ONE ASEAN: GET READY!

ONE ASEAN: GET READY!

 

Erle Frayne D. Argonza

 

Good evening! Magandang gabi!

The dark clouds of the electoral contests are now getting clearer in the Philippines. With our polls settled and our elected leaders about to begin their mandates, I’d now depart from election-related advocacies and move back to the international-global arenas.

I have written quite enormously about international political economy and subsidiary themes for over two (2) decades. Even my blogging has been consumed with peregrinations on the international arena. So let me go back to this arena, even as I now clarify that I am a strong advocate of One ASEAN.

As I’ve elucidated in my past writings (see 2007-08 articles), I perceive the ASEAN as the larger polity to which my own country will return in the future.

The Philippines, Indonesia, Brunei, Malaysia, Singapore, the whole of island Southeast particularly, were largely creations of Western powers. They used to be part of the Majapahit Empire, the world’s wealthiest region before Western colonization fragmented it.

Being a strong believer in ASEAN unity, I am willing to shed off my hard-line Filipino nationalism and don the cloak of pan-ASEAN patriotism. Majapahit was the original nation to me and to those who resonate with the same worldview, and eager am I to see my country return to the Empire.

The Empire no longer bears that name today. Rather, it goes by the name of ASEAN, short for Association of Southeast Asian Nations. But it bears the same geo-political and geo-economic contours of the Empire before it fragmented.

A benevolent Empire it was, as it used the fiat of trade cooperation to get membership into the polity. That is, to be able to become a part of the Empire, concur trade with its nexus and prinzeps. This was a much different track from the typical military occupation used by other regional and world powers to expand their territorial confines.

If we reflect back on what our state players are doing here today, where they’re concurring agreements and treaties using the most civil means conceivable to get to a higher level of unity, the same means actually revives the consensus methods used by our peoples in antiquity. Today, no matter how diverse our political, economic, and cultural systems are, we are talking to each other here, which is reflective of a ‘dialogues of civilizations’ approach.

From state-to-state and civil society-to-civil society talks, let us move on to direct people-to-people talks in the region. People-to-people interactions precede people-to-people cooperations. I strongly contend that people-to-people cooperation should eventually be the base for state-to-state and civil society-to-civil society cooperation and no less.

State-to-state talks are quite slow in results, even if market players joined state actors to buttress the former stakeholders’ positions. In some areas of talks, such as those involving territories, snags are observed.

People-to-people interactions and cooperation will do much to accelerate state-to-state talks that get snagged for one reason or another. The same cooperation can also accelerate the building of a pan-ASEAN identity which should precede any writing of a general treaty that will unify the region at least economically.

People-to-people interactions have already been taking place in the region for almost 2000 years in fact. Western colonization may have diminished the scales of interactions for a long while, but that era of imperialism is much behind us now.

As states, market players, and civil society players are preparing for larger talks ahead, let us noble peoples of the region go ahead and expand the levels of talks to build greater mutual confidence, appreciation of each other’s cultures, and trust. Along the way, we have fellow Asians and global citizens who will support our efforts as true friends.

In any way we can, let us get to know each other better. Let’s set aside utilitarian gains (e.g. get to know Asean pals who can become network marketing partners) and interact based on a true call of our hearts, of our souls.

That way, we contribute to building our preparedness for the grand future coming. We just can’t be caught flat-footed, not knowing what’s going on in our larger backyard because we allowed state players to monopolize the talks.

Fellow ASEANians, let’s get ready!

[Writ – Philippines, 11 May 2010. E. Argonza is adept at international political economy. He was a graduate student of former ASEAN Deputy Secretary General Wilfrido Villacorta, PhD. He has published various articles on the subject, as well as a book on global trade regime.]

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continuously open the market to external investors

NEO-NATIONALISM’S PREMISES & CONTENTIONS / Continuously open the market to external investors

 

Erle Frayne D. Argonza

 

National savings continue to hover at a pathetically low rate of seventeen percent (17%), which is significant but is way below the minimum of thirty percent (30%) to render it as ‘critical mass’, like that of our neighbors’. The problem cannot be addressed sufficiently than through a continuing inflow of capital from external investors. Note that in today’s global context, the term ‘foreign capital’ has already lost its meaning, as the boundary between ‘domestic’ and ‘foreign’ has been effectively erased. The cross-country partnering cum out-sourcing arrangements among diverse firms have become the norm of today’s business, rendering obsolete the previously sacrosanct notions of ‘domestic’ capital and ‘foreign’ direct investments. Not only that. Latest researches have verified that transnational corporations or TNCs now tend to create more values within their host countries and reinvest the profits locally than remit them back to their ‘home country’ (a term that has also begun to lost meaning).

This doesn’t mean though that such investors should be served ‘free lunch’, through very long regimes of tax havens or through spurious ‘strike-free zones’ (read: haven for wage freeze) which makes our laborers appear like wild jackals who need to be perpetually gagged. Some forms of valves (capital controls) should also be instituted, so that the capital investments and profits wouldn’t just flow out like hemorrhage the moment that the economy hits cyclical crisis. Surely, pro-active measures can be devised to let the said investors stay, more so for those that truly re-invest their ROI for their original and diversified business concerns, as well as to those that conduct dynamic R&D and truly transfer technology.

 

In today’s globalizing context, corporate ‘national champions’ have become obsolete. The bygone era of ‘national champions’ can still be observed in the names of certain firms, such as in the names Philippine Airlines, Philippine Long Distance Telephone, or in Bank of America, American Express. Asset re-structuring is the norm, and large corporations are becoming rapidly globalized. Mergers and de-mergers are happening at rapidly ‘chaotic’ paces. The circumstances challenge investors/stockholders to quickly grasp the lesson of   ‘thriving on chaos’ or else their ventures would face bankruptcies and foreclosures as what befell many former large ventures, inclusive of former ‘national champions’.

The thought that “foreign capital might harm national interest” is simply passé and out-of-context, in as much as the term ‘foreign’ has lost its meaning save for the antiquarian Old Nationalists who regard foreign things as essentially dangerous (but are they not using foreign frameworks in their perceptions of foreign things?). Let the investors come in, recombine their assets with our domestic investors’, extend their stock participation beyond the forty percent (40%) constitutional limit. Note that “our very own” big corporations are participating in ‘foreign’ countries, and their levels of investment participation go beyond forty percent (40%). It is high time that we readjust our thinking about the matter.

[From: Erle Frayne D. Argonza, “New Nationalism: Grandeur and Glory at Work!”. August 2004. For the Office of External Affairs – Political Cabinet Cluster, Office of the President, Malacaňan Palace.]

IS DEGLOBALIZATION POSSIBLE?

IS DEGLOBALIZATION POSSIBLE?

 

Erle Frayne D. Argonza

 

Globalization has traversed a historic track that is considerably long and expansive in impact at this juncture. Curiously, certain forces are working hard to de-globalize the world, so let me raise the question: is deglobalization possible?

 

Before anything else, a reflection on the meaning of the ‘globalization’ term. Globalization is delimited to the integration of national economies into a seamless planet-wide borderless economy, as this was the original meaning of the term.

 

There are so many insurgent voices around the globe today that are agitated by their own painful experiences in the aftermath of the official effectuation of the 1994-signed treaty called the GATT-UR. That fiat was largely binding on the states that forged and signed it, binding thereof on the economic life of member nations of the World Trade Organization that the treaty created.

 

The core principle behind globalization is free trade which in turn is based on laissez faire doctrine. Already rotting in the dustbins of archives for some time, as an obsolete stinking doctrine, laissez faire was suddenly revived and revved up globally to forge free trade. Largely British in origin (recall the Scottish physiocrats), free trade soon caught the obsessive attention of predatory financiers and technocratic subalterns who then transformed it into a global phenomenon.

 

Japanese technocrats then picked up the free trade resonance and concocted the term globalization. Kenichi Ohmae is the topgun Japanese thinker of globalization, which was then copycat by other Japanese thinkers. By the 1980s, the Japanese economic diplomacy corps then convinced their Americans and Western counterparts to accept the term and build up on the core principles of global free trade in order to forge a seamless, borderless planetary economy.

 

I’ve writ too many articles already about the subject, and spoke in many occasions about globalization and free trade from the 1990s to the past decade. I was among the insurgent voices then, being among nationalist ideological blocs in Manila that opposed the PH Senate’s signing of the GATT-Uruguay Rounds. I kept on drumming up the threat side of globalization till last decade.

 

Beginning this decade though, I shifted mode to a silent observer. I witnessed the win/win impact of globalization on developing economies. Fact is, the very world powers that arm-twisted small countries to sign open up their economic borders to free trade, and later to arm-twist small nations to sign the globalization treaty, were hit so badly by depression (i.e. Great Recession), which I did forecast to happen using a long-wave Kondratieff model.

 

Now my very own country, the “sick man of Asia” in the years ’83 through ’86, is the ‘economic wellness’ model of Asia today. Should I still care to yield to the herd trend of insurgent voices and declare “down with globalization?”… Philippine economy had developed a ‘firewall’ against globalization’s harsh effects, and so had our neighbors in Asia, amazing grace! See how we in Ph swim along the globalization ocean?

 

Not only that, my very own country’s domestic economy had forged a ‘firewall’ against the damaging effects of political crises and fall-outs. I remember well, in my studies on international political economy, that Italy was among the first to build such a firewall, if my analysis serves me right, whereby its economy kept on running amidst the perpetual political squabbles in the legislature and constant changes of prime minister and cabinet composition. So the Philippines has become the “Italy of Asia” (smile!).

 

Well, folks out there, I am not going to advance my own answers to the ‘deglobalization thesis’ or challenge. What I can say is this: I am getting more at home with globalization today. It had even spread to other areas of life: culture, society, civil society, and so on, such as the ‘globalization of Christmas’ which I find as a very positive event.

 

[Manila, 14 October 2013]   

PH AN EMERGING POWER PER UK PRONOUNCEMENT

PH AN EMERGING POWER PER UK PRONOUNCEMENT

Erle Frayne D. Argonza

Good day to you fellow global citizens!

Just recently, a team from the British diplomatic corps made an unusual pronouncement in Manila: that Philippines is an emerging power. For a world power that once conquered Manila during the world war between the empires of Spain and Britain, the UK remark is truly unusual.

Cordially and tactfully delivered, the remark hopefully could open up more floodgates for greater investments between the UK and PH. UK better bring in more investors—bringing in more FDIs (direct foreign investments) than hot money capital—and show sincerity in relating to its partner in the ASEAN.

Known for profligate engagements in derivatives operations and related speculations, UK has been the center of operations of known predatory financiers led by the Rothschilds and fronted by George Soros, a fact that has been causing chagrin on and ambivalence towards the British by developing countries. UK diplomacy better change that image and change it fast.

On the other hand, it is time for Filipino investors to move into London and Northern Ireland with greater capital intensity. Sure, there are a lot of Filipinos in the UK, with circa 200,000 located there, albeit largely for domestic work. It is time that the population composition of Pinoys in UK better change, with greater numbers of professionals, investors, and aid volunteers (to developing countries) deciding to seek domicile there.

As to the numbers of British citizens located in PH, the number is 10,000. Composed largely of retired seniors, the number is also reinforced by diplomatic professionals, business executives, philanthropic aid workers, artists and students. The composition may need to change soon, as PH is an open society and its multi-cultural environ is a plus factor for British and other Europeans to seek domicile here.

Let’s go back to the contention of emerging power. This contention was culled from the observation of PH as an emerging market, which together with other emerging markets will equalize the OECD powers by 2025 as per World Bank forecast. Emerging markets have large populations and significant middle income consumers (earning $6,000-$30,000 per annum).

PH has around 19 Millions out of its 94 Millions of warm bodies as comprising that global middle class. Small for now and seemingly stagnant, the 19 Millions can be made to grow, and the number is significant vis a vis the total population. All over the ASEAN, a total of past 100 Millions of people are in that category today.

The USA has 160 Millions in the global middle income category. It is no wonder that the World Bank made the forecast, knowing the sustained growth that the emerging markets have been showing. As the USA stagnates along the way, ASEAN will surpass it in terms of doubling its middle income to past the 200 Millions warm bodies before 2025 yet.

With Philippines, Indonesia, Vietnam showing the way to what emerging markets are in the ASEAN, it is no wonder that traditional world powers are in a hurry to re-chart the directions of their foreign policies, aimed at creating long-term modus vivendi with the emerging markets.

PH political clout will most likely increase along the way as its economic clout also strengthens. The domestic stakeholders better take note of the new perceptions of OECD powers such as UK on PH, and widen that latitudes for rapid growth and wealth redistribution to accelerate the creation of a middle class past the 50 Million mark soon.

This time around, PH shouldn’t miss out on the emerging global opportunities and perceptions of multi-polarity. Stakeholders should put up or shut up in meeting the gargantuan challenges at hand.

[Philippines, 02 June 2011]
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Come Visit E. Argonza’s blogs & website anytime!
Social Blogs:
IKONOKLAST: http://erleargonza.blogspot.com
UNLADTAU: https://unladtau.wordpress.com

Wisdom/Spiritual Blogs:
COSMICBUHAY: http://cosmicbuhay.blogspot.com
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com

Poetry & Art Blogs:
ARTBLOG: http://erleargonza.wordpress.com
ARGONZAPOEM: http://argonzapoem.blogspot.com

Mixed Blends Blogs:
@MULTIPLY: http://efdargon.multiply.com
@FRIENDSTER: http://erleargonza.blog.friendster.com
@SOULCAST: http://www.soulcast.com/efdargon

Website:
PROF. ERLE FRAYNE ARGONZA: http://erleargonza.com

EUROZONE’S PATHETIC 0.8% GROWTH

EUROZONE’S PATHETIC 0.8% GROWTH

Erle Frayne D. Argonza

Pathetic! This is what I can say of the latest 0.8% growth for the Eurozone during the 1st quarter of 2011. The figure seems to echo the growth for Greece during the same period, of 0.8% growth in growth domestic product or GDP.

As I’ve been saying for a couple of decades now, based on a pattern that was started from 1990 onwards yet, Europe is flat on its back, and that flatness just doesn’t seem to be changing at all. I already heralded the alarming trends way back in the 1990s, as a professor at the University of the Philippines Manila, and shared my notes to tv and radio audiences whenever I was invited as guest resource speaker on economics and social development.

When the Euro was launched, simultaneously with efforts to politically integrate Europe, I saw the opportunity for a slight correction of the stagnant situation of Europe. But monetary solutions to non-monetary problems will only be temporary, and sooner or later this solution will falter. Then the entire stagnation trend will ensue.

The ‘fall of Europe’ economically traces back to the radical return of the obsolete doctrine of liberalism laissez faire. European nations rose to wealth and fame based on physical economy doctrines, so it is best to reconstruct those doctrines the moment that stagnation and decay would take place. But to junk entirely those strategies and policies that brought Europe to where it was till 1990, is to champion madness in the economic terrain.

The same radical embers of liberalization, privatization, deregulation, and reinforcing policies (tax reforms, decentralization, currency liberalization, decreased budgets for social services) were enforced in the United States and Japan, and look at where those powers are today.

Well, the same ‘mad economics’ policies were imposed on the developing economies like the Philippines’, and the results of the austerity measures that were used as sticks to enforce them redound to mass poverty, endemic unemployment & underemployment, low or sub-optimal wages, and hunger. The ‘dragon’, ‘tiger’, and ‘emerging market’ economies have learned their lessons the hard way, and they are today the drivers of the world economy.

Look at these degenerative results of the obsolete ‘mad economics’: (a) de-industrialization, (b) agriculture decay, (c) deterioration of infrastructures, (d) decline of cutting edge in S&T (science & technology), and (e) deteriorating transport facilities. Destroy those sectors mentioned, and you destroy a nation’s economic foundation altogether.

That was exactly what happened to the North—Europe, Japan, U.S.A.! Just make a close scrutiny of Greece, where de-industrialization alone factored so strongly to bring down growth, degrade labor to paltry wages (down by 35%-40%), and saw its remaining wealth looted by greedy, demonic financial predators. The same financiers that looted Asia and led to its financial meltdown in 1997, have destroyed the North and will continue to do so.

Eurozone’s technocrats are mentally bankrupt and should be lined up in the Hall of Shame. Like the Mad Nero that fiddled in the roof as Rome burned, the technocrats and politicians of the entire European Union or EU have been fattening their purses and meteoric prestige rise, while Europe’s folks grovel in the dire effects of austerity measures imposed by the financiers’ puppet bank IMF.

[Philippines, 14 May 2011]

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Come Visit E. Argonza’s blogs & website anytime!

Social Blogs:
IKONOKLAST: http://erleargonza.blogspot.com
UNLADTAU: https://unladtau.wordpress.com

Wisdom/Spiritual Blogs:
COSMICBUHAY: http://cosmicbuhay.blogspot.com
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com

Poetry & Art Blogs:
ARTBLOG: http://erleargonza.wordpress.com
ARGONZAPOEM: http://argonzapoem.blogspot.com

Mixed Blends Blogs:
@MULTIPLY: http://efdargon.multiply.com
@FRIENDSTER: http://erleargonza.blog.friendster.com
@SOULCAST: http://www.soulcast.com/efdargon

Website:
PROF. ERLE FRAYNE ARGONZA: http://erleargonza.com

ASIAN ECONOMIC POWERS BETTER BUILD THE ‘NEW SILK ROAD’

ASIAN ECONOMIC POWERS BETTER BUILD THE ‘NEW SILK ROAD’

Erle Frayne D. Argonza

The recent finalization of the 450-kph bullet train of China is among the top great news showing the positive, constructive life going on in Asia. Such a life has been led by the ‘emerging markets’ of the continent and seconded by the ‘dragon economies’. Altogether, the economic powers of the region are exhibiting to the world what is meant by the idiom ‘truly human’: constructive, cooperative, life-giving.

Now that Asia’s powers have shown that Asians are indeed humans—and not those “halfway between monkey and man” as imperialist White racists once regarded them—it is time to interconnect the whole of Asia via a New Silk Road. That ‘silk road’ could later interconnect with Africa and Europe, but first of all the priority must be to interconnect Asia in order to catalyze synergy and complete the development goals of all member countries of the continent.

The Old Silk Road once linked the Middle Kingdom, at one time the greatest civilization on Earth (circa 600-900 Before present), to the countries west of it, all through the Persian dominions and Arab dominions, and onwards to Byzantium and the Balkans. Ceaseless warring by the abominations of Europe—the mercantile and oligarchic powers of Venice and Normandy on top of the list—closed that road forever.

Those ignominious Dark Ages are way behind us now, though a new Dark Age is now enveloping the planet through the latest destructive pursuits of the Anglo-European oligarchy. Before the Dark Age would come to fruition, it would be best for Asians to bond together, exhibit cooperation and synergy, and build the New Silk Road.

In today’s context, a ‘silk road’ would comprise of a mesh of interconnecting roads, shipping lanes, and railways. Island Southeast Asia, among the dynamic economies of ASEAN, would benefit immensely from this new form of ‘silk route’ that interconnects roads, ships, and railways.

The prototypes of new bullet trains and maglevs should immediately be erected down the ground, while the stakeholders of Asia talk with each other to map out the Silk Road Plan and implement them phase by phase. ASEAN, India, China, Pakistan, South Korea, Japan would in the best position to lead the talks, both on bilateral and multilateral arrangements. Other countries, such as Nepal, Mongolia, Bangladesh, Bhutan, would follow suit the moment that the talks would yield actual results towards an integrated inter-looping Silk Road for the entire continent.

Surely a Damocles sword hangs by the planet today, threatening to unleash terrible woes as weapons of mass destruction will pummel and destroy nations in a new global conflagration. Needless to say, the Western powers are the ones orchestrating the compass towards this new Dark Age, sick as they are with the polarized minds they inherited from their ancestors.

But it’s never too late to decelerate the forces leading to the new Dark Age, and nothing can stop those forces better than Asia. And I would say boldly, that the New Silk Road will be among the best means or strategies to bring a new Age of Hope to planet Earth, humans, flora, fauna and resource endowments.

[Philippines, 07 May 2011]
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Come Visit E. Argonza’s blogs & website anytime!

Social Blogs:
IKONOKLAST: http://erleargonza.blogspot.com
UNLADTAU: https://unladtau.wordpress.com

Wisdom/Spiritual Blogs:
COSMICBUHAY: http://cosmicbuhay.blogspot.com
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com

Poetry & Art Blogs:
ARTBLOG: http://erleargonza.wordpress.com
ARGONZAPOEM: http://argonzapoem.blogspot.com

Mixed Blends Blogs:
@MULTIPLY: http://efdargon.multiply.com
@FRIENDSTER: http://erleargonza.blog.friendster.com
@SOULCAST: http://www.soulcast.com/efdargon

Website:
PROF. ERLE FRAYNE ARGONZA: http://erleargonza.com

ASEAN TRADE LIBERALIZATION, PREPS FOR 2015 UNION

Erle Frayne Argonza y Delago

 

Will the ASEAN ever achieve economic integration that its member states have long dreamed of? Being an advocate of ASEAN unification, let me once more share thoughts about my humble region.

Binding rules of tariff reforms are now in the offing for implementation this year across the region, a proof that the unification efforts are going on despite internal barriers. The original ASEAN 5 –Philippines, Indonesia, Malaysia, Singapore, Thailand—are the most prepared for execution of the rules, while Brunei can test-case them as it has the resources to cushion off negative repercussions if ever.

Agreed, the continental countries that are catching up in their development—Vietnam, Cambodia, Myanmar, Laos—need some breather space of five (5) more years to be considered as executors of the same rules. They can catch up, rest assured, so collective trust should permit their self-confidence to propel themselves to high growth.

Economic integration can induce enormous growth and fast-track development in the region altogether. Pushing through with the integration would yield a result that no more member country would be poor by as early as 2020. In other worlds, every country would move on to middle income country status, fast-tracked in its growth momentum by the economic union.

Integration would go beyond tariff reforms, for a reminder. An economic union would need central institutions to note: (a) central bank, (b) regional currency, and (c) related regulatory institutions. Governance institutions, such as a regional parliament and executive council, can undergo deeper study and preparatory formation right after 2015 (political union will take a longer time to traverse).

As to a regional currency, do note that Asian countries have already agreed on a resolution to create an Asian Monetary Fund and an Asian currency. The former speaker of the Philippines’ House of Representatives, Speaker De Venecia, was a prime mover in getting the Asian states to agree on the matter. With him out of power now in the legislature, some other key personalities in Asia should take on the cudgels for implementing the resolutions.

There are surely kinks to be resolved in matters pertaining to economic sector priorities. ASEAN countries tend to compete with one another in certain manufactures and services, so the resolutions could yield an elimination of competition and/or concurring cooperation among the competitors concerned.

ASEAN integration is coming at a time of an evolving paradigm of mixed land use. This paradigm, on a macro-level, could justify well the existence of all key manufacturing and services in a member country, thus undercutting complaints about competition across borders.

Population-wise, the ASEAN will be 700 million head-strong before 2015, which renders the region as a gigantic one. Imagine if just half of the population will be middle income in status, the class that can sustain consumer spending across time. That would be a 350-million head count serving as the economic powerhouse at the household level!

In terms of aggregated Gross National Product or GNP, the figure is nearing $3 Trillions for the region. The prospect of the ASEAN overtaking Japan is no longer remote, a possibility that can happen before 2020. Such a possibility, however, can best happen should economic integration take place as scheduled, an eventuality that will render more focused managing of economic policies and governance reforms that will fast-track growth & development.

Meantime, we can only wish for now that the trade reforms will push through, thus resulting to a semi-integrated economy. The semi-integration will produce pronto a context of ‘import-substitution’ on a regional scale, which I think is a long-overdue goal in the region.

From hereon, ASEAN has only over four (4) years to resolve the last kinks, study the integration directions inclusive of institutional designs. It will be 2011 in just two months’ time, with we hope will be another auspicious year for the humble region and its noblesse diplomats, experts, and leaders.

[Philippines, 03 November 2010]

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

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

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

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

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

TRADE & HUNGER: SALVING HUNGER VIA TRADE POLICY

Erle Frayne Argonza

Let me continue on the issue of hunger, which many politicians are raising howls this early in time for the 2010 polls. The tendency right now, with politicians’ short-sightedness and poverty of wisdom, is that hunger will be perpetuated and sustained even long after the same politicians are all dead.

In the study on fair trade & food security I did for the national center for fair trade and food security (KAISAMPALAD), I already raised the howl about hunger and recommended policy and institutional intervention.

Since other experts, notably nutritionists, already highlighted many factors to hunger and under-nutrition, such as lifestyle problems, economics, and lack of appropriate public policy, I preferred to highlight in that study the factor of trade on food insecurity and the hunger malaise. Let me cite some cases here to show how trade and hunger are directly related:

·        Immediately after the termination of the sugar quota of the USA for Philippine-sourced sugar in the early 80s, the domestic sugar industry collapsed. 500,000 hungry sugar workers and their dependents had to line up for food, a tragedy and calamity that shamed the country before the international community. Till these days, the trauma caused by that ‘line up for porridge’ solution remains among those children of those days who are now adults, one of whom became my student at the University of the Philippines Manila campus (a girl).

 

·        Two years ago, a cargo ship carrying PETRON oil to the Visayas got struck with leaks and a tragic spillage covering wide swaths of sea waters. The island province of Guimaras suffered catastrophically from that incident, its economy was as bad as a war-torn economy for one year. Its marginal fishers couldn’t fish for at least one year as the sea spillage had to cleaned up. The hunger and under-nutrition caused by that tragedy is indubitably related to a trade activity: oil being transported to a predefined destination.

 

·        At the instance of trade liberalization on fruits upon the implementation of a series of GATT-related and IMF-World Bank sanctioned measures that began during the Cory Aquino regime, the massive entry of apples and fruit imports immediately crashed tens of thousands of producers of local mangoes, guavas and oranges, as domestic consumers (with their colonial flair for anything imported) chose to buy fruit imports in place of local ones. Economic dislocation and hunger instantly resulted from the trade liberalization policy.

The list could go on and on, as we go from one economic and/or population to another. What is clear here is that trade measures and activities do directly lead to food insecurity and the attendant problems of malnutrition and hunger. In the case of the Guimaras oil spillage calamity, humanitarian hands such as the Visayan provinces and Manila’s mayors’ offices, added to private and NGO groups, quickly moved to help the affected residents. Of course the PETRON itself took responsibility for the spillage, clean up, and offered humanitarian help as well. But did trade stakeholders ever paid for the hunger malaise suffered by the sugar workers and families, fruit small planters, and other families in the aftermath of shifting trade policy?

A strategic solution to trade-related hunger would be to constitute a Hunger Fund, whose funds shall come from at least 0.1% of all tariffs (on imports). A 0.1% tariff alone today translates to P800 million approximately, or close to $20 Million. This can serve as an insurance of sorts for trade-induced hunger. The funds will then be administered by an appropriate body, comprising of representatives from diverse sectors and headed by a nutritional scientist of international repute (e.g Dr. Florencio) rather than by a politician or ignoramus species.

Furthermore, insurance groups here can begin to innovate on food production-related insurance to cover force majeure damages. Cyclone insurance and earthquake insurance would be strong options for agricultural producers, even as other options can be designed most urgently.

I would admit that trade-related hunger and its solutions are practicable for the productive sectors of our population. There are 2.3 million street people today who comprise the relatively ‘unproductive sectors’, who all suffer from hunger. This need to be tackled as a distinct sector and problem, and discussed separately.

[Writ 28 July 2008, Quezon City, MetroManila] 

SPECULATION PESTERS FOOD: U.S. CASE

Erle Frayne Argonza y Delago

Greedy financiers across the globe made humungous killing in the commodities futures recently, which largely explains the sudden hyper-inflationary price increases in grains. The panic that resulted from the ‘self-fulfilling prophecy’ that food stocks are running out further exacerbated the already volatile situation of the food markets.

The flawed reasoning—that the problem has a great deal to do with the supply side—has been bandied by the paid Pied Pipers of the greedy financiers. This is an old hat lie, and facts about the capital and financial markets belie such cranky rationale for a sector (food) that has been subordinated to predatory finance worldwide.

Below is a case study regarding the subject matter of sky-rocketing food prices on account of speculation, culled from the Executive Intelligence Review. Make your own assessment about the matter.

[Writ 30 June 2008, Quezon City, MetroManila]

Speculators Making Killer Profits Off Midwest Flooding While Farmers Can’t Sell Grain

June 16, 2008 (EIRNS)—This morning’s frantic speculation on the Chicago Board of Trade (CBOT) opened with corn (December futures) up 19 cents, for a record $8.06 a bushel (contrast to $4 a year ago); and new crop soybeans hit a record $15.53 a bushel (contrast to $8 a year ago). This is the 12th consecutive day for record-setting corn prices on the exchange, occasioned by binge-speculation off the likely destruction of at least 5 million acres (2 million hectares) of crops in the Midwest flood zone, including at least 3 million acres of corn (out of 86 million nationally).

The volume of grain and soy trading contracts is soaring on the CBOT, part of the Chicago Mercantile Exchange (CME). All futures trading has risen 26 percent over the first part of 2008 on the CME, compared to same time 2007 (including non-commodity futures of all kinds). The Commodity Futures Trading Commission (CFTC), the Federal agency which could stop the deadly game, but will not, released a report June 13, showing huge flows of funds going into the corn market. The CFTC report gives specifics on the record volumes of outstanding corn commitments—amounting to paper bushels, the way paper barrels exist in oil speculation. The CFTC says that speculative funds have added 34,732 contracts to their long positions and cut 4,588 contracts from their short positions, putting them net long on 219,041 corn futures contracts. Index funds are now net long on 427,352 contracts.

At the same time, prices are falling for the farmer trying to forward-sell his corn or soybeans to his local buyer. There has been a 12 cent drop in the prices offered to farmers for their corn over the past 24 hours! This comes on top of an average 4 cent a bushel drop in prices to the farmer last week in the Cornbelt, according to a spot check of local grain buyers, by Dow Jones. This farmer price disparity with the exchange prices, reflects not only the physical destruction of shipping and processing infrastructure, but also the fact that whenever prices spike on the Chicago Board of Trade, the local grain elevator or buyer is hit with a margin call, that he now cannot meet. So he is not offering farmers forward-contracts. Many local terminals, strapped for cash, have gone bankrupt, or sold out to the wave of hedge and index funds now on a buying spree for hard infrastructure, with which to further hold and hoard grain. E.g. WhiteBox, based in Minneapolis. The cartel terminals, dominated by Cargill and ADM, started denying forward contacts to purchase farmers’ grain months ago, under the principle: protect yourself, screw the farmer. The cartel firms offer the farmer take-it-or-leave-it prices, and terms of delivery.

On top of this, key grain and meat processing facilities are shut down by the flood all over the Midwest, for example, a huge ADM corn-processing plant in Cedar Rapids.

PHILIPPINE ECONOMICS: BOP SURPLUS, INVESTMENT-HEALTHY

Erle Frayne  Argonza y Delago

 

The Philippine macro-economic fundamentals remain alright, bright and positive.  So says the official report from the central bank. I myself opine in the affirmative regarding RP’s economic health.

 

The Philippines has been hit lately by inflationary waves in rice and petrol. These alone were sufficient to slow down growth a bit. But the factors behind these problems in grains and oil go beyond the domestic, they’re global and have to do more with the manipulations of financial speculators in the overseas markets. As a result, the overall inflation rate moved up.

 

The exact figures released by the Bangko Sentral ng Pilipinas are: US $499 million for the month of April (08), and a total of $2.13 billion for the first four months of the year. Hefty sums! Not bad!

 

The fiscal situation is the one that is now being threatened by the volatilities in the rice and oil prices, or should we say spot markets overseas. The news about rice price being subsidized should the crisis worsen is surely a bad one, as it will crash down the ‘balanced budget’ target supposedly achievable at the end of the year.

 

Yet even that seemingly shaky fiscal situation isn’t sufficient a force to dampen the overall macro-economic health. The BOP surplus indicates the positive compass of the economy for the rest of the year, rendering this country a lucrative haven for investments from both domestic and overseas investors.

 

So, fellows out there, the Philippines is much in tune with the Asian growth trend amid the latest rounds of inflation and the problems in oil and grains. The prophets of gloom & doom better find something else to do, such as to bash the corrupt oligarchs, as the economy is within the right compass of growth.

 

[19 May 2008, Quezon City, MetroManila]