Check out today’s Business Mirror editorial, on some interesting stock market-friendly legislation poised for passage. In the news, Palace fiat jump-starts national identification system plan (I support a national ID system). Also, Bishops in Palace: What’s wrong with it?True. It’s not as if any should doubt those bishops are Palace acolytes.
Meanwhile, Southeast Asia Vulnerable To Us Recession—Imf. See The Economist’s Next stop Asia? How an American recession might hit Asia:
Asian stockmarkets were until recently big fans of the “decoupling” theory: the notion that Asian economies can shrug off an American recession. This week’s plunge in shares, taking the MSCI Emerging Asia Index down by 25% at one point from its October high, suggests they have changed their minds. But the fact that Asian markets have not decoupled does not necessarily mean that their economies will follow America’s over a cliff.
Decoupling was always a misnomer, seeming to imply that an American recession would have no impact on Asia. In fact exports and hence profits would certainly be reduced. The pertinent argument is that they would be hurt by much less than in previous American downturns.
As well as hitting exports, America’s troubles could affect Asia through various financial channels. Asia’s exposure to the subprime mess is thought to be much smaller than that of American or European banks. Even so, Chinese bank shares tumbled this week on rumours that they would have to make much bigger write-downs on their holdings of American subprime securities. And if stockmarkets slide further as global investors flee from risky assets, this could dampen business and consumer confidence in the region.
Some Asian economies are more vulnerable than others: Singapore, Hong Kong and Malaysia have exports to America equivalent to 20% or more of their GDPs, compared with only 8% in China and 2% in India. There are already some ominous signs. Singapore’s exports to America are down by 11% over the past year, while Malaysia’s fell by 16%. Exports to other emerging economies and to the European Union surged, so total exports still grew by 6% in both economies. But that was much slower than at the start of the year, and the worry now is that demand from Europe has started to flag.
The growth in China’s exports to America slowed to only 1% (in yuan terms) in the year to December from over 20% in late 2006. So far the impact on GDP growth has been modest. Figures on China’s fourth-quarter GDP are to be published on Thursday January 24th and most economists expect growth to slow to a still healthy 9-10% this year.
China’s economy would probably still expand by around 8-9% even if export growth dried up. During the 2001 American recession China’s GDP barely slowed. In contrast, Hong Kong, Singapore, Taiwan and Malaysia suffered full-blown recessions. America’s recession this time is likely to be deeper than in 2001 and Asia is now more integrated into the global economy. Doomsters conclude, therefore, that these economies could be hit harder this time.
The main reason to be more optimistic is that domestic demand (consumer spending and investment) is likely to remain strong and governments have more flexibility. Last year, despite a slowdown in America’s imports, most Asian economies grew faster as domestic demand speeded up. Robert Prior-Wandesforde, an economist at HSBC, says that those who argue that Asian economies cannot decouple from America are ignoring the fact that they already have. Take Malaysia: exports to America plunged, yet its GDP growth quickened from 5.7% at the end of 2006 to 6.7% in the third quarter of last year.
Something an Israeli businessman asked me about before Christmas, and which turns out to be true: Oil smuggling costs govt P16B yearly.
My column for today is, A familiar passage, more in a Suharto-esque vein. See “Memory holes” by Juan Mercado, too:
Filipinos have “a very special problem” in recalling, Ateneo de Manila University president Bienvenido Nebres, S.J. observes. “It is not just wrong memories. It is the lack of a national memory… The consequence is, we tend to live in a perpetual present. We have little collective memory of the past and thus we can not see well into the future.”
In his novel “1984,” George Orwell depicted a country where citizens thrust into a “memory hole” anything that crossed the whim of rulers. As “memory holes” shredded remembrance, wrong became right, lies replaced truth, and freedom turned into slavery.
Like malign genies, blotted-out memories don’t stay bottled up. They deform daily life. Thus, Imelda Marcos insists that Ferdinand Marcos’ dictatorship was the “most democratic period in our history.” The communists claim that “majority of (pogrom) victims decided to continue their work,” even praising the carnage. Estrada? Well, some days he can’t recall if his name is Jose Velarde.
All the hullaballoo about the 50th anniversary of SM (see SM through half a century), oddly enough, never mentions how salespeople remain contractual, and have had their contracts reduced to 3 months instead of 6 months as before. As the different political groups start marshaling their forces in preparation for the political engagements to come -whether a referendum campaign for or against constitutional amendments, or for the 2010 elections- the labor vote will be courted.
Yet the labor force, perhaps well-organized for certain unions, remains relatively small and if the May 1 mobilizations are any guide, seem to be shrinking. Unions didn’t prevent the collapse of certain industries, such as textile factories, have remained static in others such as the transport industry, and has no presence in growing ones such as call centers or the hi-tech manufacturing ones; they can’t have a presence in other countries yet sympathetic groups have been marginally successful in terms of mobilizing the OFW vote (potentially immense).
For example, would any effort to mobilize contractual workers at SM result in anything but opening up more contractual jobs? A strike would simply create huge lines for other citizens eager for any sort of SM-related job. Workers picketed PLDT for months but the country shrugged off the news, even when some of the workers claimed they were assaulted.
As entrepreneurship is encouraged, so will an anti-union mentality. And the unions themselves, how can they muster the clout necessary to cater to their members’ needs, when unemployment is so high, which makes any kind of employment desirable and permanent employment a losing proposition for most employers?
On a related note, Filipino entrepreneurs lack ‘culture of innovation’–DOST.
Let me play catch-up with stories that deserve to be followed, but which I haven’t had time to tackle.
1. The revival of Constitutional amendments proposals
Dan Mariano in his column points to
At the Kapihan sa Sulo media forum Saturday, Bataan Gov. Enrique “Tet” Garcia unveiled what he described as a “workable proposal” for Cha-cha through a second PI.
The Union of Local Officials of the Philippines (ULAP), he said, is “seriously considering [another] people’s initiative in proposing amendments to the Constitution to change the present [bicameral] Congress into a unicameral legislative body. That’s all.”
Garcia said that the presidential form of government “shall be maintained to uphold the right of voters to directly elect their chief executive.”
This is just one of several trial balloons. There’s Malacañang ally files House bill making all elected terms 5 years, and there are other proposals to Federalize the country, etc: Philippine Government Drafts Constitutional Amendment to Create Muslim Homeland. See also Gonzales for scrapping Comelec through Charter change. And Nograles proposes election of Con-con delegates in 2010.
Cities reel from unseen IRA cuts suggests one motivation for amendments moves: the expenses of the 3 year term and frequent elections, a business class increasingly able to say no to political demands, at least during campaign season, may be conspiring to push local government leaders to pursue brinkmanship in terms of constitutional changes. The different proposals emerging (trial balloons, as I’ve said) all seem to have gotten the hint from last year’s Cha-Cha debate: no one seems to be seriously proposing parliamentary government, but having thrown in the towel as far as trying to scrap the presidential system is concerned, unicameralism and federalism are being put back on the table.
Meanwhile, Cito Beltran has a point that in places where it’s needed, the national government lacks the political will to confront what Beltran calls Little republics of anarchy. Still, gerrymandering will continue apace, it seems: Mayors oppose bill relaxing cityhood: Local officials contend creating more cities will reduce IRAs for existing cities.
Fr. Joaquin Bernas SJ recently discussed Surgical constitutional change. Reforms enabling state subsidies for political parties, and bloc voting, don’t require constitutional amendments, though.
2. The downgrading of our airport rankings
Let’s start with What US air inspectors found unsafe (most embarrassing of all, on the eve that the unfavorable findings were released, Naia circuit box stolen, which had left the fence beside SLEX without lights for two days). The result? Arroyo fires aviation chief: US Embassy tells citizens to avoid RP airlines (and which derailed PAL’s expansion plans). Meanwhile, damage control: NAIA complies with ICAO standards–MIAA.
So, could it be, Aviation deficiencies resolved by April? Yet RP air talks mostly in limbo. But in the meantime, Another blow to PAL: Forwarders migrating.
For a thorough look at the situation, see this feature by Recto Mercene, who used to be an air traffic controller (of whom we have too few, and who are overworked): Dreams a-crashing to the ground.
3.ZTE continues to fester
While DOTC pushes ‘broadband’: New name, new partners, same network project, the autopsy of ZTE proceeds slowly. A comparison of ZTE’s prices, compared to prevalent prices in the industry, only appeared last Wednesday in the column of Jarius Bondoc (see the informative table in his column). You can verify, for yourself, if you’re technically inclined, whether Bondoc is on to something, or not. See the long-awaited NBN Contract Annexes (for example, in Yugatech’s initial NBN contract reaction, he mentioned that the annexes would be crucial to determining if the contract was really fishy or not).
4. Zubiri in trouble
Last August, in Newsstand, John Nery wrote this, concerning Juan Miguel Zubiri:
He has filed an absurd counter-protest against rival candidate Aquilino “Koko” Pimentel III before the Senate Electoral Tribunal, contesting the results of a jaw-dropping 73,000 precincts. (That’s one-third of the entire country.)
I do not know if the SET will give his counter-protest due course; considering that Pimentel didn’t even have enough campaign funds to show more than a handful of TV spots featuring top celebrity endorser Angel Locsin, the claim that he cheated massively is preposterous.
But Zubiri does not need to prove his allegation of election fraud. All he needs to do is tie up the SET in an interminable recount. Pimentel, who believes he was cheated in 2,680 precincts in a total of seven provinces, is confident that the review of election returns he is contesting would be completed in half a year or so. Zubiri’s protest, on the other hand, would take years to resolve.
Redemption? More like a ruthless gaming of the system. The “Senator from Maguindanao” has cynically exploited the limitations of our election rules, to hold on to his job.
Pimentel’s protest has creaked along and while Is it hello Pimentel, goodbye Zubiri? Not quite, it’s enough to have An OFW in Hong Kong comment, sarcastically, he’s convinced Zubiri won -by cheating:
Now that the ballot boxes are being opened for revision (examination to establish correctness), it has even become clearer that all accusations made against Zubiri (and this administration) regarding manipulation of election results in many parts of Mindanao were true.
For how can you explain (a) empty ballot boxes? (b) Ballot boxes containing ballots filled up by one distinct handwriting only? (c) Ballots inside those boxes without the security seals? It’s clear as day, cheating was done!
As expected, the winning senator will not easily abandon his post. That was part of the sham: to be proclaimed as fast as possible because they know that election protests are decided only after soooo looong! Zubiri is now counting on that proven way to cling to a stolen post.
Hence Lakas-CMD projecting Zubiri as one of its spokesmen, as the party wrestles with its lack of real presidential timber, and the “going on leave” of the President’s son, and fresh rumors of the Speaker being toppled when the House resumes its sessions.
In the blogosphere, The Philosophical Bastard reflects on a comment in this blog. Thoughts on what should government’s role be, in Willing Exile:
If we are to look closely at the things that work for us — private initiative in providing services for those who can afford them, courage and determination to work overseas to make extra dollars, contributions by the sectarians in moving education to a higher level (memo to UP on the celebration of your centennial: in five years, if not less, DLSU will overtake you as the pre-eminent Philippine university in terms of academic reputation, quality of graduates, and infrastructure. Accelerate reform now!), innovation and ingenuity in micro-level enterprises — is that in an environment where individual effort and contribution, fairness, excellence, and quality are observed, we do well.
Government’s role has expanded to that point where it has to intervene in everything. When it does that, it tends to stultify initiative and individualism and thus promotes mendicancy and stagnation. Instead of helping themselves, our people point the finger on others, and mostly on the government. Unfortunately, despite our socialist policy efforts, we cannot aspire to become a welfare state like those in Scandinavia. Given the mad scramble of these states to enlist foreign workers to support their retiring citizens, that system is flawed as well.
Methinks the government’s role in most public spheres is to generate consensus to reduce duplication of activities, support innovation, set fair standards. and then punish violators vigorously. This model will definitely work in business, education, sport — while the government can focus on securing our borders within and without, fostering healthy international relations, and promoting cultural identity.
Still, while we can go on theorizing models of government, it still bears to remember that without a proper culture of public service, any model is guaranteed to fail, as it is doing poorly right now in the Philippines. Change must come from the top, while those below must keep on pushing to ensure that happens. To be a truly “strong republic” the citizens will have to be “strong” in mind themselves.
Basapa tackles Why the Philippines Government Can’t Stop Filipinas from Having an Abortion.
And Gridcrosser Files on the Comedia.