ADB: No Good Samaritan

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).

World peace: BRICS by BRICS

Herman Tiu Laurel

5/7-5/13/2012

OpinYon

I grew up with the United Nation's message of World Peace hung on my elementary classroom. That era of utopian peace vision ended at the turn of the last century and optimism from the closure of the Cold War soured as the West's imperial projects became apparent again over the decade. Led by U.S. neoconservatives' vision known as the PNAC (Project for a new American Century) to reestablish U.S. predominance over the World.

The PNAC pined for a New Pearl Harbor to re-ignite U.S. patriotism and serendipitously came the shock and awe of the 2011 World Trade Center 9/11 terrorist attack allowing George W. Bush his "Axis of Evil" State of the Union Address on January 2001, subsequently leading to the attacks on Iraq and Afghanistan. In 2006 in a Zogby poll, 30% of the American people believe the U.S. government was engaged in a "cover up" and many believe it was an "inside job".

Project for a New American Century
In the mid-2000s the indisputable confirmation of the new hegemonistic crusade emerged: Nato Yugoslavia war commander, 4-star General Wesley Clark in his memoirs "A Time to Lead" recalls two visits to the Pentagon after the 9/11 incident and in those occasions narrates that a "senior general" told him "We're going to attack Iraq. The decision has basically been made, and six weeks later the same general held up a memo to him saying "Here's the paper from the Office of the Secretary of Defense (Ronald Rumsfeld) outlining the strategy. We're going to take out seven countries in five years.", and named Libya, Somalia, Sudan, Syria and Iran. The U.S., dragging Nato along, has been or are in or around all those countries today fomenting "regime change". Unmentioned in all these is the fact that the fall of these countries constitute a stranglehold on Middle East and Africa oil, a sine qua non for constricting oil to China and eventual encirclement.

World Peace today is more elusive than ever before, incontrovertibly due to U.S.-Nato "exuberance" in all continents of the World, the latest in its basing of 2,500 Marines in Darwin, Australia in it "refocus" on Asia-Pacific and the announced deployment of "missile defense systems" in Japan, South Korea, and rumored, believe it or not, even in the Philippines. The missiles here may still be a rumor but the spy and weaponized drones are already believed flying about in the Southern islands and reportedly killed 15 Abu Sayyaf fighters. Given this reality in the Philippines, including the reported "rendition" of terrorists the U.S. catches in foreign lands and brought to the Philippines for interrogation and torture (see "Gregan", Carlos Isagani T. Zarate's April 30, 2012 column of Filipino believed "suicided" by U.S. military in Zamboanga), we clearly can't expect the Philippine government to examine its foreign policy in relation to U.S. imperial overreach.

Filipinos, citizens of a Republic and of the World, have an obligation to engage in forming world public views on matters affecting our nation in the community of nations. Corny as it may now sound to some, our World's and children's peace is at stake. After the deceptions for war in "Saddam's WMD (weapons of mass destruction) and Osama bin Laden's improbable role in WTC 9/11, the "R2P" or "right to protect" in Libya, "humanitarian intervention" in Syria, and the alleged "kill" of Osama bin Laden but show not even DNA proof, can we trust U.S. claims to lead the globe to peace? If not, why then are we as a nation silent about the U.S. abuse of power everywhere – from the U.N. Security Council to all continents of the World. Lord Acton's famous phrase "Power corrupts, absolute power corrupts absolutely," we appreciate when applied to governments, but it is as true for global powers. When the Soviet Union fell the U.S. became the sole power and it ate into its brain – PNAC was born.

BRICS to build a Multi-Polar World
The U.S. and Europe, misleadingly appropriating for their selves the term "international community", are allied in the project for hegemony over the World; but the real and greater international community comprising 70% of the World's population has refused to go along. These countries are organizing an alternative World to supplant the U.S.-Nato vision of the 21st Century. It is the most historic development that will shape the rest of next 90 years of this century – the BRICS alliance of Brazil, Russia, India, China and South Africa, building currency bridges to skirt the global US Dollar system and establishing a BRICS bank as an alternative source for developing nations. BRICS blasted U.S.-Nato intervention in Libya, opposes outside intervention in Syria, and is effectively helping Iran survive unilateral U.S. economic sanctions as China and India buy more Iranian oil using gold, barter and each other's currencies to trade.

World Peace will depend greatly on how Iran survives the onslaught of U.S. sanctions. A fallen Iran would bring U.S. and Nato to the Russian border and control of 20% of China's oil supply. That's a situation tempting for Western powers to exploit and likely the last straw for the long wary Eurasian and Asian powers. In a "next war" global holocaust is imminent. Hence, it's better to keep the balance of power where it is today maintain, expand and fortify the current "multi-polar world" to distribute global powers amongst more players against the consolidation of global power into a "uni-polar world" under a U.S. hegemony. What policy does the Philippine government have on this issue? There is no discussion of it but by its actions it is clear the Aquino III government and cabinet are scampering behind like a little ugly duckling tailing Mother Goose. The Philippine president and his cabinet are blatantly obsessed with playing sidekick to the U.S. even as the Lone Ranger refuses to declare its loyalty to the Philippine cause.

Hillary Clinton prefers to officially state that "The United States supports a collaborative diplomatic process by all those involved for resolving the various disputes that they encounter," which makes cabinet member Albert del Rosario and Voltaire "Rambo" Gazmin seeking partisan support and the country they represent, in the words of Sen. Joker Arroyo "… look like beggars". While the Aquino III administration continues to hew to the age-old Philippine "little brown brother" role, other emerging economies and nations are in advancing their breakaway from the dependencies and inequities of the neo-colonial past, forging economic progress with each other: Venezuela recently signed a $ 130-M offshore oil development project with Iran which has the technology, and Vietnam has joint oil exploration with India and Russia. In the Philippines, Recto bank project is delayed due to Chinese hostility to the Philippine government and the project.

Rambos or Peace makers and De-nuclearization
Del Rosario and Gazmin went to the U.S. to obtain equipment for "credible deterrence" while CNN was reporting the "pagpag" or recycled garbage eaters of the Philippines. The oil in the Philippine claims of the China Sea remain unexplored and untapped, and projects in the pipeline are getting clogged up by the acrimony with China. The Philippines present leadership doesn't even make an appearance of trying to figure out what Filipinos really need under the present circumstances, it just maintains its Rambo posturing. The Filipino should be dismayed that this government simply doesn't have any inkling about the broader issues of the World that affect our country – global stability for global development, the multi-polar world and the abundant opportunities it offers, the great boon that BRICS is in terms of economic alliances and projects, and the potentially great role of the Philippines in helping BRICS build World Peace as the present generation's legacy to the next.

The great aspiration for this century is global nuclear disarmament. The Philippine government has no progressive and honest policy on this, preferring only to parrot the U.S. State Department line, condemning the North Korean rocket test but silent on Israeli possession of 200 nuclear missiles and on the recent Indian and Pakistan successful missile tests. In Syria where the balance of World power hangs today and Filipinos OFWs are in peril, it has no clear policy. On the aggression facing Iran that puts Philippine oil supply and costs in peril the government has no creative initiative. There is no thinking "out of the box" of traditional U.S.-Philippines ties that straitjackets the conduct of Philippine foreign affairs. Suffice it to say at this point that if the Philippine government had the ability to exercise leeway, support for Iran and North Korea would be the best steps towards global nuclear disarmament.

If Iran and North Korea attain even a limited degree of "MAD" (Mutual Assured Destruction) with Israel and the U.S. the global nuclear weapons disarmament table would be assured of a quorum. The tension will continue into the future, however there will be a short period of respite between now and the U.S. elections, the feared Iran-U.S./Israel confrontation is put off the rest of 2012 with Obama unwilling to engage in conflict before the U.S. elections and Israel wracked with divisions between war-itchy Netanyahu and detractors including former Mossad chiefs and prime ministers. Meanwhile, I urge readers to join in preaching the gospel of Multi-Polarism and the BRICS road to World Peace and democracy – and for the Philippines and Filipinos to drop its dependency on the U.S. syndrome.

(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., on "Mindanao's Revenge" with Govs. Bono Adaza and Al Tillah; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Who’ll advocate ‘nationalization?’

DIE HARD III

Herman Tiu Laurel

5/7/2012

The growing clamor for a minimum wage increase to allow formal sector workers to mitigate some of the many cost of living increases may be justified even while it is wrong. That's because the real task of government is to control, restrain and constrain galloping price hikes that have overtaken consumer purchasing power by two decades forward.

The basic drivers of the economy — fuel, power, water and food — are at the base of our cost of living pyramid. In three of these, the Philippines is already the highest or thereabouts in the whole of Asean and Asia.

It has been quoted that the minimum wage in the Philippines is already at $9 per day to Cambodia's $2.24, Vietnam's $2 to $3.21, and Indonesia's $3.15 to $5.27. Yet Filipinos are worst off especially in electricity and food prices. Notably, the Philippines is also the most aggressive in its economic liberalization and privatization. Surely, the connections must be obvious by now.

Minimum wage increases really punish the SMEs, or small and medium scale enterprises, which account for 98 percent of Philippine businesses and contribute at least 50 percent of all employment. The margins of SME businesses are very thin such that additional costs constantly squeeze their viability to the hilt. I should know; my family runs an SME employing a few hundred workers.

In the squeeze of power and fuel costs, municipal as well as national fees and taxes, not to mention exploitative real estate costs, additional minimum wage orders can easily tip the books into the red. Giant corporations, meanwhile, don't have these problems. Their power, for one, is subsidized by us residential consumers and SMEs, thereby financing their costs lower by as much as 50 percent.

Worse, the wage distortion created for longtime employees is even onerous — as Chris, a texter to my radio program puts it: "I have been at my work for 15 years but the new employees coming in are almost matching my salary."

In addition, more minimum wage increases can only push SMEs into the informal sector, which already employs 27.3 million workers as compared to the formal sector's 5.6 million. Thus, the wage increases will constrict the informal sector workers' ability to move up the wage ladder as formal sector SMEs are prevented from hiring them, owing to fears of violating the minimum wage law.

Besides that, other SMEs are going to be compelled to go the route of the Barangay Micro Business Enterprises Act by breaking up their formal SMEs into smaller units in order to fit the BMBE structure and offer jobs with commensurate wages — that is, if they still register at all.

Finally, the illogicality of the present system is described aptly by labor sector analyst and writer Rod Kapunan, who long ago criticized the "deregulated economy with a regulated wage regime," which is a guarantee for a dysfunctional economic system. And, as seen by the world last week when CNN featured the "pagpag" (or recycled garbage) eaters of the Philippines, we are experiencing the damaging effects of it today.

At the root of the decades-old Philippine economic degeneration are the policies of deregulation and privatization. This is so evident in the Philippine power industry now known as having "the highest power cost in Asia" with its ironies highlighted by the recent Mindanao power imbroglio of having lowest cost hydroelectric power but force fed with high priced power, as power barges were left idle due to an ill-conceived power law.

Although so far, Mindanaoans have gotten a tentative, if not halfhearted, commitment from government that it will desist from privatizing the prized Agus-Pulangi hydroelectric complex and will limit the duration of high priced contracts with independent power producers, these measures will eventually be overwhelmed by privatization unless a reversal is made via re-nationalization, such as in Bolivia which this week nationalized generating assets of Red Electrica de España for "inadequate investment" (the same way Filipino power companies limited investment in new energy sources by merely taking over state power assets).

And while Philippine politics the past month has been frenetic, beyond the sound and fury is this question: Who among the politicians are willing to address the root crisis of our country and push for the re-nationalization (or forms of it such as consumer stock ownership or "cooperativization") of the electric power industry without which there can be no solution to the murderously exorbitant power rates (which is also the case in the West today)?

Looking at the political alternatives, we still see no clear platform from any of the emerging candidates. That said, the United Nationalist Alliance, with Estrada's influence, may still have more of a maverick potential and could, if empowered in 2013, craft more populist-oriented policies. Meantime, Trillanes, although on the other side, is still emphatic in calling for profit caps and for certain heads to roll. Ditto for an independent like Mitos Magsaysay, who has been aggressively criticizing the present fuel and power policies.

Besides nationalization, the other medium-term solution to our energy woes is tapping the China and West Philippine Sea fossil fuel reserves. But that will never happen if the Philippines remains in the grip of US-British clutches as BS Aquino III, Albert del Rosario, and Voltaire Gazmin are.

It's amusing to read some Filipino opinion writers, like Babes Romualdez, say, "China pushing RP closer to US," when we've long been collar and leash in the US' hands; or Raissa Robles with her "Is China after RP oil and gas fields?" when it is the US and Britain who really control these (like in the case of Malampaya).

There should be no illusion about oil projects today under "Philippine auspices," such as the Reed Bank with Forum Energy. These are all Western-controlled in the same way that certain mining companies are a front act.

All the conflicts being raised in our shared areas with China are motivated by the West's intent to keep China out and garner a monopoly for itself, with mere crumbs given to Filipinos. So the real solution is to also nationalize all energy exploration projects henceforth.

(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., on "Tampakan anti-large scale mining updates;" visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)