2009 ECONOMIC FORECASTS: DEPRESSION, INTERVENTIONISM, REVERSAL

Erle Frayne Argonza

Magandang hapon! Good afternoon!

2009 will be another bleak year economically, more so for the North (USA, EU, Japan are topmost). The recession that began with the subprime mortgage bubble burst in America in 07, will ensue with even mightier turbulence, as there are no coherent policy solutions of a strategic nature that can salve the economic ailment on a global scale.

As already articulated by this economist/analyst in various articles, the policy environment must be changed and regulatory mechanisms strengthened to immediately gain business confidence and reverse the tide of catastrophe. On the domestic front, the solution begins by following a New Deal type of policy set, which will bring back the fervor of production-driven growth and full employment. On the international/global front, a new financial architecture must be agreed upon via a global summit called for the purpose, akin to a New Bretton Woods.

The only intervention mechanisms we observe today are bailouts of failing financial and business institutions, which are toxically immoral as those criminal oligarchs are even rewarded for their sordid looting and corrupt practices. Only Russia and China have openly resorted to a New Deal type solution, in consonance with the practices of the late regime of Franklin Delano Roosevelt of the USA. As far as the international-global front is concerned, the concurrence of a new treaty that will resonate a new financial architecture is nowhere in sight.

In the absence of genuine solutions that can stabilize ailing economies on both the domestic and international fronts, the downward spirals will continue, until the economies of the North will hit rock bottom depression that will be worse than the one that crashed the USA, UK and Germany almost a century ago (USA, UK, Germany were then the world’s top industrial & military powers). In the absence of capital control policies up North, capital flight will ensue at dizzying speed, draining their respective countries of trillions of dollars and/or euros at levels far higher than the 2008 drain. The smart money that will sneak out will find better shelters in the South (emerging markets notably East Asia + India).

The possibility of North-based companies transferring their headquarters to the South is not entirely ruled out. The other option is for the corporate owners to transfer domicile from the North to the South, leaving their ailing mother companies in the hands of trusted stewards. The era of distance remote control-type management by corporate owners could very well begin this year, which will modify corporate governance by no small means.

The positive light for the global economy is that finally the corporate and state leaders will see light at the end of the tunnel and call for a global conference to carve out a new financial architecture. Laissez faire, a cadaver doctrine before the 2nd world war that was revived by the monetarists and greedy financiers, will finally lay to rest as it gives way to dirigist or interventionist economics. Stronger regulatory mechanisms may be charted this year too, at least on paper.

New Deal, Keynesian, and welfare state doctrines will be blended together to produce an eclectic admixture. Since New Deal has an international facet into it thus rendering it more comprehensive, as the late FDR cogitated the need for international cooperation and development for all countries to end all wars and foment lasting peace, this doctrine will more or less be followed. We will not be surprised if, after the Davos conference, the shape of the future will already be definitively of the New Deal type.

Conclusively, even if the Northern economies will flatten down to zero and/or negative growths, the downward spiral may stop by the last quarter of the year. The full effects of the intervention solutions won’t be felt this year though, as it will take some more years to get them to galvanize. So let us brace for more turbulent winds, while hoping that the storm would finally stop so we can enjoy a delightful holiday season comes December.

[26 January 2009, Quezon City, MetroManila]

OBSTACLES TO PEACE PACT BETWEEN PHILIPPINE STATE AND MUSLIM REBELS

Bro Erle Frayne Argonza

Allahu Akbar!

Here is a news report about the obstacles to peace pact’s signing between the Government of the Republic of the Philippines (GRP) and the Moro Islamic Liberation Front. The analysis came from a US-based group called the US Institute of Peace.

The involvement of US-based groups in GRP talks with insurgents does attract curiosity of sorts. While I have nothing against internationalizing Philippine insurgencies so as to involve 3rd parties in the talks, involving US-based groups is another thing altogether as it fuels our thesis of Americans’ involvement in the launching of rebel groups here at the behest of the Anglo-American oligarchy.

At any rate, do read for yourself the news below. The same group wasn’t actually allowed to co-facilitate the signing of the peace pact in Malaysia.
Peace be with you!

[05 August 2008, Quezon City, MetroManila. Thanks to yahoo.com database news.]
=======================================================
US Institute of Peace says it had warned government about obstacles to peace pact

A group calling itself the United States Institute of Peace (USIP) had been tasked by the US State Department to undertake a project to help expedite a peace agreement between the government of the Republic of the Philippines (GRP) and the Moro Islamic Liberation Front (MILF) from 2003 to 2007 and which supports the establishment of an ancestral domain for the Bangsamoro people.

However, after undertaking its Philippine Facilitation Project (PFP), the USIP has warned of the obstacles to the inking of a peace agreement between the two parties - the need for constitutional amendments, a case at the Supreme Court, Congress' disapproval of the agreement and the political weakness and unpopularity of President Arroyo.

USIP is an independent, nonpartisan institution established and funded by the US Congress.

Its goals are to help prevent and resolve violent international conflicts, promote post-conflict stability and development, and increase conflict management capacity, tools, and intellectual capital worldwide.

The US's special interest in the GRP-MILF peace agreement is meant to prevent international terrorist groups from exploiting the conflict in the Philippines after the Sept. 11, 2001 terror attacks on the US.

The late MILF chairman Salamat Hashim also personally wrote US President George Bush in 2003 to help resolve the conflict between the government and the Moro people.

The US support for the peace talks with the MILF came during the same period that the MILF, through Salamat, declared that they had renounced terrorism to attain its political ends.

At that time, Deputy Secretary of State Richard Armitage said that while the "United States absolutely supports the territorial integrity of the Philippines,...we also recognize that the people of Mindanao have legitimate aspirations and some grievances."

The US government was unwilling to commit financial and economic assistance to MILF areas until an agreement had been signed. The State Department asked USIP to inform it of significant developments, advise on appropriate government responses and if negotiations were not leading to a satisfactory settlement, recommend an end to US engagement.

In a special report published in February of this year and written by G. Eugene Martin and Astrid Tuminez, a copy of which was obtained by The STAR, USIP said Mrs. Arroyo expended only minimal political capital to move the peace process forward and that the three branches of government "also lack consensus on the outlines of a deal that may be offered to the Moros."

Martin was the executive director of the PFP while Ramirez served as the project's senior research associate. Their special report highlighted the USIP activities in the Philippines from 2003 to 2007. The USIP clarified, however, that the views expressed in the report "do not necessarily reflect the views of USIP, which does not advocate specific policy positions."

USIP tried but failed to be part of the peace negotiations between GRP and MILF as Malaysia, the host of the talks, had not agreed, but the group had produced and disseminated to educators, journalists and politicians a short video on ancestral domain, tracing the history of Moro grievances and articulating how and why an agreement on ancestral domain could effectively address the roots of conflict.

The video was shown during discussions of Moro ancestral domain in Manila universities, at forums in Mindanao and in a briefing with three Philippine senators.

"Efforts to help the parties think creatively of ways to overcome long-standing obstacles on ancestral domain and to initiate dialogue among disparate Moro ethnic groups made USIP a valuable contributor to the peace talks," the report said.

There are many hindrances, however, and the USIP said resolving conflict in Mindanao is likely to be an extended undertaking even with the best of intentions from all parties.

"As with past agreements, a serious risk exists that the national legislature could scuttle any agreement signed by the government in the implementation phase. The Supreme Court might also declare unconstitutional any deal on ancestral domain that grants Moro significant political authority and control over natural resources," the report said.

The report also noted that the ability and intent of Mrs. Arroyo, whose term would expire in 2010, to press the peace process to settlement were also uncertain.

If Mrs. Arroyo makes serious compromises with the MILF or forces significant change in the political and economic dominance of Christian migrants over land, resources and political power in Mindanao, the USIP report said "she could rouse a wave of opposition that might endanger her presidency."

"Nonetheless, if such an agreement were signed and fully implemented, it would unequivocally augment the president's historical legacy after nearly 10 years at the helm of Philippine politics," it said.

The USIP report also said the multiple changes in the composition of the GRP negotiating panel had been a challenge and although GRP negotiators were "well-informed, creative and well-intentioned, they are in many ways unable to influence those at the center of political power and public opinion."

USIP's PFP ceased in June of 2007 but the group said the peace process in Mindanao was far from concluded.

The USIP implemented its role as facilitator of the peace process through USIP president Richard Solomon, a former ambassador to the Philippines, who assembled a group of other former ambassadors to the Philippines, the chairman of the USIP Board and a retired general.

The term facilitation signified that the US was not assuming a direct, hands-on mediating role in the negotiations. - Aurea Calica/Philstar