CONSUMERS' DEMAND!
Herman Tiu Laurel
5/7-5/13/2012
Last week saw a lot of hype for the Asian Development Bank (ADB) on the occasion of its 45th Annual Meeting of its Board of Governors. I am not one of those effusing over this institution as I remember that this is still a financial institution set up by the Western powers to control and exploit the direction of economic development in Asia. For Filipinos, the highlighting of the ADB's exploitative role is the passage of the Electric Power Industry Reform Act (Epira). The IMF, the World Bank and the ADB all made the passage of the power privatization law a conditionality for release of their loans. In particular, the ADB released its second tranche of the Power Sector Restructuring loan of $ 400-M only upon the signing of the Epira into law, a law that is now causing the sucking sound we hear on the Philippine's financial and economic resources, transferring massive wealth to foreign financial predators and local comprador oligarchs. The ADB is no "Good Samaritan."
Privatization not beneficial
Nations and government do not need these multi-lateral financial agencies if they want truly sovereign, independent and progressive growth. Although China is now a prominent and powerful member of the ADB it didn't rely on the ADB to build up the foundations of its economy and national development. When Mao established the People's Republic of China (PROC) in 1949, the ADB still hadn't been born. Even at that time China could already extend ODA (Official Development Assistance) to its ideologically kindred countries and nations in the World. The ADB was only established in 1966, as an extension of the IMF and World Bank network. The multi-lateral financial agencies can be helpful to a nation only when that nation clearly knows what financial commitments are really in its interests and capable to obtaining the just and beneficial terms – and privatization of public utilities is certainly not beneficial to any nation and its people.
The Epira was a historic debacle for the Philippines and making the country the economic basket case of Asia, destroying productive industries, employment generation hopes and spreading poverty that has been highlighted recently on CNN's portrayal of the "pagpag" people eating and even selling recycled food from garbage bins of fastfoods and hotels. From the "leftover" debt the power privatization program has burdened the Filipino people we see how much has been siphoned out due to the Epira: the power sector debt of P 1-Trillion still has to be paid to IPPs (Independent Power Producers) and creditors. The profits carted away by the IPPs are humongous, such as Mirant which sold off its Philippine IPP operations five years after it started in 2001 and is estimated to have carted out $ 10-B in profits. In the transfer to Marubeni and Tepco the global banks and investment houses earn again in securitizing and financing the deal, and this is repeated again five years later.
ADB's "Poor" rating
Besides, overall, the ADB projects in Asia and the Philippines get a "poor" performance rating from its own evaluators, as its "Development Effectiveness Review 2011" reports saying the bank "failed to meet 80 percent of its goals" Its current projects in the Philippines include: the privatization and rehabilitation of the Masinloc coal-fired power plant (which will be partaking of the "high power cost in Asia" feast); the development of urban poor communities (as surveys show more are getting poorer), a Mindanao irrigation project, and "support" for government spending based on debt "toward recovering from the financial crisis". The ADB VP for sustainable development also urged Asia to "invest $ 6-Trillion in "green projects" to address the effects of global warming and climate change, and in the Philippines this means ADB support for the onerous Renewable Energy Law that would charge P 20/kWh generation cost to support the Wind and Solar power lobby and interests.
The ADB chief Haruhiko Kuroda announced the $ 12-B Special Drawing Rights, money created out of thin air, to lend out to "Asia's Poorest", but in exchange for what? Invariably it will be in exchange for one form of economic subservience of the debtor countries: privatization, opening up markets, opening up to GMOs (genetically modified organisms), large scale mining, etc. With SDRs created out of thin air they will have nations turn over physical, material, tangible and operational assets to ownership of foreign corporations. Ultimately, as we have seen our country go through, the chances are that loan recipient countries become poorer and poorer, and salvageable only if militantly pro-people and nationalist government can take over as we learn from Latin America these days where privatized state assets are being restored through nationalization – Spanish Repsol oil nationalized in Argentina and Red Electrica Plc. nationalized this week in Bolivia – allowing people to recover just living standards.
Alternative to IMF-WB-ADB: BRICS bank
An alternative to the IMF-WB-ADB that developing nations may be able to look forward to the recently announced BRICS bank, a fruit of the last meeting of the quintet of emerging World and regional economic powers Brazil, Russia, India, China and South Africa from its New Delhi meet. The development caused a knee jerk reaction from WB chief Zoellick who dismissed the idea perfunctorily, only to reverse himself three days later probably realizing the futility of the condescending attitude to the BRICS bank concept he had taken earlier. The BRICS bank will signal the end of Western and Japanese domination of the global financial and credit system, allow an alternative for developing nations to run to for development funding assistance without the onerous terms. In the last analysis, it is still better for a nation to depend on itself, establish a self-sustaining financial system – which is entirely possible for this country abundant in trillions of dollars of mineral wealth and dynamic citizens; if only it had the leadership to pave the way.
(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., April 8 "Tampakan anti-Large Scale Mining Updates"; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives).
Privatization not beneficial
Nations and government do not need these multi-lateral financial agencies if they want truly sovereign, independent and progressive growth. Although China is now a prominent and powerful member of the ADB it didn't rely on the ADB to build up the foundations of its economy and national development. When Mao established the People's Republic of China (PROC) in 1949, the ADB still hadn't been born. Even at that time China could already extend ODA (Official Development Assistance) to its ideologically kindred countries and nations in the World. The ADB was only established in 1966, as an extension of the IMF and World Bank network. The multi-lateral financial agencies can be helpful to a nation only when that nation clearly knows what financial commitments are really in its interests and capable to obtaining the just and beneficial terms – and privatization of public utilities is certainly not beneficial to any nation and its people.
The Epira was a historic debacle for the Philippines and making the country the economic basket case of Asia, destroying productive industries, employment generation hopes and spreading poverty that has been highlighted recently on CNN's portrayal of the "pagpag" people eating and even selling recycled food from garbage bins of fastfoods and hotels. From the "leftover" debt the power privatization program has burdened the Filipino people we see how much has been siphoned out due to the Epira: the power sector debt of P 1-Trillion still has to be paid to IPPs (Independent Power Producers) and creditors. The profits carted away by the IPPs are humongous, such as Mirant which sold off its Philippine IPP operations five years after it started in 2001 and is estimated to have carted out $ 10-B in profits. In the transfer to Marubeni and Tepco the global banks and investment houses earn again in securitizing and financing the deal, and this is repeated again five years later.
ADB's "Poor" rating
Besides, overall, the ADB projects in Asia and the Philippines get a "poor" performance rating from its own evaluators, as its "Development Effectiveness Review 2011" reports saying the bank "failed to meet 80 percent of its goals" Its current projects in the Philippines include: the privatization and rehabilitation of the Masinloc coal-fired power plant (which will be partaking of the "high power cost in Asia" feast); the development of urban poor communities (as surveys show more are getting poorer), a Mindanao irrigation project, and "support" for government spending based on debt "toward recovering from the financial crisis". The ADB VP for sustainable development also urged Asia to "invest $ 6-Trillion in "green projects" to address the effects of global warming and climate change, and in the Philippines this means ADB support for the onerous Renewable Energy Law that would charge P 20/kWh generation cost to support the Wind and Solar power lobby and interests.
The ADB chief Haruhiko Kuroda announced the $ 12-B Special Drawing Rights, money created out of thin air, to lend out to "Asia's Poorest", but in exchange for what? Invariably it will be in exchange for one form of economic subservience of the debtor countries: privatization, opening up markets, opening up to GMOs (genetically modified organisms), large scale mining, etc. With SDRs created out of thin air they will have nations turn over physical, material, tangible and operational assets to ownership of foreign corporations. Ultimately, as we have seen our country go through, the chances are that loan recipient countries become poorer and poorer, and salvageable only if militantly pro-people and nationalist government can take over as we learn from Latin America these days where privatized state assets are being restored through nationalization – Spanish Repsol oil nationalized in Argentina and Red Electrica Plc. nationalized this week in Bolivia – allowing people to recover just living standards.
Alternative to IMF-WB-ADB: BRICS bank
An alternative to the IMF-WB-ADB that developing nations may be able to look forward to the recently announced BRICS bank, a fruit of the last meeting of the quintet of emerging World and regional economic powers Brazil, Russia, India, China and South Africa from its New Delhi meet. The development caused a knee jerk reaction from WB chief Zoellick who dismissed the idea perfunctorily, only to reverse himself three days later probably realizing the futility of the condescending attitude to the BRICS bank concept he had taken earlier. The BRICS bank will signal the end of Western and Japanese domination of the global financial and credit system, allow an alternative for developing nations to run to for development funding assistance without the onerous terms. In the last analysis, it is still better for a nation to depend on itself, establish a self-sustaining financial system – which is entirely possible for this country abundant in trillions of dollars of mineral wealth and dynamic citizens; if only it had the leadership to pave the way.
(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., April 8 "Tampakan anti-Large Scale Mining Updates"; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives).
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