Monday, November 14, 2005

Comments on Jesuit guidelines on Philippine political crisis

Comments on the the Jesuit guidelines on the Philippine political controversy:

1. Bringing out the truth cuts both ways. It is a given that we all should work at finding out the truth. In the meantime, GMA is presumed innocent until PROVEN guilty. GMA critics charge her with election fraud based on a wiretap. Wiretapping is illegal in the Philippines. So, there are two possible illegal acts here, the alleged election fraud and wiretapping. We need to know the facts regarding this illegal wiretapping because this has serious implications on our civil liberties and the Machiavellian way of assuming political power. If it could happen to the President then it could happen to any citizen, and even worse, the vulnerable and weak in society. This is a serious implication, which the "progressives" in civil society, academia, media, church, etc. are silent on. This is a terrible omission on their part.

2. Justice is multidimensional. Seeking out the truth is only one aspect. Another important aspect is procedural justice, which is the process of arriving at the truth, reaching a decision, and acting on the decision reached. The election fraud charge could have been resolved by: a) GMA resigning, b) another People Power or coup det'at, and c) impeachment by Congress. Options a and b were rejected by GMA, which is her prerogative, by majority of the Filipinos (no People Power), and the Armed Forces respectively. Impeachment was the logical, next, and most feasible alternative. However, as a friend observed, the opposition Congressmen who led the impeachment/prosecution panel were also the ones in charge of the defense of ERAP during his impeachment proceedings. On both occasions, they bungled the job (despite their educational credentials and their dominance in Congress during ERAP's presidency). Let's face it, impeachment is both a legal and political process. If the opposition and their allies had a weak case, they should not have hurriedly filed the impeachment complaint and should have prepared better. The Filipino people are not stupid and will not confuse legal and political ineptness on the part of the opposition with the administration's political machinations.

There should be a way of proving GMA cheated AND finding out who authorized, organized, funded, and conducted an illegal wiretap without sacrificing the economy. All these, not only GMA's ouster, should constitute the fixed pie of justice in this case.

3. Headless opposition. As FVR noted, GMA may not be our ideal president, but there are currently no alternatives in the opposition. The opposition is headless, disorganized, inept, and lazy. They are also vulnerable. Cory, aside from being retired, has her Hacienda Luisita agrarian reform and massacre debacles (including the killing of union leaders). Bro. Eddie has his Zoe TV station legal woes. Drilon and Dinky Soliman are being attacked for their insincerity. The Senate is so unproductive that I am amazed that they are not ashamed of it. Drilon and the UP Law Center charged GMA of graft and corruption on the Northrail project, a critical transportation project for Central Luzon, but they misidentified the Chinese proponent-corporation. Nestle, which Ex-DTI Sec. Santos headed previously, is tainted by the killings of Nestle union leaders. Ping Lacson is in trouble because of the alleged kidnapping, murder, and drugs accusations, and possibly espionage in the U.S. because of his protege, Michael Ray Aquino. Makati Mayor Binay is hindering business activity in his own city by co-organizing allegedly paid-for rallies. The Makati Business Club calls for GMA's resignation without consulting its members, while its Executive Director is allegedly a Canadian citizen. Congressmen are concerned more with their pork barrel and political dynasties. The Left, well, what can I say?

Do you think that persons and groups of contradictory political persuasions, who are now united in their attempts to oust GMA, will be able to solve our political and economic problems? They are their own worst enemies. The Philippines has been spared from catastrophes this year, but not the biggest catastrophe of all- inept and lazy professional politicians and amateur politician wannabes.

4. Debate now. The Constitutional debate is not being rushed. Discussions started almost immediately after the implementation of the 1987 constitution when various sectors of society began noticing the negative impacts of some aspects of the constitution. During FVR's presidency, the debate heated up. Many think it was bad timing because it would've favored FVR, but hindsight now provides us with the regret of an alternative future. The point is that on every occasion the possibility of amending the constitution was raised, select groups immediately opposed it. Why are those who profess to work for democracy so adamant against discussing and debating constitutional amendments? Shall we let this opportunity for constitutional amendment (and possibly shortening GMA's rule) pass? A parliamentary form of government is not a panacea to the nation's ills, but it addresses an important structural aspect of a country's developmental strategy- the political and legislative sector. Again, as FVR noted, a parliamentary form of government also provides for the development of leaders from all sectors of society; since it is cheaper to gain political power. Vested interests are not the monopoly of GMA and her allies, it seems.

The future is uncertain with globalization, "war on terror" (??), and "natural" disasters (actually natural phenomena affecting human settlements). Self-defeating politics are only an added misery. Too many people in the Philippines and in the world live in poverty. In the U.S., living wages are declining so working here will become increasingly difficult. The same may be true in Europe. If the Middle East autocrats don't shape up and their oil runs out, their economies may not be resilient enough to hire more migrant laborers. While economic migration is now the norm for a number of us middle class, middle-aged Filipinos, it is developing the Philippine economy that will enable us to live meaningful lives at home. We need to tackle poverty everyday and not let the politicians waste our time entertaining us with their clownish behavior. The poor are desperate and poverty is one antecedent to political upheavals and violence. While we have been weathering the external shocks of the 1997 Asian financial crisis, ERAP and GMA?, oil price increases, etc., a catastrophe such as a massive earthquake, another Pinatubo, a tsunami, drought, or a pandemic hitting a populated area could easily send the country in to chaos. All it takes is one massive "external" shock. Are we prepared?

I suggest reading the Hyperwage Theory of Thads Bentulan/Streetstrategist at the Businessworld on how to tackle poverty (I have parts 1-26 on e-file).

Office of the Provincial
To Jesuits and Jesuit Institutions of the Philippine Province
With this letter, I endorse to all Jesuits, Jesuit communities and Jesuit apostolic institutions of the Philippine Province, the attached Guidelines in a Time of Confusion and Crisis, produced by our Province Commission on the Social Apostolate. These Guidelines, produced after much discussion and consultation, are an attempt to provide Christian moral reflection on our present national situation of political crisis and confusion.I ask that these Guidelines be read, reflected, and prayed upon, and made the subject of serious discernment, towards action, by individuals,communities, and institutions. They may be shared with others who are seeking direction and guidance in our troubled times.I know that not many will agree with what is presented here: some will judge that the Guidelines go "too far;" others will doubtless think that they do not go "far enough." For my part, I personally believe that these Guidelines offer sound directions to help us "read" our present situation and to orient us in our common search for authentic solutions to the grave problems of our country today. Nonetheless, these Guidelines are not presented as positions that all are compelled to accept and adhere to. If some, in conscience, differ with the positions taken here, let that dissent be presented with civility and intelligence, as input for the continuing task of communal discernment towards what will serve the true good of our country.Let us be united in prayer and deep concern for our country and our people. May the Lord show us the way toward the truth, freedom and justice that our people yearn for. May God bless us with courage and hope.
Fraternally in our Lord,
SOME GUIDELINES IN A TIME OF CONFUSION AND CRISIS for Jesuits and Jesuit Institutions of the Philippine Province
1. The struggle to bring out the truth must go on. The freedom to advocate this struggle must be upheld. The President has not sufficiently rendered an account to the people where serious charges have been raised against her, and efforts to hide the facts only confirm the suspicions of many. Todismiss the concern for truth in the name of stability is to condone the culture of impunity, by which those in power have long been able to commit crimes unpunished, and our people have become cynical - accepting corruption and deceit as normal in our public life.
2. Those who claim that the "rule of law" was triumphant in the recent impeachment proceedings confuse proceduralism with law. While it is true that the procedures of law were fulfilled, the spirit of the law was subverted. Evidence was not allowed to emerge.
3. Peaceful and legal means that protect and strengthen our democratic institutions must be used in the continued search to bring out the truth. In this same spirit, the legislature, especially the Senate, must not be remiss in its oversight functions, to ensure the system of checks and balances setin place by the Constitution. Likewise, care should be taken that concrete actions do not support or strengthen groups with covert anti-democratic, adventurist, or power-grabbing agenda.
4. We respect the decision of those, who, in conscience, have reached a judgment that the President should not remain in office. Part of this process is the moral obligation to seriously consider alternatives that will be truly for the good of the country, and not abet the struggle for power among elite and corrupt politicians.
5. The search for the truth must include a search into the deeper truth of Philippine political life, the factors which make the present crisis just one of a series of political crises that hinder the country's development. It is necessary to listen to, reflect seriously on, and address the concerns of a large majority of people who seem apathetic or whose dissatisfaction does not seem to translate into political action. Some, for example, have lost trust in all politicians, of whatever camp. Others, especially those in the provinces, feel excluded by and resentful of what they perceive to be Manila deciding for the country again. Efforts must be made to address this disillusionment and sense of exclusion, so that our people might be motivated to participate more vigorously in our country's political life.
6. If many of our people seem to be uninvolved or uninterested, it is primarily because of an overriding concern for economic survival during very hard times. The real and urgent concerns of the poor should be given highest priority amidst all efforts to search for truth. Indeed, the search for the truth is integrally linked to the fate of the poor. Corruption and dishonesty have made the lot of the poor worse.
7. Programs and initiatives from both government and the private sector to address the urgent needs of the poor, in fields such as education, health, housing, livelihood, and the like, should continue to be supported,and indeed intensified. This is especially urgent in view of the looming international oil crisis.
8. While there may be reasons to consider amending the constitution for the sake of greater responsiveness to the needs and aspirations of our people, charter change as a diversionary tactic in times of political conflict, or as a means of perpetuating elite democracy, should be rejected. Thus, the rush to change the Constitution, especially through a Constituent Assembly, should be resisted. Furthermore, while major constitutional changes such as parliamentarism and federalism may seem to have merit, their concrete realization and implications should be carefullystudied and discussed, rather than prematurely decided upon.
9. There may be no clear solutions or exit strategies to our present state. But our past history, especially during the Martial Law years, reminds us that we can continue being vigilant and work for truth and justice even when the alternatives are not clear.
Thus, the following courses of action should be pursued:
a. Our educational institutions, parishes and other institutions should become centers for conscientization. Discernment groups must be organized, to combat apathy, to heighten awareness and involvement, and to prepare for future action. We echo the call of the CBCP in their statement of 10 July 2005, to "urge our people in our parish and religious communities, our religious organizations and movements, our Basic Ecclesial Communities to come and pray together, reason, decide and act together always to the endthe will of God prevail in the political order."
b. Conscientization that leads to organizing and reorganizing base groups and forming community or sectoral organizations should be given priority. Such groups can also be invited to deal with local problems, to engage local government, and to do network-building with other sympatheticgroups.
c. These and other groups should be mobilized towards vigilance, monitoring:
· first, the continued effectiveness of government programs for the poor;
· secondly, appointment to public offices made by the President;
· third, acts of apparent retribution against those who are critical of the government and the President;
· fourth, the actual use of pork barrel by legislators and their possible abuse of it for themselves;
· fifth, the preparations for forthcoming electoral exercises, through advocacy for automation, and the continuing task of voters' education;
· sixth, the use of funds that will be made available in the event of a Peace Agreement in Mindanao.
d. Deeper study and reflection on institutional alternatives (such as parliamentarism, federalism, etc.) should be conducted at various levels, from university think-tanks to grass-roots groups.
Albert E. Alejo, S.J.
Miguel B. Lambino, S.J.
Jose Cecilio J. Magadia, S.J.
Antonio F. Moreno, S.J.
Karel S. San Juan, S.J.
Primitivo E. Viray, S.J.
Peter W. Walpole, S.J.
Roberto C. Yap, S.J.

Tuesday, October 04, 2005

comments on hyperwage theory

I don’t have the technical answers to questions raised about Hyperwage Theory, but below are some perspectives.

1. The strength of an economy is a function of, among other things, the level of industrialization and purchasing power of the citizens. That’s how the G7 countries and tiger economies, i.e. S. Korea, Taiwan, etc. made it. They industrialized and protected their infant industries until they were able to compete. At the same time, wages were living wages, so the employed citizenry were able to buy needed goods and pay for services. They also bought local. Culture trumps all. We all know this but it is good to keep it in mind.

2. Economists have foisted upon us the myth that their economic data are accurate and importantly, up-to-date. Unfortunately, this has not always been the case as data gathering is very difficult, costly, and time-consuming. Economists also rely on data that they did not themselves gather, so the data are questionable. All of the social sciences struggle with the twin problem of data gathering methodology and data validity.

What this means is that it is difficult to get some mathematical formulation that will fully support the Hypwerwage Theory. Besides, the other popular economic theories and schools of thought were implemented with even far less mathematical justifications, i.e. classical econ, macro econ, neoliberalism, state socialism, etc.

3. What businessmen, such as many of you, have done is that you have relied more on buying behavior, the market, pop psychology, and trends. That is why books like the Tipping Point, Butterfly Economics, and now Freakenomics (I’ve read the first 2) are widely popular and counter-intuitive. It is how people spend their money (marginal subjective utility) in a manner they personally feel is best utilized. Successful businessmen and entrepreneurs are those who discern this market/ subjective utility. The Hyperwage theory posits that it is prices that determine market behavior. But the “pricing behavior” is basically individual wants and needs which influence others’ behavior. This is then eventually scaled up to the societal or market level.

4. One way of looking whether Hyperwage will work has been written about already, the example of Ford raising his employees’ wages so they can buy the Ford T. Don’t think that this has not been done in the Philippines. One reason why Ayala Land is successful, aside from its good management, is that employees buy Ayala Land properties. They sell in-house and sell a lot. It and many other companies have what is called the employee-discount plan (all the U.S. car companies are doing it). Where do you think SM employees shop? Where do insurance and educational plan agents buy their plans? So, good wages and employee discount will generate in-house sales especially if you are selling GOOD QUALITY consumer items with good service (best management practices still count!).

5. The other point is the emergence of a major market segment that nervous local businessmen do not realize that they actually have been selling to. This is the OFW market. One out eight Pinoys are out of the country presumably earning, presumably remitting ($6-8 billion/year), presumably spending back home (a lot of assumptions here). Hey, we Pinoys spend $50 million yearly alone on U.S. visa applications. What does this imply?

5. 1 OFWs are becoming the middle class because of their higher wages.
5.2 They are re-investing and spending somehow in the country.
5.3 There is some multiplier effect on the local economy.

Who is earning from OFW spending? Astute businesses benefiting from hyperwages. Now, the truly creative part is getting the rest of the population to start buying (and selling!!!) more.

6. In the long-term, the government needs to give enough opportunities to Pinoys to be the best they can be. Given the right breaks and better governance, I believe Pinoys will choose to industrialize (in an environmentally-friendly manner) and provide even better wages. While the G8 countries are an inspiration, we will have to develop in our own unique way. Free trade has been bad for us, because we should’ve negotiated for FAIR trade. The OFWs are giving us another chance, but we all need to pitch in whatever way we can. We all need to support Pinoy businesses- and labor.

7. My thesis though is that it is futile to put our national economic salvation in our politicians and bureaucrats. I posit that due to their vested interests, they will never be able to reform by themselves. They must be forced to. Marx said it himself when he noted that bureaucrats have turned themselves into a class unto themselves in direct competition with the other social classes.

So, if we pin our hopes on reforming the bureaucracy/politics; then it will necessitate a bloodbath. Are we willing to do this? There are about 1.5 M government employees exclusive of the politicians. Where do we start the eradication? My brother-in-law, an American, says we go top-down. Ok, I said, why don’t we start with GMA’s kamag-anaks, relatives, classmates, then move on to the Congressmen, Senators, and their families and friends? Where does it end, I asked him. Do you think these powerful people will take it sitting down? It will be a bloodbath.

8. A few months ago, these same questions were raised by former Ramos NSC advisor, Gen. Jose Almonte (he correctly predicted in 1998 that if ERAP won the presidency there would be a coup d’etat or some sort of uprising in 2 years) and UP/PhilStar’s Alex Magno. Their conclusion? The market is the only feasible way of instituting reform. They said a bloodbath would be too costly for the nation and that “millenarian groups” (ideological bent can not be determined but might be of an ultra-fundamental religious leaning) would have a good chance of taking power. The country would then enter into a cycle of violence and become a failed state. I think Hypwerwage provides one pillar of support for their market-as-solution proposition.

9. The Philippines has been recognized in the academic literature, in the international social movement, and in the global human rights community for its contributions to democracy, people power, etc. Some writers are beginning to note that the effects of globalization and how to address some of its ill effects have come from Philippine civil society initiatives. Philippine environmental and community-based projects have been winning accolades. They also predict that the Philippines will also be able to come up with a way of solving its economic problems in a democratic manner. I think this could be done through generating wealth or as Almonte and Magno write, through the market and through Hyperwage.

Tuesday, September 06, 2005

Need people-to-people assistance in LA/MISS

Many of us think that since the U.S. has had many tragic experiences with hurricanes and storms and that it is a first world country, the crisis in Louisiana and Mississippi in the wake of Katrina is being adequately handled by U.S. government agencies. In another era (or presidency?), this would have been a correct assumption, but not today. Government funding has been used for you- know-where. Environmental programs, as well as disaster prevention and mitigation programs have been drastically cut because of you-know-what. U.S. military forces and importantly, equipment, that could be used in relief and rescue efforts, are overstretched and are in you-know -where. Thus, what you have now are the horrific scenes of floating bodies, the dead in hallways, rape, and people wasting away from the heat, hunger, and thirst.

The American people need help and the resources of the U.S. government are inadequate at the moment. Disaster relief efforts have been amateurish at best, borne out of the same reasons you are thinking of. Nevertheless, if you find it in your hearts to give/help in whatever way, please do so and insist that it go to the very young and old, the sick, and the poorest. The victims are the most vulnerable in society, i.e. of color, minorities, and without resources to leave the disaster area (even prior to the hurricane). Prayers do help too, as well as innovative actions. Spread the word at the very least.

The Bureau of Applied Research in Anthropology (BARA), U. of Arizona, where I am a research assistant, has had long presence in Louisiana and is trying to get a more on-the-ground assessment and how to get the best bang for the buck/time/effort. If you want to help in anyway even if you are half-way across the world, contact me offline. I've attached an article summarizing how things went wrong and an email from my boss Dr. Diane Austin (

Thanks and regards.

Published on Friday, September 2, 2005 by The Progressive
Katrina Compounded
by Matthew Rothschild

Even in the first seventy-two hours after Katrina came ashore near New Orleans, it became obvious that government had failed, at every level.
If ever there was an occasion for government intervention, this was it. People were drowning. People were stranded. People were cooped up in the Superdome in disgusting conditions. People were on the highway in the baking sun with no food or water or facilities or medicine. And none in sight--for themselves, or their elderly parents, or their infants.
The state and local authorities were woefully unprepared, and the Bush Administration responded with a lethal tardiness.
While Katrina was without question an extraordinarily vicious storm, the vast majority of people who died did so not because of Katrina but because of a laissez-faire federal government with skewed priorities. “A rightwing government that strangles public expenditures for public works is largely responsible for what happened in New Orleans,” says Paul Soglin, former mayor of Madison, Wisconsin, and past chair of the committee on urban economics for the National Conference of Mayors.

It’s not like there wasn’t any warning. The New Orleans project manager for the Army Corps of Engineers, Alfred Naomi, had warned for years of the need to shore up the levees, but the Bush Administration and the Republican Congress kept cutting back on the funding.
The most recent cutback was a $71.2 million reduction for the New Orleans district in fiscal year 2006. “I’ve never seen this level of reduction,” Naomi told the New Orleans CityBusiness paper on June 6. His district had “identified $35 million in projects to build and improve levees, floodwalls, and pumping stations,” the paper said. But with the cuts, “Naomi said it’s enough to pay salaries but little else.”
Louisiana Senator Mary Landrieu blamed the Bush Administration for not making the funding a priority. “It’s extremely shortsighted,” she told the paper. “These projects are literally life-and-death projects to the people of south Louisiana and they are (of) vital economic interest to the entire nation.”
After Katrina hit, The New York Times interviewed Naomi. “A breach under these conditions was ultimately not surprising,” said Naomi, who had drawn up plans for protecting New Orleans from a Category 5 storm. “It would take $2.5 billion to build a Category 5 protection system, and [now] we’re talking about tens of billions in losses, all that lost productivity, and so many lost lives and injuries and personal trauma you’ll never get over.”
Naomi wasn’t the only one who warned of this disaster. In 2001, prior to the terrorist attacks, the Federal Emergency Management Agency “ranked the potential damage to New Orleans as among the three likeliest, most catastrophic disasters facing the country,” wrote Eric Berger in a prescient article in the Houston Chronicle on December 1, 2001, entitled “Keeping Its Head Above Water: New Orleans Faces Doomsday Scenario.” In that piece, Berger warned: “The city’s less-than-adequate evacuation routes would strand 250,000 people or more, and probably kill one of ten left behind as the city drowned under twenty feet of water. Thousands of refugees could land in Houston.”
In June 2003, Civil Engineering Magazine ran a long story by Greg Brouwer entitled “The Creeping Storm.” It noted that the levees “were designed to withstand only forces associated with a fast-moving” Category 3 hurricane. “If a lingering Category 3 storm—or a stronger storm, say, Category 4 or 5—were to hit the city, much of New Orleans could find itself under more than twenty feet of water.” One oceanographer at Louisiana State University, Joseph Suhayda, modeled such storms and shared his findings with “emergency preparedness officials throughout Louisiana,” the article noted. “The American Red Cross estimates that between 25,000 and 100,000 people would die” if the hurricane floods breached the levees and overwhelmed the city’s power plants and took out its drainage system.
On October 11, 2004, The Philadelphia Inquirer ran a story by Paul Nussbaum entitled “Direct Hurricane Hit Could Drown City of New Orleans, Experts Say.” It too said that “more than 25,000 people could die, emergency officials predict. That would make it the deadliest disaster in U.S. history.” The story quoted Terry C. Tuller, city director of emergency preparedness: “It’s only a matter of time. The thing that keeps me awake at night is the 100,000 people who couldn’t leave.”
But Republicans in Congress and the Bush Administration could not be bothered. They were more concerned with diverting money to cover Bush’s Iraq War. “It appears that the money has been moved in the President’s budget to handle homeland security and the war in Iraq,” Walter Maestri, director of emergency management for Jefferson Parish, told the New Orleans Times-Picayune on June 8. “I suppose that’s the price we pay. Nobody locally is happy that the levees can’t be finished.”
Money was not the only valuable resource diverted to Iraq. So was much of the Louisiana National Guard. One reason that thousands of people were stranded without food or water in New Orleans for days is that 35 percent of the Louisiana National Guard was 7,000 miles away.
“Some 6,000 National Guard personnel in Louisiana and Mississippi who would be available to help deal with the aftermath of Hurricane Katrina are in Iraq,” Pete Yost of AP reported on August 29. “The war has forced the Guard into becoming an operational force, far from its historic role as a strategic reserve primarily available to governors for disasters and other duties in their home states.”
It’s not just having the uniformed personnel in place but the equipment, as well.“Earlier [in August] the Louisiana National Guard publicly complained that too much of its equipment was in Iraq,” reported Democracy Now! “The local ABC news affiliate reported dozens of high water vehicles, Humvees, refuelers, and generators are now abroad.”

Once again, George Bush fell to the occasion. He waited out the storm in Crawford, held his breath for a day, and then jetted off to San Diego to seize a propaganda moment for his war. His speechwriter did patch in two paragraphs on Katrina, and then made a clumsy transition to Iraq: “As we deliver relief to our citizens to the south [south of San Diego?], our troops are defending all our citizens from threats abroad. . . .”
When he finally, the following day, cut short his precious vacation and flew over the devastation on his return to Washington, he gave one of the most lackluster speeches of his colorless career. He bragged about all the supplies the federal government had delivered, but it was clear from the media that those supplies had not reached many of the people who needed them the most. He appointed the Homeland Security chief to head a cabinet-level task force, but why wasn’t such a task force in place when there was ample warning that a monster hurricane was going to strike?
Beaming with local pride that was painfully out of place, he went out of his way to “thank the state of Texas” for providing relief for some of the refugees.
He urged people to donate to the Red Cross—nothing wrong with that. But at a time like this, the government, which is supposed to represent us as a national community, should be providing the emergency relief. Bush lauded “the armies of compassion”—the Red Cross, the Salvation Army, the Catholic Charities. They are to be praised—but relief should not be privatized at a time like this. With a disaster of this magnitude, only the federal government has the resources to provide the crucial relief expeditiously.
Bush acknowledged, belatedly, that “repairing the infrastructure, of course, is going to be a key priority.” It would have been a whole lot easier to repair it beforehand.
And then he took the occasion to push through a long-awaited wish of the oil industry by granting a “nationwide waiver for fuel blends” on gasoline. He didn’t say one word on the price gouging that the oil companies and retailers were engaging in.
“To announce this repeal as the major initiative to control prices is nonsensical,” says Tyson Slocum of Public Citizen’s Critical Mass Energy and Environment Program. “It does not address the fundamentals. The fundamentals are you have speculators on Wall Street who are driving up the price of crude. For American cities that are suffering from very poor air quality from asthma and other respiratory diseases, this is going to make things worse.”
Then there’s Bush’s head-in-the-melting-iceberg approach to global warming, which may have contributed to the force of Katrina and may make similar hurricanes more likely.
“The hurricane that struck Louisiana . . . was nicknamed Katrina,” wrote Ross Gelbspan in The Boston Globe. “Its real name is global warming.”Gelbspan, one of the leading environmental journalists in the country, is the author of two books on global warming, The Heat Is On and Boiling Point. His assertion that global warming was the cause for the intensity of Katrina raised some hackles in the scientific community, with some scholars saying that any particular event cannot be pinpointed to changes in the Earth’s temperature.

But study after study on global warming has warned that as the water temperature of the world’s oceans goes up, the likelihood of more vicious hurricanes also increases. The most recent MIT study, released in the June 25 issue of New Scientist, showed that hurricanes were increasing in duration and intensity by 50 percent over the past thirty years as water temperatures increased.
Bush, for his part, won’t even admit that there is such a thing as global warming. He pulled the United States out of the Kyoto Accords, blocked efforts of other countries to move aggressively to curb greenhouse gasses, consistently downplayed scientific studies of the phenomenon, and had his political appointees even edit out some of the conclusions of the government’s own scientists.
Some disasters can’t be avoided. But they can be contained. Katrina was not. It was not contained because of a laissez-faire government that failed to bother to take warnings seriously, because of a Republican Congress and Administration that is stingy when it comes to spending on public goods but lavish on armaments and war, because Bush diverted much of the National Guard to Iraq rather than to keep them here to do the jobs they are meant to do, and because of an Administration that is pathologically hostile to science.
Katrina was a natural disaster. But it was compounded by a scandalous political disaster that took an even greater toll.
© 2005 The Progressive


Greetings.As most of you know, Tom McGuire and I have been working in south Louisiana for nearly a decade. We - along with Joanna Stone - were supposed to fly to New Orleans this morning as part of our ongoing work. Numerous students have worked in the communities impacted by the hurricane and some have started contacting me for information. I have been in touch with people in several communities over the past couple of days and wanted to give you a bit of an update of what is happening.
As Steve Shirley, the editor of Morgan City's local paper, said this afternoon, unlike most hurricanes and even Andrew (1992) where the hurricane passed and tremendous damage was done but people were able to get in there right away and start cleaning up and rebuilding, in this one things simply continue to get worse. Not only is New Orleans devastated (reports I received today include people passing up floating corpses to continue to search for survivors and people sitting on porches with rifles to guard their property from looters because our National Guard is you-know-where), but all the surrounding communities are continuing to be impacted. The full story of this one will take a long time to sort out. Here are some examples from Louisiana and ideas of where resources are needed.
1. Lower Plaquemines Parish has been nearly wiped out; some communities are gone, others are completely flooded. The United Houma Nation, a state-recognized tribe with communities in Plaquemines Parish, is organizing an effort to help its members there and can accept donations. Fortunately, Lafourche and Terrebonne parishes are in relatively good shape - trees down, roofs off, etc. but nothing out of the ordinary as far as hurricanes go.
2. A major concern is that communities throughout the area that received evacuees are facing shortages of food, fuel, etc. Unlike in other hurricanes where evacuees come in for a few days and leave, in this case they are being told they may not be able to go home for 1, 2, or even 3 months. The surrounding communities - many of them small towns without many resources themselves - are trying to cope with people who stopped in their towns and have now run out of money, food, etc. and have nowhere to go. To make matters worse, in the wake of Andrew federal policies were established that no official disaster relief shelters could be set up south of I-10 because all of these communities are at risk in future hurricanes (the season is not over...). Thus, the communities are unable to receive any federal assistance to help the evacuees already there and are being told to send the people on to Houston, Alexandria, etc. where FEMA (Federal Emergency Management Act) shelters have been set up. These communities are setting up groups to raise funds and help provide gas and food vouchers for people to move on to the areas with shelters.
3. Electricity is still out in many places; the city of Houma, which is the largest in the region outside of New Orleans, has been told it will be without power for two weeks. In addition, New Orleans is the hub for regional infrastructure so communication and transportation networks are disrupted and will continue to fail as cell phone batteries, small generators, and other devices stop working. People are having trouble communicating via phone even across town. Organizations and institutions for which New Orleans houses the web server, for example, are no longer able to maintain web pages. There will be need for assistance in establishing and maintaining communication.The list goes on and on... I have asked a couple of friends to send me specific information about how people can help - unfortunately banks are running out of money so it is not even as simple as sending checks - and expect to receive that in the next day or so. As I told Steve, the least they can get out of us after nearly a decade of researching them is access to some of our networks. It would be great if we can organize something here. If you are interested in being part of that effort, please get in touch with me.

Monday, July 04, 2005

Change the Plot

Marx said that philosophers should not only interpret the world, but change it. His mother though was said to lament, “If only Karl made Capital instead of just writing about it…” We Filipinos need to carefully think our state of affairs through. As one economist wrote, the crux of the matter is not only in changing the world but in first interpreting it CORRECTLY.

The past few weeks have been politically and economically brutal for the nation. After a good economic first quarter, dirty politics, graft and corruption, and roadblocks to economic reform are threatening the modest economic gains of the economy. Indeed, in the Philippines, the economy is intertwined with politics. Or is it?

Everyone in the country loves discussing politics. A look at the newspapers, writings of columnists, TV talk shows, and even discussions at family gatherings ultimately focus on politics. The alleged shenanigans of the Macapagal administration and the Arroyo men make for good fodder. Why so? In discussing what ails the country and the search for solutions, do the people agree on the root causes and the course of action needed?

From listening to these discussions and reading what columnists and “experts” write, the problems identified are generally; a corrupt government and legislature, peace and order issues, poor infrastructure, rampant poverty, and overpopulation, among others. Recommended solutions range from a hardline, authoritarian leader, to a parliamentary form of government, to a communist revolution. We ask, why is it that the identified problems are mainly economic in nature, but the solutions prescribed political? One could easily answer that this is the reality of political economy; but what if we try something else, something based on reality? Why should the national savior be a politician?

Two EDSA People Power, numerous coup de’tats, national worker strikes, a communist insurgency, Muslim secessionist movement, church activism, etc. have not done much to improve governance by our politicians and bureaucrats. Politicians and bureaucrats are clearly a problem and a significant part of the solution, but reforming them is not the only solution unless we are willing to literally KILL them all off.

Many of our countrymen have done the next best thing. They have voted with their feet. They have not given up on their country, only their politicians and bureaucrats. The Leftists’ calls for various boycotts have been taken up by our overseas foreign workers (OFWs), who want nothing to do with government. They have gone abroad to become the best that they could be in their fields, specialization, and careers. For many the costs are high, but their individual actions collectively state their priorities. These seven million plus OFWs prioritize personal and professional achievement, family economic security, and a better future for them and their families. For the country, the OFWs have been an economic lifesaver. They deserve more than just as a new national commodity.

For those who have remained behind, the successful are those who have done it through legal and honorable means or through criminal and rent-seeking activities. Looking only at the former, these small and medium-sized entrepreneurs, big businessmen, and professionals diligently conduct their affairs and seek to minimize their interaction with government. I know of successful businessmen who refuse to bid on government contracts and avoid contact with government. The successful Chinoy business community deals with government on an arms-length basis and through third party mediators. Their focus is on growing their businesses, not socializing with the political powers. The Ayala family, who have adopted the motto “Profit with Honor” have tapped the best and brightest their money can hire to help them professionalize and expand their businesses.

Business leaders like PLDT’s Manny Pangilinan, the Aboitizes, Lorenzos, and so on, have not only studied the Philippine business cycle well, but have developed a deep understanding of what products and services the country needs. These they provide to the immense profit of their respective companies.

What do these individuals and organizations have in common? The focus is excellence, be it personal or business. Diligence. Skill. Individual and corporate achievement. Providing for the family and the future. Personal integrity and responsibility. Continuing education. Highly competitive spirit. Work ethic. Team effort. Profit with honor. Corporate responsibility. Innovation. Studied risk taking. Growth and diversification.

What about government? Government is seen by them as a hindrance, a burden, something to be overcome. For the OFWs, government is irrelevant. For the companies, they must ensure that they comply with all laws and regulations. Do they seek to influence government or resist some corrupt politician or bureaucrats’ attempts to extract money from them? Sure they do, but they do it at arms length. No way will they invite these corrupt politicians and bureaucrats to dinner in their homes. Have you noticed how geographically far away our resilient farmers and fishermen are from bureaucrats?

Democracy is not only exercised at the polling booth. Politicians, their lackeys, arm-chair intellectuals, and the media have drummed it into us that votes, which are easily bought, are the best and only manifestation of a vibrant democracy. Another way though of exercising democracy and good governance is through each individual’s wallet.

We each need to take back control of our individual destinies. Do not wait for the government to reform itself and get the economy to grow. Politicians and bureaucrats are enriching themselves through rent-seeking activities because we allow them to. Where do we start in preventing this?

To the youth, do not abandon your education. Make sure you get a degree regardless if you are a Leftist or party animal. Sooner or later you will need that degree for credibility when you are in power or applying for work. Unless you want to be an inept individual and a liability to the organization you will join, you will need basic skills of reading comprehension, writing, public speaking, math, abstract thinking, and adaptability, among others. Get these skills in school asap. Plus, it will be harder for the politician/bureaucrat to fool or intimidate you.

To the entrepreneur, seek business opportunities that minimize interaction with government officials at all levels. Seek a low profile so you are not targeted by them. Study the lifestyle of the Chinoy entrepreneur, who saves and re-invests profits, diversifies both in business and geographical terms, and seeks to constantly improve his/her situation. If you do have to interact with a government official, do so professionally and do not seek to befriend them. It will be cheaper for you and less stressful in the long run.

To the professional, it is okay to seek employment abroad if that will ensure the economic future of your family. Take your expertise to the one who will either pay you or who appreciates your skill and professionalism the most. You deserve it. Love of country is not based on where you live, but what is in your heart and the help you will eventually extend to your friends, relatives, and community. When abroad, insist that OFW associations do not host or invite politicians who visit to speak or seek financial support. The point is to ignore the corrupt officials.

To civil society, focus your energies on specific, attainable goals. Do prioritize local sites and situations. In fighting for good governance, focus on the erring official and his/her family, while demanding command responsibility. Corruption is personally enriching, hence the consequence must be intimately personal. Information is a powerful tool. Get and clearly document instances of graft and corruption and immediately share it with the public through the internet, text, TV, radio, etc. Set up blogsites/websites that accept tips on graft, corruption, and criminal activities of government officials. The corrupt must be publicly ostracized. Let the management of these sites be flat and free-wheeling so that it will be hard to shut down. Increase the penetration of the Internet and other mass information technology to the countryside and to poorer communities, so that they can participate in a grassroots movement of governance. Your success will inspire compassionate individuals, and there are many, to support your cause.

Politics has been used to corner scarce resources for interest groups. Individual wealth and community self-help can insulate us from the pervasive influence of corrupt officials. Focus on generating your own wealth, while at the same time insisting on good governance. With a bigger middle class, more pressure can be laid to bear on government officials to do what is right.

Approximately 7.5 million Americans and 67,000 Hong Kong residents have assets of at least $1 million exclusive of primary residence. The Asia-Pacific region has at least 2.3 million millionaires mainly concentrated in India, Hong Kong, Australia, and Singapore. Economic growth and market capitalization are the main drivers. In these countries, even with a monkey as the leader, the economy and market continue to operate.

The bottom line is it will be wealth, individual wealth in many hands that will determine whether our country will grow or become a failed state. It is individual wealth that will enable us to demand good governance, hale the corrupt to court, sue the incompetent government official, jail the criminal, pay for better infrastructure and social services, and financially support civil society. It is not government who will do it but ultimately each one of us.

Do not believe what is being written that we need a political savior, a benevolent hardliner, or a communist takeover for the economy to grow. The first two are contradictions in terms, while the communists, though idealists, are inept in management and governance. Further, as seen in the Erap leftist officials, they are easily co-opted by sudden riches.

The most sustainable reform movements are those that are broad based, cognizant of merit, wealth-generating, focused on self-help and enlightened self-interest but with a sense of community, compassionate, and integrity-driven. These movements try their best NOT to depend on politicians. Once successful they leverage this success to help others and seek reforms. That is why projects such as Gawad Kalinga, the OFW initiatives, the community-based environmental programs, voluntary professional associations like Rotary, European Chamber of Commerce in the Philippines, MABINI, etc.; organizations such as the Philippine Center for Investigative Journalism, Businessworld, WWF, etc.; businesses like Jollibee, Globe, San Miguel, PLDT, Ayala, Red Ribbon, and the Chinoy business community are so efficient, effective, and successful. These are real people doing real things.

Political reform to effect economic growth is only one way. Political reform can be done either violently or with fundamental societal change that may have either positive or unintended consequences. Another way is through individual wealth generation that enables citizens and civil society to pressure government officials to do what is right.

How do we go about generating wealth? That is your task. Read the StreetStrategist's Hyperwage Theory at the Businessworld.

Saturday, May 28, 2005

Comments on Prof. Ylagan's Hocking the Future

Comments on Hocking the Future By Amelia H.C. Ylagan (week of May 9-13, 2005,
Hola Nilo, as always, your comments are insightful. I totally agree with you, especially if I was in government or business. With a huge foreign/domestic debt and a bloated bureaucracy, government has no funds for anything else, particularly infrastructure development, education, social services, and defense. Indeed, raising capital is expensive whether for government or business activities (how the heck will we be able to buy a house without help from our families/relatives?).

My comments though were geared more to a strategic framework of governance. Correct me if I am wrong, but your starting point is that you are wearing the shoes of a government official. If so, then the starting point is: Government has no money, so it needs to raise funds creatively.

But what if you were wearing the shoes of business or civil society? Then the framework of analysis be: Should we prioritize solving the process inefficiencies of graft and corruption in society and hopefully benefit by: a) generating savings/ revenues from better tax and fees collections; b) renewed confidence in government leading to investments, grants, loans, etc.?

I have no answers to these chicken or egg questions (especially since I don’t want to be in government’s shoes at present--but that is escaping the problem). Also, are we discussing from different perspectives, me from a social science perspective and you from a financial and operational point of view? How do we combine both or other perspectives?

Is the ability of businessmen to discount market difficulties and distortions in their operations different when it comes to (political) governance? It is just that government has no credibility in asking everyone to pitch in under their direction despite graft and corruption at all levels of government. It might be too much to ask without meaningful reform (what with good people consecutively resigning from government).

In a way, I was asking Prof. Ylagan, what happens if the citizenry starts to discount the pervasiveness of government in our lives? Our parents sort of did that during Marcos’ time. But what if it is done on an even wider scale that parallels what Gen. Almonte wrote earlier this year (on using the market)? The presence of a large number of NGOs and the size of the underground economy doing what government should be doing, I think, are indicators of this. Social (or environmental) movements grow in proportion to the negative effects of globalization, poverty, bad governance, environmental impacts, etc.

On the part of the Overseas Filipino Workers (OFWs-take note Ed…), I wrote earlier that they are organizing on their own and trying to be self-sufficient in all possible areas. What does this mean? Are their earnings better utilized this way rather than going to government during the present time? What kind of social movement is it shaping up to be? I’ve attached below, from just one OFW e-group, the number of their related e-groups. Are the number and diversity signs of strength or weakness? Anyone into organizational network analysis will find this veeeeery intriguing (baka Frieda can do her dissertation on this). Even for entrepreneurs out there, this phenomenon raises intriguing possibilities.

FOR ONLINE BAYANIHAN and DAMAYAN at Global Filipinos in Information Technology (Fil-IT):

1. RuralComp - a mass computer literacy -
2. Database of the Future -
3. Tulong Pinoy Movement - the cyber NGO -
4. Bridging OFWs worldwide -
5. Vote for OFW Airlines -
6. Help my Hometown -
7. Lazaga Elem School - Pangasinan -
8. San Isidro Parish - Lipa-Batangas -
9. OFW Business / Investment Groups
10. OFW Monorail -
11. OFW Airlines -
12. OFW Transport Group -
13. OFW Business Center Group -
14. OFW Credit Card Company -
15. OFW Public Utilities -
16. OFW Marine Investments / Microfinancing -
17. OFW Telecom -
18. OFW Wellness Center -
19. OFW Subway / Railway -
20. OFW-AFRRIE - Agricultural-Forest-Residential-Resort-Industrial Estate Model –
What models are being formed here? How is the Filipino diaspora different from the Jewish, Irish, Gypsie, Chinese, Asian, etc. diasporas of different historial eras (an article by Perry Diaz partly answers this)? I tell you, when it comes to civil society innovations, the Philippines is a global leader.


Hecks,One big problem for any start-up company or an emerging market like the Philippines, is the availability of cheap funds. We don't have that luxury due to our very leveraged situation and very low revenue base. This holds true for the thousands of SMEs in the country that provides a major source of employment for our country. Without funds to invest whether you are government or an SME, one's potential growth is limited.In that sense, we don't have a choice but to widen our ability to generate more revenues. One could label "graft and corruption" as a process inefficiency if government were a private undertaking. Some process improvements take time and any improvement on corruption will take some time.What the government has in the short term is the ability to create immediate impact on the revenue side. The tax base is just too narrow to support the needs of a growing population. A tax effort of 12.5% of GDP won't cut it.There remains many avenues albeit unpopular ones:1) Tax on text- not inflationary at all- original estimates were at Php5-6B. Anti-poor- not at all. Text used to be free but telcos started charging and yet they've seen a exponential rise in usage.2) Income tax on OFW's. Previously, Filipinos working abroad, paid between 1-6% income taxes until someone changed it. Some symbolic income tax will go a long way in increasing the tax base. Woe to the Philippine based employees who pay between 6-32% of their very depreciated peso earnings.Nation-building calls for everyone to pitch in.Hope things are going well for you and Tammy.Best regards.

May 23, 2005

Thanks for the article Hocking the Future. Sorry I couldn’t reply right away. I was away last week for a U.S.-Mexico border environment conference in Baja California, Mexico, which was very interesting. my comments on your article are the following:

I agree mostly with you comments. The government’s trial balloon announcement smacks though of desperation. It seems like they are now willing to go after the family’s jewels or the children’s trust fund, so to speak. After allowing our U.S and Ivy League-trained technocrats to borrow like there was no tomorrow, they are scraping the bottom for novel ideas.

Novel ideas though should be equated with the need to address issues of graft and corruption in the BIR, BOC, DPWH, etc. Tax evasion/leakage/ exemption and the theft of government funds need to be addressed by government. Until bold reforms are initiated, our fiscal problems will linger.

With bold reforms in this sector, will come the energy, courage, and determination to address the issue of selective debt repudiation of Marcos-era debts and the aggressive renegotiation of the lopsided IPP contracts. Justice Puno has laid the legal conceptual framework for debt cancellation, especially for the BNPP.

But you know all of this already. What I want to stress though or ask is whether you sense a widening disconnect between the government/politicians on one side and the populace/civil society on the other side?

I am part of a handful of expatriate e-groups and the discussions increasingly speak of initiatives that discount the participation of government. There are initiatives and online discussions on OFW banking facilities, airlines (yes, they want to put up their own airline), countryside development projects, TV (pilot projects in existence), IT projects, job placements, health, education, etc. OFWs are organizing. They have the training, experience, and they are networking on a global scale.

OFWs as a social movement, I think, is occurring. Government and the Manila elite look at OFWs as naïve and immature people that can be manipulated and exploited. While there are many cases of exploitation, I am willing to bet that the best and brightest from the OFW world will get together and will organize to defend and promote their interests, even if this is against the government’s priorities.

When Jaime Zobel de Ayala gave that speech on the need to look at OFWs as a resource of the country, the government should not take it to mean that they can use OFW remittances to fund their corrupt and incompetent management of national affairs. OFWs have a sense of what they want to do with their earnings and letting the government use it is not one of them. They went abroad precisely to avoid interacting with government (they voted with their feet). To exploit their remittances is not only unjust, it is an insult to the sacrifices of OFWs.

This is not the way for government to be innovative. Rather it should be innovative in instituting bold reforms and limiting the pervasive influence of vested interests without leading to instability and violent class conflict. A third way of political economy is what is in order for the Philippines.

It is the task of Philippine intelligentsia, civil society, people’s organizations, citizens, government, politicians, and all concerned to develop this third way.
All the best.

Comments on the proposed medical malpractice criminalization bill

Just a few additional thoughts on the proposed medical malpractice bill filed by Philippine Senators.

1. This discussion has been ongoing for a few years now. While on principle I am against it, the continuing discussion and pressure to enact such a law may be reflective of the frustration and lack of action against erring doctors.

2. This situation then is also reflective of the impotence and neglect of the Philippine Medical Association (PMA) and other oversight or regulatory bodies on ensuring quality medical service from its members as well as resolution of malpractice complaints from the public.

3. Thus, the problem of medical practice can be seen at multiple levels both structural and professional. At the structural level, the medical profession is overworked, understaffed, poorly compensated, lacks equipment, unevenly geographically distributed, perhaps under-trained, frustrated, and discouraged, among others. Many have set their eyes on working abroad.

4. The national economy is not robust enough for prioritizing nutrition, health, and preventive medicine. Environmental degradation threatens national health, hence making heavier the workload of medical practitioners.

5. Note however, that it is the task of the national government to be more proactive rather than reactive. The root causes of medical malpractice should be determined. Are we training cohorts of incompetent doctors or is the system turning aspiring, dedicated doctors into frustrated, unhappy, and disillusioned doctors?

6. It is government’s task to create a positive, encouraging, and LEVEL, playing field for medical practitioners. I don’t have the answers to these deep structured problems, but a few initiatives may help.

7. The first of course is to stem the hemorrhaging of our doctors/nurses leaving for abroad. While we should encourage them to seek the best training wherever, they must return to ensure the health of the nation is not compromised.

8. This means a creative set of initiatives both financial and non-financial to retain our doctors and nurses, as well as to encourage those abroad to set aside some time during the year to practice in their home country and perhaps retire here to do consulting.

9. Because of its strategic location in the Asia-Pacific region and its deep talent, the Philippines should naturally be the regional health center of the region. Medical costs are rising in the Western world and the baby boomer generation will be retiring soon. Coupled with a deteriorating environment, health issues are on the rise. The Philippines should prepare to capture a slice of the growing health and medical services sector nationally, regionally, and globally.

10. Medical practitioners still need to be held accountable for their actions. Anecdotal evidence abounds on erring doctors, corruption, the negative side of the seniority and medical fraternity old boy/girl network, the pervasive influence of the pharmaceutical firms, etc. Short of legislating morality and competence, what else can be done to ensure accountability?

11. If one were an economist, one would use the market to ensure that competition brings out the best in everyone. The market works when the rules are enforced and there is perfect information. On the first, I think we have enough laws to address professional neglect/incompetence. On the second issue, perfect information, instead of laws we should develop a way where we can monitor the effectiveness of the medical practitioner, keep track of their professional progress (or errors), and relay this information to those who need it.

12. When we were a young nation and our communities more cohesive, the community doctor had personal and long-term relationships with one’s patients. I myself only visit doctors/dentists recommended by friends or family. The few cold calls I made resulted in less than satisfactory treatment. Community relations ensured that the doctor did his/her best. Communication, an essential component of medical service, was intense and of good quality. Rumors of negligence or incompetence were enough to kill a doctor’s business in a locality.

13. Monitoring, evaluation, and feedback work in business and industry. If it is transparent, participatory, and easily accessible this may be a better alternative to new laws that may further drive doctors/nurses abroad or raise the cost of medical services across board.

We need to think our problems through. The problems of the medical sector are deep seated and medical malpractice is only a symptom and not the underlying cause. It involves structural issues and not just the personal capabilities of the medical practitioner. Philippine society is different from the litigious American society. Maybe there is another way of ensuring both professional accountability and the strengthening of the medical services sector. Let us discuss this in a more holistic manner that encourages the various professions/disciplines in the country to develop in a competent and HUMANIST manner.

The country's loss: Dr. Raymundo S. Punongbayan

I was connected with an environmental consulting firm until 2003, when I left to do my PhD in anthropology in the U.S. Dr. Punongbayan was one of our top, occasional consultants (geology and seismology). In the mid-90s, in a public hearing, he received a thunderous applause when introduced to the participants. I'll never forget how he didn't have any transparencies and notes and made his presentation by drawing his points directly on the projector itself. As part of the team, I knew what he was going to say, but his lecture was still one of the best I've heard. Like many of you who have known him, being with and listening to the best, wisest, helpful, and most sincere people is one of life's greatest pleasures. He and his colleagues (who were with him when their helicopter crashed) will be missed.

Friday, April 22, 2005

Is there such a thing as Sustainable Growth?

Last March 30, 2005, a week after the prepublication draft was approved by the study’s governing board; the tongue-twisting Millennium Ecosystem Assessment (MA) Synthesis Report ( was presented to the public. More than 2,000 scientists, researchers, policy specialists, and reviewers (including several from the Philippines) from 95 countries cooperated in preparing the MA Report. The assessment was prepared in response to the 2000 report of U.N. Secretary General Kofi Annan (We the Peoples: The Role of the United Nations in the 21st Century), which cited the need to document the consequences of global human activities on the environment and to establish the scientific basis for the recommendations drafted.

The findings come as no surprise to those who have worked in the sustainable development sector. It also, once and for all, comprehensively refutes assertions of disingenuous scientists like Bjorn Lomborg (The Skeptical Environmentalist, Cambridge University Press 2001) who insist that the earth is still resilient enough, and with technological innovations, will continue to allow for more breakneck growth. The report in itself can and should be used as a resource material; not only for schoolchildren, but also to everyone especially power holders and capital-wielders to reflect on how human actions may be compromising our society’s survival and sustainability.

The main findings are sobering. Ecosystems provide the basis and linkages for man to meet the constituents of well-being, namely; (a) personal, resource, and (from) disaster security, (b) access to adequate livelihood, nutritious food, shelter, and needed goods, (c) health, well-being, access to clean air and water, (d) good social relations (mutual respect, social cohesion, ability to help others), and ultimately, (d) the freedom of responsible choice and action. Yet, humans have made unprecedented and profound changes to these ecosystems to meet the growing needs of food, potable water, timber, fiber, and fuel.

The rate of change in the last 50 years has been no like other in the past two centuries and is having non-linear (abrupt, accelerating, potentially irreversible, highly complex and interactive) effects. Conversion of land to agriculture has increased the supply of food but has led to the extinction of species (more than 1,000x background rates) and a decline in genetic diversity both of which play important roles in maintaining ecological stability. Around 2 billion people are vulnerable because of the dwindling supplies and limited access to freshwater, while more and new diseases are expected to become more prevalent because of continuing ecosystem degradation. Climate change, mainly due to emissions from fossil fuels, is exacerbating the problems. Fish stocks and the global marine ecosystem are in a dire and crisis state such that the food security of millions of mostly poor communities is in peril. Without a fundamental change in how humans look at, utilize, and care for nature and one another, the next 50 years will lead to horrendous difficulties for humanity.

The MA Report’s recommendations are not new. Philosophers, scientists, religious persons, activists, enlightened businessmen and politicians have written and spoken about what should be done to address ecosystem degradation. What the MA Report does is put into the forefront the truism that ecosystem degradation is in fact a loss of capital assets. It also highlights the growing inequities between the rich and poor and the need to address poverty on a global scale. Sooner or later, even the rich will join the poor in being seriously impacted. The report went to the extent of mentioning that forms of social, behavioral, cognitive, and knowledge responses are needed. It stops short, though, on commenting on whether economic growth and the high-energy lifestyle in industrialized countries should be curtailed.

This, however, is the crux of the matter. Although many subscribe to the tenets of sustainable development, this should not be equated with the term sustainable growth as former World Bank economist Herman Daly writes in Beyond Growth (1996). Sustainable growth is a contradiction in terms. As a species, we need to ask ourselves and more specifically those in the industrialized countries, whether economic growth in their part of the world should continue forever. To Daly, if economic growth of the rate experienced in the G7 countries were to occur in industrializing and poor countries, the global environment’s carrying capacity will collapse immediately. Daly estimated that it “requires about one third of the current annual world extraction of nonrenewable resources to support that 6% (or less) of the world’s population in the United States at a per capita level to which it is thought that the rest of the world should aspire” (p.105). A lot of people think that we can grow ourselves out of our problems be it economic or environmental, but the empirical findings do not support this thesis.

Neoclassical economists have always looked at economic activities as existing in an isolated circular system with firms producing goods and services for households who provide the means for further reproduction of these goods/ services. Further, they note that mitigation of environmental impacts is included in the price of the product (“externalized costs”). Daly says this is a faulty preanalytic vision of how the economy operates. In reality, the economy is an open subsystem of the environment and that many factors of production come from the environment and are finite. Daly called for a new vision, basically asking, “what is the proper scale of the macroeconomy relative to the ecosystem” (p.48)?

Daly recommended that economists read Frederick Soddy and Nicolas Georgescu-Roegen, rather than people like Lawrence Summers, formerly of the World Bank, Clinton’s Treasury Secretary, and now President of Harvard, who once proposed dumping pollution from industrialized nations into the “underutilized” developing countries. Recently, Summers rhetorically asked whether women academicians were up to the rigors of high-level research/teaching. Soddy (1922, 1926, 1933, and 1934) was a Nobel awardee and chemist who insisted that the starting point of economics must be the first and second law of thermodynamics. The first law of thermodynamics states that energy cannot be created/destroyed but transformed, while the second law states that natural processes are directional and irreversible, leading to entropy in the system.

Georgescu-Roegen, a Romanian émigré, was Daly’s professor at Vanderbilt U., who without reading Soddy, wrote The Entropy Law and the Economic Process (1971 Cambridge University Press). Using an hour- glass metaphor, he noted that there are two resource stocks which man uses, the solar stock and the terrestrial stock. The former may seem infinite, but it actually isn’t, while the latter is definitely finite. The flow of this resource stock is only downward and irreversible (the hour-glass cannot be inverted). Unfortunately, man is currently using up the terrestrial stock, degrading ecosystems, and generating high entropy material such as wastes.

In essence, both Soddy and Georgescu-Roegen state that the economy cannot continue to expand at rates that the industrialized world has grown accustomed to. The economy is dependent upon the ecosystem for its inputs. Ultimately, the total scale of key resource throughput has to be limited. Afterall, as Daly wryly asks, of what use are better or more chainsaws when there are fewer trees to cut or better or more fishing boats when there are less fish to catch? Hence, global society should work at sustainable development, which is the qualitative improvement of life indicators without growth beyond environmental carrying capacity (Daly 1996:9). This has serious implications on up to how many mouths we can feed (population) and who gets to own what and use what (resource ownership and utilization). Free trade, for example, has to transform itself into fair trade with the industrialized world having to settle with less.

For the Philippines, we (especially power and capital holders) need to rethink how we look at fair trade, income distribution, natural resource utilization, infrastructure development, education and knowledge management, social justice, even our religious beliefs, morals, ethics and so on. Once we’ve internalized that the economy is an open subsystem of the environment, we can then value our resources and ensure that they benefit the Filipino first and foremost. Free trade should not lead to a country dependent on imports, a culture of consumerism, and without domestic food security. The latest Supreme Court ruling on foreign investment in mining, for example, should generate downstream processing industries and fund: (a) the rehabilitation of degraded areas, (b) economic diversification of mining areas, and, (c) training and education of local/ native environmental scientists, geologists, mining engineers, etc.

Income inequality may be a result of historical and social factors, but the gap needs to close to a level that reflects merit and industriousness, not birthright. The country needs to invest in the education of its youth and ensure its capacity to feed its populace, protect and conserve its natural resources, and integrate the nation through infrastructure, communication and information technologies, as well as promote cultural and social solidarity.

Is growth then sustainable? In the Philippines, there is still room for growth, but we should keep in mind that economic growth should be justly distributive and the focus eventually should be on sustainable development in a steady-state economy. Our natural resource stock should be strategically utilized, meaning, it should lead to clean and green industrialization of the country and not solely as a supplier of raw materials to the richer nations. Daly concludes that “We are creatures endowed with creativity but also subject to limits, and we have obligations to our Creator to care for Creation, to maintain intact its capacity to support life and wealth” (p.224).

Happy Earth Day!

Monday, April 11, 2005

Economic Revolution- on Almonte's market strategy

Economic revolution

Philstar’s Alex Magno recently quoted a think piece by former President Ramos’ former National Security Adviser, (Ret.) General Jose Almonte, on how the country is faring and what it needs to do. Almonte, among many stories of brilliant strategizing, is also known for preparing a few months before the 1998 presidential elections a think piece predicting a revolution of sorts within two years of an Erap presidency. Edsa Dos occurred in early 2001.

We all have our ideas on how to solve the national problems. It’s just that everyone seems frustrated at how our politicians are clowning around, how the peace and order situation is deteriorating, and how the economy is underperforming. What is intriguing about Almonte’s thesis is that instead of addressing the soft state (can not enforce its laws) of the country politically, he proposes that Filipinos must vastly improve the economic to spur political reform, i.e. law and order, management of grant and corruption, etc. This is the path being taken by China. As the Chinese economy expands, democratic stirrings are beginning.
I will suspend my misgivings on how the absence of distributional (power and resources) justice can be neglected in favor of economic growth and development and thereby lead to social justice and equity. Let us explore how Almonte's thesis can proceed. How do Pinoy expatriates, and we citizens who are excluded from the political process, contribute to the economic development of the nation? Granted that we are already doing so by presumably paying our taxes, setting up a business, following the law, sending back money to the Philippines etc.; what else can we do to accelerate the economic development of the country?

Filipinos, both back home and abroad, realize that our government officials are failing us and are simply incapable of turning the country around. We need to accept the fact that we have to do things on our own, as individuals, as a community, and as citizens. If not, future generations of Filipinos, including our children, will be handicapped by the mistakes of our generation. This piece is about doing “little” things with significant impacts.

First, think Filipino in all aspects. Whether abroad or back home, buy Filipino. Let’s try and make it both a national and international brand of quality. The past Christmas season was a good time to buy Filipino products as gifts and giveaways. Local handicrafts, art pieces, foodstuffs, drinks, etc make very attractive and memorable gifts. Significant multiplier effects are achieved buying corporate gifts from NGOs or charitable institutions (tribal groups, home for the aged, sick, orphans, refugees etc.). With a population of 80+ million and approaching 8M overseas, Filipinos have significant purchasing influence on the local economy.

As an expat abroad, use Filipino products as much as possible. Using a Barong Tagolog in a sea of suits, or smoking a Tabacalera cigar instead of the South American varieties are good conversation starters and promote local products. Your foreign friends or neighbors will always appreciate a bottle of Tanduay, Philippine coffee, or even lambanog that now come in well-packaged boxes. Promote health and one of the country’s best products by buying, giving, or distributing extra virgin coconut oil (EVCO).

A number of Filipino friends in the U.S. have adorned their homes with Filipino paintings, art pieces, and books. This is a very good way of not only promoting Filipino culture and history, but also supporting the artistic and literary communities back home.

Second, a stumbling block to national development is that concerned citizens and the conscious middle class are isolated from one another. EDSA 1 and 2 brought various groups together to depose despots and corrupt leaders. The dynamics that led to this people power must be harnessed for economic development. We need to network with as many groups all over the country and abroad to achieve this. The least we can do is to start and keep the discussion alive. The expat IT community has a very active e-group ( This must be replicated in the other professions and then all networked together some way.

A result of this networking maybe that expat Filipinos will be encouraged to invest (either by themselves or their organizations) in the Philippines, while those back home could work with expat Filipinos to export Filipino products. I am not talking big business here, but small businesses that could be grown. EVCO, Filipino handicrafts, Filipino literature, foodstuffs, drinks, etc are some of the small-businesses that come to mind. Health related products, for example, will be in demand in the U.S. as the population ages (70M+ retiring by 2010).

Third, the country needs to encourage small businesses all over the country, while at the same time ensure a local and stable supply of food. If we can make food prices affordable similar to Thailand, then it can free up funds to invest in other economic activities. A U.S.-based batchmate, has decided recently, to invest in an aquaculture project in the Philippines. Villages and subdivisions, for example, can organize and commit to buy a certain amount of organic vegetables weekly from a farming community in the province (transport and storage needs to be addressed). Tourist resorts should be encouraged to buy local as much as possible and so on.

Middle class citizens are members of various organizations, be it professional, civic, or community. Harness these organizations to do two things: a) generate livelihood activities for the poor in YOUR community; b) invest in education of the youth. The middle class (us) is educated and conscientious. Hence, the burden of simultaneously addressing the current economic malaise and investing in the future lies with us. The Gawad Kalinga ( project of the CFC is one of the best community development models I have seen, because of its holistic and integrated approach.

Another example is the non-governmental organization (NGO) Linis Ganda (Clean and Beautiful), which was organized in 1983. With 572 participating junk shops, 1,200 eco-aides, 2,500 bodega helpers and drivers of 132 trucks and jeeps, and 17 primary cooperatives, the NGO generated 182,051,000 kilos of recyclables from 450,000 households in year 2002, which were sold, earning it 231.6 million Philippine Pesos (PhP) or US$4.21 million (US$1=PhP55). This was an increased of PhP74.4 million increase from year 2001. Of the recyclables, 46% were paper and cartons. Total sales of recyclables have been estimated at PhP4 billion a year (US$73 million) and are clearly a significant contributor to the underground economy (DPWH SWMP, 1998).

Short of a violent revolution, how can the country develop with incompetent and corruptible government officials and politicians? Avoiding a bloody uprising by those oppressed and hungry necessitates that those of us that have a little more not only share our material blessings, but also our talents and time to provide opportunities to those that have less in life. Our officials and politicians have been deemed incapable. The country needs our help and Almonte suggests that an economic revolution of sorts from below may be a possible solution, if not a safety valve, for the impending violent catharsis the country is hurtling towards.

The point of this piece is to raise awareness and to start a discussion on how to improve the Filipino economy from the ground up. I have not proposed a complete menu of solutions and nothing raised here is new. That is for you, your friends and colleagues, family, community, batchmates, organization etc. to discuss, draw up, and initiate.

Let us turn the development model on its head and see what comes up.