Sunday, July 05, 2015

BWorld 9, Poitical populism vs. tax realism

* This is my article in BWorld last Friday.

Political populism vs. tax realism

THE 2016 general elections are just 10 months away. It is natural that people are discussing who should lead this country of 103 million people by that time. And more often than not, political and economic ideologies determine, whether explicitly or implicitly, people’s criteria in choosing and supporting their candidate/s.

The Philippines has a personality-oriented politics, not philosophy- or ideology-oriented. This is also true of other countries, to be sure. Political parties have come and gone, and others are moribund, depending on whether the key party figure remains visible and influential. Either way, candidates are easily swayed by the populist aspirations and welfarist demands of many voters.

During the two-party system that dominated Philippine politics until the Marcos dictatorship beginning in the 1970s, an ideological line, in hindsight, was supposed to distinguish the Nacionalista Party (NP) and the breakaway Liberal Party (LP). The Nacionalistas were supposed to be nationalists and trade protectionists, more state-oriented; and the Liberals were supposed to be globalists and free traders, more market-oriented. Yet both parties were ruled by the same elite, and the line that was supposed to distinguish them was blurred further by turncoatism. Two Liberals among the roster of presidents in the postwar Third Republic ran under the rival banner of the Nacionalistas and went on to uphold the supposed ideology of the Liberals. And then as now, as the presidency had always demonstrated, Philippine politics was and remains personality-driven.

Post-Marcos politics gave way to the multiparty system in effect until today, with other parties, other advocacies, giving voice to past attempts in the two-party system to present an alternative politics. Yet all these parties must accord with the practicalities of political survival by forming coalitions -- including the ruling coalition led by the LP and including its odd ally, the NP.

The foremost consideration for survival is the pulse of the electorate, and thus the mentality and behavior of politicians may generally be deemed a reflection of the mentality and behavior of the voters, as influenced further by the mainstream media and various advocacy groups. If voters think politicians are opportunistic and corrupt, politicians too -- without articulating it, of course -- think voters are just as opportunistic and corrupt. Many politicians feel there is high pressure from the voters for an entitlement and welfarist set of policies. These voters and pressure groups (including non-voters like those below 18 years old) feel that they are entitled to be given free healthcare, free education, free or highly-subsidized housing, credit, tractors, burial, etc.

It is always easy and populist to blame politicians who, in turn, take advantage of populism and the entitlement mentality by supporting high and multiple taxes, or pushing for a further increase in those taxes, so they will have additional revenues to fund various types of subsidies, including corporate welfare for crony firms.

Such political populism and welfarism coupled with corruption are costly to the taxpayers. While the politicians and governments of other countries, our neighboring countries, in particular, have their own brand of populism, their taxes are not as high as those in the Philippines.

In the 10 countries who make up the ASEAN, for instance, the Philippines has the highest corporate income tax rate, the highest withholding tax for resident aliens, and the highest VAT. It has the second highest personal income tax rate in the region.

Notice that Vietnam is rather aggressive in cutting its tax rates, coupled with liberalizing their economy to more investors, local and multinational. That is a good formula to broaden the tax base and possibly realize even bigger tax revenues.

If Philippine politicians and presidentiables cannot escape following political populism, then this should be complemented by tax realism -- people and businesses dislike high and multiple taxes, so the tax base becomes narrow, the temptation/incidence of tax avoidance rises, and overall tax collection becomes smaller than its potential.

Consider also that after almost one-third of people’s monthly incomes has been taken by the government, there are other mandatory and forced contributions to government-owned social security agencies (SSS, GSIS, PhilHealth, Pag-IBIG, etc.). And from the take-home pay (net of personal income tax and mandatory contributions), government further collects many other taxes and fees -- VAT for almost everything on consumer items, vehicle registration tax for cars, franchise tax for businesses, real-property tax, etc.

And that is one criticism of the ruling LP, that it is not acting liberal enough. Many of its adopted and implemented policies are far from liberal and closer to the populist and welfarist philosophy, while eschewing tax realism too.

Another example that the LP diverges from (classical) liberal philosophy of more freedom for the citizens and limited government is the proposed Cavite-Laguna Expressway (CALAX) -- about which Dr. Raul Fabella noted in an article that “the bid parameter should have been the lowest toll charge rather than highest premium payment to the government.”

Thus, future CALAX users should pay lower toll fees (more savings in their pockets) and not pay more because of the higher payment to the current government.

Tax competition among ASEAN member-countries is happening and winners, very often, are those who offer low tax rates and carry out tax regulations that are easy to remember and manage.

Presidentiables and political parties should consider campaigning and advocating for drastic cuts in both corporate and personal income tax, withholding tax, VAT, and other types of taxes.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, a Manila-based think tank that advocates classical liberal ideas, and a fellow of the South East Asia Network for Development (SEANET), a regional center that advocates economic freedom in the region.

See also: 

Wednesday, July 01, 2015

Binay Dynasty, 29+ Years in Makati

For the first time in 29 years and 4 months (March 1986 to July 2015), Makati City has experienced a non-Binay as City Mayor. The premier city known as the country's financial center has Jejomar "Jojo" Binay (the country's Vice President, 2010 to present) as Mayor for many years, and in between the max 3-terms limit for Jojo, his wife, Elenita Binay, served as Mayor. Then Jojo goes back again as Mayor. Then when his second set of 3-term limits ended, his son, Jun-jun Binay became Mayor.

The family is accused of plunder and large-scale robbery at the Ombudsman. Mayor Junjun was suspended by the Ombudsman last March over plunder cases in the over-pricing of Makati Parking building. Vice Mayor Kid Pena took his oath as Acting Mayor but Junjun managed to get a temporary restraining order (TRO) from the Court of Appeals (CA).

Yesterday, a second suspension order was served by the Ombudsman, over the over-pricing of Makati Science HS building. Again, Junjun and supporters opposed the suspension order. They also ran to the CA to get another TRO but they failed, the CA set various conditions before it would grant another TRO. So Junjun was forced to step down.

The Binay clan is the most extensive political dynasty in the country of all time. Four members of the family are high government officials: (1) VP Jojo Binay, the father; (2) Sen. Nancy Binay, the older daughter; (3) Congresswoman Abigail Binay, the younger daughter; and (4) suspended Mayor Junjun Binay, the son. (5) Mrs. Elenita Binay, the wife, was an ex-Mayor too.

VP Binay's multiple political tentacles continue as he aims to be the next President of the country in 2016. The old man, perhaps approaching 80 years old, is also the President of the Boy Scouts of the Philippines (BSP) for 1-2 decades now. So greedy with power and the various perks and privileges associated with the BSP, he never relinquished this organization of mostly elementary school students nationwide.

Last week, the VP resigned from his Cabinet positions in the PNoy government, particularly as head of HUDCC and another body in charge of OFWs. His position there for several years is also known for some corruption scandals.

Sen. Koko Pimentel asked him to attend a Senate investigation about those corruption allegations. The VP sent this arrogant letter to the Senator.

"Magpakalalaki ka", hehehe. Too bad for him, Sen. Pimentel is more transparent, more "manly" than him and sent him this reply.

The VP is scared when challenged to public testimonies -- at the Senate, at the Ombudsman -- so he can disprove serious accusations and allegations of plunder and large-scale robbery.

VP Binay, you should change tack now. If there is nothing to hide, face those accusers. But if you have lots to hide, better back off from your Presidential ambition, admit wrong doing and ask for forgiveness from the public.

See also:
Branding Via Clans, Not Philosophy, April 05, 2013
Weekend Fun 41: Nancy Binay, Grace Poe, Other Politicians, May 25, 2013 
Weekend Fun 52: Nixon had Watergate, Binay has Dasma Gate, December 20, 2013
 Dr. Doy Romero on Binay, Roxas and Grace Poe, June 01, 2015  
Bernard Ong's Analysis on Binay, PoeJune 21, 2015

Monday, June 29, 2015

Election 15, On Inclusive, Principled, Competent and Humble Presidentiables

My former Prof. in undergrad Political Science subject in UP Diliman in the 80s, Dr. Segundo "Doy" Romero, asked yesterday in his fb wall, "Is Mar Roxas inclusive, principled, competent, and humble as appropriate to the Philippine Presidency?"

He then defined those four concepts.

1. “Inclusive” means you, the candidate, is committed to the quality of life of, by, and for the whole Filipino people. Inclusive development means enabling the poor, the vulnerable, the marginalized, and the disadvantaged to develop faster than the rest of society.

2. “Principled” comes from a consistent code of behavior (“sa isip, sa salita, at sa gawa”) that, faced with a series of dilemmas, enables you to choose the higher interest of nation over sectarian or narrow interests.

3. “Competent” comes from doing the right things right – good technical and administrative results being consistently produced to match good intentions. This includes extending your reach beyond your grasp through teamwork and technology.

4. “Humility” is when self-praise is unnecessary; it comes from public acknowledgment that you are inclusive, principled, and competent.

I commented and gave a direct answer, No.

But in fairness to Mar Roxas, other Presidentiables like VP Jojjo Binay, former President Erap Estrada, Sen. Alan Cayetano, Sen. Bongbong Marcos, other presidentiables, will also have a NO answer, at least for me.

Sen. Grace Poe may have humility; and competence, am not sure. 

With the current system of personality-oriented, not philosophy or ideology-oriented politics in the PH, no candidate can be really principled. Where the populist and welfarist idea prevails, Presidentiables and other politicians will be swayed by populism too. If majority of voters want more subsidies, more welfare, more entitlement programs, never mind that taxes are high and public debt is rising yearly because of annual deficit, with or without a crisis, most or all Presidentiables will be swayed towards populism.

Being a free marketer and believer of classical liberalism (not US liberalism or other variants), the closest political party in this ideology in the PH is the Liberal Party. The LP is also affiliated with Liberal International (LI), based in Europe. European liberalism is closer to classical liberalism.

My beef or complain about the LP is that it is not acting liberal enough. Many of Its policies adopted and implemented is far from being liberal but closer to the populist and welfarist philosophy. Notice how socialists like Walden Bello. Joel Rocamora, Ronald Llamas and other officers of BISIG-Akbayan found it easy to be in partnership with the LP. Either the latter group are confused socialists or the LP are confused liberals.

Sir Doy asked, "Is it possible to assess the utility of political parties in terms of the outcomes they envision and actually achieve for the people and nation over a period of time...?"

Maybe Yes. One problem is that all political parties here say the same thing -- "good governance", "anti-corruption," or "the current administration is corrupt, we can clean government", etc. And personality-based political parties are born. PROMDI party by Lito Osmena, REPORMA party by Rene de Villa, Aksyon Democratiko by Raul Roco, PRP by Miriam, PMP by Erap, Lakas by FVR and JDV, etc. When those leaders are gone or lie low, the party is gone or become less visible too.

We cannot expect much differences among political parties and leading candidates. The visible difference perhaps is that one candidate is more vulgar in its plunder and robbery (like Jojo Binay, based on various pending and filed cases against him and his family) while the others are less vulgar.

Very often, the mentality of the politicians is a reflection of the mentality and behavior of the voters, the public, mainstream media and NGOs. From some politicians that I talked to, they often say, "so many people clamor for it", referring to the entitlement and welfarism mentality. Many voters  feel they are entitled to be given free healthcare, free education, free housing, free or highly subsidized credit, tractors, burial, etc.

The people's values, in short, are corrupt. Many people will not admit it of course that they have corrupt minds and entitlement values. It is always easy to blame the politicians. And somehow true, the politicians take advantage of populism and entitlement mentality. How else can one justify that the government confiscates almost 1/3 of people's monthly income, and from the take home pay, government further collects many other taxes and fees (VAT on consumer items, vehicle registration tax for their cars, real property tax for their house and lot and farm, franchise tax for their business, etc.).

See also:

Sunday, June 28, 2015

CSOs and State 22, CIPS' Community Schools Project in Indonesia

Here is another noble project worth supporting. Our friends in Jakarta, new independent think tank Center for Indonesian Policy Studies (CIPS) is launching a big project -- to develop NGO-administered community schools that will provide low cost but good quality education for some 36 M poor Indonesian kids. They are seeking donations for this project. In their special site for this project, CIPS wrote,

Low-cost community schools is a way to get more kids in classrooms.

Low-cost community schools are schools set up by community leaders and members to teach children from low-income families. Community schools use curricula that give parents and teachers more influence, so that schools provide their child the type of education they feel is most needed for better opportunities.

Students from low-cost community schools in Asia and Africa have even done better than their counterparts in government-run schools. Proving that quality education does not need to be expensive, and can be done.

For example, in India, poor families are willing to invest $2 a month to send their children to such community schools. Kids in these schools achieve higher scores in maths and english than children in public schools.

Being a think tank, CIPS will conduct a major study on how public basic education in Indonesia can be made more effective and less costly. The paper, when finished, will find its way in the hands of the Education Minister and Indonesian legislators. CIPS has a working relationship with some important policy makers in Indonesia.

It should be a good initiative that can be replicated in other big SE Asian countries with big population like the Philippines, Vietnam, Thailand and Myanmar. Here in the PH for instance, I think ALL high officials and consultants of multilaterals and foreign aid (UN (WHO, ILO, UNDP, UNICEF, etc), WB, ADB, USAID, etc.) plus high PH government officials and legislators, them who endlessly call for "more government spending in public education", do NOT bring their kids to public elementary and high schools, except in science HS. That alone is a clear admission by the eople working for those institutions that they have high distrust of the quality of public education.

I admire and support the CIPS for this project. Friends and readers, please consider giving a donation for this project. Thank you.

See also:
CSOs and State 18: Civil Society as Lobbyists for More Government? Cigarette Warning Bill, March 02, 2014 

Saturday, June 27, 2015

BWorld 8, Manila's Traffic and Transport Woes

* This is my second article  for BusinessWorld Weekender yesterday.

Metro Manila’s transport woes and the aircon-van alternative 

ELLEN is a senior accountant in one of the offices on Ayala Avenue, Makati City. She lives in Dapitan, Manila. Her father has a car that she can borrow occasionally and drive to Makati but she has little patience enduring the traffic congestion, then paying high parking fees in Makati. So she takes public transportation.

If she takes the regular transportation route to Ayala, that means three rides: jeep from Dapitan to LRT Tayuman Station, then LRT to Buendia Station, then aircon bus to Ayala. Total fare would be P35 but travel time will be between 1.5 and 2 hours one way due to the traffic and the inconvenience of walking and queuing to ride the train then the bus.

There is an alternative to multiple and inconvenient rides, the air-con vans. Only one ride from Dapitan to Makati, travel time is one hour or less, fare is P60 for the legal, franchised vans up to Ayala, and P45 for the non-franchised “colorum” vans that stop only at Makati Central Post Office, at the Buendia-Ayala intersection. To save money, she takes the “colorum” van, gets off at Makati Post Office, then walks two blocks to her office.

While the colorum van drivers can somehow deal with the “yellow boys,” officers of the Makati Public Safety Authority (MAPSA), they will have difficulty dealing with another bureaucracy, the “blue boys” of the Makati Parking Authority (MAPA) keeping watch on Ayala Avenue. These officers are often stricter and more inclined, shall we just say, to slapping penalties on both public and private vehicles.

Being robbed in an air-con van by a fellow passenger is a possibility, of course, but that risk is minimal, compared with the risk of being robbed in a jeepney or on the streets, as one commutes from one ride to the next. It is also inconvenient, obviously, to be out in the streets when it is raining and the streets are flooded.

Queuing at Dapitan can be long, because of the many residents who commute to Makati where they work, and the number of aircon vans is not enough. Normally, Ellen would be in a queue for 30 to 45 minutes until a new, empty van arrives, but she prefers the relative convenience of taking only one ride in an air-con van.

Therefore, with or without a regular franchise from the LTFRB, those vans provide real public service to regular passengers like Ellen. She feels that her energy and work productivity are higher if she takes the van than if she goes through the three-ride system or drives a car.

Government officials have yet to acknowledge this view, going by the serial harassment of drivers of “colorum” vans -- who can avoid the harassment and penalties if they bribe the officers, but this “cost” is passed on to the passengers, naturally.

Ellen has noticed that a number of these colorum drivers are off-duty policemen or their siblings, even officers at the usual government offices, or barangay chairmen. She believes roughly one-third of these drivers belong to those categories. Asked how she knows this, she says these drivers show their IDs, and they have these unique hand signals that traffic officers recognize to spare these drivers from their usual harassment. This is what happens when you have an observant passenger on board, as opposed to a commuter who is lost in his headset or social media.

Makati’s Central Business District (CBD) is a premier area for the Philippine economy. Business groups surely recognize this distinction as sustained through the decades by their harried employees. Data from the city government’s website show that as of 2012, there are 472 banks, 3,279 insurance and other finance-related institutions, and 48 shopping malls in Makati. Data as of 2013 show that there are 41 PEZA-registered IT buildings, 47 embassies, 40 consulates, and 20 international organizations like the UN and its various offices located in the city.

These banks, hotels, shops, restaurants, malls, and other establishments employ roughly a few hundred thousands of people. Those employees, from the clerical to the managerial levels, need convenient transportation to be able to arrive at their offices promptly and render efficient work. Otherwise, employees beyond the frontline services may be spared the trouble of commuting to work, but many employers are still not open-minded enough to accommodate flexible time or work from home -- options that should ease Metro Manila traffic considerably.

This daily scenario is common everywhere in the National Capital Region, which, in the given year of 2013, contributed P4.29 trillion or 37.2% of P11.55 trillion in GDP. In the services sector in particular, 2013’s national output at current prices was P6.66 trillion, of which P3.49 trillion or 52.7% was contributed by the NCR.

The NCR’s registered population in 2013 was 12.5 million or only 12.8 percent of the total Philippine population of 98.2 million that year. But NCR’s weekday population can soar up to 15 million, as residents, including university students, from the neighboring big provinces of Rizal, Cavite, Laguna, Bulacan, and Pampanga would troop to the NCR to do various businesses.

The development of an integrated and efficient public transport system, as existing in developed economies in Asia and Europe, is the best long-term solution to Metro Manila’s traffic woes. That dream has been articulated for decades, until the gap in public transportation is now being filled by private initiative, to the chagrin of government.

The absence of an efficient and integrated public transport system in Metro Manila can be considered as due both to market failure and government failure. The appearance of air-con vans and other ride-sharing schemes like Uber is a market solution to such previous market failure. Government should not over-bureaucratize and over-tax these transport innovations. By stepping back from too much regulation and taxation, government effectively renders public service.

The services of air-con vans that provide workers and employees with convenient and direct public transportation, similar to school buses that transport students from their homes to school, are the next best thing for people who don’t or would rather not drive and brave the traffic. This is public service, providing an efficient, fast, economical, and safe car pooling system.

But when government agencies and their officers make the franchising system of air-con vans very costly and bureaucratic, many operators skip the franchise system and become “colorum” operators. To avoid the harsh penalties and regular harassment, they must bribe traffic enforcers, and this further compounds the culture of corruption in government. -- Bienvenido S. Oplas, Jr. 

See also: 

Friday, June 26, 2015

BWorld 7, Free Trade vs.Protectionism via Non-Tariff Measures

* This is my article for BusinessWorld Weekender. Posted online yesterday, hard copy is published today.

Trade, human welfare, and their barriers

TRADE is perhaps the single most important invention made by humanity to improve their condition and welfare. It is so vital as to be essentially inherent to human nature, as shown by the earliest, the most primitive societies.

This is because no man, no matter how bright and resourceful, is capable of producing everything that he needs for himself and his family, especially in modern societies. Modernization is possible only through specialization of labor and skills, making efficient production of certain goods and services, generating big surplus and using the surplus to procure other goods and services that are more efficiently produced by other people somewhere else.

While trade is vital to human welfare and progress, it is also the object of envy and contention among certain sectors of society in different countries. While it is human nature to have free trade among people, politics and governments come in to cater to special interests in society and deprive many consumers of the freedom of choice, by erecting various tariff and non-tariff barriers (NTBs) to trade. And this creates trade disputes among participating governments.

The World Trade Organization (WTO) was established in 1995 mainly to pave the way for a rules-based global trading regime. The rules are transparent and apply to all member-countries.

In a forum at the Asian Development Bank on May 21, WTO director-general Roberto Azevedo said the organization supports global trade and development via five schemes.

1. Providing a rules-based trading system that now covers around 98% of global commerce.

2. Serving as a forum where countries can sit down and monitor each other’s practices and regulations to ensure that agreements are observed and respected.

3. Offering a settlement mechanism for trade disputes between and among countries. Almost 500 trade disputes have been heard by the WTO, helping members to resolve their differences in a fair, open and transparent manner.

4. Fighting protectionism. During the 1929-1933 Depression, retaliatory trade restrictions wiped out two-thirds of world trade. Such practice was not repeated when the world experienced heavy fiscal and financial turmoil in 2008, and response by governments was mostly calm and restrained. Under the WTO, member-states knew that they were bound by rules and obligations, so they had the confidence to resist domestic protectionist pressure.

5. Providing a place where developing and least-developed countries have a seat at the table and an equal voice in global trade issues. These countries are also afforded special and differential treatment, and technical assistance to help improve their trading capacity.

While tariffs have generally gone down across many countries, there are various non-tariff measures (NTMs) and barriers that restrict free trade. The most prominent is restriction via various bureaucracies or trade bureaucratism, a serious problem for many exporters and importers.

In December 2013, a historic WTO ministerial conference in Bali produced an important output, the Trade Facilitation Agreement (TFA). Its goal is to make faster, easier, and cheaper the movement of goods across countries and borders. The WTO estimates that the TFA can reduce trade costs at the border by up to 15% for developing countries, and inject up to $1 trillion per year into the global economy, creating some 21 million new jobs worldwide.

The next challenge for the WTO is the TFA’s ratification by at least two-thirds of the member-states.

There are many other barriers to free trade. Here are the eight non-tariff measures (NTMs) imposed by different governments that limit or restrict the movement of goods and services across borders: Sanitary and phytosanitary (SPS), technical barriers to trade (TBT), anti-dumping, countervailing duties, safeguards, special safeguards, quantitative restrictions (QRs), and state trading enterprises (STEs).

STEs are also known as state-owned/operated enterprises (SOEs) and, in the Philippines, they are called government-owned and -controlled corporations (GOCCs).

In East and South Asia, the NTMs are plentiful. See these charts. In the first row are charts for the Philippines, Thailand, Indonesia, Malaysia; second row has India, China, Japan, USA.

In the Philippines and Indonesia, the most common NTM is SPS. In Thailand and India, safeguards and anti-dumping are the common NTMs. China loves imposing QRs and anti-dumping while Japan’s favorites are safeguards and special safeguards.

The US, falsely labeled by many people as the “chief ideologue” of the “jobs-killing free trade” philosophy, is actually a practitioner of multiple NTMs and other forms of trade restrictions.

In contrast, many other economies have very few NTMs, among them, Singapore, Hong Kong, United Arab Emirates, Qatar, United Kingdom, Germany, Spain, and Sweden.

Hong Kong and Singapore are the known practitioners of unilateral trade liberalization in goods in this part of the planet. Their NTMs are few compared to their neighbors in East Asia. UAE and Qatar used to be very small economies that became super rich largely through trade opening.

UK, Germany, and other EU member-countries have strict observation of the free mobility of goods and people across the Union. Thus, their NTMs are very few, except for SPS measures. Freeing trade is among the most important policies that any nation can undertake to unleash the entrepreneurial skills and potentials of its people.

Whether high tariffs or low tariffs but multiple NTMs, such policies deprive the people of the freedom to choose and buy those goods and services that maximize their individual and household welfare. When households make big and regular savings via purchase of cheaper, freely-traded commodities, they can use those savings and surplus to procure other goods and services that otherwise they could not buy. This expands the range of commodities among consumers and, in turn, this expands business and employment opportunities for many other people.

Free trade simply expands human welfare, whether people realize it or not.

Bienvenido S. Oplas, Jr. is president of Minimal Government Thinkers, a Manila-based think tank advocating free-market economics, and a fellow of South East Asia Network (SEANET), a Kuala Lumpur-based regional think tank advocating free trade in the ASEAN. 

See also: 

Wednesday, June 24, 2015

AEC 14, SEANET-ABAC Meeting, IDEAS-OBG Partnership

The ASEAN Economic Community (AEC) will materialize in just six months, at end-December 2015. Many people both within and outside the region are excited about this common market project, composed of some 630 million people. Free movement of people and commodities, free mobility of goods and services within the 10 member-countries. That is economic freedom. 

But not full mobility yet, there are still pockets of protectionism especially in services, in almost all member countries. But the trend is towards gradual phase out of those non-tariff barriers (NTBs) in  goods and protectionism in services.

Yesterday, the team of South East Asia Network for Development (SEANET)  met with Tuan Syed Nabil Aljeffri, the Secretary General of the ASEAN Business Advisory Council (ABAC). Photo below, from  left:  Mr. Yohannan "Yogi" Nair of SEANET, Mr. Aljeffri, and Ms. Fareeza Ibrahim, also of SEANET.

In its facebook page, SEANET reported that the discussion focused on the various challenges and prospects that ASEAN and regional small and medium enterprises (SME's) face, and the necessary steps that must be taken to ensure that economic integration is equitable and sustainable in the long run.

See also the network's first newsletter,

On a related note, our ally and fellow free market think tank based in Kuala Lumpur, the Institute for Democracy and Economic Affairs (IDEAS), has partnered with the global publishing and consultancy firm Oxford Business Group (OBG). The two think tanks will produce a report about Malaysia and the ASEAN economic integration.

IDEAS is the "mother entity" of SEANET. It is also a member of the Economic Freedom Network (EFN) Asia. Photo below, IDEAS CEO Wan Saiful Wan Jan and OBG’s Regional Manager for Asia Lauren Denny.

From IDEAS Press Release today,

The Report: Malaysia 2016 will provide detailed analysis of what the launch of the ASEAN Economic Community at the end of 2015 signals for both the regional and global economy. The publication will chart ASEAN’s drive to ensure people and their needs remain the top priority in the nations’ efforts to promote regional cooperation and solidarity.

Other issues set for coverage include ASEAN’s push to boost the part played by small and medium-sized enterprises (SMEs) in regional economic development and its efforts to promote more public-private sector partnerships (PPPs).

In other analysis, The Report: Malaysia 2016 will explore the achievements of the 10th Malaysia Plan, as well as the launch and goals of the new 11th Malaysia Plan which will lead the country to Developed Nation status by 2020.The publication will also shine the spotlight on the Malaysian states of Sabah and Penang, where there is evidence of significant economic potential; as well as the opportunities for foreign direct investment (FDI) emerging across many of the sectors of the country’s economy.

The Institute for Democracy and Economic Affairs (IDEAS) has signed a Memorandum of Understanding (MOU) on research with OBG for its forthcoming report on the country’s economy. Under the first-time MOU, OBG will work with the leading think-tank, which promotes market-based solutions to public policy challenges, to compile and produce The Report: Malaysia 2016.

Wan Saiful Wan Jan, Founding Chief Executive of IDEAS said he is excited to contribute to The Report especially this year as IDEAS has just started their project on ASEAN.

"This is an exciting time for Malaysia and for the region. The birth of the ASEAN Community and the ongoing negotiations around the TPP hold huge potential for growth in this region and if done correctly Malaysia will certainly benefit from them. The government too has introduced some important structural changes in our economy which shows their commitment to improve the investment climate. My team has been looking into these issues and we are very keen help OBG capture these important developments in The Report."

OBG’s Regional Manager for Asia Lauren Denny said she was delighted that the Group’s team in Malaysia would benefit from IDEAS’ local knowledge in what marks its ten-year anniversary of analysing the country’s economy.

“Oxford Business Group has long recognised the importance of working closely with local partners who bring on-the-ground insight and expertise to the table,” she said. “The Institute for Democracy and Economic Affairs and Oxford Business Ground share plenty of common ground when it comes to areas of research, especially in the fields of economics and education. I am thrilled that our team will benefit from the institute’s contribution to our forthcoming report, which we’re sure will be a valuable tool for investors.”

See also:
AEC 10: Indigenous Rights, Labor and Human Rights in the ASEAN, April 21, 2015 
AEC 11: Trade and Economic Development is Social Development, April 25, 2015 
AEC 12: Workshop on Trade Liberalization at the APF 2015, Kuala Lumpur, April 27, 2015 
AEC 13, SEANET Website, AFAS in Financial Services, June 18, 2015

Election 14, The Middle Earth of PH Politics, by Doy Romero

The Presidential and local elections in the Philippines are just 10 1/2 months away. Generally it will be a battle between which side of Big Government advocates will prevail. Nonetheless, we can delineate or distinguish them which side will advance Big Government + Big Private Monopolies and Oligopolies, vs. Big Government + Competitive Economy.

I think the old and traditional politicians like VP Binay belong to the former while newbies like Sen. Grace Poe may belong to the later, am not sure.

What about good governance? For me, Big Government = bad governance There is little or no justification why bureaucracies, regulations, permits, taxes, fees, fines, mandatory contributions, etc. should be as many as possible.

In the absence of a political party in this country that advocates limited and small government, free marketers like me can only compromise with candidates or political parties that somehow advocate more economic freedom and less monopolies, oligopolies, which are always created by government via Constitutional restrictions and franchising system.

This article by my former Prof. in a Political Science subject in UP Diliman in the 80s, Dr. Segundo "Doy" Romero, is another sharp analysis and can help guide voters who among the different political parties and factions can advance more economic freedom and who can oppose it. Sir Doy posted this in his fb wall, reposting with his permission.

The Battle for "Middle Earth" Begins
 Dr. Segundo Romero
June 24, 2015

The resignation of Jejomar Binay from the Cabinet of President Aquino is a declaration of war. Now the campaign for the Presidency in 2016 is unofficially open. The battle lines are drawn. Consolidation of forces begin.

The Binay declaration of war is timed to prevent other opposition contenders from prematurely declaring and committing themselves to the fight for the Presidency. If they do, it will take time and a lot of resources before they and their core supporters can be cajoled to give up their presidential ambitions and agree to put themselves behind Binay. That would waste at least six months of preparation for and conduct of war.

Now that Binay is the default leading opposition contender, he can now begin to consolidate the fragmented opposition. He is hopeful despite the polls showing he is steadily losing the people's favor, for he finds himself in fertile opposition ground. PNoy has so changed the political landscape that he has created powerful enemies among the traditional elite and political families. These families, while themselves competitors and rivals for slices of political and economic power, are willing to set that aside at this time, just to bring back the old rules of the game of politics where they perform exceedingly well..

Jejomar Binay is the man for this nostalgic return to the status quo ante, the return to the good old days. There is no doubt He is open to negotiation. He is an astute cobbler of win-win situations with political factions and other parochial tribes. So, he will be busy building the forces of the future Binay empire, selling shares of stock to the following, who must now be eagerly waiting to make deals with him:

Class A: The Core Ex-Presidential families

1. The Macapagal-Arroyo family and loyalists
2. The Estrada family and loyalists
3. The Marcos family and loyalists

Class B: The "Penumbra" Dynasties, such as

4. The Enrile family and loyalists
5. The Bong Revilla family and loyalists

Class C: The Issue advocates, such as

6. The "progressive" groups who have been calling on PNoy to resign
7. The various opponents of the Tuwid na Daan in the government
8. The various opponents of the Tuwid na Daan in the private business sector
9. The passionate advocates or opponents of very specific policies (FOI, BBL, CCT, K-12) who are disaffected

Class D: The Spurned Supporters

10. The various enthusiasts of the Tuwid na Daan who have been variously slighted, rejected, abandoned, and now decry what they claim to be the Baluktot na Daan

Class E Middle Earth

At this early point, there is also a big chunk of the electorate who are unattentive, just observers or hecklers of the passing political scene, who are yet uncommitted, perhaps as much as 60 percent of the electorate. The polls show they are the voters who are lower in socio-economic status and farther from Manila. They are in the middle between the Binay camp and the Poe camp. They are the Middle Earth.

This is a source of hope for Binay. The Binay touch had shown wonders here in the 2010 elections, using local government officials and leaders to transact electoral support the way cobradors of jueteng fan out to the countryside.

Binay's assets are frozen and, under the watchful eye of the public, cannot be renewed or augmented through public coffers as in the past. He needs the subscription of various investors and stakeholders to his campaign.

His promises will be weighty, because Grace Poe, will not be willing to enter into these sweetheart deals, using the Presidential prerogatives as a futures commodity to be traded.

The reason Grace Poe has edged Binay from the presidential preference polls is that she has served as the consolidation point for all those who advocate for continued good governance and rejection of corruption.

The Binay declaration of war simply creates a parallel, symmetric consolidation around two opposite poles -- the experienced but tainted, the inexperienced but principled.

For the first time since the Ferdinand Marcos-Cory Aquino face-off in 1986, we will have another face-off between just two major opponents -- Binay and Grace Poe. .Any other candidate will serve to be a muddler -- serving only to draw votes from any of these two primary contending forces. Mar Roxas and Duterte are in this category.

SWS and Pulse Asia, working independently but validating each other's reading of the people's political pulse, will ensure that no politicians will be blinded with illusory hopes of personal grandeur.

With social media as the new powerful channel of information between candidate and voter, the 2016 elections will be the neatest, sharpest reflection of the people's will in a long, long, time.

It will tell us whether the Filipino people essentially judge on the basis of the "aliwalas ng mukha" factor, or the "lalim ng bulsa" factor.

For the first time since Cory Aquino, the Philippines is poised to have a majority president in 2016. The question is, Binay or Poe? I already have my answer, and it makes me smile.

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