April 11, 2014

Upending economic sovereignty thru Cha-cha

In the run-up to the Manila visit of US President Barack Obama, mass media attention has been riveted towards the cat-and-mouse game of Philippine and Chinese naval forces near the Ayungin Shoal and the high-profile declarations of support by the US for its defense treaty allies Japan and the Philippines in light of their territorial and maritime disputes with China. 

In the meantime, a far more imminent and dangerous threat to national sovereignty and territorial integrity called the RP-US Increased Defense Cooperation Agreement  (purportedly the lynchpin to beefing up the country’s external defense capabilities) as well as serious moves to further undermine national economic sovereignty at the expense of national development goals, social equity and the people’s overarching welfare through the latest Charter Change (Cha-cha) offensive in Congress -- have not merited as much sustained media and ergo public attention as they should.

In order to draw attention to these impending affronts on our people’s immediate and long-term interests and general well-being (not to mention aspirations for national development, social progress and a just peace) we wish to train a probing light onto the latest Cha-cha bid being railroaded in Congress.  The House Committee on Constitutional Amendments has in fact peremptorily approved Resolution of Both Houses (RBH) No. 1 to amend what remains of nationalist economic provisions in the 1987 Philippine Constitution and has set this for plenary debates on May 5, barely a month from today.

One would think that the dire effects of the neoliberal policy environment of the past three decades under the “Freedom Constitution” of 1987 should be enough to give pause to the “free marketeers” and “globalists” among our policymakers in the executive and legislative departments representing foreign and domestic big business interests. 

Apparently the simplistic and unsubstantiated line -- the Philippine economy is backward because of the lack of capital; foreign investments can fill in that lack but restrictive Constitutional provisions act as a disincentive; and removing these Constitutional barriers will automatically up the volume of foreign investments thereby assuring vibrant economic activity, job creation and invariably, sustained growth and development  – continues to stranglehold official policy discourse and decision-making.

This is without a doubt attributable to the various “incentives”, material and otherwise, that powerful lobby groups (including interventions emanating from the Foreign Chambers of Commerce, international financial institutions such as the International Monetary Fund, and the embassies of the advanced capitalist countries in deep economic crisis) have utilized.  This latest incarnation of Cha-cha in Congress that claims to be limited to economic amendments cannot be an exception.

Thus it was refreshing to have been able to participate in a recent round-table-discussion among economic policy experts, academics, small-to-medium business groups, social activists, farmers’ organizations, legislators and media practitioners that highlighted and expounded on very straightforward and quite compelling arguments against RBH No. 1.

Bayan Muna representative Neri Colmenares underscored the highly suspicious speed and gross lack of democratic consultations that attended the passage of the Cha-cha bill at the committee level in the Lower House.  Mr. Colmenares raised two major questions that remain unsatisfactorily addressed to date:  1) whether Congress can introduce wide-ranging changes in the Charter “just like passing a normal law” and 2) whether Congress can be allowed a free hand in overturning the protectionist, pro-Filipino provisions of the Charter by the mere exigency of tacking on the phrase “unless otherwise provided by law” to pertinent sections on natural resources, land ownership, strategic enterprises, public utilities, education, mass media and advertising.

Speaker Sonny Belmonte and his pro-Cha-cha cohorts are apparently taking advantage of the ambiguity in the 1987 Constitution about the method of Charter amendments via two-thirds vote of the two houses of Congress but without the necessity of convening a Constituent Assembly for the express purpose.  More insidiously, Cha-cha proponents seek to avoid the necessity of rigorous crafting of Charter amendments on the aforementioned sensitive aspects of the national economy and the attendant vigorous debate such will entail by assigning omnibus power to the “honorable members” of Congress to henceforth make the changes as only as they deem necessary or desirable.

Private think tank, Ibon Foundation, through its Executive Director Sonny Africa, has sought to demolish some major assumptions of the Cha-cha proponents.  For one, the conventional wisdom that foreign investments per se always redound to the benefit of the local economy, much more, the majority of the people is belied by the Philippine experience of increasing foreign direct investment (FDI) since the 80s but with little to show in terms of overall economic development.  According to IBON, annual FDI inflows are currently fifteen times larger than in the early 80s from USD 243 million (1981) to USD3.6 billion (2013).  However, “(r)ising FDI has been accompanied by  increasing unemployment, increasing labor export, falling real wages, shrinking domestic manufacturing and more volatile and exclusionary growth.”  IBON provides the data to corroborate their analysis.

Part of the Cha-cha offensive is the conscious effort to denigrate the necessity and overall benefits of economic protectionism and state regulation of foreign capital.  IBON takes pains to show how this baseless claim flies in the face of the clear historical precedents in a diverse range of countries whether these be the United States of America, the United Kingdom, France, Germany and Japan in the late 19th century; South Korea and Taiwan in the 60s and 70s; and China, Russia and Cuba during their respective periods of revolutionary overhaul.  All these countries resorted, at certain stages in their development, to state protection of the domestic economy from unbridled penetration by foreign capital.

While there is a place in underdeveloped or backward economies such as that of the Philippines for foreign capital’s contribution to national development, this only comes about with deliberate, responsible and democratic government intervention.  Otherwise, foreign capital, especially in the hands of transnational corporations will, by nature, put a premium on profit-making regardless of or even in contradiction to a country’s development goals.  For example, while governments in the Third World have sought to impose certain requirements for investments in manufacturing like technology transfer and some percentage of locally-sourced raw materials in the end commodities produced, or some form of equitable sharing in revenue generation for the exploitation of natural resources such as in mining or oil and gas exploration,  advanced capitalist countries have consistently opposed these whether in bilateral or multilateral forums.

Moreover, since the global financial and economic crisis in 2008, even the more advanced economies and developed countries have resorted to protection and regulation. IBON cites the United Nations Conference on Trade and Development (UNCTAD) tracking of national regulatory changes worldwide since 2000 showing an increasing trend towards regulations and restrictions especially in the extractive, agribusiness and financial sectors.  IBON also cites the Centre for Economic Policy Research (CEPR) with its similar observation of rising protectionism amid the worsening global crisis.  In fact, the US, European Union (EU), Germany, Russia, China and India are leading the pack.

Concrete analysis of historical experience, whether global or Philippine, clearly trumps the uncritical and even unthinking acceptance of foreign capital as the be-all and end-all of domestic growth and development.  Most especially so if we speak of growth for the majority of the people, not just for the elite few and their foreign business patrons and partners; and of genuine development for the entire country, not just for a few economic enclaves in highly urbanized areas that are merely a cog in the global supply, production and marketing chain controlled by transnational corporations, in turn based in the advanced centers of capitalism.#

(Next week, Cha-cha on foreign land ownership, exploitation of natural resources, ownership of public utilities, educational institutions and mass media and advertising and concomitant political implications.)

Published in Business World
11-12 April 2014













April 03, 2014

Dealing with China

When we criticize and oppose a new de facto basing agreement dubbed the “Framework Agreement on Enhanced Defense Cooperation” between the Philippines and the United States of America, we are often met by strong, emotional reactions in connection with the territorial and maritime disputes of the Philippines with China in the West Philippine Sea (South China Sea). We are accused of either burying our head in the sand, refusing to recognize China’s aggressive acts and intent to bully us into submission, or we are actually aiding and abetting China.

Invariably our patriotism is questioned for not wanting the Philippine government to seek US help in defending Philippine claims militarily.  A more sober reaction has been to challenge us to come up with alternative approaches and concrete steps that government should take if we are against involving the US in our quarrels with our neighbors.  (Note that aside from China, the Philippines has overlapping claims with Malaysia and Vietnam.)

There certainly are other ways that are valid, viable and have better chances of finding short to medium, if not long-term, solutions to the disputes with China.  These approaches avoid counterproductive and even violent confrontation between an obviously weaker state (the Philippines) and an emerging behemoth (China), economically and militarily, that would not entail the former becoming dependent on a third party (the US) with its own primordial interests to promote and protect.

Hence while in principle it is our patriotic duty to assert our national sovereignty and territorial integrity over the issue of the Spratlys (Kalayaan) and other islands, reefs and shoals which are well within the 200-nautical mile exclusive economic zone (EEZ) as defined by the UN Convention on the Law of the Sea (UNCLOS), we must not forget that it is also in our sovereign interest to avoid involving ourselves in unnecessary displays of military force or provocations, much less a shooting war with China, no matter how we delude ourselves into thinking the US will automatically come to our aid should push come to shove in the disputed waters of the West Philippine Sea.

In light of China’s increasingly aggressive actions, for whatever reason (China claims it is the one being provoked by Philippine moves to establish physical structures on uninhabited reefs and shoals and to interdict Chinese fishermen in waters that are part of their territory), the Philippines’ counter action of bringing its case to the Arbitral Tribunal of UNCLOS last January appears reasonable despite China’s refusal to take part in the proceedings.  It is a diplomatic and political move that has its pros and cons that must be weighed carefully.

It should be pointed out however that international arbitration, even if the Philippines wins its case, does not necessarily lead to the resolution of the disputes with China. As opined by former Philippine Permanent Ambassador to the UN, Mr. Lauro Baja, apart from the UN Security Council where China has veto power, other international bodies such as the Arbitral Tribunal do not have any means of enforcing its decisions.  Everything will still redound to the realpolitik of which state has the over-all capacity to assert its claims in actuality.

China has reacted quite strongly to the filing of the Memorial seeking to nullify China’s 9-dash line map on which it bases its claim on almost the entirety of the South China Sea and has declared that such Philippine action “seriously damaged bilateral relations with China”.  Invoking the Declaration on the Conduct of Parties in the South China Sea signed by China and all ASEAN countries, the Philippines included, China continues to call on the Philippines “to resolve disputes over territory and maritime rights and interests through negotiations by the sovereign states directly concerned”.

The Center for People’s Governance (CENPEG), a Filipino policy studies group, in a statement submitted to the Committee on Foreign Affairs of the House of Representatives last March 4 advanced the view that bilateral talks with China is worth pursuing contrary to conventional wisdom that such bilateral negotiations places the Philippines at a disadvantage from the outset.  CENPEG underscores that the Philippines had in fact been negotiating bilaterally with China and had inked various agreements since diplomatic ties were reinstated in the 70s.

“One advantage of bilateral talks is that it opens up for discussion and negotiation many nuances of a disputed issue that cannot be addressed in a strictly rules-based form of arbitration… Moreover, many sensitive political issues that cannot be openly discussed in a legal arbitration format can be better addressed and threshed out in more informal bilateral talks, ” the CENPEG elaborated.

The Philippines can take a leaf from the examples of Vietnam and Malaysia that have avoided further escalation and provocation in its territorial and maritime conflicts with China compared to our official tack.

At the same time, it doesn’t help that no less than the Philippine head of state, President B.S. Aquino, continues to engage in antagonistic, even belligerent, rhetoric in almost every international forum available while seeking international support for his government’s position against China’s aggressiveness a.k.a. “bullying”.

More important, is the recognition that involving the US, the sole Superpower now embroiled in its own  deep socio-economic crisis and geopolitical quagmires, in our disputes with our neighbors is not only unhelpful, it is asking for trouble. 

In the first place the US has already stated in no uncertain terms that it is not going to involve itself in such territorial and maritime disputes.  In the real world, the working relationship of the US and China is too important for both countries, grounded as it is on huge investment, trade, foreign policy and other strategic concerns, for either side to risk being drawn militarily into the other’s conflicts with its neighbors unless it has a vital interest at stake. Run-ins and even saber rattling over the islands, islets, reefs and shoals in the Spratlys and other small archipelagos in the West Philippine Sea is insufficient casus belli for either country.    Moreover, the Mutual Defense Treaty does not have an automatic retaliation clause despite all the deceptive reassurances and barefaced gullibility of our political leaders.

Should the Philippines and the US come to an agreement to increase “rotational” troop presence and the “prepositioning” of its warships and other war munitions inside Philippine territory together with more frequent holding of joint war “exercises” including in disputed waters, it is to be expected that China will consider this a provocation, part and parcel of the US containment strategy against China, with the Philippines a very willing junior partner.  Objectively, such a development will lead to the heightened militarization of the West Philippine Sea thus increasing the dangers of miscalculations and armed skirmishes that neither the Philippines nor China really wants.

Certainly it would be very useful all around for people-to-people exchanges and relations to be encouraged and developed in order to counter the undercurrent of big-country-chauvinism and ultranationalism in China and the matching flag-waving pseudo-nationalism and anti-Chinese racism in the Philippines that lend themselves to jingoism and other types of populist calls for retaliatory moves on both sides. #

Published in Business World
4-5 April 2014




March 27, 2014

Honoring agreements, a prerequisite to peace

The signing of the Comprehensive Agreement on the Bangsamoro (CAB) by the Philippine Government (GPH) and the Moro Islamic Liberation Front (MILF) yesterday, is being hailed as “historic” and ushering in the dawn of peace in Muslim Mindanao.  In this light, there is understandable questioning and speculation about the implications of the arrest last weekend of spouses Benito Tiamzon and Wilma Austria-Tiamzon, alleged by the Armed Forces of the Philippines (AFP) as the “No. 1” and “No. 2” of the Communist Party of the Philippines-New People’s Army (CPP-NPA), to “the other peace” (PDI editorial, 27 March 2014); that is, the peace negotiations between the GPH and the National Democratic Front of the Philippines (NDFP), the umbrella alliance that represents the CPP-NPA and several other national democratic underground mass organizations in the peace talks.

So far, the preponderant voices from both sides are pessimistic.

The Aquino government asserts that the arrests are quite legal and regular, proof positive of the proficiency of state security forces in running after the “enemies of the state”. GPH claims that the couple is not covered by the Joint Agreement on Safety and Immunity Guarantees (JASIG) under the GPH-NDFP peace talks because of the following: Wilma Austria-Tiamzon jumped bail during her arrest in 1994; both are facing several criminal charges; and Benito Tiamzon used an alias in his safe conduct pass.  The GPH has unilaterally declared that the JASIG is inoperative for all those who used aliases because of the failure of the process attempted in 2011 to verify if the persons claimed by the NDFP to be JASIG-protected were really so.

More important, the GPH views the arrests as a major, if not fatal, blow to the viability of an armed movement that government claims is continually dwindling in terms of adherents and whose ideological and political moorings have been undercut by a “daang matuwid” government and hefty economic growth figures.

And while the GPH says it continues to keep its door open to the peace talks, it insists that the intransigence and insincerity of the NDFP is what is dooming any hope for the resumption of the peace negotiations which, while not yet officially or technically terminated, has been at an impasse since mid-2011, soon after the reopening of the formal talks under the BS Aquino administration.

The NDFP for its part stands pat on its position that the Tiamzon couple’s arrest is illegal and violates the JASIG signed by the two parties in 1995.  The two are bona fide NDFP consultants holding documents of identification duly acknowledged by previous GPH Peace Panel heads, Howard Dee and Sylvestre Bello, which act as safe conduct passes giving them immunity from surveillance, arrest and prosecution while they perform their tasks in the ongoing peace talks.

Wilma Austria-Tiamzon is publicly known since the Fidel V. Ramos administration as a key participant in the peace process (in fact she was released on recognizance as a confidence-building measure for the peace negotiations).  She holds a safe conduct pass and is listed under her real name in the list of JASIG-protected persons, a copy of which is held by the GPH.  Therefore no other verification process is necessary.

Benito Tiamzon was in possession of his safe conduct pass under the name Crising Banaag but this was disregarded and even confiscated by the arresting team.  This same name with the corresponding specific identification number appears in the list of GPH-acknowledged JASIG-protected holders of documents of identification.

As to the criminal charges facing the two, JASIG provides that such charges are held in abeyance while the peace negotiations are ongoing, an arrangement legally recognized by the GPH courts in the cases of other well-known NDFP consultants who are currently out on bail.  In many other instances, the mechanism set up by the two Parties to facilitate resolution of the cases had resulted in the withdrawal of charges and dismissal of the cases inasmuch as the arrests and detention were usually illegal, charges were trumped-up and evidences fabricated or weak. However this mechanism was unilaterally dissolved by the GPH in June 2012.

The JASIG is a solemn and binding agreement that the GPH cannot just set aside unilaterally and on the basis of its own determination.  There are provisions as to how this bilateral agreement shall be terminated.  Without the JASIG, the GPH-NDFP peace negotiations could not have taken off and continued despite numerous suspensions and a couple of GPH-initiated terminations.

In the first place, JASIG was set up by the GPH and NDFP precisely “to facilitate the peace negotiations, create a favorable atmosphere conducive to free discussion and free movement during the negotiations, and avert any incident that may jeopardize the peace negotiations” learning from the 1986-87 peace negotiations which collapsed when the safety of the negotiators as well as the process itself was put in great peril.

At the same time, the integrity and security of the agreement itself was safeguarded with the explicit provision that the JASIG can only be terminated by either Party issuing a written notice of termination to the other Party, and which will only take effect 30 days after receipt of the notice by the other Party. Since no such written notice of termination has so far been issued by either Party, the JASIG remains in full force and effect, binding on the GPH and the NDFP to this moment.

Furthermore, in the event that the JASIG is terminated, the agreement provides that “All immunities acquired by virtue of this Joint Agreement shall remain in full force and effect even after the termination of this Joint Agreement, provided said immunities shall not cover acts which are contrary to the purposes of the peace negotiations and outside and beyond involvement or participation in the peace negotiations.”

Clearly, recent statements by some high government officials that the Tiamzon couple cannot be covered by JASIG protection because the JASIG is no longer in effect because there are no talks are false and have no basis in the agreement itself.

But is the NDFP setting as a precondition to the resumption of the stalled formal peace talks, the release of the Tiamzon couple?  No, the NDFP is demanding the release of the Tiamzons as a matter of obligation on the part of the GPH, in compliance with the JASIG and other solemn bilateral agreements it has entered into with the NDFP.

In any kind of negotiation, be it a business contract, a labor-management agreement, or a peace treaty, there is nothing more natural, plainly obvious, logical, and commonsensical than for one party to demand of the other party compliance with whatever agreements are entered into.  In peace negotiations where smaller agreements form the building blocks toward a final and comprehensive peace agreement, the integrity of the former are essential to the solidity and efficacy of the final agreement. Simply put, how can any party expect the other party to honor its obligations in a final comprehensive agreement when the latter cannot or does not comply with previous smaller agreements?

In the final analysis, what really matters in the peace negotiations is how serious both Parties really are in finding common grounds of cooperation in effecting fundamental reforms needed to eradicate the social,  economic and political roots of the armed conflict.

Unfortunately, what we are hearing and seeing in the GPH pronouncement and actions, regarding the arrest, continuing detention and prosecution of the Tiamzons, is a complete lack of interest if not intent in resuming peace talks with the NDFP.  #

Published in Business World
28-29 March 2014