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]

RE-ECHOING ROOSEVELT’S ‘PHYSICAL ECONOMY’ SOLUTIONS TO GLOBAL FINANCIAL COLLAPSE

Erle Frayne Argonza

My beloved country remembers the late Franklin Delano Roosevelt very well. It was his presidency that paved the way for preparing the Philippines as an independent state, by first granting the country the status of a commonwealth with its own constitution (1935 Constitution), and by permitting such domestic government to prepare the legislative measures and policy environment for a future independent state (granted independence in 1946).

Roosevelt’s regime also paved the way for the developmental paradigm that would propel the Philippines along the road to industrialization (we now term this as Import-Substitution Industrialization). The paradigm, based on the works of previous thinkers Alexander Hamilton, Friedrich von List, and the exemplar development policies of Abraham Lincoln, puts great stress on the ‘physical economy’ as the foundation for a prosperous and mighty economy in the long run.

Roosevelt further went on to cogitate that colonialism should fold up after the war, and that all former colonies must follow the road to development and prosperity, this being the road to genuine international peace and cooperation. The international doctrine of Roosevelt became the foundation for post-war cooperation, and buttressed the founding of the Bretton Woods agencies whose mandates were propelled precisely by the physical economy framework, the need for undertaking development in the former colonies, and the need to regulate national currencies via fixed exchange rate backed by the gold standard.

The current circumstance is now too remote from the ‘physical economy’ policy regime of the post-war era. Economic liberalization policies led to globalization and the galvanization of the ‘virtual economy’ based on predatory finance. The ‘virtual economy’ had led to de-industrialization, agricultural decay, decline of S&T, and deteriorating infrastructures in the most affected economies, and had fragmented developing states into ‘failed states’.

The global financial system created by the relentless liberalization of financial, fiscal and monetary policies across borders, had already collapsed and is beyond salvation using the present intervention tools that now seem to be burnt out tools altogether. A global conference must be convened most urgently to carve out a new financial architecture based on a ‘physical economy’ framework, and to decisively criminalize predatory finance.

Below is a press release of relevant notes on the global financial collapse, by the economist Lyndon LaRouche.

[27 July 2008, Quezon City, Metromanila. Thanks to the Executive Intelligence Review database news.]

 

LaRouche: Financial System Is Dead, Cannot Be Saved

July 13, 2008 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).

With the U.S. and British financial press full of wild speculation about how the Bush Administration is going to intervene Monday morning, to bail out Fannie Mae and Freddie Mac, Lyndon LaRouche today issued a sharp, preemptive warning: “The financial system is already dead. It cannot be saved.”

LaRouche expanded: “If any of the reports of a planned bailout of the two big mortgage lenders, by the Treasury Department or the Federal Reserve are true, I say, ‘Forget it.’ Any such efforts to delay the funeral of the present global financial and monetary system will only make matters worse. A bailout will cause an accelerated hyperinflationary explosion, far worse than the hyperinflation that hit Weimar Germany in the autumn of 1923. Back then,” LaRouche continued, “Germany had a gun pointed to its head. The gun was called the Versailles Treaty, and Germany had no choice. Today, the United States has a choice. I spelled out the choice in numerous recent locations.”

LaRouche cited his recent call for the Federal Reserve to immediately raise interest rates to 4 percent, as a stop-gap measure to prevent a massive flight of institutional capital from the banking system. He demanded that this move be accompanied by clear statements from the Fed that there will be no more Bear Stearns-style bailouts of the speculative bubble. Instead, the Fed will protect the chartered Federal and state banks, through bankruptcy reorganization, on the model of what Franklin Roosevelt did, when he first took office in March 1933, and faced the same kind of collapse of the banking system that we face now. “Only, today’s crisis is orders of magnitude worse,” LaRouche added, “due to the massive leveraging by the banks and other financial institutions.”

LaRouche warned that Bush Administration and Fed officials, like Hank Paulson and Ben Bernanke, may be on an “ego trip—unwilling to admit that they have failed miserably. But the reality is that they, like the George W. Bush Administration, have failed, with wretched incompetence. For one thing, they failed to reverse the Alan Greenspan monster bubble, which is now blowing.”

LaRouche added that there is no way to even estimate the magnitude of the financial bubble, that has now blown. “The collapse of Fannie and Freddie means the end of the system. And that has already happened, and nothing can be done, within the rules of the current system, to solve that problem. We can keep Fannie Mae and Freddie Mac alive, but only through actions reforming the system, in terms echoing the precedents of President Franklin Roosevelt, that in ways appropiate for the actual conditions of today.

“The only alternative is to implement my three-step solution to the crisis,” LaRouche concluded. “If the so-called leadership in Washington is unwilling to do that, then this financial system, and, by extension, these United States, are finished. It may be a tough reality to swallow, but it is the only reality that there is.”

Lyndon LaRouche will be delivering an international webcast on Tuesday, July 22, 2008, at 1:00 p.m. (EDT). The webcast takes place on the first anniversary of LaRouche’s July 25, 2007 Washington, D.C. webcast address, in which he announced that the financial system had already crashed. Days later, the collapse of Countrywide, and other major mortgage lenders, and the blowout of Bear Stearns, illustrated that LaRouche was 100% correct.

US WATCH: DE-INDUSTRIALIZATION

Erle Frayne  Argonza

The public (in America) is of the broad position that the NAFTA was responsible for the folding up of many factories and the transfer of jobs to Mexico/South. This NAFTA-bashing has some validity to it, but the semi-economic integration alone with Mexico and Canada isn’t a sufficient reason for the bigger problem of de-industrialization.

Once robust and colossal, the industrial sector of the USA contributed over 50% of the Gross Domestic Product or GDP, and employed half the labor as well. As early as the mid-50s, the futuristic sociologist Daniel Bell already warned that the trend wouldn’t hold long enough, as the ‘post-industrial society’ was already knocking its doors on the USA. Not only that, he also forecast that by the 21^st century, the center of global economic growth would be the Asia-Pacific, while labor would shift to the services sector.

Had the policy-makers heeded the warning of the likes of Bell then, and fine-tuned the ‘real economy’ principles of Franklin Roosevelt, the de-industrialization of America couldn’t have happened. By the early 1980s, Alvin Toffler added resounding echoes to the forecast of a post-industrial society, by adumbrating the  ‘3^rd wave technology’ thesis. Such a thesis expounded that knowledge-intensive technologies would dominate post-industrial society, and will destroy institutions founded on old economic-ideological precepts notably liberal capitalism and socialism.

However, the neo-liberals led by Friedman and Hayek became the dominant Pied Pipers in shaping the public policy of America. All sectors of the economy soon became dog-eat-dog arena for private sector hegemony, leading to the ascent of the ‘virtual economy’ founded on predatory finance. Gradually did the ‘virtual economy’ wreck the classic industries of America, the most exemplary being the steel industry.

The tragic closure of Bethlehem Steel tells it all: that the ‘virtual economy’ has no interest in sustaining strategic industries or to develop their technological edge further. One after the other, manufacturing concerns were closed shop, dis-assembled and re-assembled in emerging markets where labor and factor inputs were cheaper. The ‘industrial belt’ of America—stretching from up New England down to the automotive & machine tool shops of the south—is rapidly evaporating.

The clear message for this year’s presidential poll in America is: resuscitate the industrial sector. Re-tool both the hardware, institutions and human resources to make them competitive again. Revive all the strategic reproducible industries (steel, machine tools, railways, automotive, shipping, airlines, etc.), or else face the specter of ‘third worldization’ of America. A tall order, but what choice does the USA have?

[Writ 06 June 2008, Quezon City, MetroManila]

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.

 

SAVE THE PHYSICAL ECONOMY

Erle Frayne D. Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

Globalization is not only destroying the nation-state. It has also been destroying the ‘physical economy’ that is the economic foundation of the nation-state. All in the name of the greed of the financier oligarchs, who bred the monstrous ‘virtual economy’ founded on predatory finance.

 

The New Nationalism, as contended in my meaty article on the same, argues strongly for a restoration of the physical economy of affected nations. The USA, which produces 22% of the world’s gross economic output, is now in the phase of advanced decay as its physical economy had been looted and eventually destroyed by predatory financiers. There is now way that we citizens of the global community can’t be concerned about this, as the eventual crumbling of this megalithic economy will redound to global economic turbulence that can lead to global war.

 

In East Asia we all witnessed the horror of the economic meltdown in the late 1990s. Though the impact of that meltdown is hardly felt today, we saw the horror of it just the same. We peoples of the region simply felt so helpless as the contagion smelted the mightily growing economies here, beginning by destroying the currencies and ending with the crash of the physical economies.

 

Incidentally, East Asia has a better chance to weather the storms being caused by predatory globalization. The physical economy here has better chances of being secured, even food security has better chances of crystallizing contrasted to the crashing economies of the USA and Europe.

 

The lesson should be clearly read by every development practitioner: destroy not thy physical economy if you want peace and development to go on in sustained levels. Absent the physical economy, and the nation will crumble, leading to civil disturbances and uprisings and even to global conflicts among the world powers.

 

Below is the entire subsection regarding the physical economy culled from the New Nationalism article.

 

Continue to stimulate growth through the ‘physical economy’.

 

This writer strongly argues that the greatest driver of the economy must be the ‘physical economy’. By ‘physical economy’ we refer to the combination of (a) agriculture, (b) manufacturing, (c) infrastructure, (d) transport and (e) science & technology (S&T) whose results further induce ‘production possibilities’ in the sectors a-d. An economy that is prematurely driven by the service sector, growing at the expense of the physical economy, will create imbalances in the long run, failing in the end to meet the needs of the population. A premature service-driven economy would be subject to manipulations by predatory financiers, who would do everything to destroy the national currencies and consequently the physical economy of the nation as well. An economy driven by derivatives and every kind of speculative pursuit is a ‘virtual economy’ such as what has dominated the USA since the era of Reaganomics.

 

I would hazard the thesis that our national economy moved to a service-driven phase prematurely. Look at all the fiasco after our ‘physical economy’ had rapidly declined in GDP contributions since the early 1990s, as the service economy advanced in its stead! Relatedly, the over-hyped Ramos-era ‘Philippines 2000’ economy was largely a ‘bubble economy’ driven by speculation and portfolio capital, and was more in kinship with the ‘virtual economy’ than any other one. We have not fully recovered from the bursting of that bubble, even as we are now threatened with another bursting of sorts—of the debt bubble, leading to fiscal crisis.

 

It pays to learn our lessons well from out of the immediate past experiences. And the clear message sent forth is: get back to the physical economy and re-stimulate the concerned sectors, while simultaneously perfect those services where we have proved to be competitive, e.g. pre-need sector, retail, restaurant/f&b. We should also strive to learn some key lessons from other countries’ positive experiences such as China’s, whose economy continues to grow enormously, and grow precisely because it is the physical economy that primarily drives it up and lead it—at an enormously rapid rate—towards development maturity, permitting China to outpace the USA’s economy on or before 2014 (using GDP Purchasing Power Parity indexing).