ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT

ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT
Erle Frayne D. Argonza

Magandang hapon! Good afternoon!

Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.

Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.

Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:

• Core principles: Privatization, Liberalization, Deregulation
• Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)
• Governance Principle: Decentralization (local government autonomy)

Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.

But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.

Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.

Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.

At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).

In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:

• On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).

• On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.

Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.

Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.

Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.

There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.

Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.

Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.

That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.

Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.

[Philippines, 14 November 2008]

OBSERVATIONS AND POSSIBLE ADVOCACY POSITIONS REGARDING THE MINING SECTOR

April 28, 2008

 

Erle Frayne D. Argonza

 

Date: 10 February 2005

 

[Written for the Office of the President/multi-agency task force on mining advocacy.]

 

BACKGROUND

 

The paper summarizes the observations of this analyst regarding the mining sector. Some prospective advocacy positions are advanced at the concluding part of the report. The references were largely the Mining Act and related reports coming from the DENR

 

Being a constituency-enabling agency, this organization most appropriately considers the ‘constituency criterion’ in addressing problems/issues of advocacy. That is, in regard to mining, the relevant question is: do the constituency groups benefit at all from a revitalized mining sector? This paper will try to answer this question in particular.

 

DEFINITION OF TERMS

 

For easier comprehension, a number of key terms are operationally defined as follows:

 

State: Government of the Republic of the Philippines, with all of its agencies and instrumentalities.

 

Market: All economic institutions aimed at seeking profits, notably: single proprietorships, partnerships and corporations.

 

Civil Society: Non-profit institutions, specifically: NGOs, Peoples Organizations or POs, brotherhoods/sisterhoods & civic clubs, associations (in the generic sense) and cooperatives and social enterprises (civil society with market functions).

 

Community: Territorially-bound, localized grouping of people, with associational life and unique culture.

 

Constituencies: Social sectors, localized community groups.

 

POTENTIALITIES, BARRIERS, ADDRESSING PROBLEMS

 

The developmental and wealth-producing potentials of the mining sector are enormous. The sector is noticeably in the doldrums though. Inspite of the enormous levels of mineral resources possessed by the nation, the (mining) sector produces only around 1% of the GDP, and employs merely 104,000 human resources or 0.30% of the labor force.  Barriers to entry of market players combine institutional, policy, fiscal, technological, environmental, infrastructural and micro-level productions factors. A combination of technological, environmental and financial factors led to the closure of big metallic mineral producers in particular (i.e. Atlas , Marcopper, Lepanto, Dizon).

 

Legislative measures were enacted to address the policy side of the sector.  Among these are: (a) Presidential Decree No. 1899, “Establishing Small-Scale Mining As A Dimension In Mineral Development,” and (b) Republic Act No. 7942, the Philippine Mining Act of 1995. DENR Administrative Order No. 96-40 was put into place in 1997 to serve as the administrative framework of the sector.

 

A debate raged for some time regarding the constitutionality of the Mining Act. The debate had since been resolved, with the Supreme Court deciding to defend the legality and propriety of permitting foreign investors to engage in mining within the Philippine territory, both onshore and offshore, at a 100% ownership scheme. The SC decision finally resolved a key policy barrier, and is expected to lead to synergy of efforts between the state and the market to revitalize mining activities and increase mining’s contribution to GDP in the short run.

 

POLICY ENVIRONMENT AMID SHIFTING POLITICAL REALITIES

 

Based on a review of the Mining Act of 1995, it can be inferred that the policy environment for the sector had become more definitive. Such a definitiveness had encouraged more market players to signify their intention to participate in the sector, from exploration to extraction. However, ambiguities lie in the operational side of the policy, which has implications to revising the present policy. It is quite premature to say though that a comprehensive national policy on mining prevails, this being the product of series of trilateral talks among state, market and civil society players.

 

As can be observed from the introductory provisions of the law, mining intervention is largely a state-market synergy. To quote Section 2 (Declaration of Policy) of Chapter 1 (Introductory Provisions):

 

It shall be the responsibility of the State to promote their rational exploration, development, utilization and conservation through the combined efforts of government and the private sector…

 

Such a policy statement that delimits mining to a state-market synergy, without civil society provision, is explained by the fact that liberal economic policies were the wave of the past three (3) decades when the law came out. The ‘ideological field’ changed the states’ role from ‘provider state’ to ‘enabler state’, while providing greater space for market players to operate—presumably on ‘level playing field’. The policy regime comprised of: liberalization, deregulation, privatization, decentralization, tax reforms, downsizing, and liberalized currency exchange.

 

However, while the policy statement excluded civil society, the other chapters of the law provides for the roles of civil society players along the various phases of mining operations. Invariably mentioned were the following players: NGOs, cooperatives, associations, indigenous cultural communities or IPs, and local communities. This is in addition to small-scale miners covered by previous laws.

 

Such a recognition of civil society as industry stakeholder is a response to the broad challenges posed by a strong civil society on state and market players to fast-track the  redistribution of power, resources and values. Even traditionally market-oriented sectors and engagements must provide space for civil society to participate in the sector, while corporate social responsibility turned into a powerful wave in the corporate world.

 

In sum, using a typical cost-benefit analysis, the policy environment has become more definitive so as to ensure that a revitalized mining would economically benefit market players, most specially but not exclusively corporate players, as well as government coffers in terms of added taxation (e.g. excise tax). However, there are remaining kinks concerning the social and economic benefits of communities and constituencies, or civil society, that must be addressed. Hopefully, a Comprehensive National Policy will eventually address the ambiguities in the constituency side of the equation.

 

While relevant issues concerning civil society stakeholders are not sufficiently addressed, thorny questions will be raised and tensions will prevail during the implementation of the Mining Act. Many detractors will claim that civil society has been reduced to a kibitzer in the Mining Act and related documents, a contention that is not altogether invalid. The Mining Act campaign of government will also be largely biased for market players in the absence of more definitive provisions for civil society benefits. The constituency side must therefore be addressed with immediacy and dispatch, to avoid making the mining sector a mitigating factor in destabilization campaigns.

 

PROVISIONS CONCERNING CONSTITUENCIES/CIVIL SOCIETY

 

Non-Governmental Organizations

 

Among the functions of NGOs is policing mining activities. Ch. 2 (Authority of the  Bureau) stipulates that “the Director may deputize, when necessary, …duly registered nongovernmental organization (NGO) or any qualified person to police all mining activities.”

 

Another important role of NGOs concerns the environmental side of mining. Section 70 (Environmental Impact Assessment) under Chapter 11 (Safety and Environmental Protection) stipulated the following:

 

That a completed ecological profile of the proposed mining area also constitute part of the environmental assessment. People’s organizations and nongovernmental organizations shall be allowed and encouraged to participate in ensuring that contractors/permittees shall observe all the requirements of environmental protection.

 

 

Indigenous Peoples

 

The Mining Act was very clear about IPs as stakeholders in the sector, from the exploration phase through the post-production phases such as royalty provisions. Chapter 3 (Scope of Application) contained two (2) relevant sections on IPs, to note:

 

Sec . 16. Opening of Ancestral Lands for Mining Operations. No ancestral land shall be opened for mining operations without the prior consent of the indigenous cultural community concerned.

 

Sec. 17. Royalty Payments for Indigenous Cultural Communities. In the event of an agreement with an indigenous cultural community pursuant to the preceding section, the royalty payment, upon utilization of the minerals shall be agreed upon by the parties. The said royalty shall form part of a trust fund for the socio-economic well-being of the indigenous cultural community.

 

It can be remarked that the provisions are progressive enough. However, Section 17 does not contain specific  benchmark ceilings that define how much can the IP community receive as royalties. In the absence of such a benchmark ceiling, the IP group can end up at the losing end, as royalties can be defined in the marginal figures by the mining companies involved. Also, corrupt leader-officials from the IP side can appear on the scene to aggrandize a large portion of the royalties.

 

Not only that. IP groups can always cite the USA case as the most progressive instance of IP treatment. In the USA today, various ‘affirmative action’ measures have taken place to ensure that the native Americans become co-owners of gambling centers, tourist spots and various market concerns in their localities. Many native Americans today own middle class residential structures and live middle class lives precisely because they all benefit as being co-owners rather than just be treated as beneficiaries of trickles from ambiguous royalties. The mining sector doesn’t seem to be prepared to cross swords with any IP group citing the USA case.

 

Cooperatives and Associations

 

Cooperatives and associations were clearly stipulated as among the permissible participating market players in the sector. They were lumped up together with partnerships and corporations, notably in Chapter IV (Exploration Permit). The chapter defined the geographical limits of operations by market players, without discriminating against any particular form of stakeholder.

 

Whether in onshore or offshore operations, the limits applying to partnerships and corporations will likewise be benefited by cooperatives and associations. Let us cite for example Secion 22 (Maximum Areas for Exploration Permit):

 

 

(a)    Onshore, in any province –

For partnerships, corporations, cooperatives, or associations, two hundred (200) blocks.

(b)   Onshore, in the entire Philippines –

For partnerships, corporations, cooperatives, or associations, four hundred (400) blocks.

      © Onshore, beyond five hundred meters (500 m) from the mean low tide level –

For partnerships, corporations, cooperatives, or associations, one thousand (1,000) blocks.

 

Corollary provisions in Chapter 5 (Mineral Agreements) also stipulated the same stakeholders as participating market players. The chapter set the limits on maximum areas for mineral agreements, without discriminating against any form of stakeholder, inclusive of cooperatives and associations.

 

There was no clear definition, however, of association. Just exactly what sort of associations can participate in mining intervention in a given area? This question must be answered by the operating guidelines affecting the sector.

 

[Note: 1 block approximately equals 81 hectares.]

 

Marginal Miners

 

Aside from stating that a previous law (RA 7076) already defined the scope and limits of participation by small-scale miners in the sector, the Mining Act also contained important provisions affecting the said miners. Chapters 4 and 5 referred to them as ‘individual miners’, with maximum ceilings of geographical areas considerably smaller that those of partnerships, corporations, cooperatives and associations.

 

Mining Communities

 

The Mining Act also cared to ensure the development of mining communities. Chapter 10, titled “Development of Mining Communities, Science and Technology,” articulated on provisions about the locality being a beneficiary of a mining intervention within its folds. Section 57 (Expenditure for Community Development and Science and Mining Technology) states: “A contractor shall assist in the development of its mining community, the promotion of the general welfare of its inhabitants, and the development of science and mining technology.”

 

Another section of the same chapter, Sec. 61 (Donations/Turn Over Of Facilities), defined how a mining community can benefit from the post-operational facilities left behind by a mining operator. The section stipulates the following:

 

…Prior to cessation of mining operations occasioned by abandonment or withdrawal of operations, on public lands by the contractor, the latter shall have a period of one (1) year therefrom within which to remove his improvements; otherwise, all the social infrastructure and facilities shall be turned over or donated tax-free to the proper government authorities, national or local, to ensure that said infrastructure and facilities are continuously maintained and utilized by the host and neighboring communities.

 

Labor

 

First of all, the latest mining law is very friendly towards children, and strictly prohibits child labor. Section 64 (Mine Labor) under Chapter 11 (Safety and Environmental Protection)  contained the following unambiguous provision: “No person under sixteen (16) years of age shall be employed in any phase of mining operations and no person under eighteen (18) years of age shall be employed underground in a mine.”

 

Labor in FDI (foreign direct investments) controlled firms have relevant provisions for Filipino labor, as contained in Chapter 10 (Development of Mining Communities, Science and Technology). To cite the key provisions:

 

Sec. 59. Training and Development. A contractor shall maintain an effective program of manpower training and development throughout the term of the mineral agreement and shall encourage and train Filipinos to participate in all aspects of the mining operations, including the management thereof. For highly-technical and specialized mining operations, the contractor may, subject to the necessary government clearances, employ qualified foreigners.

 

Sec. 62. A contractor shall give preference to Filipino citizens in all types of mining employment within the country insofar as such citizens are qualified to perform the corresponding work with reasonable efficiency and without hazard to the safety of the operations. The contractor, however, shall not be hindered from hiring employees of his own selection, subject to the provision of the Commonwealth Act No. 613, as amended, for technical and specialized work which in his judgement and with the approval of the Director, required highly-specialized training or long experience in exploration, development or utilization of mineral resources: Provided, that in no case shall each employment exceed five (5) years or the payback period as represented in original project study, whichever is longer…

 

While the provisions are sterling instances of ‘affirmative action’ measures for Filipino labor, certain quarters can raise the howl that labor is treated in the traditional way as wage labor. There is no provision at all that stipulates a far more progressive scheme on profit sharing. We may as well anticipate such howls to come, added to another age-old issue of  ‘nationalization’ pertaining to the sector.

 

Environment

 

The concern for ecological balance was taken up in one whole chapter (Ch. 11/Safety and Environmental Protection). This chapter signifies the changes in developmental approaches, in that this time around development cannot be left to market forces alone. The risk to a purely market-driven development is the further degradation of the environments and destruction of human habitats mitigated by severe ecological damages. Section 63 stipulates provisions on mines safety and environmental protection. Section 64 defines mine labor, as previously mentioned.

 

Other interesting and relevant sections are: Section 68 (Reports of Accidents), which penalizes mining firms that fail to report mining-related accidents within a given time; Section 69 (Environmental Protection), which mandates participating market players to undertake an environmental protection and enhancement program; Section 70 that mandates the conduct of Environmental Impact Assessment, with civil society participation as mentioned earlier; and, Section 71 (Rehabilitation) that requires contractors and permittees to “technically and biologically rehabilitate the excavated mined-out, tailings covered and disturbed areas to the condition of environmental safety…,” with stiff penalties for failing to undertake rehabilitation.

 

EFFECTING WINNABLE ADVOCACY BY CLARIFYING POLICY & OPERATIONAL AMBIGUITIES

 

This analyst argues that the mining campaign could be a potentially winnable one, and can be a focal point to reverse prevailing perceptions about the state. It is further argued that the crux of the winnability lies in providing clearer, unambiguous guarantees to the social benefit & acceptability aspect of the entire mining sector. The following positions are advanced for deliberations and adoption:

 

Draft a Comprehensive National Mining Policy. Such a policy must pay respect to the evolving trend of tripartite state-market-civil society synergy in all forms of developmental endeavors and all phases of program and project execution. The national policy must ensure that constituencies are co-partners in the sector and are not just mere kibitzers that can ‘perform a role’ when contingencies arise.

 

Call for a Mining Summit that should involve precisely the three (3) sectoral stakeholders, namely: state, market, civil society. The output of the summit should be clear, definitive and doable policy agenda that can serve as input for the drafting of the national policy and revision of the mining act to incorporate the changes in the policy framework.

 

Revise the mining act in accordance with the summit covenant drafted and adopted thereof. The law should not just limit the participation of NGOs to monitoring activities and the conduct of EIAs but should be broadened to include  participation in the periodic review and assessment of the entire mining industry and drafting of policy covenants in the succeeding years.

 

Define specific benchmark ceilings for the royalties that should go to the IP communities where mining is involved. Such a ceiling should not be lower than five percentum (5%) of the income after taxes derived from the specific cite. [5% is the standard brokerage fee in various enterprises.] The accounting system that can define the benchmark should likewise be clearly defined. The basis for the royalty should be ‘social capital’, which means that the norms, values, institutions of the community must be properly valuated and regarded as equity or equivalent for royalty purposes.

 

Define clearly what ‘association’ means, by defining who can constitute an ‘association’ that can participate as a market stakeholder. Should local, broad-based community associations be involved in mining, as co-partners of partnerships, corporations and cooperatives, than the ‘social capital’ of the members should be considered as an equity capital equivalent to no less than five percentum (5%) of the authorized capital requirements for the concerned mining project.

 

Stiffer penalties on those market stakeholders that violate child labor policies should be added to the mining act. Section 64, Chapter 11 of the law should be amended accordingly.

 

Provide incentives to partnerships and corporations that will share profits to their laborers. The higher the percentage of profits shared to the workers at any given time, the greater the incentives, notably tax incentives.

 

 

END

 

 

 

 

 

 

INDIA JETISSONS 2011, ALL SET FOR BIG GROWTH

Erle Frayne D. Argonza

Gracious day to you fellow global citizens! Special goodwill greetings to the people of India!

The year 2011 just kicked off with a good start for Asia, today’s indubitable growth driver of the global economy. From macro-economic fundamentals to micro-innovations, things are heading for another great year of bountiful growth and future prosperity for Asians.

India, known in ancient times as Bharat, is no exception to the Asian trends. Its income grew by double digit the past year, its macro-economic fundamentals are reclining on the positive side, and so external observers like me have reason to infer a very optimistic year of performance for modern Bharat.

Not only is India growing with sufficient prudence domestically, but even on the international terrain the Bharat ‘emerging market’ has done well. India’s enterprise moguls have sustained the patterns of expansion in overseas investments, which is laudable.

Just recently, the news bannered the gladdening reportorial about investments moving to Africa. As this is happening, the tie up between Tata Group and Siemens for producing the Nano car (priced at $2,000) and a diversity of machines and tools is now in the pipeline, with joint ventures expected to permeate Brazil, China, and other ‘emerging markets’.

So far so good! Well, the social sectors of Bharat may have a different opinion, such as the rural food producers who still number the greatest in the population, so they are entitled to their perceptions. And, the women who for millennia have been subjugated in yokes of patriarchalism, they too must feedback their advocacies about greater economic and social freedoms for women.

As to the market players, they have already advanced their reservations about the move to tap through their private communications networks (e.g. bug them, in search for possible money salting overseas or racketeering, and so on…). They have aired their concern about possible abuse of their privacy, a move that is short of installing a fascist tyranny in India.

India has been an exemplary democracy in Asia and the world, so there really should be no apprehension about the moves there to monitor money laundering and related criminal activities via covert tapping of communications lines and channels. However, there are fundamentalist groups in the power structure there, so there is some reason to be bothered about possible abuse of such intelligence discretions by right-wing Establishment groups.

One wish I’d like to share for Bharat’s people is that they should avoid advancing materially at the expense of their spiritual growth. India’s greatest wealth, as I observe it, is its spiritual wealth. It would prove very tragic if not catastrophic if Indians will eventually drop off their spiritual practices, such as going the Yogic Path, in order to metamorphose completely into a materially prosperous federation.

I remember that couples of years back I said the same thing about Nepal. I just couldn’t believe that Nepalese regard themselves as a poor nation, when in fact their spiritual wealth remains intact. Such a perception could lead to a win/lose situation, whereby Nepalese would prosper materially by throwing away eventually their spiritual wealth, and that for me will prove catastrophic as it bodes a Dark Age for the future materially wealthy nation.

It would be best for India and south Asian nations to prosper in an integrative way, by synthesizing material progress and spiritual wellbeing. That compass would lead to a new experience of win/win situation, where both techno-economic progress and spiritual growth would go hand-in-hand.

That represents a daunting challenge for India and its people. For those persons and groups in India who resonate with my thesis, they are already assured of my moral and spiritual support—me being a spiritual guru here in Manila/Philippines. Should they invite me to their cyberspace forums, sure I will join them and be a process observer of these tech-savvy scions of Rama.

For the Indians of today, cheers! Namaste!

[Philippines, 17 January 2011]

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$2000 CAR FROM INDIA SLAMS NORTHERN AUTOMAKERS’ RENT-SEEKING

Erle Frayne D. Argonza

Good morning from the suburbs south of Manila!

To continue with our exciting news for the ‘ember’ months, let me share some reflections about the recently released people’s car from India. The array of new innovations goes longer than that, with the car serving as the icing in the cake.

Beth Day Romulo, international journalist who’s the other half of the late Carlos P. Romulo who is one of Asia’s greats in the foreign policy field (former President of UN), featured the Nano car in her regular Sunday space at the Philippine Panorama, dated July 25, 2010. The Nano was engineered by the giant Tata group of companies of India, and sells at a very affordable $2000 apiece.

As Beth Day Romulo aptly titled, “In India, cheap doesn’t mean shoddy.” A sleek yet classy looking prototype, the Nano would surely be an envy of many countries up North who just couldn’t think of a car unless it sells past $25,000 apiece. Accustomed to the corrupted status-seeking behavior, the North’s customers would do everything in the books (e.g. get credit) to acquire flashy Mercedes Benz or Porsche and brag the same to their family circles and peers.

Mass markets are the in-thing in automotive industries as far as the bankrupt or near-death Northern car manufacturers are concerned. Flashy cars & SUVs would be okay for the fractional upper middle class markets up North and their clones down South, but for the larger billions of workers & professionals in emerging markets utility is the yardstick, hence the affordable folk car suits them well.

Before I venture into other thoughts, let me declare my own deep admiration for the Tata Group over its feats across the decades. I encountered this group during my own research on the steel industry in the late 90s, and in 1999 their representatives presented papers in the Manila-held conference of the Asian Iron & Steel Institute (I participated in that conference held at the Shangrila Plaza in EDSA).

From Tata Steel to Tata metallurgies and now to automotives, what can I say but SALUTE! With top-of-the-line scientists among their design innovators, including the world-renowned steel expert Dr. Mukerjee, the only way for Tata to go is to jettison upwards in a very exponential fashion.

What the Tata Group is silently proclaiming to the world is that the price policy of Northern car makers is pure and plain rent-seeking practice. Look at the Volkswagen beetle for instance, a people’s car that is now priced at past $23,000 apiece, and that surely makes one have doubts about the ‘people’s car’  facet to the Volkswagen.

It’s all pure and plain rent-seeking. Profiteering is a more palatable term for the layman. Just like those Western pharmaceuticals that are produced for a mere $0.01 apiece but sell for over $1 per pill, rendering the pharmaceutical companies the top-gun of obnoxious rent-seeking firms.

I wouldn’t be surprised if we’d find out that a people’s car up North should be selling at merely $4000 apiece, using factors of production costs in their own backyards. A Beetle should be selling at $3000 or even lower, come to think of it.

At any rate, the peoples of the emerging markets have lives of their own, and they set the patterns of consumption on the basis of their own needs. Such as the need for utility cars that are truly ‘utility’ and not luxury items masquerading as utility.

As per report, the German engineering company Siemens had jumped the gun, by committing to mass produce and market the Nano in India, China, Russia, and Brazil. The Mumbai subsidiary of Siemens alone will produce half of the Indian innovations (Nano’s just one of them) that they’ve committed to produce and market.

As Beth Day Romulo reported, “While western engineers work on highly sophisticated products, the Indian engineers, who focus on high quality but low cost, aim at simplification and adaptation to the environment.”

Stressing on the infusion of social technologies to the engineering works, Madam Romulo concluded that “all of those devices and products are the result of local innovation, the engineers on the ground who study and recognize the needs of the Indian consumer.”

Not just the Nano car but also a whole array of innovations from India have been showing the way to the fusion of quality and consumer sensitivity in the product prototypes. This is what true development should be in terms of technological innovations: driven by people’s needs rather the pockets of greedy corporate executives and owners.

[Philippines, 02 September 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]

FIND LIGHT & PEACE IN BRO. ERLE ARGONZA’S BLOGS

FIND LIGHT & PEACE IN BRO. ERLE ARGONZA’S BLOGS

Gracious Day to all friends, partners in development, fellows in the Path!

 

You’re all invited to relish moments of Light-seeking reflections, call to relevant actions and self-development thoughts with me, through my blogs:

 

Development, Economics, Better World: https://unladtau.wordpress.com

 

Seekers’ Lessons, Freethought, Yoga, Self-Development:

 http://erleargonza.blogspot.com, http://raefdargon.mysticblogs.com

 

Poetry for Inspirational Living: http://erleargonza.wordpress.com

 

Happy Reading!

 

Bro. Erle Frayne Argonza / Guru Ra Efdargon

FAIR TRADE AND THE NATION-STATE

 

Erle Frayne D. Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

In a recently written book by me titled Fair Trade and Food Security: Framework and Policy Architecture (Kaisampalad, 2004), I was able to gather clear evidences of the failures of free trade policies. Not only free trade but the whole policy regime of economic liberalization—that paved the way to globalization—had downgrading effects on our currency, agriculture, and industry here in my home country.

 

I argued right then for a policy reform in the direction of fair trade. The totality of policy change should be the re-crafting of the entire policy architecture, which if commensurately followed can become fitful guides for foreign policy and diplomacy.

 

In the light of the massive acceptance of liberalization policy frameworks in the 80s and 90s, I gave their advocates a chance to prove the potency of free trade and laissez faire in general. In the long run, free trade is unsustainable, and can only be perpetuated, as shown by the experiences of the previous centuries, by imperialism.

 

Autarchy, which was experimented in the Hapsburg empire, is more of a hermitage option that can work only if, as the Hapsburg had fittingly shown, the domain for intra-trade exchange and distribution is large enough. The option, even for nationalist economics, is for the conduct of overseas trade. But whether his has to be a free trade option is contentious.

 

The British Empire, which calls itself by the euphemy British Commonwealth of Nations, is still alive today. That empire was built precisely because it is the only way by which Great Britain, or England, can sustain its trading edge through the power of the ‘stick’. But this empire, the last among the ancien regime formations, is now crumbling, and cannot hold water for long as the member nations continue to assert their sovereignty.

 

Globalization based on free trade had already crumbled, as we can see. Unless there is another perception out there. It had failed. What I am arguing for now is that globalization can succeed only if it takes into consideration the interests of nations and marginal sectors within them rather than be based on the interests of a chosen few of financier oligarchs and their TNCs.

 

The contention from the article New Nationalism is shown en toto below.

 

Let ‘unbridled free trade’ give way to ‘fair trade’.

 

In the international trade scene, the President had declared it emphatically: “no to unbridled free trade!” Fair trade should be the game in trade, not free trade. This does not mean a full return to protectionism, which proved counterproductive in the past. Protectionism had only served rent-seekers, who did not engage in full-scale S&T innovations that could have propelled us to advance in product development, achieving world-class standards in many of our articles of industry & trade quite early. Returning to a regime of protectionism is surely out of the question.

 

Permit articles of imports to come in, employ this strategy to meet ‘commodity security’ and keep prices at competitive rates, while minimizing the possibility of shocks. This should also challenge domestic market players to become more competitive, precisely by engaging in dynamic research & development or R&D, resulting to higher-level product innovations (intended for the domestic market). Meanwhile, continue to institute a regime of ‘safety nets’ and strengthen those that have already been erected. However, where ‘infantile enterprises’ are barely out of the take-off stage, e.g. petrochemicals and upstream steel, provide certain tariff protection, but set limits up to that point when dynamic R & D have made production more cost-efficient, permitting thereafter competitiveness in both the domestic and global market. The latest move of government to provide the greatest incentives on upstream steel, for instance, is a right move, as it will entice market forces to install our long-delayed integrated steelworks.