD!

July 27, 2010

Erle Frayne D. Argonza

Brazil is now clearly leading the growth path of the entire South America, and this is a most welcome news. I am truly impressed by the developments down south that Brazil had led, and so I extend my kudos to the citizens and development stakeholders of Brazil.

Under the able stewardship of the very popular president Lula, the growth policies of the country were strengthened and sustained. The added feature is that, under a socialist regime, Brazil’s social policy had been further stressed and strengthened, with the hopeful gains of growth distributed more equitably to the poor folks of the cities and countrysides.

As we should all realize, South America isn’t exactly following a growth trend akin to East Asia’s. While Asia generally surges upwards, breathing new life to the global economy, that of South America’s could only count on specific countries (not general trend) jettisoning their ways further upwards. Brazil, Argentina, Chile are the most concrete success stories, while Mexico burns in the embers of an anti-drug war (Mexico sputters in its role as a growth driver).

Among all regions down south (America), it seems that the Brazil-Mercosur promises the greatest hope for the continent. It remains to be seen though how far this can be sustained. Contrast this to Asia, where three regions—Northeast Asia (China-Korea), Southeast Asia (ASEAN), and South Asia (India-led)—are acting as a grand chorale that enchants and enthralls the global economy as a whole.

Brazil, as an emerging market, clearly leads the pack in the whole of the continent, and being large enough by itself, it can jettison ahead and be the equivalent of China-India-ASEAN of the south. Its ‘real economy’ is the base of its growth that enables it to veer away from the anarchic and destructive ‘virtual economy’ policies up north (America).

Such an upward surge should move on till the aerospace program of Brazil will clearly be established as solid rock, thus ensuring the country’s entry as a top producer of affordable satellites for diverse end-users. It can go on and establish, in 25 years’ time, active metallurgical R&D in other planets such as Mars and Jupiter that can be alternative sources of metals for our own planet.

Also, Brazil better lead in creating a continental-looping railway that can accelerate development of the other regions, quicken the movement of skilled peoples and information across borders, and magnify continental trade by many folds. Likewise should Brazil lead in cyber-looping the continent with state-of-the-art infotech cables like what the East is now ambitiously embarking on.

Likewise should Brazil lead in massive energy investments, with clean technologies leading the way. Incidentally, biofuels and other clean energies are now surging upwards in the emerging market, with a policy environment in place that qualitatively is as sterling as East Asia’s (the Philippines has one such policy environment now well built up).

On the other hand, Brazil should better go slow in taming the Amazons with massive energy projects that could sadly kill the indigenous cultures that are among the country’s top endowments. Furthermore, in no way should the Amazon jungles’ diverse species be terminated for the sake of producing power, mineral resources, timber, and heavy industries for the country and its trading partners.

The world is watching Brazil mutate into a gigantic pillar of the global economy, we in Asia are surely watching with awe, and such a rise of a giant will ensure that the imperialist power up north will tone down its hegemonic attitudes towards the southern continent in the short run. The USA should better choose the path of cooperation with the south if it desires to remain relevant at all, as its own economy slides down a 3rd world level notwithstanding the continuous ‘virtual economy’ predation of its industries, agriculture, and infrastructures.

Surging upwards under a series of conscienticized and enlightened leaders, Brazil will continue to come on as sweet and enchanting as samba and bossa nova. To celebrate Brazil’s victories, we better chill out with Brazilian music & dance while we relish Brazilian cuisine in a spirit of peace and cooperation worldwide.

[Philippines, 21 July 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]

EUROPE & AMERICA ON DOWNWARD SLIDE TO 3RD WORLD ECONOMIES

July 24, 2010

Erle Frayne D. Argonza

Magandang gabi! Good evening!

It’s dusk time as I write, and this dusk at a time of intensifying monsoon rains seems to bode images of a grim future for the West at large. The European Union or EU members and the USA, the gigantic pillars of the global economy, are particularly in dire straits as they have entered the zone of flat growth and perpetual recession.

As already tackled by me in diverse articles, the East is surging forward bringing life to the global economy as a whole. In contrast, the West is spiraling downwards, and the strategies their stakeholders are putting into place to arrest the downslide are at best palliative. As the East continues to surge upward, the West continues to stagnate and decay.

After World War II, both Europe and America embarked on massive infrastructures and heated industrialization that saw both economies dominating the global economy’s wealth production. The result of that was an OECD producing 60% of Gross World Product or GWP for some decades (today that’s down to 40% of GWP and will still go down).

That was the situation back then. By the 1990s, the situation had been badly reversed as a result of liberal economic policies instituted in the previous decade (80s). The rise of a ‘virtual economy’ dominated by predatory finance was instrumental in the West’s massive de-industrialization, decay of relatively unattended infrastructures, decline in science & technology research, and neglect of the transport sector (only Japan & Germany were actively pursuing maglev railways).

By the early 1990s yet, certain experts among economists and sociologists in America began echoing alarming notes about the possible downslide of the USA into a 3rd world country should the economic decay, such as that of relatively unattended infrastructures,  be allowed to continue till past 2010s.

In the late 1990s, my own circle of political economists in Manila (Sunday Kapihan/Independent Review) saw such a possibility ourselves as we consolidated the data made available to us thanks to the internet. By 1998 all fellows of our circle were convinced of the catastrophic direction that the USA and Europe were plunging themselves into, which could begin with a depression past 2005 and a thirdworldization by 2010s (both have been hit by recession this decade as a matter of fact).

When Katrina struck the USA and when those floods struck Europe just a few years back, and the same free market policies stubbornly remained in place, I knew the downslide would turn out to be irreversible. The fate of New Orleans, with its residents lining up for food akin to a depressed city, revealed an appallingly decayed 3rd world city inside the USA which, to my mind, is but a fractional tip of a gigantic iceberg that are America’s decaying cities on the way to 3rd world infamy.

If, for instance, just about 55% of the top 700 cities of the USA will be so badly decayed by 2015 and be declared as 3rd world or ‘developing cities’, then we know more or less that America had catastrophically seen its worst state. With 97% of U.S. population living in cities (urban), likewise will the whole of the USA be declared as a ‘developing economy’ as early as 2015.

That is, again, if the destructive ‘virtual economy’ policies will not be taken down and reversed sweepingly. As I’ve declared in previous articles before (when Obama was still campaigning for the presidency), America must quickly return to a New Deal-type policy regime: interventionist, with great stress on revivifying infrastructures, revitalizing transport R&D (railways, shipping, etc), upscaling science & technology investments (including rockets), returning heavy industries (revive steel and many dead manufactures), and ensuring agricultural productivity.

Europe is not far behind such near-catastrophic downslide of the USA, just to remind our friends in Europe and the globe. Decisively institute interventionist policies in the continent, regulate the financial-banking sectors (criminalize predatory finance), and revivify social policy that were hallmarks of a once strong and mighty European economy.

And there’s no better time to act then now. Failure to act soon, by stubbornly instituting the palliatives (e.g. bailing out failing big banks, semi-regulating stock exchange), will be the best sure-fire formula to see a rapid thirdworldization of the West.

Before long, some messianic mad leaders in both continents would be drum-beating their being “stubbed behind the back” and generate  new Hitlers and Bonapartes in their backyards. Act now, Western peoples, to avoid this eventuality from ever taking place at all.

[Philippines, 21 July 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]

WEST MARKETS SHRINK, ASIANS’ RISE AND OVERTAKE WEST SOON

July 19, 2010

Erle Frayne D. Argonza

 

Good evening from the Pearl of the Orient! 

The International Monetary Fund or IMF has been quite bullish lately about Asian growth. It had forecast East Asia’s average growth at past 7% for this year, and shares an equally positive growth trend for RP at 5.5%-6%. Just what could be the implications of the growth trends on the global economy and the West? 

As Asia expands, the West (Europe, USA, Canada, Japan) contracts. The trend will not change much over the next five (5) years, so let’s see where the East and West are headed for in the foreseeable future. 

In early 2008 yet, the economists and financial analysts of the West (or North) were of the opinion that the technological cutting edge of the West was already breached by Asia by the end of 2007 yet. Remember that 2007 was the beginning of a new cycle of recession for the West which began in the USA with the implosion of the realty bubble. 

Given that the Western economies are flat on their back growth-wise, and their toxic bubble economies have given them only virtual economy results (read: inflated values not based on real production but on speculation), there is ample reason to forecast that they will be mired in problems of saving their ailing banks, financial-monetary systems, and providing sovereign guarantees to their capitalists at the expense of taxpayers and infusing investments in the physical economy. This is now matter of fact, as we can clearly see. 

Western economies have suffered from the ill effects of continuous de-industrialization for decades, of being remiss in their own infrastructures (USA seems to be the worst in infrastructure decay), and deteriorating investments in science & technology. From being a producer economy, Western economy generally has become a parasitical ‘eater economy’ that stands on no clear foundation other than financial quicksand. 

In contrast, the Eastern economies have steadily built their strategic industries across the decades, reinforced their infrastructure expenditures and projects, and invested in science & technology. The Eastern economy generally has therefore been role-playing as ‘producer economy’ worth the emulation of other developing economies worldwide. 

Result: by 2007, at the downspin year of a recessionary West, the East overtook the West in terms of cutting-edge technologies. To qualify, the technologies we refer to are those life-inducing technologies, not those death & destruction technologies that the West has clear edge till these days. 

I still remember what my nationalist colleagues in the Sunday Kapihan that we then held every Sunday at the Sulo Hotel in Manila: the West knows nothing but perfect its Armaments.  Dr. Emmanuel Yap, an economist who finished his PhD at Harvard University, was the most vocal about that emphasis on the death & destruction focus of Western innovations. 

To continue, the added forecast that I’d share at this moment is this: from the years 2007 through 2015, Western markets will contract by at least 30%. That means their own consuming public will spend less and less across a 9-year stretch, until the consumption pattern will settle down by 2016 or so. Real GDP (gross domestic product) will radically decline during the period, shrinking by as much as 30%-40% contrasted to their 2006 levels (the last of the best years of the West). 

In contrast, the Eastern markets will expand by at least 100% during the period. The giants China and India will go farther than that, with China expanding by as much as 200% during the same period. That means the middle income earners in the East will continue to rise by the year and consume more products by the year, even travel more overseas year by year. 

Result: China will clearly overtake the shrunken economies of EU and USA by end of 2015. India may follow suit, at around the years 2020-2025. The last would be ASEAN, which will overtake the West by 2025-2030 period. 

Once a region overtakes others technology-wise, it will just be a matter of time before the same innovator region will overtake the rest wealth-wise. Technologies—physical technologies, biotechnologies, social technologies, medical technologies—are precisely the cutting edge practices that will enable one region to overtake others across the globe. 

The bad news for the West is this: if their own states and markets will fail to solve their ailing problems in infrastructures and reverse de-industrialization, they will pathetically go down as 3rd world or ‘developing economies’ past 2020. No less than their own economists warned of this possibility in the early 1990s yet, and sadly no one paid attention to them in their own backyards. City after city in the USA and EU will immerse in urban decay, becoming 3rd world cities in the process. 

My mother just retired from New York where she migrated since the 80s yet. She decided to come home back to the Philippines, and visited the Libis & Cubao areas of Quezon City/Manila suburb pronto upon her arrival. She was so deeply enchanted by the esthetic beauty of the architectures and planning in those mixed land use zones, while she complained of the dilapidated buildings and nauseating smells of cinema theatres in downtown Manhattan. 

Those observations are signs of the times indeed. In just a year from now, the Pagcor City will rise in Manila, housing the world’s tallest tower. Burj Dubai, Petronas Twin Towers, and Taipei 101 are already similar hallmarks in other Asian cities, signifying the power shift from East to West. 

The message is hereby brought to the West’s peoples: shift back from virtual reality to physical reality, from the virtual economy to the real economy. We Asians will help you along the way, as we’ve already been doing through our colossal treasuries investments, direct foreign investments, and quality Asian expatriates in your backyards that have been saving your collapsing economies from rapid decay.  

[Philippines, 13 July 2012] 

[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]

RP’S FOREX RESERVES AT ALL-TIME HIGH

July 15, 2010

Erle Frayne D. Argonza

Magandang gabi! Good evening!

It’s almost bedtime as I write this piece. I am currently listening to world music as I keep my fingers busy on my laptop, even as I am in a celebratory or positive mood after a nice productive day.

Let me genuflect on the reported all-time high gross international reserves or GIR by our central bank here. The latest figure is $48.8 Billion, which is sufficient to purchase ten (10) months worth of imports or so. The GIR has been largely shored up by upscaling exports and continuing high inflows of overseas remittances.

Such a figure would correct my earlier claim of $45 Billion+ in my previous essays on RP development updates. The errata was unintended, as I do have some memory slips sometimes (my figure is applicable to early 2009 yet).

I do appreciate very well the level of GIR of my beloved Philippines. We have always been financially struggling due to our perennial low forex for over five (5) decades since after our 1946 independence (from the USA’s colonial yoke). GIR levels have since been moving up at the turn of the century and millennium, indicative of a relatively healthy macro-economy that can withstand new recessionary rounds to come.

The country’s GIR is in keeping with the east Asian region’s healthy levels of GIR as a whole. This is good news altogether. Contrast our situation with those of the western countries’ more so the USA whose GIR can buy less than a month worth of imports or so.

The only cautionary note that I can make about the matter is that our GIR is largely made up of US dollars. An unsolicited advice to our monetary authorities is for us to adopt a ‘basket of currencies’ policy for our GIR.

The over-concentration on the dollar will make our monetary situation burn in the short-run should the forecast decline of the dollar take place in the financial markets. East Asia should by now carve out contingency measures to deal with the massive dumping of dollars that can happen in case that financial volatilities will lead to the forecast event.

Just the same, let me toast a glass of wine to my compatriots, both overseas and domestic Pinoys, for the latest feat of GIR ascent.

[Philippines, 09 July 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]

LUISITA ESTATE, HACIENDAS: ANACHRONISM IN POST-INDUSTRIALIZING PHILIPPINES

July 5, 2010

Erle Frayne D. Argonza

Magandang araw! Good day!

It’s the 1st of July, the first day of official reporting by the newly elected political leaders of the country led by President Benigno ‘Noynoy’ Aquino III. Riding astride the air of optimism induced by the new leadership, let me say more notes then about my homeland.

Let me shift to landlordism as this phenomenon seems to have remained unscathed by the ‘scorched earth’ flames of modernization and post-industrial growth. Our newly elected president here, ‘Noynoy’ Aquino, is a scion of the oligarchic family of Cojuancos and is an heir to the 11,000-hectare Luisita Estate in Tarlac province.

I still recall that in the late 1990s, as a graduate student of development studies in De La Salle University-Manila, I underwent the course on constitutionalism and development. I tasked myself to review the constitutions of thirty-five (35) countries, with the aim of unearthing and extracting the theme of agrarian reform from them.

To my amazement, most of the countries I researched on, including Taiwan, Korea, and many developing states, clearly emblazoned in their national charter the theme of agrarian reform. The impeccable intention was to declare land reform as a determinative development policy. The landlords should be enticed to divest from their rural estates and channel their new investments to birthing strategic industries.

I did write a paper on the topic, which my professor, Dr. Wilfrido Villacorta (former undersecretary of ASEAN, delegate to the 1986 Constitutional Convention), appreciated very well. The research also enlightened me more about the urgency of decisively implementing agrarian reform in the Philippines that barely made it to the passing mark of successful land reform programs.

Almost a quarter of a century after the new charter was signed and ratified by our citizens, and after the consequent legislation of the Comprehensive Agrarian Reform Law, many large feudal estates still abound. They seem to remain untouched by the law, as if they are autonomous mini-states in a nation that is rapidly urbanizing along mixed industrial and service economy growth trajectory.

Let’s take the case of the Luisita estate. In 2006 yet, the Agrarian Reform department decided that a total of 6,453 of Luisita should be apportioned to the farmworkers. Unfortunately, the Supreme Court blocked the implementation of the decision as it issued a Temporary Restraining Order or TRO that stopped the implementation. A TRO should be in effect only for a maximum of 30 days, yet years have elapsed and it is still in place.

Other large estates are similarly situated as Luisita. For instance, there are the Yulo estate in Laguna and the Pedro Roxas estate in Batangas. I still recall that way back in 1998, I was among consultants who helped agrarian reform beneficiaries of a 500-hectare piece of Roxas estate (out of total 30,000 hectares) in their capacity-building and productivity boosting. The same beneficiaries asked me if I knew anybody from the Agoncillo clan that owned a total of 30,000 hectares of estates…

There are more such huge estates to count. And truly, I am overwhelmed by their gargantuan sizes that are enough to build huge mega-cities such as Singapore or Manila. I could almost puke at the mere mention of their names, and puke much more when I learn about their vast sizes and the slave-driving management styles of their owners that have led to appalling living conditions for the farmworkers.

RP’s population was 66% urban and 34% rural as of end of 2009. Urban population is moving up by 2% every year, while rural population is moving down by the same figure. By 2016, the next presidential election year, urban population will already be at least 80% urban and rural population down to 20%. What are haciendas for in an urban Philippines, one may ask.

Furthermore, RP’s labor force is now past 50% service sector and 15% industrial sector, with barely 34% left to fend for our farms and fisheries. Agriculture now contributes to merely 15% of the GDP, while services comprises a whopping 60% or so (the rest is industries). Tourism, which forms past 10% of GDP today, will most likely surpass agriculture as a contributor to national income by 2016.

Now that brings us back to the question: what are feudal estates doing in an urban-to-suburban Philippines with a rapidly post-industrializing economy? Strange anachronism! All we need to do is follow the footsteps of Japan, Korea, Taiwan, and China to realize that such estates must be released from feudal yokes so as to carve out a win-win growth path between the small planters and their former overlords-turned-entrepreneurs.

When I registered my vote for the ratification of the charter in 1986, I already made up my mind to see that all such estates be transformed to high productivity enclaves beginning with their subjection to the reform program. All the landlords should quickly divest from such landholdings and move their investments in industries and services.

I stand pat on that decision, and will be on standby to help out those agrarian beneficiaries who seek professional help for improving their farm production and quality of life. And I welcome a Philippines that will someday move towards the space age, thanks for a willful departure from an anachronistic feudalism of past dark ages.

[Philippines, 01 July 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]

ISLAMIC BANKING RECONSTRUCTED

June 22, 2010

Erle Frayne D. Argonza

 Islamic banking is part of the totality of ‘best practices’ that originated from Asia. Being among the strong proponents of the ‘Asian way’ as the way out of our capitalist economic malaise and crises of our times, I’d share my own notes of hallelujah to Islamic banking.

I am among those development practitioners and social scientists who propose that let’s all undertake a review of Islamic banking. This banking practice is based on zero-interest banking. The challenge is for us to reconstruct the practice to suit the current context of  information society. 

Usury is among the proscriptions of spiritual masters and sages of the East. It is within the context of a non-usurious finance, embedded in spiritually-guided livelihood practices, that Islamic banking emerged in Western Asia. 

Zero-interest financing contributed immensely to accumulating wealth for the Asiatic polities that engaged in them in antiquity. The same wealth was utilized for social services, ambitious projects, building cities, and advancing the arts, sciences, and philosophy. 

Usury is alien to Asia, even as its massive introduction to the continent brought untold miseries to the marginal folks. It had also tied up Asian economies in debt peonage to the financial cartels of the West and their local banking/financial partners. 

Before the Asian economies, notably the emerging markets, will go down the drain and lose their growth gains due to usury and predatory finance, their own stakeholders should rethink their borrowed paradigms. They better review those golden Asiatic economic principles taught by spiritual masters, and make ways to re-carve their financial systems following such principles. 

Asia is indubitably the driver of the global economy today. It is time for Asia to set the trends by beginning with new financial paradigm such as the one offered by Islamic banking. 

[Philippines, 07 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]

RE-ECHOING BASIC NEEDS

April 28, 2008

 

Erle Frayne D. Argonza

 

[Writ 22 March 2008, Quezon City, MetroManila]

 

“Go back to basic needs,” I declared in the same article on New Nationalism.

 

Sometime back, the ‘basic needs’ framework rang strong bells in the development field as a potent framework for development. Having started with the defunct Ministry of Human Settlements in 1981 as a community development specialist, I still recall then how brilliant and exquisitely crafted was this Ministry’s adoption of the ‘basic needs’ framework as its guiding light.

 

“Higit sa lahat, Tao!” is the core premise of the Ministry’s development paradigm. Roughly, this translates as “man precedes everything else.” Meaning, man should be at the core of all development efforts, and not the objects of a synthetic (infrastructures, industries) or physical nature (raw materials, livestock, plants).

 

Till these days, the powerful Ministry premise had stuck with me. At that time too, the same Ministry already recognized ‘ecological balance’ as among the 11 Basic Needs of Man, and organized ‘ecology brigades’ in advancement of this contention. That was a time when environmentalism wasn’t even born in the country but was just being planted.

 

It need not be overstressed that meeting the basic needs of peoples is a fundamental yardstick for addressing development problems leading to further cooperation and peace among diverse communities. I therefore find it still a potent discourse to re-echo the ‘basic needs’ premise.

 

The excerpts from the article are entirely quoted below.

 

Go back to basic needs.

 

“Spend for your needs but save as much as you can!” would be an apt idiom that could  encapsulate the need to build up national savings within the context of an increasingly consumer-driven economy. It is argued that moderate consumption would be a most fitting behavior in today’s context, while under-consumption and over-consumption are out as they could burn us all out in the process. Consumption saved the day for us in the aftermath of the Asian crisis in 1997, so there is no reason to be morally repulsive about consumerism—provided that it should be a moderated consumerism. Low consumerism brings us back to export-driven strategies, our aggregated wealth production subjected to the vagaries of external markets that are beyond our control; high consumerism, contributing further to high debt levels, as the credit card culture entice people to acquire more articles of consumption through debts, perennially driving our economy to ‘bubble bursts’.

 

The emerging situation should have taught our market players the appropriate lessons at this time. The era of omnipresent and omnipotent markets—for goods of relatively ageless utility, stored in large inventories—is now a foregone era. What we have now is fragmented markets (chaos economics explains this well; see Tom Peters’ works), so the adjustment would be in the form of market niches. Market players should veer away from storing large inventories of a broad array of products, as obsolescence and changing consumer taste undermine the profit-gaining side of such a practice. Rather, they should be sensitive to emerging demands, and customize services and/or tangible goods based on such demands. We Filipinos particularly change taste so often, “madaling magsawa” as we  say it in the vernacular. Which means that fixed products, based on fixed ideas, are simply out of context and out-of-date, and must be reformulated towards more flexible product mixes matrixed with constantly  emerging ideas.

 

On a macro-scale, there is the continuing need to ensure ‘food security’ and its expression in other sectors as well. We should continue to be sensitive to the needs of the larger economy, such as the need for capital goods. We should design ‘vital & strategic commodity security’ frameworks and policies through a combination of domestic production of such goods as well as importation strategies. The continuing absence of strategic industries such as integrated steel could prove degenerative for development efforts such as it has done to our country, while completely shutting us off the international markets for some other goods could likewise be deleterious in the long run since domestic producers would be exercising rent-seeking, pricing articles way beyond five hundred percent (500%) of their opportunity costs as amply demonstrated by industrial chemicals (before the country began importing from China). As current experiments in grain & livestock management show, with appreciable success, the strategy should be to combine domestically produced goods with imported articles, the proper mix of which should be the subject of continuing eco-scanning and constant studies. In the end, all of our individual, community and national needs will be met, building stability and security amid a ‘chaotic’ or turbulent global condition.