Thursday, December 18, 2008

Global Capital 2: ICT, Capitalism and Government

A friend's yahoo email add was hacked, the hacker or virus was able to get into his address directory, and a message announcing or promoting a particular product and website was sent to everyone in his address directory. What's worse, he lost many of the contacts in his directory. Another friend commented that he's using Linux to protect himself from those undesirable hackers and/or viruses. He mentoned one Linux product or derivative, Kubuntu.

I only hear about Linux, but I haven't tried it yet, or too lazy to try my hand in learning those softwares and IT systems. Just a typical user of whatever is user-friendly, reliable, cheap or freely available.

Kubuntu sounds like an African term or village. Nonetheless, innovations like Kubuntu and its cousins or distant relatives, are all products of capitalism and its subversive nature of trying to knock down the complacent and irresponsible, anytime and anyday of the year.

Yahoo, google, yahoogroups, googlegroups, blogger, facebook, friendster, multiply, Linux, etc., are all products of capitalism too and the continuing innovations inherent to it. These are all free products and services, freely available to the people who wish to use them anytime and anywhere, so long as they have access to the internet. And somehow the capitalists, the inventors of those IT systems are making money somewhere. Zero coercion, zero taxation, zero bureaucracy, but there are free services and millions or billions of $ of income to the inventors. That's the "magic" of capitalism.

And capitalism is being ridiculed by many people who so love government regulations, if not socialism. They even herald the "demise" of capitalism with the current global financial turmoil as the single biggest proof for their claim. But it's not the "crisis" of capitalism. Capitalism is simply removing and culling the complacent and irresponsible among its players. The current turmoil is market self-correction to remove the excesses and abuses in the market. It's a healthy process over the long term, though there are pains in the short-term, the same way that there were unjustied gains in the past as a result of those excesses.

Oeople are rationale by nature. If they lose their jobs in this particular industry and company, there is nothing that can stop them from trying another job or another career in another industry, in another company, in another region or country and continent, using another technology and management style, etc. There are always options and alternatives, provided people and markets are allowed to make adjustments freely, and not curtailed by endless regulations and restrictions to mobility.

In the coming months and years, more versions of kubuntu and other derivative products of Linux or competitors by the latter, will be made available to the people around the world, freely or cheaply. Because capitalism never rests. It's a dangerous virus that can cripple the less innovative players by understanding the needs and whims of the people, the consumers around the world, and supplying such changing needs and whims.

Related Papers that I wrote,

(1) ICT and Government

December 03, 2008

Today, I was one of five speakers in the "Congress briefing on the Global IT industry" held at Edsa Shangrila Hotel. The event was sponsored by the Computing Technology Industry Association (CompTIA). All the 4 speakers were industry players, I was the only "outlier" coming from a think tank that dabbles on various topics and subjects. It is also my first paper on information and communication technology (ICT).

My paper is entitled "ICT growth amids mixed government intervention". Below are my concluding notes:

A mixture of less government intervention and regulation in the ICT sector, and a regime of bureaucratic business regulations plus burdensome multiple taxation in general, created some modest growth in internet use and penetration in the Philippines. The 15 percent of Philippine population linked to the global web in this period is small even among many neighboring countries in east and south-east Asia.

The government needs to step back, not come and intervene more, in business regulations and taxation in general, and ICT sector in particular. The proposed creation of a new and big department to harmonize government use of ICT in the short-term, and centralize regulation of private enterprises in the ICT sector later, may create more problems than solutions because the pursuit and propagation of information is one of the inherent values of people. But since the DICT bills are already in advanced stage of possible enactment in Philippine Congress, regulatory restraint should be emphasized in the said measure.

The government and ICT players should go for policies that stimulate competition-driven solutions, innovation and investment. And policies designed to address perceived market inequities should be avoided as such measures are easily used to advance protectionist trade policies and an anti-competitive business environment.

In the current debate in the EU regarding more regulation of broadband access providers (BAPs) for instance, two writers proposed that “the best approach to improving the provision of broadband access is to ensure that the environment in which BAPs operate is competitive. That means removing regulatory and other government-imposed barriers to competition, not creating new barriers in the form of restrictions on differentiation and mandatory quality of service (QoS).” (Morris, Gelder, 2008).

(2) The Ratings Agencies

February 11, 2008

The world has plenty of big banks, big car manufacturers, big IT companies, big airlines, big hotel chains, etc. But there are only 3 big ratings firms - S&P, Fitch and Moody’s. This looks like an oligopolistic industry. How come? I am curious.

In a number of indebted countries like the Philippines, these ratings agencies are often more powerful than the IMF in reviewing these countries' “credit-worthiness” or their ability to pay later. I have read some of the analysis by the staff of these ratings agencies, and funny that they often sound like the IMF bureaucrats that they are supposed to replace. For instance, it's not uncommon to read the former arguing for "more government spending and avoid early 'balance budget' and tax-cut goals for macroeconomic stability."

Turns out that it's the companies being reviewed, or the countries being reviewed, that often pay for these ratings agencies. Hence, the subprime crisis in the US was not "forewarned" by these agencies.

* See also Global Capital 1: Why Market Turbulence are Necessary, November 19, 2007

Tuesday, December 16, 2008

Pol. Ideology 10: Joe Stiglitz and the Market

Joseph Stiglitz, the Nobel prize winner, at one time one of my favorite economists, recently wrote an article, "Capitalist Fools"

http://www.commondr view/2008/ 12/10-1
Published on Wednesday, December 10, 2008 by Vanity Fair

In his concluding paragraph, he wrote,

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pushed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace by America-and much of the rest of the world-of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

Joe Stiglitz has been among the chief spokesmen of "more government regulations, abandon market self-correction" philosophy these days. It was very clear in his first sentence above.

The US government played big intervention in the build-up to the current housing bubble that burst recently:

a) Community Reinvestment Act (CRA), aka "anti-redlining law" where people with low or unstable incomes, cannot be turned down by banks when they borrow for housing mortgages. Enacted October 1977 by Pres. Jimmy Carter, a Democrat, and never repealed or amended by succeeding Republican leaders who recently turned big government advocates themselves.

b) Freddie and Fannie: if private banks will have some trouble lending to financially-suspect people, the "sub-prime" borrowers, even the NINJA (no income, no job or asset), they will guarantee those loans.

c) 12,100+ government financial regulators in Washington DC alone, working full time, that's not enough regulation?

d) Bail-out statism (AIG, Bear Sterns, Freddie and Fannie, etc.) by several hundred billion $.

And Joe Stiglitz would still consider that "minimal government role"?
He's dreaming, if not lying.

I wrote these two short papers recently:

(1) From Recession to Depression

December 12, 2008

People have now accepted the fact that the US, Japan, Germany, other rich countries are now in recession. The new discussion, even on a limited scale, is if the recession (short-term economic contraction, at least 2 consecutive quarters) will morph and expand into a Depression, similar to the Great Depression of 1929 to 30s, even early 40s to some countries.

A NY Univ Econ professor, Dr. Noriel Roubini, wrote a rather scary scenario, below.

We are in the middle of a very severe recession that's going to continue through all of 2009 - the worst U.S. recession in the past 50 years. It's the bursting of a huge leveraged-up credit bubble. There's no going back, and there is no bottom to it. It was excessive in everything from subprime to prime, from credit cards to student loans, from corporate bonds to muni bonds. You name it. And it's all reversing right now in a very, very massive way. At this point it's not just a U.S. recession. All of the advanced economies are at the beginning of a hard landing. And emerging markets, beginning with China, are in a severe slowdown. So we're having a global recession and it's becoming worse.

Things are going to be awful for everyday people. U.S. GDP growth is going to be negative through the end of 2009. And the recovery in 2010 and 2011, if there is one, is going to be so weak - with a growth rate of 1% to 1.5% - that it's going to feel like a recession. I see the unemployment rate peaking at around 9% by 2010. The value of homes has already fallen 25%. In my view, home prices are going to fall by another 15% before bottoming out in 2010.

...You should preserve capital. It'll be hard and challenging enough. I wish I could be more cheerful, but I was right a year ago, and I think I'll be right this year too.

(2) Cut Taxes to Limit Recession

December 02, 2008

The proposal by UN economists, as well as economists by various governments and multilateral institutions, that governments must spend more and bloat their budgets to counter economic slow-down if not recessionary trends, is wrong. When the economy is bad, people tend to limit their spending, to save more, and this further reduces the sales of other people and enterprises selling various goods and services. When government will spend more, then it will tax and/or borrow more. When it hikes the taxes, this further reduces the spending power of the people; when it borrows more to bloat its budget, it will compete with private borrowers from banks and other financial institutions, which can push domestic interest rates to go up, and will help push inflation to go higher.

The alternative policy to counter economic slowdown or recessionary trend, is for governments to cut taxes, fees and borrowings. This will put more money into the pockets and savings account of the people. More disposable income would translate to more private spending, while more savings will translate to lower interest rates, which will encourage investments and job creation.

It is a big myth propagated by many governments and multilateral institutions that more taxation and intervention by them will arrest recessionary trend, when they themselves and their tax-and-spend policies are a big part of the problem.

(3) Capitalism and Bail-outs Don't Mix

November 20, 2008

Another friend from Delhi, Mohit Satyanand, who is also a director at Liberty Institute in that city, posted a short but very frank and provocative paper about capitalism and bail-outs, in Outlook Money website yesterday.

Mohit wrote,

"The begging bowls are out.
All across the world.
And these are not your ordinary tin bowls, with dents in the bottom and black stains on the side. These are huge, yacht-sized begging bowls, being held out by people who haven't ridden a public plane in years, and work out of office suites the size of large family apartments. They're asking for bail-outs of billions of dollars, or thousands of crores of rupees - in loans, sovereign guarantees, tax deferrals, or lower interest rates....

"Failure is the primary reason why capitalism is the most successful way of running business - it is the process of natural selection. Companies that are poorly run or produce products ill-suited to the environment fall, and are taken over by smarter managers who understand the consumers better. Toyota makes cars that people want, at prices they are willing to pay. GM doesn't. It needs to go out of business. If the US Congress decides to bail GM out, ironically, the same people who don't want to buy will be forced to bail-out GM through the strange device called tax-payers' money.

These devices - whether in housing or banking, airlines or automobiles, prolong the agony of a financial crisis, which is a period of adjustment. Those who have failed need to exit; those who will succeed are already in the wings, but getting crowded out by governmental action."

It seems that competitive capitalism, that oldie but goldie economic system where expansion and failure is as certain as the sun rising up and setting everyday, is possible only in a small or limited government political set-up. Government should be BIG only in facing killers, kidnappers, rapists, land-grabbers, extortionists, embezzlers, and other types of criminals. But that same government should be near-zero in business taxation and regulation, so that it will have zero capability to bail-out large but mis-managed and sinking corporations.

It's also a lesson or warning for independent think tanks that rely on donations from private individuals, corporations and foundations. They should not solicit contribution from big corporations that owe their bigness due to political favors and rent-seeking. Sooner or later, those corporations will run into financial trouble in a competitive environment. And when they do, the first thing they will do is ask for government bail-out. And as a think tank that previously got money from them, it will have some "obligations" or "debt of gratitude" to somehow defend them. And it's going to be messy.

(4) Keeping Faith in the Market

October 16, 2008

A fellow free marketer friend expressed some reservation and doubt "if the bailout will make the average joe suffer less or more. What about the liquidity trap theory?"

I advised him to keep our faith in the market. Tthe market is composed of the big and small businessmen; gamblers and risk-averse investors; big and small producers and consumers, rich and poor. It's you and me, our neighbors, friends and enemies.

Even Karl Marx recognized the business cycle in capitalism, under his "declining rate of profit" theory. Smith, Hayek, Friedman, other classical and modern thinkers recognize business cycle and hence, would not recommend government coming in in times of market downturns, the same way that they would not recommend State intervention in times of market expansion and huge wealth creation.

I have argued it earlier, I will repeat it. In times of recession or recession-like conditions where consumers are cutting back on their spending -- meaning producers, shops, malls, restaurants and resorts are not making enough money -- government should cut income tax, drastic cut, to allow people to have bigger take-home pay out of their salaries. And government should better cut its bureaucracy too, encourage bureaucrats to become entrepreneurs or staff of entrepreneurs. Society needs more people producing and trading all sorts of goods and services. Big supply of everything would mean price of everything will later fall, then consumers will buy more, and the economy should be able to rise quickly.

One of the greatest maladies of our time is that the supposedly independent intellectuals -- those in the academe, in civil society, in media, in corporations, etc. -- are generally parroting what the unproductive but powerful people in the State bureaucracy are saying and advocating. For them, drastic tax cut in times like these is a crime; that we should surrender more of our income and savings, both current and future, to the State and the state will take care of us. This is the "mother of all rackets" ever invented and retained in the whole planet.

* See also:
Pol. Ideology 5: Have Movements for Liberty Progressed? June 26, 2006
Pol. Ideology 6: Quotes from Adam Smith, February 04, 2007
Pol. Ideology 7: Individualism, Entitlement and Freedom, April 30, 2007
Pol. Ideology 8: Ideas on Liberty, September 15, 2007
Pol. Ideology 9: Liberty and Choice, Atlanta and HK Conferences, June 09, 2008

Monday, December 15, 2008

Tax Cut 9: Flat Tax, 26 Countries Now

A friend, Bjorn Tarras-Wahlberg of the World Taxpayers Association (WTA) sent me this updated list of countries that have flat, low income taxes.

Flat income taxes 2009
from 1 to 26 countries in 15 years

Kyrgyzstan (since 2006) 10%
Kazakhstan (2007) 10%
Macedonia (2007) 10%
Mongolia (2007) 10%
Albania (2008) 10%
Bulgaria (2008) 10%
Serbia (2008) 10%
Georgia (2005) 12%
Macau 12%
Belarus (2009) 12% New
Russia (2001) 13%
Hong Kong (1947) 15%
Ukraine (2004) 15%
Iraq (2004) 15%
Montenegro (2007) 15%
Mauritius (2007) 15%
Czech Republic (2008) 15%
Romani (2005) 16%
Slovak (2004) 19%
Jersey and Guernsey (1940) 20%
Estonia (1994) 20% Lowered
2010 19%
2011 18%
Iceland (2007) 22,5%
Lithuania (1994) 24%
Jamaica (1984) 25%
Latvia (1994) 25%
Trinidad & Tobago 25%

Why flat income taxes?
1. Simple and fair
2. Promotes economic growth
3. Promotes tax competition
4. Neutral to inflation

Why mostly in the new democracies?
1. Liberal values with more individual freedom
2. Wish to get rid of socialistic high taxes
3. Wish to reduce the black economy
4. Wish to promote economic growth and increased tax revenues with lower taxes (see Russian example)
5. No heavy package of social welfare

Copyright: Björn Tarras-Wahlberg, CEO, World Taxpayers Associations 2008-12-05. Any news to: +46 70 325 00 11.

Meanwhile, I am posting 2 short papers on taxes early this year.

(1) Taxes vs. Subsidy

May 26, 2008

A Malaysian friend, Wan Saiful Wan, head of Malaysia Think Tank London, shared with us a news story, "Making the rich pay more for fuel", May 23, 2008. The article went this way:

"Malaysia's rich will have to pay more for heavily subsidised items including fuel as part of a new two-tier scheme to reduce government spending, reports said today. "We need to have a good system for those who deserve the subsidy, such as the lower and middle-income groups," Second Finance Minister Nor Mohamed Yakcop was quoted saying by the Star daily."

I think the headline was wrong. It says "Government wants to tax the rich" when the story says the "government wants to reduce subsidy to the rich". These 2 -- taxes and subsidy -- are different things. The first is taking money away from the people. The second is giving money to the people, the money coming from various taxes.

My take on this and almost any other issues on other sectors is that subsidies should be kept to the minimum – and taxes should be kept to the minimum too. You encourage something, you'll have more (consumption) of it; you discourage it, you'll have less of it. That's one of the "7 Principles of sound public policy" made by Larry Reed. So you provide more fuel subsidies, you encourage more fuel consumption. You tax oil, you discourage more fuel consumption.

If oil taxes around the world are removed, or at least drastically cut by one-half of their current rates, especially in European and North American countries, retail price of oil will drastically go down, which will encourage more fuel consumption, which will result in ever-higher world crude prices, perhaps shot up to $200 a barrel within a year or less. But at least people will not complain of the artificially high retail oil prices caused by oil taxes. They can complain of high retail price because of the high crude oil prices, high cost of refinery, high cost of transporting refined oil, etc.

If government revenue from oil taxes will decline if not evaporate, where will government get money to build new roads, or improve and expand existing ones? Road, especially expressways, should be on user-pay via toll roads. Roads can be privatized. So that the more you use the road, say you drive 100 kms a day on average, the more you will pay toll fees. If you use less, say only 20 kms a day, you pay less. This still discourages high fuel consumption. The rich who have more meetings, more places to visit and work, will pay more on toll roads and fuel. There is still "equity" there.

(2) On Tax Registration

April 01, 2008

Many firms and enterprises in developing countries operate in the informal sector or the "underground economy". There's one paper on Bolivia that says that on average, formality leads to higher profit. This is especially true for mid-sized firms but not for both smaller and larger enterprises.

Many small- and micro-level enterprises in developing countries indeed remain to be informal. This is because business registration in those countries are very bureaucratic and time-consuming, and the fees are plentiful too.

For medium-level enterprises, formal business and tax registration helps increase profit because the owners and managers of such enterprises can concentrate on their business, and worry less on extortion and harassment by the state's tax and trade bureaucrats.

* See also Tax Cut 8: Comparing HK and Philippine Taxes, March 04, 2008

Sunday, December 07, 2008

Education as parental responsibility

A number of friends commented and agreed with my earlier thesis that education is mainly parental responsibility, not government responsibility. When this idea will be accepted by many people, one implication is that ultimately, we do not need the Department of Education (DepEd) and the thousands of government schools. And we do not need to surrender lots of our earnings and savings to the government in the form of high and multiple taxes.

About language in the school, these days, mobility is the rule of the game. Your neighbors now in your village or community may no longer be there 3 or 10 years from now. They will soon migrate elsewhere, or you and your family will migrate soon, somewhere in the Philippines or somewhere in Asia-Pacific or in other continents. Some middle class families whose parents may not be good English speakers, will work hard to have their children become good in English reading and speaking -- because they plan to migrate somewhere in English-speaking countries in the future. Or they simply want their children to become international entrepreneurs or managers or artists someday. Or some want their children to learn Spanish because the parents will be working with companies that are based in Latin America or Spain. Or have their kids learn Korean or Mandarin or Japanese, etc. Countries speaking these languages are the Philippines' top trading partners,
that's why.

There are hundreds of reasons why parents want multi-lingual, multi-disciplinary training for their children as early as pre-school. Thus, the insistence of a national bureaucracy called DepEd to have one or two language as official language for ALL government schools around the country reflects the rigidity and desire for uniformity by a bureaucracy. They hate diversity.

Meanwhile, while we are stuck with a huge education and other national bureaucracies, and a big portion of our earnings and savings are stuck into forcibly funding those huge bureaucracies, we helpless citizens can only choose which language imposition can cause the least damage to our children's education. If we can't bear those impositions, then we will be forced to bring our children to private schools, while we still forcibly contribute for those public schools that we do not personally support and we do not directly benefit from.

Another friend reacted to my earlier posting and asked,

what if your parents did not want you to go to school.
what if your parents did not care about you
what if you were born as a streetchild
what if your parents cannot afford a good education
what if your parents are not as astute as you want them to be?

Well, if your parents did not want you to go to school, if your parents did not care about you, then you're fucked up! It doesn't matter if it is a cowboy capitalism or bleeding heart socialism state, you’re an unlucky child from irresponsible parents.

In a typical welfarist or trying-hard welfarist state, it is possible for irresponsible parents to work 6 days a week and drink 7 nights a week, because their children's education is not parental responsibility but "government responsibility" . And if the quality of government education is bad and mediocre, they can blame the government, blame the capitalists, blame the rich, blame everyone, except themselves.

But many politicians also like this, even prefer, poor quality public education -- but they won't publicly admit it -- because that would mean bigger allowance for "commissions" and robbery. In addition, the products of public school system in general will be unskilled (save for a few bright and ambitious students) and they become cheap labor employees because they are unskilled, and the poverty continues, and so there is more reason to demand "more tax money for public education" because people are poor. And they perpetuate a vicious cycle.

Meanwhile, there is no government restaurant, govt food chain, govt carinderia or turo-turo. But people are eating, rich and poor alike. Why? Because of product and food diversity. People can eat a P30 meal or P300 or P3,000 meal, but it doesn't mean that the one who eats P30 lunch in a neighborhood carinderia will die or become malnourished next week or next year, compared to someone who eats P3k lunch in a plush hotel.

People accept diversity and inequality in food service, diversity and inequality in clothing, shoes, houses, cellphones, etc.

But how come people won't accept diversity and inequality in education, so that government should always be there?

Now if some parents are too irresponsible to even think about their children's education (and nutrition and health care, etc.), then there is nothing that will prevent other parents and responsible individuals, to take care of the children of the irresponsible people. Voluntary charity is all around us, whether it's church-based or civic clubs and organizations, even village and sports clubs, etc.

Many people will be hesitant to accept there will be big voluntary charity to help the underprivileged people. But if they will not trust you and I, their friends and neighbors, as incapable of such action, why would they trust government politicians and bureaucrats to really care for the poor and underprivileged? What’s with the latter that they are more “trustworthy” than any average citizen?

Also, a household that pays P500,000 per year in income tax to the State, when that tax is slashed to P250,000 per year or less, that household will not burn and throw away the difference or savings or de facto "pay rise". They can go to Cebu or Boracay or Bohol or Boracay, spend the money there, and that money will go to the pockets of boatmen, employees and owners of airlines, hotels, restaurants, souvenir shops, etc. The people who receive bigger income will be happy to save more and bring their kids to different schools that cater to their hopes, preferences and budget constraints.

It still puzzles me why people would resist giving other people more personal freedom and responsibility, and would always call in the State to confiscate a big portion of their earnings and savings, to do things that people and their voluntary associations are capable of doing. Only those functions that people cannot effectively do by themselves, like neutralizing armed robbers, killers, rapists, land grabbers, carnappers, etc., that the State should come in. Then our taxes to the State to perform this kind of social function is highly justified. But the State to assume our children's education? our children's health care and nutrition?

CSOs and State 6: Stichting Kapatiran and Books for the Barrios

(Note:  This is my article for the online magazine,

One of the biggest and longest myths ever invented in this planet is that people are not capable of sustained voluntary assistance to their underprivileged fellowmen -- that is why government must come in to provide and engineer various forms of welfare and social assistance to the poor. That is why governments invented many forms of taxes and fees to finance an ever-expanding list of “government responsibilities”.

But people are greatly capable of voluntarily helping their less privileged fellow human beings. There are thousands of charity groups and civil society organizations (CSOs) in this country, as well as charity groups based abroad that have projects in the Philippines. I will mention two such initiatives here.

Stichting Kapatiran ( is a Netherlands’ based charity organization whose main mission is “supporting underprivileged street children and small local communities in the Philippines”. They have a number of community projects – basic literacy, akay kalinga, income-generating and livelihood projects – from Luzon down to Mindanao. This year, it has been selected as one of the recipients of the “Lingkod sa Kapwa Filipino Award 2008”. It is an award given by the President of the Philippines to organizations that are based abroad. The awarding ceremonies will be held next week.

I have known Kapatiran through one member of its board of directors, Ms. Wads Winjberg-Tiongson, a Kapampangan married to a Dutch lawyer, Bart Wijnberg. I have known Wads and Bart since 1987 when I first went to the Netherlands and they hosted me in their house in The Hague for a few days. I visited them again in 2003 after my seminar in Sweden ended.

In those visits, I noticed that their house would sometimes become a “refugee” or “assistance center” for some Filipinos who encountered problems with their work and employer, their visa or passport, or simply would have no money to go back home, and so on. Not that the couple are rich to pay for the plane fare of the problematic “kababayan,” but they have a wide network of friends there -- private individuals and government officials, both in the Dutch government and the Philippine embassy, who can help the distressed Filipinos. It is a story of low profile, unpublicized and personal charity work, repeated year after year for at least two decades now. Some Filipino graduate students studying at the nearby ISS who feel terribly homesick would also come to their place sometimes and have a “Filipino home plus adobo and other Filipino food” to cure homesickness.

I do not know how many awards Stichting Kapatiran has received so far. What I know is that the desire to help fellow human beings, Filipinos especially, both in the Netherlands and in the Philippines, are always in the heart of this couple and their like-minded friends in the Netherlands.

Another initiative is the Books for the Barrios (BftB program, where thousands of used books from the US that could possibly be heading to landfill stations, are collected and donated to poor students in poor villages in the Philippines and other developing countries. I do not know anyone from BftB, but I have a friend, also originally from Pampanga, who now lives in California, Ramon “Monchit” Arellano, who was passionately supporting that project.

Last year, Monchit heard that “due to dwindling financial support in the wake of many natural disasters (Katrina, tsunami, etc.), BftB may be forced to close its operations this summer if it does not generate enough funds… after more than 25 years of providing quality education materials to remote schools in the Philippines.”

In order to help, he registered for the San Francisco Marathon and started a website -- First Giving, with just a single purpose: he would run to raise awareness among his friends and other people, get donations for the BftB program so it can continue its mission and operations. Monchit targeted a modest goal of raising $4,000 and donate the amount to BftB. His initiave was noticed by the Philippine Consulate General Office in San Francisco and posted his story on their website. ABS-CBN was also at the finish line to interview him and the news was aired at Balitang America and posted in

Monchit works at AT&T in the Bay Area. He infected some guys in his company by bringing the AT&T Fil-Am employees association as occasional volunteers for BftB. He also secured some funding from AT&T Foundation (that was before the current financial turmoil). His family (with wife and their two kids) also do volunteer work for BftB for the past six years -- they help sort and pack used books, toys and computers to be shipped to remote public schools in the Philippines.

BftB received the money raised by Monchit from his First Giving and SF marathon as well as from other sources. In recognition of his support, BftB honored him by building a library in his name in Sapang Batu, Angeles City, Pampanga. The library was constructed with the help of the local government. BftB will supply the books, computers, toys, tables, chairs, etc. from the US.

But BftB does not have used Filipino books for obvious reasons. So when I visited Monchit in his place in the Bay Area last April, he asked me if I can help him on this. When I got back to Manila, I asked some friends for their help and I got emails and text messages that they wanted me to pick up their elementary kids’ used books at their house or office for donation to Sapang Batu. I could pick up only a few of those requests, compiled them in our house, then later delivered to the BftB office in Ortigas Center.

I do not know if the Department of Finance and the Bureau of Customs (BoC) are taxing book donations from abroad even for educational and non-commercial purposes. If they do, then that partly speaks of how “welfare-oriented” the government is. Maybe the BoC can reason out that they need to partially discourage the entry of so many donated books from abroad because this can displace, even on a limited scale, the local publishers, local bookstores, and the people employed by them. This is possible, but local publishers and local bookstores also have to grapple with high government taxes that make their local book prices more expensive, which turn off some potential buyers, especially poor ones.

Many people around the world distrust their governments, that is why their “contribution” to society have to be done by force and coercion, through taxation and mandatory fees. But the same group of people trust their friends, or friends of their friends, and so they give and support without coercion and force. In addition, people can choose which kind of charity project they will support, as well as the group of targeted beneficiaries.

This is the essence of civil society: voluntary support by people for their underprivileged fellowmen, self-reliance, and no coercion to attain certain social objectives.

* See also:
CSOs and State 3: Poverty and Public Education, February 12, 2008
CSOs and State 4: Local Government and Civil Society, August 12, 2008
CSOs and State 5: Subsidiarity, Decentralization and Privatization, September 04, 2008

Thursday, December 04, 2008

Thai politics and the Monarchy

I am inclined to tell my friends to boycott visiting Thailand now. Not that I think the Thais as a whole need penalty for the mob rule of the PAD activists and their supporters. But the latter are now the clear winners of the political instability, even temporarily. These are hidden dictators who have to resort to hostaging ALL incoming and out-going visitors and businessmen to and from Bangkok airport, to pursue their political objectives, no matter how noble or mundane these could be.

The political "victors" will now rule Thailand. And they will call for "national unity" and "heal the wounds" -- after they hostaged and inconvenienced hundreds of thousands of foreign visitors and locals? Such hypocrisy deserves some penalty. Now they will inherit a limping Thai economy with up to a million jobs lost perhaps, in tourism, international trade and related sectors.

Here at home, I do not support our current President. She's probably as dirty and corrupt as the 2-decades ruling Marcos dictatorship that was toppled in 1986. But if some fellow anti-President activists will call for a big mobilization against her and occupy Manila international airport, I will never join. And if the pro-administration police will disperse and whack the activists, I will cheer up and support the police.

People's right to mobility and travel is non-negotiable. Activists can rally and demonstrate anywhere they want -- the President's palace, the parliament house, various public plazas, etc., fine. But NEVER an international airport.

Now if it's indeed the Monarchy who backed up the PAD demonstrators and told the police and military not to disperse the rallyists for cripping the international airport, or the King's family was directly involved in the recent shameful political acts, I wish that this will be exposed and be understood by the Thai people. Then they may take a second look at the kind of reverence and respect they give unto him.