Later in the day, an image of Christ on the cross — known as the “Lord of Health” — was removed from its spot in the cathedral for the first time since 1850 and carried in a procession around central Mexico City. The “Cristo,” as the image is known, has been credited with past miracles, including intervention in an 1850 cholera outbreak.
For updates and for local color on the goings-on in Mexico City, check out Intersections, the blog of Daniel Hernandez:
On Monday authorities here canceled school across the country and elevated the number of suspected swine flu fatalities to 149. The ’suspected’ there is important. Keep in mind Mexico is not yet equipped to test for and identify the virus. The number could rise, or just as well, it could fall. Also, more than 1,600 people have been treated for swine flu, but the majority of those have been released and sent home. So even if you do catch swine flu, it’s more likely you’d recover and live than it is that you’d die from it.
Also, in case you were wondering, it is still perfectly OK to eat pork. (I mean if that’s your thing.)
Yes, the swine flu could mutate and become more dangerous. It could spread farther and further. Things could change at any moment. But again, as I argue today, what’s more worrisome is the corrosive and contagious quality of the fear, not the flu. And frankly the economic impact of this outbreak has the potential to be even more painful and long-lasting for all of us.
The progression of the swine flu doesn’t seem to have reached exponential levels, but developments are enough to make things trackable day-by-day. Last night, if you consult H1N1 Swine Flu Google Maps, the result would have been this (purple balloons are confirmed cases; pink are probable cases; yellow, disproven cases):
Today, as I’m writing this, here’s the map, showing the newly-confirmed cases in Europe:
The World Health Organization lists three pandemics during the 20th Century: “Spanish influenza” in 1918, “Asian influenza” in 1957, and “Hong Kong influenza” in 1968 (see also History of pandemics). Recent articles (see Flu in Mexico City May Be Next Pandemic: Firsthand Account of 1918 and 1957 for example; more can be found in the PanFlu Storybook) haven taken to putting the present, and past, outbreaks in the context of the Mother of All Outbreaks: the 1918 pandemic.
Influenza 1918: The American Experience has this animated graphic of the spread of the flu in the United States, where the pandemic seems to have begun (it ended up being called the “Spanish flu” because Spain was the first and most open to report about the pandemic):
The flu morbidity and mortality statistics of the Philippine Islands, which had a population of 9 to 10.5 million, depending on which authority you consult, are undependable. Something like 40 percent of Filipinos contracted the disease, and 70,000-90,000 died. By even the most conservative estimate, the pandemic killed 2 percent of those it made ill. In many villages in the worst days there weren’t enough well people to bury the dead. The pandemic seems to have wreaked the worst damage in the remote areas, such as in Cotobato province in Mindanao, where 95 percent fell ill.
For many decades, published epidemiological literature assumed that mortality rates from the 1918-20 pandemic were distributed fairly equally. A simple population count from that period would lead to the conclusion that about 20 percent of all fatalities occurred in the developed world. “But when you look at the data,” said Murray, “that number shrinks to about three or four percent.”
The disparities between the developed and developing worlds during this period are striking. For example, in Denmark 0.2 percent of the population succumbed to the flu. In the United States, that figure is 0.3 percent (based on data from 24 states). In the Philippines, the mortality rate was 2.8 percent, in the Bombay region of India, 6.2 percent, and in central India, 7.8 percent, which was the highest rate of the countries and regions analyzed. According to this data then, from Denmark to central India, death rates from the 1918-1920 flu pandemic varied more than 39-fold.
The researchers then took the relationship observed in 1918 between per capita income and mortality and extrapolated it to 2004 population data. After adjusting for global income and population changes, as well as changes in age structures within different populations, the research team estimated that if a similarly virulent strain of flu virus were to strike today, about 62 million people worldwide would die.
The fascinating book Colonial Pathologies by Warwick Anderson mentions the 1918 flu pandemic. First, though, this extract concerning the at times heavy-handed efforts of the Americans in their campaigns against rinderpest, malaria, tuberculosis, leprosy, and cholera. He reproduces some extracts from an outraged letter by Trinidad H. Pardo de Tavera (himself a physician, and a member of the Philippine Commission) to Governor-General William Howard Taft:
…the people fear the Board of Heath a great deal more than they fear the epidemic. The sanitary inspectors, white, brown, black, civil and military have committed and still commit all kinds of abuses… [there are complaints] against the barbarities of the health agents… [In Pasig, the provincial treasurer] set fire to a house where a victim of the cholera had died and the flames extended to two neighboring houses…. [while the provincial inspector] went about with a gun on his shoulder in order to intimidate the people in order to make them obey sanitary laws…
Anderson writes that American public health officials were often mistrustful of Filipinos and skeptical of the capacity of Filipinos to undertake public health, with every possible shortcoming being used as proof of the incapacity of Filipinos to govern themselves:
[Public health director] Hesier and most of his compatriots continued to find in the failures to enforce smallpox vaccination, the recurrence of cholera, and a rising death rate in the archipelago evidence of the unreadiness for office of the Filipinos they had trained. American papers unsympathetic to the Democratic administration declared that “the full harvest of the ‘new era’ is now in the reaping in the Philippines.” “The Filipinization wind,” warned the New York Herald, had caused the incidence of plague to “jump” in the islands. Even the increasingly Filipinized health service conceded that in Manila the mortality rate for each one thousand inhabitants -42.28 in 1903, at the end of the war, but as low as 24.48 in 1913- had risen in 1918 to 46.33, and in 1919 was 27.55. To Heiser this was a clear indictment of Filipino management. But Dr. Vicente de Jesus, the acting director of public health, had another explanation: the influenza pandemic of 1918 had exacted a heavy toll in lives and caused “a weakened organic resistance” to other diseases among the population.
Around 1.5 million people died in Dutch East Indies, which was then home to just some 30 million people.
The first case was reported on the east coast of Sumatra. By July 1918, it had spread to Java and Kalimantan before reaching Bali and Sulawesi. It then reached the eastern part of the archipelago in Maluku and Timor.
It seemed to die down for several weeks, but soon reemerged.
The second wave came in October 1918 and was more widespread. Like the pandemic in the US and Europe, the second wave brought the most deaths. These deaths were recorded in the Dutch Kolonial Verslaag (Colonial Journal).
Some of Brown’s reports show the horror of the pandemic situation. In Southeast Sulawesi, a Catholic missionary was quoted as saying that “deaths are everywhere”. According to the report, in one Sulawesi village, 177 of its 900 people died in a period of just three weeks.
In Tana Toraja, 10 percent of the population reportedly died from the flu. Meanwhile, according to the Dutch regional administration, 36,000 people in Lombok, or 5.9 percent of the island’s population, died.
Statistics are scarce and it is hard to gain a sense of what truly happened. Brown’s research shows that most fatalities occurred in people aged between their mid-teens and mid-fifties, the same age bracket that has been most affected by the bird flu in Indonesia.
Now a brief word on the “vessel” in which the spooky combination of human, swine, and bird flus seem to have mixed: the pig. Also in the same year (2006), as the Harvard study, a marvelous article appeared in Harper’s Magazine titled Swine of the times: The making of the modern pig by Nathanael Johnson. It tells the story of modern breeding and farming methods for commercial pork in the United States, and the dangers that have arisen from these practices: briefly, unhappy, unhealthy pigs too susceptible to disease because too genetically uniform and raised by means of bombardments with antibiotics.
Let China sleep, for when she awakes, she will shake the world.-Napoleon
The East is Red!-Mao Zedong (upon reaching the summit of Mount Taishan)
If capitalism is restored in a big socialist country, it will inevitably become a superpower. The Great Proletarian Cultural Revolution, which has been carried out in China in recent years, and the campaign of criticizing Lin Piao and Confucius now under way throughout China, are both aimed at preventing capitalist restoration and ensuring that socialist China will never change her colour and will always stand by the oppressed peoples and oppressed nations. If one day China should change her colour and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.-Deng Xiaoping (circa 1974, quoted in Time’s The China Blog)
Over the Christmas holidays, a friend recounted, with some concern, having dinner with a Filipina who has essentially abandoned her Filipina identity, adopting, instead, a Chinese cultural supremacist attitude that extends to weeding out what she considers her former, inferior, culture. My friend and I discussed the enthusiasm with which some Filipinos jettisoned their own identity in order to take on the characteristics of a culture they viewed as the “up-and-coming-one,” and hence, superior. No different from the worship of Spanish culture in the past, I suggested; and in the case of today’s Sinophiles, no different from the debates on Asiatic Monroeism in the 1930s in the wake of Japan’s expanding prestige and power in the region, and the Japanophiles during the War. In the case of China, as far back as the 1920s, the rise of Chiang Kai Shek’s Nationalist government led to proposals, in the Philippines, to orient the independence movement towards China, in an effort to counterbalance American influence.
Since the closing of the US bases and the banishing of the Philippines to the periphery of American strategic and other concerns, Filipino leaders have been at a loss to make up for their shortcomings at home no longer being lavishly subsidized by Washington. When the United States started showing concern over the resurgence of China, in the late 1990s, Filipino leaders sensed an opportunity (shared by many countries in the region, also nervous over the growth of China) to reburnish old alliances with Washington.
The problem was that Washington blew hot and cold, and after courting Asean governments (Singapore and Thailand, most notably), during the Bush, Sr. and Clinton years, the Bush, Jr. years saw a dwindling of American interest in the region, which it seemed content to delegate matters to Australia as far as the Western presence was concerned. The Americans oriented themselves, primarily, towards neutralizing Islamic Extremism (see this Japanese article, Hu Jintao’s Strategy for Handling Chinese Dissent and U.S. Pressure from 2007, on the lack of American interest in the Chinese ploy to assert Beijing and Washington as the ultimate arbiters of Taiwan’s fate).
The Philippines, having achieved favored nation status by climbing onto the Coalition of the Willing bandwagon, promptly hopped off for domestic reasons, and this led, in turn, to the government playing the “China Card” as a foil to Washington. A kind of modus vivendi ensued, in which Washington remained content with focusing on Mindanao, while making noises from time to time to remind Manila not to fall too firmly in Beijing’s pocket. But the pockets of Beijing are deep, and somehow, despite domestic crises, Manila and Beijing’s relationship seems to be fairly stable.
This has raised repeated questions about how the Philippines will be affected by the rise of China to, potentially, Great Power status.
This detail (below) of a wartime American speculative map (found at Strange Maps) shows how the Americans envisioned our region as victory seemed imminent in World War II. The Philippines was portrayed as an American protectorate, with added territory from the then-Dutch East Indies. Note how Indochina and Thailand are given over to the Chinese sphere of influence, while Burma belongs to an undivided India’s sphere of influence.
From the same site (see China as a World Power: How Big?), comes this map, showing China’s potential sphere of influence in the world:
In the case of a “Regionally Dominant Greater China,” the Philippines lies just outside the informal borders of China; in the case of a “Greater China as a Global Power,” the Philippines lies firmly within the Chinese sphere of influence. It’s interesting that in the New World Order Map, the “United Republics of China (URC)” was envisioned by the Americans, even then, as federation composed of China, Korea, Indochina, Thailand and today’s Malaysia.
Back in 2008, I’d pointed to Waving Goodbye to Hegemony, and it’s well worth reviewing what Parag Khanna said was taking place:
Aided by a 35 million-strong ethnic Chinese diaspora well placed around East Asia’s rising economies, a Greater Chinese Co-Prosperity Sphere has emerged. Like Europeans, Asians are insulating themselves from America’s economic uncertainties. Under Japanese sponsorship, they plan to launch their own regional monetary fund, while China has slashed tariffs and increased loans to its Southeast Asian neighbors. Trade within the India-Japan-Australia triangle — of which China sits at the center — has surpassed trade across the Pacific.
At the same time, a set of Asian security and diplomatic institutions is being built from the inside out, resulting in America’s grip on the Pacific Rim being loosened one finger at a time. From Thailand to Indonesia to Korea, no country — friend of America’s or not — wants political tension to upset economic growth. To the Western eye, it is a bizarre phenomenon: small Asian nation-states should be balancing against the rising China, but increasingly they rally toward it out of Asian cultural pride and an understanding of the historical-cultural reality of Chinese dominance. And in the former Soviet Central Asian countries — the so-called Stans — China is the new heavyweight player, its manifest destiny pushing its Han pioneers westward while pulling defunct microstates like Kyrgyzstan and Tajikistan, as well as oil-rich Kazakhstan, into its orbit.
And the process is continuing.
All right, so apparently Deng Xiaoping did not say “to get rich is glorious,” but the China’s that emerged since Deng was at the helm has come closer to the kind of Great Power he warned about, when still toeing the Cultural Revolution line in the 1970s. The rise of China, too, has been put forward in the context of the decline of the United States. But what if they’re joined at the hip?
Here’s more on the themes of his book and “Chimerica”:
Aside from “Chimerica,” there’s even, as Brad Setzer proposed on December 21, 2008, Chieuropa. Europe is part of the equation: “Chimerica only works, in some sense, if China lends the (large) surplus it earns with the non-Chimerican world (and Europe in particular) to the US, allowing the US to run a deficit with the non-Chimerican world.”On one hand, cash-rich, China has continued going shopping, essentially buying futures in minerals and oil for when times get better; there’s also the effort to start building up the Yuan as a Reserve Currency, see China to Boost Yuan Swaps, Payments on Dollar Concern.
In “Inside the Red Mansion: On the Trail of China’s Most Wanted Man” (Oliver August), there’s a scene where the author talks to a Chinese citizen who remarks that China’s mistake was that it confused paper with power; that is, it bought American debt but in the end, even though it ended up holding vast amounts of that debt, the Americans, indebted as they are, still held on to the tangible manifestations of power: China might have paper, America continued to possess nuclear aircraft carriers for projecting influence -even to China’s shores.
2. Rich country, strong country. Use the vast amount of cash reserves to get plugged into the economies of many nations.
3. Armed country, strong country. (see Tony Abaya, on the Chinese buying the HMAS Canberra for scrap, but making blueprints for future reference.)
Ferguson in his documentary mentioned how “crisis-free” China’s growth has been. That was before recent news that 20 million migrants have lost jobs, China says. There therefore remains the serious problem of maintaining internal peace.
For the first time in the history of the PRC, the ruling Party is no longer principally led by a strongman, such as Mao or Deng, but instead consists of two competing factions or coalitions. These two factions cannot be divided along typical ideological lines, such as liberals versus conservatives, or reformers versus hardliners. Rather, a more accurate set of labels would identify the two factions as the “elitist coalition” and “populist coalition,” with the former led by ex-President Jiang Zemin and current Vice President Zeng Qinghong and the latter by President Hu Jintao and Premier Wen Jiabao. These new factional dynamics have three main features: (1) the two coalitions represent two different socio-political and geographical constituencies; (2) the coalitions have contrasting policy initiatives and priorities; and (3) they compete with each other on certain issues but are willing to cooperate on others.
Of the six members of the fifth generation serving on the Politburo today, three are tuanpai and three are princelings. The policy differences between these factions are as significant as the contrasts in their backgrounds. To a great extent, their differences reflect the country’s competing socioeconomic forces: Princelings aim to advance the interests of entrepreneurs and the emerging middle class, while the tuanpai often call for building a harmonious society, with more attention to vulnerable social groups such as farmers, migrant workers, and the urban poor….
Despite their many differences, the fifth generation of tuanpai and princelings share a common trauma: They are part of China’s “lost generation.” Born after the founding of the People’s Republic, they were teenagers when the Cultural Revolution broke out in 1966….
If there is another event that approaches the importance of the Cultural Revolution in the lives of these men, it is undoubtedly the Tiananmen Square incident in 1989….
These events taught the fifth generation two lessons: First, they must maintain political stability at all costs, and second, they should not reveal their fissures to the public. Although these leaders wear their differences on their sleeves, there is solidarity at the highest level, inspired by past unrest, to avoid any sign of a split in the leadership, which would be dangerous for the party and for the country….
…Barring something entirely unexpected, though, the populist policy platform will prevail over the next three to four years, and the ongoing global financial crisis will likely push Chinese leaders to increase government intervention in the economy. Yet there may be a swing in the opposite direction in 2012 as princeling Xi Jinping succeeds Hu Jintao, similar to the transition from Jiang to Hu.
IMF: Asia’s growth forecast for 2009 reduced to 2.7% with further downside risks. Developing Asia will grow 5.5%, the slowest pace since 1998. China will grow 6.7% though an additional stimulus package could help China reach the 8% target. India will grow 5.1% while South Korea’s growth will contract by 4%. The region may expand 6.9% in 2010. Given high trade and financial linkages, Asia will recover (rapidly) only when global recovery begins. But improved fundamentals and considerable room for counter-cyclical policies are pluses.
Tholons Philippines country manager Jo-An Darlene Chua was quoted as saying that with the country’s BPO export value aggregating close to 50 percent of India’s, companies may well find the Philippines as a good alternative.
Tholons said the same for Vietnam “as a solid alternative to India on the IT side.”
Sañez said he can’t see any backlash yet on the US government’s move to generate domestic jobs that may impact the BPO industry.
“It doesn’t matter whether the policy of President-elect [Barack] Obama may rein in offshore activities because outsourcing and offshoring are business decisions.”
But as blogger Marocharim, over at Filipino Voices, recently wrote a timely reminder of the very human face of all these statistics: the layoffs are real, the concern among young Filipinos, acute.
However, if the country is to weather the storm, or position itself to recover as quickly as possible, then it surely helps to see where the bad news has been fostered by existing conditions.
The complete story is that, and this has been extremely misrepresented in various circles thus far, there are issues with the current building where Intel CV is operating and given Intel’s utterly strict standards on safety and building code compliance, this is deemed more as a long-term move for safety reasons (think Hanjin and you know what I mean) rather than an immediate pull-out of busines operations. In order to sustain the business, a set of options have been formulated by Intel Corporation as a whole with the most promising being that a new building should be identified where all operations can be transferred to and resumed. This part of the story is still not resolved and a second announcement is due by end of June to finally roll-out the official plan, a full closure being one of the alternatives, if a building is not identified and the economic climate of the Philippines continue to be inferior versus Vietnam and China and the rest of the world.
According to Yugatech (in Intel to shut down Cavite facility by year-end), has been steadily paring down its workforce since April, 2008 (when SEAV’s entry came out), reducing it from 3,000 workers at the time, to the 800 who made the cut but who will now lose their jobs. It seems reasonable to deduce that the economic reversals of the company at present meant it had to dispense with finding a win-win solution for the problem it’s wrestled with for some time now:
According to a source who received the memo, Intel will no longer continue its plans to transfer its operations to Laguna (the one by NXP Semiconductors, formerly Philips Semiconductors, plant in Cabuyao as reported earlier). Intel has been taking bids and contracting 3rd party providers for the transfer but suddenly scrapped them altogether. The memo did not specifically indicate the reasons for the sudden reversal of decision.
Now there’s a moral to this story, and it is, that if we are to not only entice, but retain, foreign investments, you can’t muck around with “puwede na” slipshodness and that problems, once identified, ought to be resolved within a reasonable period of time, otherwise the window of opportunity might simply close, leaving ordinary employees in the lurch -and further retarding the competitiveness of the country (and other issues were raised concerning the waning enthusiasm of Intel: high taxes, high power rates, etc.).
As to 2007 being a good year, we can’t fully agree. The reported growth of 7.2 percent was not because of a strongly growing economy but because of a numerical oddity. Import growth is subtracted in the equation for the gross domestic product (GDP). In 2007 imports fell by five percent, the double negative meant that this rate of fall was added to GDP — a double-negative becoming a plus. Had imports grown at their previous more normal rate of around five percent, GDP growth would have been about 4.8 percent, much more in line with anecdotal evidence.
One must ask: How could imports have fallen if the economy was growing strongly; intriguingly how could oil imports fall by some 6.6 percent? The only explanation we can think of is that smuggling must have been up.
But then the problem is that data is ever disputable. But Wallace’s letter, which ends with his opinion that the World Bank’s blacklisting of some domestic firms is a step in the right direction, brings me to another point related to my point concerning Intel’s shutting down its Philippine operations, and my blog entry, yesterday, on the government and its possible anxiety over the handling it will get at the hands of the new American administration.
Personally I think Amando Doronila is being alarmist (and if you want my view on the matter, there’s my commentary, New era of intervention ; the best overview, remains, to my mind, in Torn & Frayed’s blog). So f what the country can expect is more assistance for development, but no encouragement for secession, and also, increased scrutiny on human rights, then this means the Palace had better nip all this talk of ex-Gen. Palparan being put in charge of the anti-drug agency of the government! And more to the point, it had better start finding some big fish to fry as far as corruption is concerned.
Following a major investigation spanning several years by the Integrity Vice Presidency, the World Bank found evidence of a “major cartel involving and international firms bidding on contracts,” it said in a release.
That led to four Chinese state-run firms being barred for the first time from doing business with the World Bank for a period of between five and eight years - the China Road and Bridge Corp., China State Construction Corp., China Wu Yi Co. Ltd. and China Geo-Engineering Corp.
A Philippine firm E.C. de Luna Construction Corp. and its owner, Eduardo C. de Luna, were each banned indefinitely. Two other Philippine companies, Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc., were each barred for four years.
“This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank’s investigative and sanctions process,” said Leonard McCarthy, vice president of the World Bank Integrity department, in the statement.
The investigation began in 2003 after the World Bank team grew suspicious about collusion in the bidding process for a contract during the first phase of the Philippines National Roads Improvement and Management Program. The road improvement program was partially financed by a $150 million World Bank loan, though none of the sanctioned firms received any money.
In August 2008, the inquiry led the bank to ban a South Korean firm working on the roads project, Dongsung Construction Co. Ltd., for four years.
The government, from what I’ve been able to glean, saw the writing on the wall as far back as October last year. In broad strokes, the story goes like this.
In October, the government got wind of the Millenium Challenge Corporation’s attitudes cooling towards the government.
It seems some officials in the President’s official family decided that some sort of public to-do had to take place. The private sector was approached, in an effort to net, as the saying goes, a big fish or two.
The idea, as proposed by the members of the President’s official family to representatives of the private sector with whom they met, was to mount some sort of investigation and undertake prosecutions to prove that the government was serious about curbing corruption.
The private sector suggested that one way would be to focus on issues that were festering, such as the Diosdado Macapagal Highway issue or even electoral fraud in the 2004 presidential elections. But the officials balked at this.
OK, so why not look into the National Road Improvement Project and the findings of the World Bank, the private sector suggested, by way of a compromise. Apparently the World Bank findings were already being discussed not just in government circles by this point.
But when the private sector asked for a copy of the World Bank report, the officials balked, although it seems the government was in possession of the report in full, and not just an executive summary of its findings. Along the way, the Ombudsman seems to have received a copy of the report, but with the interesting proviso, on the part of the World Bank, that the report not be used by the Ombudsman for prosecution: if a prosecution was to be undertaken, the Ombudsman would have to do her own investigating (interesting, because it suggests the World Bank didn’t want to get dragged into domestic politics, or had little confidence in the report being used for anything more than window-dressing by the Ombudsman).
So the whole thing fell apart because the private sector failed to be convinced of the good faith of the officials that made the approach; I wouldn’t be surprised if ongoing efforts in Congress will simply be written off as the government deciding it would be better to go through the motions of doing something regarding the World Bank report rather than opening up other investigations. To be sure, the World Bank report deserves a congressionaly inquiry.
The Millennium Challenge Corporation (MCC), an American government aid agency, has restricted aid flowing to the Philippines due to concerns about corruption. The MCC is setting aside a prior decision to promote the country from “Threshold” to “Compact” aid status, which would have secured significant funding for development projects. The decision appears largely based on the World Bank Institute’s aggregation of corruption perception surveys, which report a worsening public perception of corruption problems.
After she’d taken great pride in the supportiveness of the Millenium Challenge Corporation, the President obviously knew she’d have a lot of explaining to do once news of this reversal leaked out. But more than perception, it seems, the problem of the government was that the Millenium Corporation seems to have been affected by the World Bank’s findings -and they were factual. Which pulls a rug from the government’s beloved “where is your proof? Prove it in the proper forum!” mantra.
After all, it could undertake precisely what’s going on -its own investigation, within the controllable parameters of congressional inquiries.
Still, the damage has been done. The charts above shows the inexorable slide, downwards, of the Philippines’ ratings concerning corruption. But if the Millenium Challenge Corporation hands you lemons, make lemonade.
If the government’s going to suffer a black eye -and a loss of funding and the accompanying erosion of its prestige- it could, at least, keep its China Card in play, as an antidote, fiscally, and politically, to its having lost the American Card. Which, one could argue, is what it’s doing.
On the principle that even if stories end up unfolding slowly but surely, so long as you keep the public distracted, it can’t detect the slow, inexorable, unfolding of events. So you can blame the closing of Intel’s plants on the global economic downturn (which is true, of course) while sweeping any domestic culpability for it, under the rug. You can thunder and shrill about the World Bank report while downplaying what you used to trumpet -the Millenium Challenge Corporation’s decision to put things, at the very least, on hold.
The Philippines said Saturday it will evacuate its citizens from Gaza in the coming week in the face of the Israeli military assault.
Preparations for the extraction and repatriation of the 21 Filipino families in Gaza are expected to be completed by Monday, the department said in a statement, as the Israeli assault entered its second week.
“We have a contingency plan and we are ready to implement it to bring them out of danger,” said Philippine ambassador to Israel, Petronila Garcia, adding that so far, no Filipino had been hurt in the violence. She said Jordan had given its permission for the Filipinos living in Gaza to be moved there.Question: Why did the DFA wait an entire week? The assumption seems to be to move the 21 families before a ground offensive is launched. Seems reasonable enough, except that (a) the ground offensive was imminent as far back as three days ago, and “preparations” for the move won’t be completed until two days from now; and (b) the air war affords Israel less “control,” and therefore the possibility of more “collateral damage” is all too real. What gives?
This news item, from Malaysia, caught my eye. Another fender-bender in the intersection between politics and religion.
KUALA LUMPUR, Jan 1, 2009 (AFP) - A Catholic newspaper in Malaysia has been ordered by the government to cease its Malay language edition until courts resolve a ban on the paper’s use of the word “Allah”, its editor said Thursday.
Herald newspaper editor Father Lawrence Andrew said the move was part of a series of restrictions put in place by the conservative Muslim government when it renewed the paper’s licence on Tuesday.
The Herald, circulated among the country’s 850,000 Catholics, nearly lost its publishing licence last year for using the word “Allah” as a translation for “God,” with authorities saying it should only be used by Muslims.
“The Constitution says Malay is the national language so why can’t we use the national language in Malaysia?” he told AFP.
He called the ban “unacceptable” and said he intended to take action.
In my view, the “all-out” Israeli offensive in Gaza is a complicated issue, which the international community must help resolve in favor of humanitarian concerns. But the Arab League, sticking to a decades-old pattern, insists on a black-and-white look at the conflict.
From an AFP report today:
Libya on Wednesday presented a draft resolution from the Arab League to a UN Security Council emergency meeting that calls for an immediate ceasefire in Gaza between Israel and Hamas.
The draft resolution “strongly condemns all military attacks and the excessive, disproportionate and indiscriminate use of force by Israel, the occupying power, which have led to the death and injury of scores of innocent Palestinian civilians, including women and children.” It calls for “an immediate ceasefire and for its full respect by both sides.” It also calls on Israel “to scrupulously abide by all of its obligations under international humanitarian law, particularly under the Geneva Convention relative to the protection of civilians in time of war.” The 15-member council is now expected to convene a public debate on the draft resolution that includes representatives from Israel, Egypt, the Arab League and the Palestinian territories.The resolution makes no mention of the ongoing Hamas rocket attacks on Israeli territory that Israel said prompted its retaliatory offensive against Gaza.Note, especially, the last graph. Not unexpectedly, the United States, Israel’s chief ally and a permanent member of the Security Council, looked askance at the draft resolution.
“This resolution as currently circulated by Libya is not balanced and therefore, as currently drafted, it is not acceptable to the United States,” US ambassador Zalmay Khalilzad told reporters.
I will present my conference notes in my next entry, but first, here are the remarks I delivered during my portion of the Asian Thoughts Leaders Forum held under the auspices of the Arts House of Singapore. The forum, the first of its kind held by the Arts House as part of its Asia-on-the-edge Festival, had the theme, “The Asian – Past, Present & Future.”
The opening forum was held on Friday, November 28, in The Arts House, located in the Old Parliament of that City-State. I had the delicious good fortune to be seated in the front bench and in no less than PM Lee Kwan Yew’s own seat.
The keynote address was delivered by Prasenjit Duara (India), Director of Research In Humanities and Social Sciences at NUS; Emeritus Professor of History and East Asian and Civilizations at the University of Chicago, US; Author. His paper was titled “Origins and Beginnings: Where Do We Start?” And the discussion afterwards was moderated by Professor Wang Gungwu, Chairman, East Asia Institute.
There were other presentations, as well, although the one by Mechai Viravaidya on “Privatizing Poverty Alleviation” had to be cancelled, because he was unable to leave Thailand due to the closure of Bangkok’s airports.
And so here’s what I said on Sunday afternoon.
***
THE FUTURE OF ASIA: WHITHER NATION AND STATE?
Manuel L. Quezon III
Abstract:
This is the first time in the history of our nations that leadership has passed to a generation with no memory of what it was like not to be free citizens of independent nations. The challenges and call of achieving independence has been a reality for a full generation for some; for others, close to three.
Whichever way you measure it, the struggle for independence is passing from living memory and so are the emotions and motivations of our independence struggles. Instead the call of our times is to be worthy stewards of that independence and to build societies in which each and every citizen is truly free: in terms of their health and wealth and, increasingly, in terms of individual liberties and participation in the political process.
Independence as our birthright means that for the generation of the children of the “independence generatiom”, they in turn, hear the siren call of global opportunity and challenge their elders and the socities that they built, which put a premium on stability, consensus, and domestic economic growth. The challenge they put forward is for heir elders to validate validity the notion of nation and nationalism.
Even as we build bridges between our nations, engaging in cooperation and mutual assistance that’s also unprecedented, our young people ask whether nation, nationhood, nationalism and even citizenship are even relevant labels in their lives. Considering the limits imposed on their peers who remain at home, in nations concerned not with individual freedom, but national stability.
IAN McKellen, the actor known to teenagers and those who adore Shakespearean drama alike, once said, “Actors don’t describe - they inhabit.” This gathering of thinkers has proposed something similar: that while those of us who think and write for a living, obsess over who or what we are, the majority of our countrymen and our fellow Asians just are –and that it takes a summoning of the imagination for us to grasp what is immediate, what is real, for the rest.
This would have suited the great players of the game of realkpolitik in the past –in the European past that subdivided us. “The word ‘Italy’ is a geographical expression,” Metternich wrote, in a letter to the Austrian ambassador in April 1847, “ a description which is useful shorthand, but has none of the political significance the efforts of the revolutionary ideologues try to put on it, and which is full of dangers for the very existence of the states which make up the peninsula.” And so the Roman Pontiff drew a line, cleaving the world in twain, so to speak, and the Spanish derived legitimacy to declare dominion over the Philippines on one hand, and Portugal claimed the Moluccas, on the other. The British, from their East India Company headquarters in India then seized Manila briefly, and their compatriots then painted the region pink, adding Burma and what they then called Malaya, and Singapore, to their dominions while France’s ouvre civilsatrice carved out its mission in Indochina and the Dutch displaced the Portuguese and declared dominion over their Dutch East Indies.
You and I all know this, it was in the textbooks we read in school; and from those colonies arose the nations whose passports we individually carry, whose flags we salute and wave with pride, and whose anthems we sing in languages our colonizers considered unfit for political consumption. Around us continue to stand monuments to imperial self-satisfaction and permanence, now reduced to whitewashed artifacts of antiquarian, mainly tourist, interest. And inexorably in our nations the buildings of truly Roman braggadocio –because such clearly structural representations of pretentions to Roman-inspired imperial cultural pride- have been reduced, as this building has, to enclaves where the past is preserved but no longer exclusive enclaves where all the truly momentous decisions are made. Those decisions are now made in postcolonial-era towers of glass and steel, by young men and women under the watchful eyes of middle aged men and women who have never known what it was like to be a colonial subject.
And yet, the era of direct foreign rule was not so long ago, that it has passed beyond living memory. There are still quite a few among us who were born and raised the subjects of a foreign power. To be sure, to still be with us, means that they were only in their teens or at most, in their twenties or thirties at that time; but they can all remember that defining moment when the flag of the foreign power was finally lowered and the new flag of a new nation hoisted, waving alone over territories over which the imperial or colonial sun was never supposed to set.
In 1939, my grandfather, then President of an autonomous republic four years into what was expected to be a decade-long transition to full independence, remarked in a speech that he wondered what would happen once the unifying influence of the independence cause was lost. With independence, he asked, would the various ethnicities then resume squabbling among themselves, according to loyalties that had predated the colonial powers and whose rivalries and jealousies the colonialists had so superbly harnessed to –as the Romans put it- “divide and rule”? His answer was to centralize authority, to build an army, to create a one-party state and to focus public attention on spectacles of state: parades, speeches, flags, anthems, banners, slogans. To begin refocusing the energies of the rulers and the ruled, on themselves, since the others, the foreigners, were scheduled to depart the scene.
Yet two years prior to his inauguration the first popularly-elected President of his country, the British and the Americans had concluded a treaty further refining the territory between the Southernmost territories of the Philippines and the British territories in Malaya and Borneo. Thus it was, for the Filipinos that their national territory was defined by the colonial powers: as it would be for the Indonesians, as it would be for the Malaysians, the Singaporeans, the peoples of Laos, Cambodia, and Vietnam, and to a certain extent, the Thais with relations to the Burmese.
Much has been made of Benedict Anderson’s thesis that nations are fundamentally “imagined communities,” but for us Southeast Asians, at least, and to a certain extent for all Asians, particularly East Asians, we are all geographic expressions, trying to translate our vernacular cultures and identities into the high language of state and statecraft, imposing reason into often unreasonable -because arbitrary- negotiated borders arrived at without either consultation or reference to our precolonial histories. As it was in the Empire of India, about to be cleft, in twain, between India and Pakistan, and where the borders between the two was being penciled in on a map by Sir Cyril Radcliffe, literally lives and treasure on the line –a British-drawn line to the end!
Still: if, for prestige and profit, the region had been subdivided and parceled out among the great and mediocre powers of the West, it was in each parcel that there germinated and thus, sprouted, the concept of a national identity.
My grandfather’s anxiety over whether the often fractuous independence movement of his country could survive the sobering reality of independence was not unique; what he could not foresee was that after the formalities and full panoply of independence was achieved, our respective Asian countries all then began to wrestle with another struggle altogether, the fight against Communism. And after that, or to be precise, inspired by that ideological fight, another preoccupation became central in the minds of what I call our independence generations: the question of social order and material progress.
When Suharto of Indonesia died, Lee Kwan Yew of Singapore went to pay his respects; Mahathir of Malaysia paid tribute, too. The elaborate courtesies they exchanged were courtly; and criticzed in the West as a kind of last hurrah of Asian Values, the exact sort of values the West of course viewed as essential during the heyday of these statesmen: but the era of statesmen seems to have passed, and in its place we have the much more modest or perhaps it is more accurate to say, definitely merely as large-as-life, politicos-cum-technocrats of today. In all our countries, the passing of a Suharto, and the shuffling out of official retirement of a Lee or Mahathir, is worthy of a kind of momentary pause; I daresay we all gawked at the goings on during those Indonesian state obsequies, because we fully well know no such political giants shall ever walk our respective lands again –whether we loved them, feared them, hated them, admired them.
These men –and they could only have been men, in their times and respective places- were statesmen in the broadest sense of the word; with the exception of Lee, they were more properly the heirs of the generation that had actually secured independence, but they were the generation that had turned the formality of sovereignty into a living and functional reality. They also had the advantage, in the main, of political longevity, and thus an unrivaled –and possibly, unsurpassable- record of institutional incumbency. Marcos was as to Quezon as Suharto was to Sukarno, and as Mahathir was to Tunku Abdul Rahman, or even as Indira Gandhi was to Pandit Nehru. The transformation of colonial government and territory to national state and national territory may have been for the first of the independence generations to achieve; the transformation of that state into a nation: it may be that for better or worse, it was the second of the independence generations that achieved that, with leaders creating what Pierre Bourdreau described as a “State Nobility” for each country: those we like to call, in more pedestrian fashion, technorats.
With independence achieved, the Cold War at an end, in many cases the economy either transformed or permanently stunted, whether rich or poor, groaning under poverty or enjoying unprecedented prosperity, Asians, in particular Southeast Asians, have run out of causes to which entire peoples can find a collective reason for being in unity with their leaders. Is it no wonder then, that in countries where prosperity has eluded governments, or where political legitimacy is fragile, two, sometimes three, generations after independence, literally prehistoric –from the perspective of our present nation-states- campaigns are launched, whether on the ground or simply in the feverish imaginations of rabble-rousers?
Claiming temples, disputing the old colonial boundaries, encroaching on modernity by disputing bedrock principles of the modern nation-state, like secularism, and challenging notions of national identity by repeatedly invoking the communitarian, sectarian, and ethnic divisions of old: all are, in a sense, the rituals and aesthetics of what the present-day State Nobilities in the clubs, churches, and schools of that nobility, consider the primitive, the dangerous, the subversive. And, alas, the thrilling and inspiring for everyone else. A specter is haunting Asia, to freely borrow the tired old rhetoric of Karl Marx: it is the specter of militant theocracy. But this is, in many ways, truly Asia, with all due respect to the Malaysian tourism authority. For it is the Asia of emperor-kings, riding on war elephants, where those God-like kings trampled the alien neighbor, and where the rulers and ruled were united in fealty and tradition; and where the world, in a word, operated to the true rhythms of nature and not the enforced, artificial, distinctions of Western time and the calendar of the secular state.
So long as you could remember what it was like to see your part of the world considered yet another province, colony, protectorate or even department of a foreign metropolitan power, the incentive for you to set aside difference with your neighbor in recognition that ultimately, to the foreign ruler, they saw no differences among you except that you were all inferior, was irresistible. You would speak more eloquent, elegant English or French; you would learn Latin and the law, you would master metallurgy and engineering, you would learn military tactics and political economy, you would draft a constitution, design a flag, make speeches, write books, sing songs, declare loyalty that set yours apart from what was expected of you by the Governor-General, the Regent, or the puppet emperor.
You would fiercely defend that against the Japanese, against returning colonialists, against Marxists; you would come up with plans superior to any Socialist Five Year Plan, you would have children who knew not hunger, nor thirst, nor malaria nor beri-beri. We have, to a certain extent, even in the poorest of our respective countries, accomplished all that; and yet, for the generations who never knew that, there is, -what?
When Megawati Sukarnoputri became the first President of Indonesia not to have been born a colonial subject, I found it a truly remarkable thing. And even more remarkable, to me, was that Gloria Macapagal-Arroyo is only the first president my country has ever had, who hadn’t been born under a foreign flag. Chances are, for my country, the next head of state would also have been born a free Filipino, just as Megawati’s successor, Yudhoyono, was also born a free Indonesian –indeed, born in the year the former colonial power reluctantly recognized his country’s independence. Whether one speaks of Najib or Anwar in Malaysia or Lee Hsien Long in Singapore, the inevitable transition to a purely post-independence-born leadership is at hand; and everywhere else, the generation of the War, the veterans of long marches and Dien Bien Phus and even of Khmer Rouge, are passing from the scene.
Just as many of the bright, well-fed, well-educated, well-accomplished of the generation of their sons and daughters and grandchildren are passing from the scene –passing from the national to the international, from the domestic to the global; inspired not with nationalist yearnings but globalized appetites for the glitter of career and its material manifestations. There is no thrill in anthem, no particular stirring invoked by flag, certainly nothing but a skepticism in the concept of army or national service, no attitude towards the state and the law but hurdles to overcome, in this and these generations. The blessings of indepence seem so mixed, so hollow, in this sense: of a failed promise for countries like Indonesia and the Philippines, where nationhood is an obstacle and it seems, often an imposition; of fulfilled promises but one which has been superseded by personal ambition, in the case of Singapore or even Japan, where the countries have material prosperity but are grappling with the frightening possibility of being unable to, literally, procreate to continue the family of the nation.
Ask any Asian and I think you will hear them say, our respective nations all face problems. The problems may differ, as I pointed out, but they all point to a similar phenomenon of a political and administrative, educational and entrepreneurial, class of leaders all wondering why their sons and daughters would rather live elsewhere than at home.
There is no consensus on what to do, not least, because increasingly, consensus seems more and more difficult to reach in these countries.
The problem of arriving at a consensus is more serious in some places than others: it may be, the longer the history, the more difficult consensus is to reach.
There is no consensus, in the Philippines, for example, on our national beginning. There is little consensus, on where the Philippines is, though a broad but shallow consensus that the Philippines has not met its national potential. There is even less consensus on where the Philippines ought to go, much less where it’s headed. Though being the perennial optimists that we are, thee seems no consensus that we are or will be, a failed state.
But then, consensus seems more and more impossible in Thailand, which has never formally been under foreign rule. And the old certainties of one party rule seem more and more endangered –and the consensus-building within the political class, more and more tenuous and thus, fragile- are vanishing in Malaysia.
But what we have are young people armed with truly astounding practical gifts, incredible mastery of tools and machines, and who now instill a kind of terror in the West that the West used to instill in our forefathers; where the West once sneered at us as old, tired, degenerate cultures, now our young people can sneer at the West for the same things –yet irony of ironies, the baubles of Orientalism now have their equivalents in our young and their Occidentalism.
And everywhere, it seems, whatever the economic accomplishments or lack of them in nations considered Asian, a problem confronts nations that are embarking on anywhere from their second to third generation of existence as independent nations. We all have a nationality; a defined sovereignty; an entrenched political class. All under leaders who are, themselves, products not of the colonial era, but of the nationalist regimes born out of that era. For the first time in our own individual national existences, a majority of both the leaders and the led have no living memory of what it was like to be colonial subjects or be pondering either the desirability, or inevitability, of a sovereign national existence.
Was it all a Pyrrhic Victory, then? We have independence, but the free peoples of the East now want to make a living as freely as possible –or sometimes, unfreely but profitably- in the West? And even as our our best and brightest desire to go elsewhere, who is left? Those that never bought into the concept of Western time with its linearity, its evolutionary aspirations, its developmental and institutional delusions? They seem to be ever-growing, ever-demanding, ever-headed for a direct confrontation with the state and its institutions.
The techocentric concern of governments: as was demonstrated in Meiji Japan and Kuomintang Taiwan, industrialization superseding the development of a civil society can result in either a nation of drones marching to destruction or to a despotism accomplishing material comfort for all, to allow the former despots to become mere politicians. We overlook the essential flaw in the design –because the design of our respective states conform to the clockwork mechanism views of polities, politics, and peoples in the era of the Enlightnment, with its underlying assumption that nations fully adept at engineering then become capable of transformations that improve, and do not wreck, the body politic.
On one hand in nations where the blueprints are beautiful but the executions is slovenly or where the design and execution really have zero tolerances for human error, the end result is the same. Millions taking to planes and making plans in a manner their ancestors long ago would have found similar, as they embarked on finding new homes in new lands, and by so doing became the mythical founders of our respective imagined or shall we say, arbitrary and accidental nation-states.
Singapore has wrestled with this problem, of technological proficiency versus the imagination –and yet the imagination, political and social creativity, with their necessary ferment, create not a new problem, but a new concern: that imagination and initative are antithetical to the orderly industrialization so craved and sought as a measure of national success and stability. The Philippines on the other hand, sees its evolution in devolution, in ignoring the grandeur of even imagining a nation-state, but instead, adoring the domestic, the local, even the feudal: autonomy under caudillo democracy.
However in the end it is the legalism and legalities of nationhood, the bureaucratic trappings of nationality, that are inescapable: passport, identity card, they are what we are born to, and what, if necessary, we must exchange, but which we cannot escape producing, whether in East or West. The documents of colonial control, refashioned, redesigned, but ubiquitous: they continue to circumscribe what for all of us, are our national identities and the tangible signs of that identity
***
Ill try to give a synopsis of the discussion that followed, to the best of my recollection, in my next entry.
Today, I was going to focus on what’s going on in America but I’m down with the flu so it will have to be for next week.
For the past couple of weeks watching Bloomberg’s been a riveting experience as experts try to grapple with the goings-on in markets in the US and elsewhere. Non-experts, too: Question for a Management Class makes for quite interesting reading.
And although some conservatives in Britain and America continue to make the ideological case against any government action as a response to the recent turmoil - governments necessarily do everything worse than the market - they have no alternative proposal about how to restore trust once it has gone. Trust is a reciprocal relationship, dependent upon a desire to be considered decent and honourable. Even in the dog-eat-dog financial markets, trust and integrity are matters of self-interest. However amoral you may be, it is in your interest to care about your reputation, because if you behave badly you will not do business with me - or others - on favourable terms again.
But the scale of the personal rewards now available in London and Wall Street - £15m-£20m at the top is the norm - along with the greed-is-good doctrine associated with extreme laissez-faire economics, has trashed the need for individuals to worry about integrity. They don’t need to be concerned about their reputations; they just need one deal or one year at the top and they need never work again. The incentive structure has so departed from one of the principal norms of fairness - proportionality between value added and reward - that it has eviscerated trust relationships and integrity.
Everybody tries to ‘game’ the system on their route to vast personal fortunes - whether short-selling, packaging up dud mortgages as prime mortgages or telling lies about their financial viability - and the result is that the system is getting wise. The best course today in any financial transaction is to presume zero integrity. Credit is drying up and with it the very lifeblood of the economy.
Worse, now that the system is in trouble, financiers are turning to taxpayers in the US and Britain for help without understanding the other key principal of fairness - that we will consider helping those who for no fault of their own get into trouble, but not those who freely created their own bad circumstances.
Hank Paulson certainly acted decisively in launching his plan, but the former Goldman Sachs CEO, who negotiated a special exemption from tax when he took the job, like his former Wall Street colleagues is not well endowed with the fairness gene. It polluted the very design of the scheme.
He knows that unless the US government does something comprehensive, the entire financial system is at stake, but his original plan was designed to bail out the system intact. It made no demands that any financial executives sacrifice pay or bonuses despite having driven their firms and wider economy to the point of bankruptcy. He does not want the government to provide new bank capital to help recapitalise a bust banking system. Instead, he wants the government to buy their toxic debt and so leave the banks unreformed. On top he wanted complete discretion to act as he chose without any oversight.
American economists of every persuasion signed a joint letter complaining not at the aim of the bail out, which is plainly vital, but for its lack of fairness. Conservative papers and politicians echoed the complaint. Suddenly, Wall Street is coming back to earth. The transactions from which it skims such riches are built on the savings of ordinary Americans to whom it has obligations, as it has to other Wall Street firms. What we know now about the yet to be agreed compromise is that Paulson has accepted Congressional oversight, will offer direct help to distressed US homeowners as well as banks, and will accept some constraints on the worst excesses of executive pay.
But the core proposal remains. The government will buy toxic debt rather than inject government funds into the banks’ capital base, in other words, reject even partially nationalising the entire US banking system as the Swedes had to in 1992. I don’t know - nobody does - whether the Paulson plan would be sufficient or whether ultimately the Americans will have to go for nationalisation. What I do know is that unless there is a radical and government-led change in ownership, structure, regulation and incentives so that the principles of fairness are put at the heart of the Anglo American financial system - proportionality of reward and fair distribution of risk - there is no chance of the return of trust and integrity upon which long-term recovery depends.
Republicans voted against the bill by a two-to-one ratio, and in the process rejected their own leadership, who had worked for nearly a week to craft a bill that could gain a majority. Nearly 100 Democrats also voted against the bill, spurning their leadership.
Many Republicans in the House were never persuaded that the credit crunch in the financial system is an impending disaster deserving of taxpayer aid. Politicians who had cut their teeth on free-market principles couldn’t accept the idea that the federal government should back up the banks who had foolishly bet everything on the housing bubble.
Or they didn’t want to face the voters in six weeks and explain why a Republican would vote for the biggest government bailout ever.
The result was that markets previously poised to celebrate, engaged in an orgy of selling instead, with something of an atmosphere not only of cutting already heavy losses, but of vengeance. In the days leading to the House vote, the weekend negotiations took place against a backdrop of analysts warning that if the market didn’t get what it wanted -a bailout anaylists previously said the markets viewed with unease- then the market would crash.
The market has been demanding a large scope bailout plan for weeks. The market has been chewing through financials one by one until it gets what it wants.
Let’s not kid ourselves, the markets are rigged. The bailout is a wimpy ass way to deal with the problem for sure, but a $1.2 trillion loss in market cap was just TODAY’s tradeoff. The market wants some extra rigging short-term and a meltdown is/was the trade-off.
The people in Washington know very little about a lot of things. That is their specialty, their claime to fame. They know shit ass less than nothing about the stock market and the MOOD of America that matters (money). Today, you saw what a bad mood can bring from traders. Tomorrow and for the next week you will see what panic brings as the selling accelerates.
This crisis though is not about the stock market, it is about THE CREDIT MARKETS. There is NO access to capital. We are shut down for business. Way worse than after 9/11 when the markets were closed. At least than, we were out shopping at the request of our President. Now we are just deer in the headlights at the whim of the House of Reps and Congress and Senate who just seem out to punish the rich. Bullshit politics. Everybody has a chance to be famous. They are really punishing everybody else.
The FED is out of bullets and we have absolutely zero leadership or hopes of any leadership soon.
On that sobering note, as the New York exchange plunged (777 points), and then Asia, too (biggest drop since 1987), An analyst on Bloomberg dryly said, “Cash seems to be the safest place to put your money now.” Commodity prices had their biggest drop in 52 years (since the index began). The Australian Prime Minister issued a statement appealing to the US Congress to pass the emergency measure, a sentiment echoed by the Japanese Finance Minister. George W. Bush will address his countrymen shortly before the markets open on Tuesday.
This seems a colossal game of “chicken,” with political leaders answerable to voters pitted on a collision course with financiers normally dismissive of nations, sovereignty, etc., demanding a bailout from the political leaders, otherwise everything comes crashing down. It’s interesting that as today wore on, the analysist began to speak rather confidently of the bailout being passed by the end of the week.
The Republican nightmare is obviously straight out of the Hollywood version of populist Huey Long’s barely fictionalized movie biopic, All the King’s Men:
Salve Duplito, who authored the two articles above, then goes on to point out that instead of hand-wringing, some sober planning is in order for ordinary people:Money Smarts » How are you dealing with the crisis?
Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system. Such recapitalization – via the use of public resources – can occur in a number of alternative ways: purchase of bad assets/loans; government injection of preferred shares; government injection of common shares; government purchase of subordinated debt; government issuance of government bonds to be placed on the banks’ balance sheet; government injection of cash; government credit lines extended to the banks; government assumption of government liabilities.
A recent IMF study of 42 systemic banking crises across the world provides evidence on how different crises were resolved. First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased – as in Chile – dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used.
But government purchase of bad assets was the exception rather than the rule. It was used only in Mexico, Japan, Bolivia, Czech Republic, Jamaica, Malaysia, and Paraguay. Even in six of these seven cases where the recapitalization of banks occurred via the government purchase of bad assets such recapitalization was a combination of purchase of bad assets together with other forms of recapitalization (such as government purchase of preferred shares or subordinated debt).
In the Scandinavian banking crises (Sweden, Norway, Finland) that are a model of how a banking crisis should be resolved there was not government purchase of bad assets; most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead – in most cases in which it was used – made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico).
Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.
It would reimburse banks, home owners, and local governments for nearly 9 million foreclosures - It could prevent over 200 million foreclosures - It could buy 8.6 billion monthly Metrocards - The government could rebuild Katrina-ravished New Orleans and Gulf Coast … three and a half times - Roughly 538 Yankee Stadiums could be built - 5.4 million students could be sent to a public university - It equals nearly 520 times the amount of Amtrak’s current operating budget - It is $14 billion more than the U.S. spent during the Vietnam War
Over at Left Flank, you can find links to scientists weighing in with their efforts to relate the financial news with Chaos Theory! See Black Swans and Charlatans.
Jeff Jarvis, in Stewardship v. ownership of our news, money, and society took a cue from the unfolding crisis and criticizes mainstream media and it’s efforts to control how their content is processed, used, and redistributed on the World Wide Web.
The political fallout, if any, is something else, altogether. I’ve been silent for some weeks because I’ve been trying to get beyond simply reacting to the news, and instead, trying to make sense of where we are and where we ought to go; I’ll attempt to start piecing my thoughts together when I’ve recovered from the flu.
It’s an interesting time to be in the UK, where the Mother of All Parliaments, the House of Commons, has been roiled by infighting and discouraging economic news.
The Brits are working through issues not very different from our own and it seems to be there isn’t all that much of a difference between the way British and Filipino politicians are trying to do damage control: orare ignoring public opinion altogether while politicizing previously relatively partisan-free civil service institutions.
The Times in a recent editorial (which came at the heels of the paper’s report that a sacking was in the offing), The twilight of Sir Ian Blair, looked at the controversial head of Scotland Yard and took him to task in all-too-familiar (for Filipinos) terms:
His responses are by now well practised. He believes that near-constant pressure to quit is an occupational hazard to be shrugged off if not actually ignored. And he believes mutinous disloyalty from senior colleagues is an inevitable result of radical reforms of which he is fiercely proud.
The trouble for Sir Ian is that his reforms have not made him indispensable. Nor can he be sanguine any longer about the calls for him to go. His support from the Association of Chief Police Officers and the Home Office has crumbled: his contract will not be renewed in 2010. This makes him a lame duck not only in the view of his many critics, but in fact. If his record were spectacular, this newspaper would back his bid to stay in office until the 2012 Olympics and beyond. Unfortunately, it is not.
What sets the British media apart from our own is the deeper sense of memory, whether institutional, national, and personal, that the media, the politicians, and commentators have. For example, Libby Purves in Why did Alistair Darling choose 1948? points out a fascinating detail, concerning 1948 as a watershed year for Britain despite postwar austerity:
The disreputable anomaly of plural voting was abolished - previously university graduates could vote in two places, and business owners had an extra vote at their place of work.
The odd thing of course being that there are frustrated middle and upper class Filipinos who continue to think plural voting might be a good thing.
The business and finance media, too, write clearly and informatively, something hardly ever seen at home. The Business Editor of The Times pens an analysis: This slowdown has a long way to go yet – so just look forward to the sales. And there are short, but richly informative reports that contextualize the economic news. An article, Is the party over for pubs?, points out British pubs are closing at the rate of four per day and also ties in the various economic trends (crashing property prices, increasing food and labor costs, etc.) into the uncertain future of a British institution.
In Britain 2028: we need ten new cities, please, Camilla Cavendish looks at the immigration policies of the UK, something that ought to be of interest to Filipinos living and working here.
Just today, Gordon Brown to increase Holyrood’s tax powers focuses on the great Labour project of restoring the Scottish Parliament and increasing its powers over taxation and budgeting: again, this ia a debate erupting in Britain which should be interesting to proponents of Federalism.
But it seems to me questionable whether any government has the right to demand loyalty from its citizens beyond its willingness or ability to render actual protection. -Quezon To MacArthur, January 28, 1942
For once, I agree absolutely with Bong Montesa: never play the game of chicken. If this recent Inquirer editorial pointed out the administration has so botched up the peace process and is zigzagging so clumsily today, as to make the restoration of peace so much more difficult, the subsequent Inquirer editorial,suggests the MILF finds itself in a bind, because of the hostilities that have erupted and for which it took credit. Pointing to August 22 news item MILF Chair Al Haj Murad raise points in meeting IMT and the from Luawaran.com, the editorial suggested that the MILF (or the faction of its leadership that wanted to achieve its political aims through negotiations) was trying to invoke the assistance of its Malaysian sponsors. See -MILF asks Malaysia to convene peace panel - INQUIRER.net, Philippine News for Filipinos
Davao City councilor Peter Lavina in his bog, suggests that the Malaysian government officially speaking, is supportive. But the political reality in Malaysia is that the government is in its own version of survival mode. Lip service and a little diplomatic nudging here and there is all very good, but in determining the cost-effectiveness of using a nation’s resources (diplomacy, economics, military, etc.) there is little going for Malaysia if it publicly supports armed rebellion on the part of the MILF.
Militarily, even, the dilemma is there. If you assume, as some do, that the MILF possesses SAM’s in its inventory, it cannot use them now, or even later. For to do so would provide proof of foreign funding or at least facilitation/support; and regionally speaking, Malaysia as the likely culprit would trigger unease in Indonesia and alarm countries like Thailand (both being firm U.S. allies) which is fighting its own Muslim secessionists.
And so it seems the last-ditch appeal, perhaps by the more moderate among the MILF’s leadership, is for the Malaysians to give a sign that they continue to enjoy that country’s confidence and backing, in an effort to convince the other foreign powers to head off full-blown hostilities. Again, here is a confluence of interests: the Americans wouldn’t be too keen on hostilities because as the primary funder of our armed forces it would have to foot the bill and this includes what the Americans know all too well includes lining generals’ pockets (see Who Profits From The War in Mindanao? | Filipino Voices). It wouldn’t even really help the American arms industry. Not much money to be gained with out Korea and Vietnam War-era weaponry.Add to this the possibility that SouthEast Asia, including the Philippines, exists in a kind of policy limbo vis-a-vis Washington: In Asia » Blog Archive » Asian Policy Challenges for the Next President.
But that doesn’t mean that these nations could prevent a shooting war, either.
So when the MILF announced, on August 21, it would hold a press conference on August 23, I had deep misgivings. What would they say? After their former brio, they’d been complaining that AFP uses excessive force in attack pulverizing Muslim communities, which ignores who started the fighting or the absurdity of expecting the AFP not to send in the PAF.
Third, uncertainty concerning traditional allies such as the United States (see US silent on MILF terrorism « Peter Laviña New Blog) and Fourth, the possibility that the armed forces intervened by mounting operations even when the President hadn’t quite made up her mind on that to do. In his blog, thenutbox actually suggests the President announced offensive operations to retroactively rubberstamp the armed forces’ decision to begin them, regardless of the President’s position on the matter:
What my uncle told me was that Mrs. Arroyo actually ordered the attacks against MILF after the generals have already decided to launch the AFP offensive.
Arroyo’s inability to control her temper, his hypothesis went on, is actually borne out of her fright of the generals’ deciding by themselves without consulting her. She made a complete turn-around in his policy towards the MILF to appease the generals who were clearly pissed off with the BJE deal she made with the rebel group. And she wanted to appease the generals as soon as possible, hence her uncontrolled emotions for the delay of the taping.
At first I dismissed this as another conspiracy theory from a Gloria-hater. But veteran journalist Ellen Tordessillias, in a reply to a comment I posted on her blog, confirmed that, indeed, the anti-MILF mopping operations were actually carried out before the Bitch ordered them.
The President hasn’t given supporters of the peace deal any chance to save themselves or the cause of peace. Which, sad to say, has been the repeated experience of those who still suffer from the delusion that they can achieve their idealistic goals by means of a pragmatic alliance with the President.
And refer to GOING IN CIRCLES « THE MOUNT BALATUCAN MONITOR and PUSONG MAMON « THE MOUNT BALATUCAN MONITOR to get a glimpse into how people -particularly Filipinos seized by uncertainty in the affected areas of Mindanao- began to send the message to civilian and military officials alike that in the absence of any reassuring information that the governmet knew what it was doing and would defend citizens seized by panic, that they would then take matters into their own hands.
He also urged community leaders to lead the people under them, to prepare for the worst, and fight if the need arose. He also mentioned the presence of the tanks and the several thousand strong army defending Iligan.
He also mentioned that the people of Iligan should not be afraid because God and Senior San Miguel was on our side. He closed his speech with a, “Viva Senior San Miguel!,” to which the people heartily replied a “Viva”.
Although, I’m Protestant and do not agree with Catholic veneration of saints and even angels, I could not help but realize that the Mayor was speaking the heart language of the Iliganon, something that they could understand. He was speaking the old language of the Spanish times at the time when the citizens of the old fort of Iligan defended the fort and even waged battle against the Moros. Historically, even though Iligan was just a doorstep away from the Moro stronghold of Marawi, it was never conquered by Muslims despite the fact that at that time their pirates raided Christian towns as far away as Luzon.
“War,” Clausewitz famously wrote, “is the continuation of politics by other means.” Samuel Johnson also famously warned that “patriotism is the last refuge of scoundrels,” and yet it is also a time when a formerly divided people can find unity and leaders can tap into a kind of mystical reservoir of national solidarity and idealism:
As Juned Sonido, perhaps one of the most even-tempered bloggers around reflected, in a time of conflict there is the need to be aware of the dangers of jingoism and the imperative that should weigh heavily on all those in authority: to provide protection from those who hold allegiance to the state. What distinguishes the two? A clear and present danger, a compelling need:
At present waltzing around the negotiation table is as useful as cupping a corpse. It is hard to negotiate when one side has not given up the armed option or has no control over its army while the other side seems to be following the likes Neville Chamberlain at Munich - practicing vermi-negotiation or the art and science of negotiations by the worms at Munich.
Meanwhile, the war continues and people are hurt. A few hours ago a bomb was exploded in Zamboanga. Will this again reach the other corners of the country. Another bomb in the MRT or LRT?
Is this jingoism? No. This is a matter of national self defense.
It is the duty of the State to protect the citizens who opt to stay in this country. Otherwise these same citizens will go to other means to protect themselves.
You have to wonder whether such viligantism can view anything other than bloodcurdling hostility as acceptable.
The reality however is that even though it’s always denied it, the Palace is sensitive to public opinion particularly when that opinion starts triggering May, 2001 flashbacks in the President’s inner circle.
Where that opinion is -and how it’s increasingly hostile to any policy other than crushing the MILF- can be gleaned from surveying the blogosphere:
12:52 PM Our principal called for an emergency meeting, the second meeting we had today that zeroed in on matters of safety and security. The schools has received calls that messages were circulating about schools in General Santos City whose students and teachers were hostaged. We were not very sure of the report but for the reason that we have to secure the safety of our students, we have decided to send them home.
However, we could not simply let them take the public transport, which will drop them in downtown GenSan. So, we arranged for vehicles that will take them to their respective homes. Those who have their own vehicles were fetched by their parents.
What happened in the elementary school is a different story. Panicking parents rushed to the school fetching their kids. Some drivers told us about the chaos in the elementary school.
Some member of the authorities went to our school to reassure us that none of the reported events were true and that we are relatively safer here. That’s a bit of a relief. But who knows what will happen next? Better safe than sorry.
Intuitive: We Need Your Prayers echoes the unreported reality for most Filipinos, worried about loved ones and even their property and livelihoods. Meanwhile, everyone waits to see which side will escalate matters and bring the front lines to other metropolitan centers of the Philippines.
