Last Monday, the Inquirer editorial tackled the question of whether “they are all the same, anyway.” Recent news, economics-wise, brings to mind a recent column by Tony Abaya.
“I am sure we are in a bear market, because the mood is very negative. People no longer believe that stocks are the road to riches,” Cannae Capital Partners managing director Hugh Giddy.
“This may be a long slow grind down because earnings expectations will start to fall.”
See also Stocks mark 7th day bloodbath (in light of the above, it will be interesting to see what bloggers like stuart santiago, who’s been keeping tabs not only on the implications of the appreciating peso, but also, what economists think should be done, will have to say about this). Now I’ve heard it said, that goings-on in America are less relevant to us, than they used to be, because our economy is now more closely aligned to China’s than the USA. But even in China, all doesn’t seem to be well. See A Recipe for Disharmony:
An Asia Times article by Martin Hutchinson paints a very sobering picture about China’s bad debt situation. The latest estimate is reported to be between US$1.2 trillion and US$1.3 trillion, which would make the often touted sovereign wealth fund of US$200 billion look almost paltry, not to mention that one-third of this fund is slated for the purchase of bad loans from Chinese banks and another third to recapitalize China Agricultural Bank and China Development Bank which are destined for privatization. What is even scarier is that, according to Hutchinson, all of China’s foreign exchange reserves, to the tune of US$1.4 trillion, might be needed to plug holes in the banking system when the inevitable liquidity crisis occurs. The article also says that China’s banking system bad debts account for about 40 percent of her GDP and are in real terms about five times those of the United States, given her economy is around one-fifth the size of the latter’s.
The article then goes on to draw parallels between Latin America and China in terms of very high inequality, persistently high inflation and rampant corruption, highlighting the fact that China’s government lacks any genuine understanding of the free market and her economy is increasingly dominated by special interests, with a small entrenched elite gorging themselves (immorally and illegally) with the fruits of economic growth at the expense of the disfranchised masses.
Which brings us back to the Inquirer editorial and Tony Abaya. In his column, GMA’s Successes, he writes:
Under Cory, the Philippine GDP grew 3.5 percent in 1986. 4.3 in 1987, 6.8 in 1988, 6.2 in 1989. The coup attempt in December 1989 by then Col. Gringo Honasan and then Capt. Danilo Lim dragged the GDP down to 4.4 in 1990, and subsequently to negative 0.6 in 1991. The average GDP under Cory was 4.1 percent.
Under President Fidel Ramos, GDP grew 0.3 percent in 1992, 2.1 in 1993, 4.4 in 1994, 4.7 in 1995, 5.8 in 1996, and 5.2 in 1997. The Asian Financial Crisis that started in July 1997 dragged the GDP down to negative 0.6 in 1998 as it devastated economies all over the world. The average GDP under President Ramos was 3.1.
It should be mentioned that the low GDPs in 1992 and 1993 were due, not just to the coup attempts of Honasan-Lim in December 1989, but also to the daily power outages of up to 8-hours that plagued the economy.
And the power outages were due largely to the mothballing by President Aquino of the 620 mw Bataan nuclear power plant just before it was to be commissioned, a concession to the anti-US bases and anti-nuclear agitation of the Communist movement. The slack would have been taken up by the 300 mw Calaca plant and the 300 mw Masinloc plant, both coal-fired, but the commissioning of these plants was blocked by environmentalists.
The net effect was that thousands of businesses and industries, and tens of thousands of families were forced to buy and operate their own generators, thus creating as much pollution as, or even more than, Calaca and Masinloc put together. There is a lesson to be learned here, but I doubt if Filipinos have learned it. But I digress.
Under President Joseph Estrada, GDP grew 3.4 percent in 1999 and 4.0 in 2000, until he was deposed from office in January 2001 by a military coup d’etat pretending to be people power. The average GDP under President Estrada was 3.7 percent.
Under President Arroyo, GDP grew 1.8 percent in 2001, 4.3 in 2002, 4.7 in 2003, 6.0 in 2004, 5.1 in 2005, 5.6 in 2006 and 7.1 in 2007. The average GDP under President Arroyo was 4.94 percent. Forecasts for 2008 range from 5.0 to 6.7 percent.
(It takes GDP growth rate of at least 8 percent per annum for 20 years for an economy to reach First World status. This is the level of the achievement of South Korea, Taiwan, Hong Kong and Singapore, from the 1970s to the 1990s.)
Having compared the economic performance of recent administrations, he goes on to point out that,
Under President Arroyo, the economy has developed an upward momentum. And the biggest element in this upward momentum is the remittances from overseas contract workers, which will reach $14 to !5 billion in 2007, compared to practically zero in the 1970s..
The corollary is that if Presidents Aquino, Ramos and Estrada enjoyed a $10 to $15 billion annual OCW windfall during their watch, the GDP during their presidencies would have been substantially higher. (If any reader has the annual figures for OCW remittances staring in 1980, I would appreciate receiving them.)
The other corollary is that if President Arroyo did not have this $10 to $15 billion annual OCW windfall, the Philippine economy under her management would not have grown as much as it has in the past five years.
Which is not to say, as Abaya points out, the President’s taking credit for things not entirely of her own making:
Whis is not to say that President Arroyo did not make any substantial contribution to economic growth from her own initiatives. Far from it. Her biggest success, in my opinion, is the growth of the call center-business outsourcing industry, which now employs more than 200,000 young, urban middle-class Filipinos, and is still growing fast.
If one were to revisit her Mid-term Development Plan, which was drafted at the start of her presidency in 2001, one would note that it had three major foci: agriculture, tourism and information technology or IT. So the call-center phenomenon was an Arroyo initiative and it is a major success, for which she deserves full credit.
The passage and implementation of the EVAT. is also an Arroyo success, which substantially increased government revenues, enabling it — theoretically at least — to invest more in infrastructure and social services…
….President Arroyo has also achieved moderate success in tourism, one of the three foci in her Midterm Development Plan. Tourist arrivals topped three million in 2007, for the first time ever. I say ‘moderate’ because Thailand drew 13 million tourists, Malaysia 16 million, in the same period.
In 1991, Indonesia and the Philippines drew more or less the same number of tourists: one million. Since then, Indonesia’s tourist arrivals have reached five million, despite the Bali and Jakarta bombings, while we are celebrating only three million. Don’t look now, but tiny Cambodia just topped two million in 2007, and Vietnam is investing heavily to develop its entire South China Sea coast into a tourist magnet..
President Arroyo’s third economic focus: agriculture is, in my opinion, a mixed bag. Even assuming that production has increased in some sectors, the stark fact remains that we are not self sufficient in such staples as rice, corn, sugar, poultry, etc and must import several billion dollars worth every year to meet domestic demand.
This by the country that set up the UP College of Agriculture in Los Banos (when the Americans were running this place), and hosts the International Rice Research Institute (also established by the Americans), both of which trained the agriculturists of Vietnam, Thailand, Indonesia etc, which ironically now surpass us in agricultural production.
Perhaps the weakness of our agriculture is not a paucity of modern technology, but an oversupply of people, because of a galloping population growth rate. In the 1970s, the Philippines and Thailand had more or less the same population size: 45 million.
Because it had a population management program all these years, in 2007 Thailand had only 65 million people, while the Philippines had 89 million. By any yardstick of commonsense, it is easier to feed, clothe, house, educate and find jobs for 65 million people than 89 million.
For this, President Arroyo must share the blame with Presidents Marcos, Aquino and Estrada, for their wishy-washy attitude towards population management and their fear of offending the Roman Catholic bishops. (Only the Protestant President Ramos dared to defy the bishops on this issue.)
But, Abaya argues, the policies for which the President deserves credit have reached their own limits:
But this has its limits, which may have been reached already, judging from the frantic efforts to sell government assets, such as those in the power sector. Without the sale of government assets, the government seems to be running out of money. Economists tell us that a government’s tax collection efforts should amount to at least 16 percent of GDP.
Even with his dictatorial powers, President Marcos could manage only 9 to 12 percent. Presidents Aquino and Ramos were able to raise it to 13 to 14 percent. President Arroyo may have been the first president to raise that percentage to 15-16 percent, but apparently not much more than that, which suggest unresolved problems from chronic tax evasion and smuggling.
And so, his conclusion?
In summary, it can be said that President Arroyo’s relative success in managing the economy can be credited largely to the $10-$15 billion windfall from OCW remittances.
Therefore it is not accurate to claim that there is no alternative to or substitute for her. In fact it can be said that the increase in workers deployed abroad — about one million a year — is due to her failure, and the failure of her predecessors, to create enough jobs in the domestic economy, forcing millions of Filipinos to seek employment abroad.
This means that she can be replaced by such reasonably qualified wannabes as Mar Roxas, Manuel Villar, Richard Gordon, Loren Legarda, or Panfilo Lacson — even by Governor Fr. Ed Among Panlilio or Antonio Meloto — and the economy would still chug along at least at the same pace as it does today, as long as whoever succeeds her enjoys the $10-$15 billion windfall from workers’ remittances.
The consequences of a recession in the USA at the start of an election year, are tackled in Economic crisis, political rebirth? in History Unfolding:
The week’s economic news makes clear that a new flock of chickens–not perhaps as large as the one that appeared in 1929, but large enough–is finally coming home to roost. The credit collapse that has begun in the housing market (and, the papers tell me, threatens to spread through unpayable credit card debt) is lowering employment, and it may get much worse. Like the two previous crises in our national life (1860-8 and 1929-45), it has been largely brought about by the unbridled ideological or economic excesses of a Prophet generation–the Transcendentals (b. 1792-1821), the Missionaries (about 1863-1884), and now, the Boomers (1943-1960.) Born into as secure an environment has humankind has been able to create, such generations begin disrupting it in young adulthood, have eaten away the foundations by mid-life, and, as they reach elderhood, have to try to find a few surviving members who can help build a new order with the help of the younger generations.
His generational approach to American politics is one that I find very attractive, since I’ve taken a similar (though far from as highly developed) one concerning our own. This is how he connects the past to the American present:
We should keep in mind that this relentless drive by people who are already rich by any standard to gain yet more money is behind our present predicament–and that it will be harder to climb out of it because the mass of people who really need more money have been getting less and less of it. The Boom generation of managers has also avenged their missionary grandparents by finding new weapons against organized labor–most notably, the weapon of outsourcing.
It is not clear that the political process is ready to deal with the crisis. Last week, Boomer Mitt Romney, who fallaciously claimed that he would bring manufacturing jobs back to Michigan, defeated Silent John McCain, who courageously recognized that those jobs are not coming back. On the Democratic side, as John Edwards fades, identity politics have taken the place of any serious discussion of issues. The question I have been pondering is whether Barack Obama, who will turn 47 this year, is really the counterpart of Abraham Lincoln (who was 51 in 1860 when he was elected), or of John Charles Fremont, the 43-year old Republican candidate in 1856, who was defeated by Compromiser James Buchanan. (If McCain should beat Obama, the parallel would be exact.)
On to other things…
Tonyo Cruz once again takes exception to my response to his comment/entry: see The difference between discreet and central. Let me work backwards and answer his question, what do I mean by “public acceptance” of the Left? Very simply: public acceptance is the refusal to condone the killing of a civilian, simply on the basis of the person being accused (and not even self-proclaimed) by the authorities of being a Leftist.
The constituency of the Left is large, indeed, per official party-list election figures for winning parties (the inclusion of Akbayan won’t go down well with some groups, so the total without it is in parenthesis, for comparison):
Bayan Muna 976,699
Gabriela Women’s Party 621,086
Anak Pawis 369,366
Akbayan ! Citizens’ Action Party 466,019
Total: 2,433,170 (1,967,151)
Comparable national election figures (NASSA-NAMFREL quick count):
Left > Gomez, Richard Independent 2,308,620
Left < Singson, Luis Lakas-CMD 3,468,039
If you use Comelec figures (PDSP is the party of Norberto Gonzales et al., you could argue also technically part of the Left):
Left = Sultan Jamalul D. Kiram III TEAM Unity – PDSP 2,488,553
Let’s argue the Left had only 1 out of every 4 votes cast for it actually counted, a potential constituency of 9,732,680. That puts it on parity with: Prospero A. Pichay, Jr. TEAM Unity – Lakas-CMD 9,798,355
The dictionary says,
the tendency to lay down principles as incontrovertibly true, without consideration of evidence or the opinions of others : a culture of dogmatism and fanaticism.
ORIGIN early 17th cent.: via French from medieval Latin dogmatismus, from Latin dogma (see dogma ).
Which suggests that even if contrary evidence were presented, the assertions of the incontrovertibly trueness of essential principles, would continue, anyway.
Let me just point out that “revisionism” is not just any word, but a word rich in meaning for the like-minded:
noun often derogatory
a policy of revision or modification, esp. of Marxism on evolutionary socialist (rather than revolutionary) or pluralist principles.
‘ the theory or practice of revising one’s attitude to a previously accepted situation or point of view.
revisionist noun & adjective
The Master Storyteller and thus, the living magisterium of the Left, demonstrates ther rigorous use of such words in intramural Left debates (and more) and extramural debates with those who aren’t affiliated in the party.
Essentially this is arguing apples and oranges but this is one statement that, again, belongs to the Q.E.D. department:
Public intellectuals should also take note that attempts to airbrush the Left out of Edsa 2 and the body politic has resulted in an ongoing massacre (nearly 900 extrajudicially executed, and another 200 involuntarily disappeared), in the arrest and detention of Satur Ocampo and Crispin Beltran, and in the filing of spurious charges against the legal Left which Arroyo considers a considerable threat. In the official script, the airbrushing is most intense. As if no legal movement exists, and as if Arroyo did not work with, sat with, conferred with, cooperated with the same movement she now wishes to kill after airbrushing operations.
Now that is revisionism. From culpability fully belonging to the administration, now even those opposed to it but who aren’t part of the Left, are assigned responsibility for the murders of members of the Left (or those merely suspected of belonging to the Left, particularly as the state definition is broader than some Leftists would admit the Left to be). It ignores the non-Left voices raised in indignation and protest over the killings, the efforts of those who tried to bring the situation to the attention of the world, since Filipinos were proving pretty much unmoved.
And this is what I mean by dogmatism. Tactical considerations aside, much as the Left will criticize those it considers non-Leftists for branding them with certain names, it is something they do so, all the time: distinctions are only to be made by the Left but non-Left-originating distinctions on the other hand, are simply unacceptable. the underlying message is pretty much the same as the administration’s: same-same (and I won’t go into the public support given by some members of the Left for Joker Arroyo’s senatorial reelection in 2007).
Now what did I mean when I said, “Since 2001, however, the Left has found itself unable to really find a place for itself in legitimate politics”? First, legitimate politics for me are obviously non-revolutionary politics, that is, participation, without molestation, in electoral politics; and as for not really finding a place, by this I mean that the government has, with some success, mobilized public opposition to the Left by calling all Leftists communists, and by generally showing itself unmoved by local opinion in contrast to the way it’s been disturbed by foreign concern over the liquidation of Leftists. And again, in the absence of a nationwide poll specifically asking people how they feel about the Left, one can only go by what one hears and reads, and that has been on the whole unsympathetic to the Left.
What is my factual basis? The murders. The indifference far too many, and outright delight far too many, have shown; the concern far too few have demonstrated. the support, tacit or overt, for the “all-out war” policy.
Again, this is a question of interpretation, not of “truth.” The truth is obvious. Civilians are being killed, on the pretext that it is justifiable to kill them based on their ideological beliefs. This is wrong; those who justify it, are wrong.
Tonyo ends with,
I hope Manolo will be kind enough to recognize the advances made by the Left not just in mobilizing “warm bodies” for elite-led mobilizations, but also in public discourse, in reframing the public debate, in offering the public some alternatives to the status quo, among others.
This is not mine to recognize, out of the kindness of my heart; it’s to be assumed. My criticism of where we are, now, is that we’re far off from assuming what Tonyo wants recognized. But it is a wonderful thing that he takes the time to painstakingly point out where my assertions may be too sweeping, or demanding that they be clarified. It is an exercise not only in public debate, but in fraternal correction; certainly, our exchange is something the administration, for one, would rather not happen at all, and most certainly wouldn’t want repeated by members of the public.
In his blog entry Death of a cycling companion (and the latest activist killing), Howie Severino describes how a statistic for officialdom is a tragedy, for him. And points to what separates Tonyo from those he disagrees with: it is his comrades who are being killed.
Philippine Politics 04 reiterates his disagreement with my views concerning the victory of Joseph Estrada in 1998.