PH BALANCE OF PAYMENTS SURPLUS DOING GOOD!

PH BALANCE OF PAYMENTS SURPLUS DOING GOOD!

Erle Frayne D. Argonza

Magandang araw! Good day!

Another great news from Asia’s emerging market Philippines has been ringing across economic sectors of late. This pertains to the end of April report of a net BOP (balance of payments) surplus of over $1 Billion.

The situation of a BOP surplus has been consistent since the begging of 2011 yet, thus rendering total BOP surplus at over $4 Billions. Add this BOP surplus to the strong peso, high foreign exchange reserves of $67.8 Billions, positive growth of over 5% for the 1st quarter, manageable debt burden (good fiscal health), and one can see a relatively good performing economy as far as macro-indicators are concerned.

The BOP surplus has been largely accounted for by the continuous inflows of foreign remittances by overseas Filipinos and the portfolio capital inflows. This hasn’t translated yet into transforming PH credit standing to A+ high credit grade, but so far so good. The credit standing has already been elevated to a notch in fact.

BOP measures the balance between inflows and outflows of capital, currency, and trade receipts. In the past, BOP deficits have been used by creditor institutions notably the IMF to bamboozle the country into submitting to harsh conditionalities. Now that BOP and other indices have been doing appreciably, the reason for creditors and investors to be stingy or cruel on the country has been reduced.

Since the country has been registering BOP surpluses for some time now, there is no more reason to be lackadaisical about reducing poverty and increasing the numbers of middle income earners. The graduation of around 32% poorer families in the CDE classes to middle income status (U.S. $5,000-$30,000 per annum) will make the country into a true economic powerhouse as an emerging market.

Today, merely 19% of our families fall within the middle income yardstick, and it had stagnated there for years now. Adding 32% to 19% yields 51% of total families at middle income, a status that Brazil attained during the noble Lula’s presidency yet. How much can the private sector can do what it can towards that end, using the gains of BOP surpluses and others, is the big challenge facing the market stakeholders.

[Philippines, 21 May 2011]
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Come Visit E. Argonza’s blogs & website anytime!

Social Blogs:
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UNLADTAU: https://unladtau.wordpress.com

Wisdom/Spiritual Blogs:
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BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com

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

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@FRIENDSTER: http://erleargonza.blog.friendster.com
@SOULCAST: http://www.soulcast.com/efdargon

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

CLOSE DOWN THE IMF, IT’S A PREDATOR BANK!

CLOSE DOWN THE IMF, IT’S A PREDATOR BANK!

Erle Frayne D. Argonza

The world watches as the director of the International Monetary Fund or IMF, Strauss-Kahn, was arrested for rape case. As the case proceeds, talks have been circulating concerning the reform of the IMF, with the option of enlarging the voting powers of the developing countries in it.

Reforming the IMF for this long-time development worker and analyst isn’t the option. Knowing the IMF as a harbinger of cruel austerity measures on debt-burdened member countries, the option for me is the closure of this inutile bank.

IMF conditionalities, imposed upon member countries that are on IMF programs via ‘letters of intent’, have resulted to appalling pauperism on the debt-burdened countries themselves. Studies done in the 1980s and 90s have shown that many countries put under the IMF programs declined in incomes to as low as half of their previous GDPs or gross domestic products.

The same studies have also shown that wherever the IMF made its presence so strong, more people slide down below the poverty line. Often than not, these were struggling developing countries or DCs such as the Philippines that have been under IMF programs for many decades. Today European countries such as Greece are among the IMF guinea pigs for austerity, and already wages were slashed by 30% as part of the austerity measures.

The IMF, in reality, is an ensurer for the stakes of global financiers whose have installed their puppet technocrats to the echelon of the bank. That it is always headed by a European, notably French, is testimony to the nature of the IMF as a criminal bank that legitimizes the lootings by European financier oligarchs of currencies and assets, legitimized via enforced liberalization, privatization, and deregulation policies.

It used to be the sole definer as to whether a DC can qualify for new rounds of IOUs from western creditors. The latter, acting as a syndicated group, would then compel debtors to pay the loans at unreasonably usurious rates, which alone guarantees that the same DC debtors will be so burdened with debts their fiscal health will falter for a long time to come.

Low fiscal health, high debts, and low foreign exchange reserves are then used as yardsticks by investors to decide against investing in the affected DCs. Those foreign companies that are already inside the DCs concerned, may decide against diversifying investments or even pull out their investments altogether.

Knowing the dire impacts of IMF programs on my own country, and likewise knowledgeable about IMF’s thuggish reversals of development trends in other countries, I can only but fume with contempt every time I think of this criminal organization. Not only should the IMF be foreclosed, its leaders should be criminalized and punished, while its assets be redistributed back to the member countries.

There is no room for this predatory bank in the new multipolar global economy emerging. Close it down before its too late that more countries will experience grinding poverty among its masses due to the predator’s policies.

[Philippines, 18 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

MARIKINA SHOES: GLOBALIZATION’S CARCASS RE-SURGES

Erle Frayne D. Argonza

Good evening from the Pearl of the Orient!

Marikina shoes, the top pioneering shoe industry in Southeast Asia after World War II, has been among the carcass industries in the aftermath of globalization. Lately though, the industry has been re-surging from the doldrums, so let me share some notes about the matter.

Marikina is a city to the east of Old Manila and is among the model cities for couples of reasons. It’s former administrators, the Fernando couple (a developmentalist couple), were able to tap official development assistance (ODA) funds directly for local infrastructures without needing securitization from national government, thus kicking off a new trend in development financing and urbanization pursuits.

Officially a part of metropolitan Manila that is the ‘Manila of the present’ (old Manila is ancient and diminutive in size), Marikina had been emulated for its cleanliness, efficient traffic management, and participative local governance. It had set off a trend for local governments to embark on ambitious projects without being subsidized by national government.

Those feats are part of the new image of Marikina, just to make it clear. For Marikina also has an older image as the home of the Philippines’ pioneer shoe industry. At one time the exemplar of Asia in shoe-making, Marikina’s exquisite shoes have straddled the planet like conquering commodity champions worth the possession of rising middle class members aspiring to acquire apparel items worth their pockets’ powers and esteem.

Marikina shoes have thus enabled the flourishing of backward linkages such as leather tannery, dye industry, and shoe accessories. Upon attaining industrial maturity circa late 60s through the 70s, product quality was at par with the best that the West can manufacture. And, Marikina shoes were priced so affordably, selling at around merely 1/5 to 1/3 of the western counterpart items.

Trade liberalization however struck a bitter chord in the 1980s, and down came Marikina shoes with globalization’s ascent. Former shoe factories closed shop, tens of thousands of shoe workers were laid off, and shoe retail shops followed the pattern of foreclosures. At the end of the day, only a few notable Marikina brands stood tall amid the storms caused by trade liberalization and serial recessions.

I won’t be surprised to find out that similar industries elsewhere, inclusive of the USA’s, will be shutting down due to the same reason: globalization. The trend is now hitting shoe factories in the USA that closed down production in the homeland as the same (production) were outsourced to developing countries where labor and capital goods (leather, dyes, chemicals) are priced cheaper than the homeland.

As Europe’s economies literally burn, its consumers are cutting down on luxuries, thus opting to buy essentials that are more affordably priced, such as garments & apparel. We shouldn’t be surprised if the prime shoe brands of Italy and France would be knocked out cold turkey by the economic storm in the continent.

Incidentally, Marikina’s local stakeholders were able to address some core social issues concerning their dying shoe industry in the 1990s yet. Those strategic measures, such as relief funds for affected industries, are now reaping fruits for the industry players.

As a whole, Marikina’s show industry was reduced to carcass indeed, but a carcass that is able to stand up at certain junctures. With the wave of China shoes conquering so many shores worldwide, Marikina shoe industry is again getting whacked heavily and paying the price of slow adjustments to make their products more competitive (i.e. attain greater comparative advantage)

Another tranche of relief subsidies for affected industries, akin to a stimulus package on a local level, is now out-flowing from the city government’s coffers. Whether the said funds are able to stave off potential deaths on specific factories and outlets remains to be seen.

For the moment, let me declare that all of my leather shoes are Marikina products. I’ve already decided to shy away from Western imports, and I’m saying no to China shoes that suffer from quality problems. This is my own way of appreciating the craftsmanship of Markina’s shoe designers and the labors of shoe workers in the city.

[Philippines, 11 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]

IMF-WORLD BANK MERGER’S A HIDEOUS MONSTROSITY!

Erle Frayne Argonza y Delago

Plans are now afoot at merging the World Bank and the IMF, the two economic pillars of the post-war alliance of nations to foster cooperation and development. They came straight out of the Breton Woods agreement, and were rightly called the ‘Breton Woods Agencies’ then.

The merger is among the responses of the technocratic-financier-political elites of the North to the crashing global economy. The ‘virtual economy’ based on financier speculation and worthless bubbles, or otherwise ‘casino economy’ of the wealthy, had burst so badly. The implosion of the financial system had seen the closure of big banks and the alarming loses of others most specially those that had enormous exposures to the subprime realty market in the USA.

The question is whether this merger is really the appropriate response to a system problem. Many experts and quarters the world over have been clamoring, since way back 1990s yet, for the convening of a ‘new Breton Woods’ and the institution of a new global financial architecture. I was among these experts on the Philippine side, and many of us are inside government as executives and legislators.

However, an IMF-World Bank merger is farthest from our mind. The IMF particularly has this notoriety for prescribing shock treatment on economies in crisis, particularly the developing countries or DCs, that do not at all mitigate the long term impact of structural problems. On the contrary, the austerity pills of the IMF were shown to have caused further contraction, depression, and deterioration of once thriving emerging markets.

Let’s face it, the IMF and World Bank are largely the institutional agents of the global financial cartels. They do not represent the true interest of sovereign nation states, do not exercise any accountability at all except to the financier sponsors behind the backs of the IMF-World Bank boards and leadership, and are instruments to encumber nations into perpetual debt peonage. The IMF-World Bank group represents the forces aimed at destroying sovereign nation-states and no less.

The North does not have a monopoly of wisdom in salving the ailments of the global economy, and so we peoples of the south  may just have to push for actions that would see how the catastrophic impact of the global economic implosion will be mitigated. Let the OECD propel their own oligarchs’ self-aggrandizing actions, while we patriots of the South move on to save our people, nations, environments and institutions from further predatory onslaughts by the greedy global oligarchs.

The IMF-World Bank merger is a hideous monstrosity. Be forewarned!

[Writ 26 May 2008, Quezon City, MetroManila]