Category: globalization

do not delete (economic provisions)

verrrry interesting that it took that angry (complete with expletives) december 12 multisectoral anti-chacha rally to provoke former leftist now gma apologist-loyalist alex magno into revealing the real score behind the arroyo administration’s kulit campaign for charter change.   apparently, suko na siya (sila), sort of.

Yesterday’s march was an event of bigotry. It was undertaken in the spirit of rejecting even a mere discussion of proposals for Charter change. It is act trapped in the presumption of malice. It does not enrich our democratic culture.

I did say, in one televised interview, that I have lost hope constitutional reform will ever happen in my lifetime. A freshly-elected administration has no incentive to surrender its electoral victory to Charter change. A sunset administration, when it does initiate a constitutional reform process, will always be suspect.

We saw that in the case of Pirma at the end of the Ramos period. We see that today.”

so.   ang solusyon ni propesor magno?   kalimutan na ang change from presidential to parliamentary, kalimutan na ang ambisyon ni gma na maging prime minister, gayon din ang ambisyon ng mga representatante na maging members of a unicameral parliament.    pero, wow, huwag na huwag kakalimutan ang economic provisions na dapat daw i-delete na from the constitution.

In one recent public forum organized by civic groups sympathetic to constitutional reform, I suggested that if there is anything that is politically feasible it has to be narrowing down the debate to only the economic provisions in the 1987 Charter.

Forget about reforming our institutional arrangement. That will always be divisive because there will always be vested interests finding themselves on opposite sides of any political question. The Senate will always oppose any shift to a unicameral assembly. Oligarchic interests will always oppose a shift away from the presidential system because any other option will be a lot harder for them to control.

The only possible aspect of the constitutional reform agenda where some amount of consensus may be forged is that section that “constitutionalizes” our nation’s economic policy.

That section is anomalous to begin with. A constitution should never prescribe economic policy. Economic policy ought to be an evolving thing, shaped by the continuing process of legislation and policy-making.

In the scenario I propose, the House majority could simply pass a resolution deleting the provisions in the 1987 Constitution that preempt economic policy-making. With a limited scope, the Senate has to agree with the revision. No one, except the ideologically blinded, wants our economic policy to be fixed like religious dogma.

I call this the “Delete Option.”

Because the provisions to be removed will not be replaced, there is no need to debate wording. The debate on economic policy, henceforth, will occur where it must: in both chambers of Congress.

It is a simply, surgical operation that will not disturb the institutional arrangement. It will not endanger the political ambitions of those who now so vociferously oppose constitutional reform.

One might call it Constitutional Appendectomy.

The necessary reform of our economic architecture has been delayed because deleting the economic provisions has been tied up with the other messy political issues in the Charter change agenda. There is an immediate benefit in liberalizing the economic architecture the soonest to help us cope with the global recession.”

it’s a whole lot of crap, the assertion that deleting the economic provisions will help us cope with the global recession.   hindi totoo.   it will only open us up completely and absolutely to the free-market kind of speculative capitalism that brought down wall street and the american economy with it, and we are expected to lie back and enjoy it.

and who really stands to benefit from magno’s delete option?   why, the arroyos of course.   check out patricio mangubat’s “The fiefdom of A“:

Sources within the palace told me that the real reason behind the lifting of these economic provisions is not to really grow the economy. No. In fact, if we think about it, the reverse would happen. If we allow foreign ownership of land and property in the Philippines, the profit that they will be getting from using these lands would definitely be taken outside the country anyway. The local economy would not benefit from it. It would just be like what Mike Defensor did when his Chinese-owned mining company bagged that multi-billion contract to mine a mountain full of gold in Zambales.

The real story is the purpose of the establishment of a Hongkong-based holding company. Allegedly, this holding company which is named after a reputable historical figure “Ashmore” is owned by the First Golfer and his associates. Ashmore is an off-shore investment firm which was built solely to be the conduit between foreign companies wanting to own lands in the Philippines and a real estate firm called “Alphaland”, which, again, is owned by a hotelier associate of the First Golfer.

The insider said that what the First Golfer and his associates intend to do is, make profit selling Philippineproperty to these foreigners using Ashmore and that Alphaland will be the authorized seller of these properties. They intend to get billions out of this.

What the First Golfer and his associates intend to do is monopolize the selling of prime Philippine property (including agricultural lands) and make a quick buck from it. Bad? Not entirely except that this smucks of bad odor and immoral since most of those behind this scheme are living inside the palace.

And you know who is helping the First Golfer and his associates build a veritable fiefdom in the Philippines? Reportedly, that person is Roberto Ongpin. (Ongpin used to be an associate of the late Ferdinand Marcos. His brother, that Ongpin during Cory’s term, reportedly committed suicide because he’s ashamed of what his brother did).”

so please, utang na loob, kalimutan na for good yang pagbabago ng economic provisions ng saligang batas.   the restrictions have been there since quezon’s time at least.   even marcos did not have the heart to delete them, knowing that to do so would not bode well for the country.

besides, foreigners are already doing good business here.   they can lease land for 50 years, extendable for another 25.   but why are we still poor?   among other things, because foreigners are allowed to repatriate all profits home.   nothing is plowed back into the economy, which says a lot about our economic fundamentals.    i’ve said this before in a letter to the inquirer editor published back in july 2005 and i’m saying it again:

There’s nothing sound about our economic fundamentals.  Nothing sound about the endless borrowing.   OFW remittances are the only thing that’s been keeping the economy afloat for many many years now, at such cost to our families, marriages, the children.  That’s fundamentally sound?  What would be sound would be if the elite, the rich, who invest their millions in China, Vietnam, the U.S., start investing here at home.  What would be sound would be if the elite were to start plowing back business profits into the local economy instead of piling it up in foreign banks or behaving like foreign investors quick to pull out their money at the first sign of unrest.”

professor benjamin diokno agrees.    invest heavily here, he urges big business.

FILIPINO businessmen should invest heavily in the country in order to generate jobs and not wait for the government to shield the country against the ill effects of the global economic meltdown, economist Benjamin Diokno said over the weekend….

He said many Filipino businessmen have invested heavily in neighboring countries and even deposited their money in Switzerland and the Cayman Islands.

Instead of letting their money sleep in the banks, Diokno said they can use at least the interest of their money to put up business in the country and help fellow Filipinos to get a decent job as well as keep the economy working.”

only when the rich-who-say-they-love-their-country start putting their money where their mouths are will this country have a hope of making it through the global slump.

feeling the fall of america

wow.  who would have thought that we would see the american economy collapse like a house of cards, bringing the whole world down with it.  diyata’t hindi pala invulnerable ang superpower na ito.   diyata’t nagkakamali rin, pumapalpak, bumabagsak.  at ngayo’y nangangapa, ikot ang puwet, trying to figure out how to reboot a financial-economic system that has crashed.

to get a handle on what happened and why, read
francis fukuyama’s the fall of america, inc.
john gray’s a shattering moment in america’s fall from power
walden bello’s a primer on the wall street meltdown
nobel laureate joseph stiglitz’s how to get out of the financial crisis

the question is: tayong mga bilib na bilib sa amerika — we who allow america to dictate our economic policies — what lessons should we be taking away from this?   it’s not enough to breathe a sigh of relief that our banks are relatively sound — that’s only because praning na sila after having been burned by the asian meltdown in 1997.

at the very least we should be seeing, and acting on the fact, that america’s kind of deregulated and globalized and greedy free-market capitalism is no longer the appropriate model for li’l 3rd world us, not if we truly aspire for economic recovery and stability and prosperity for the majority of filipinos.

otherwise, things are just going to get worse.  those foreign investments that government expects to come in from middle east now that america and europe are in financial doldrums are, as usual, not going to make that much difference to the poor, not in the long run, if the same discredited rules and systems continue to apply.

economic growth will continue to be a myth, except for the already-rich.  what will grow for sure lang besides would be the population, hunger, joblessness, and the diaspora, which is the saddest of all.  we’re a country of broken families, broken hearts, no thanks to economic policies that serve the interests of the few at the expense of the many.

what to do to turn things around?  said john bellamy foster, editor of the socialist-anti-imperialist monthly review, when asked by pagina/12 what kind of policies the u.s. government should implement to sort out the crisis, how to bail out the people and not just the banks:

I don’t think anyone knows how to “sort out” or stop this crisis. What we are seeing is a lot of improvising while the house is falling down around us. There is no possibility of avoiding a very severe world economic crisis at this point….

My own view is that the sole object at this point — though it is hard to imagine this in the United States at present due to the weakness of labour and of working-class organisations in general — should be to reorganise social and economic priorities to meet the needs of those at the bottom. It is a fact that the US economy over decades has drastically weakened the conditions of the wider population, which is at the root of the whole problem. So addressing those conditions is the real key.

But even if that were not the case, the goal of those who identify with the great majority of the population, with the working class, the propertyless, the poor, should be clear: to put the employment, food, nutrition, housing, health, education, environmental conditions of those at base of society first. This is simple humanity and justice.

Why flood the financial world (which means first and foremost the rich, the near-rich and corporations) with trillions of dollars ultimately at taxpayer expense, probably to no avail, when something might be done for the greater population?

Marx said, in one of his ironic moments, that the only part of the national wealth that was held in common amongst all the people was the national debt.

If the wealth is not shared, why should the public take on more debt, supporting the opulence at the top while the great majority of the people are seeing their basic conditions deteriorate?

Let the system take care of itself; let us devote our public resources to the people. More good would be accomplished that way. Of course what this means is a reactivation of class struggle from below; something we haven’t really seen in the United States in a long time.”

interesting.  now that america is down, we’re so like america.

jun lozada, gma, and the rice crisis

jun lozada should rethink his campaign to expose gma’s involvement in the nbn-zte bribery scandal.

the rice crisis simply trumps all other issues and naturally we are distracted, not just by the implications for the very poor and the not-so-poor and the medyo-poor who have long been barely able to buy the cheapest rice, but also our minds are busy trying to make sense of the information offered by media about rice supply and demand, and government subsidies, and global shortages, the better to get a grasp of what’s really going on and why.

jun can’t blame us if we have stopped to watch gma do her thing, praying she can find ways to remedy the situation short-term and long-term, because this time really we don’t want her to fail, or we would be facing prospects of food riots.

it doesn’t mean that we don’t want her to resign or be ousted for her sins against the constitution and the seventh and eighth commandments, but until more nbn-zte whistleblowers come out jun would be wise to go with the flow, expand his rhetoric, get into the rice problem, explain it as a failure of policy, a consequence of gma’s blind embrace of globalization, which clearly indicates a lack of foresight and vision.

not everyone loves jun lozada. still there is no denying that he has the ear of the nation. if he would polish his act and upgrade his message, he would do the nation a great service.

decoupling a dream, IMF hits panic button

there’s a lot of hoping and praying going around that asia has truly decoupled, i.e. weaned itself, from the u.s. economy. ibig sabihin kasi, it would be possible for the rest of the global economy to roll on despite the u.s. recession (ok, slowdown, maybe). china and india, the new big trading partners of the world, could take up the slack, provide what the humungous u.s. consumer market used to provide but can provide no more because its credit has run out (sub-prime pala in more ways than one).

it is true that we have decoupled somewhat from the u.s. economy, but just a little. cielito habito writes:

If we count China and Hong Kong as one country (even though the trade statistics still separate the two), the US has already been dislodged as our largest export market, whose 17-percent share of our exports is now just second to China-Hong Kong’s 23 percent. Contrast this to only 10 years ago, when the US took more than one-third (35 percent), while China-Hong Kong took less than one-twentieth (5 percent). Our vulnerability to a US recession via an export slowdown is therefore far less than what it would have been 10 years ago.

“But let’s look more deeply into the details, particularly the destinations of our top exports. Electronic products, which account for two-thirds of all our export earnings, are now well distributed among our top four buyers for these products, with the US taking only 14 percent. China-Hong Kong takes 23 percent, Japan takes 15 percent, Western Europe takes 14 percent, and even Singapore and Malaysia take sizable shares of about 8 percent each. On the other hand, the US takes up the bulk (79 percent) of our garments exports, our second (but a far second) largest export. Mineral exports to the US hardly matter, with most going to our neighbors. Woodcraft and furniture, another top export earner, mostly go to Japan, with only 20 percent going to the US.”

problem is, all these markets to which we export goods – japan, western europe, china, singapore, malaysia – also have sizeable exports to the u.s. chances are, if they lose that market, they’re going to cut back on our products, too. and really, our exports have been down since the peso started rising (falling), so we have to look elsewhere for salvation.

such as interest rate cuts maybe, like the federal reserve has done to encourage entrepreneurs and consumers to keep on borrowing (don’t stop investing, don’t stop spending). but like the bank of england, our bangko sentral is wary of inflation, even if the IMF mismo advises “monetary easing,” if we are to withstand the global repercussions of the credit crisis.

in fact, the IMF is hitting the panic button:

The intensifying credit crunch is so severe that lower interest rates alone will not be enough “to get out of the turmoil we are in”, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned at the weekend.

“In a dramatic volte face for an international body that as recently as the autumn called for “continued fiscal consolidation” in the US, Dominique Strauss-Kahn, the new IMF head, gave a green light for the proposed US fiscal stimulus package and called for other countries to follow suit. “I don’t think we would get rid of the crisis with just monetary tools,” he said, adding “a new fiscal policy is probably today an accurate way to answer the crisis.”

on the ball naman si albay governor joey salceda, top economic adviser ni gma, who brooks no arguments: a storm is coming, thus this Php75 billion stimulus package:

• A P16-billion expansion in income tax deductions (to benefit middle-class working families).

• An P8-billion rebate to households consuming less than 200 kilowatt hours of electricity a month.

• A P51-billion increase in government spending this year (P15 billion for increasing agriculture production, P16 billion for infrastructure, P12 billion for education, P4 billion to increase PhilHealth memberships to 5 million, and P4 billion for mass housing).

“We must implement the economic equivalent of a preemptive evacuation. Domestic growth is our first line of defense against the incoming virus of global credit and corporate earnings recession. Not because it is fashionable, but because there are fundamental arguments for some kind of recession-proofing for the Philippine economy to preserve the gains of 27 uninterrupted quarters of GDP expansion,” Salceda said in an interview.

problem is, salceda’s package is not too stimulating. sana rebates across the board for all taxpayers. and why not suspend VAT? masyadong malaking revenues ang mawawala sa gobyerno? so why not suspend debt payments? this is a good time as any for a moratorium, if the IMF really wants to help.