Tuesday, April 30, 2019

China Watch 32, US to treat China 'non-naval' fleets as navy vessels

Go Trump. Counter-harass those communist bullies across the sea. Five reports here.

1. "Warning Shot Across The Bow:" US Warns China On Aggressive Acts By Maritime Militia
by Tyler Durden Mon, 04/29/2019 - 22:15

“Earlier this month, we reported that 275 Chinese fishing militia and Coast Guard vessels surrounded the island of Thitu in the South China Sea, which is currently being occupied by the Philippines. The US recently delivered a stern message to Beijing about its aggression in the highly disputed body of water, announcing that Chinese fishing militia and Coast Guard ships would be treated as military vessels.”

2. U.S. Warns China Over Civil Forces in South China Sea, FT Says
By Linly Lin April 29, 2019, 12:00 AM GMT+8

“The head of the U.S. Navy warned China that its coast guard and maritime militia will be treated in the same way as the nation’s navy in the South China Sea”

3. US reportedly warns China over hostile non-naval vessels in South China Sea
PUBLISHED MON, APR 29 2019 • 2:00 AM EDT Shirley Tay

“The head of the U.S. Navy warned China that hostile behavior from its coast guard and fishing boats will not be treated any differently from the Chinese navy, the Financial Times reported on Sunday.”

4. US Navy warships pass through Taiwan Strait
April 29, 2019

“The US said it had sent two destroyers through the 112-mile-wide (180-kilometer-wide) strait on Sunday, to demonstrate Washington's commitment to maritime freedom in the region.

The move risks raising tensions with Beijing, and also comes as China ramps up assertions of sovereignty over the island. Beijing considers Taiwan to be an integral part of its territory.”

5. 2 US Navy warships sailed through the Taiwan Strait, defense ministry says
By: The Associated Press     April 30, 2019

Nearly three  years in his administration when the PCA ruling was made in mid-July 2016, Duterte making only some noise vs China activities in the area only recently because even PAGASA island itself has being terrorized by so many China communist bullies and 'fishing militias'.

Many Duterte fanatics dismiss the PCA ruling as "toothless". Precisely that Trump is sending regularly his battleships in the area because the PCA ruling further bolsters the US claim that area is international waters, NOT China waters. Trump is enforcing the ruling. JP's Abe, UK's May, AU's Morrison, etc are enforcing the PCA ruling. That area is international waters, NOT China communist waters.

I am expecting that soon, Trump will sink some or many of those "non-naval" vessels in the area, to warn the real China communist naval vessels. Go Trump.

It's basic international law -- that area is international waters, no one should occupy and militarize it. Only communist bullies disregard intl law here.

"Good diplomatic relations with China before" is another claim by many Duterte diehards because Duterte super-loves Xi Jinping dictatorship and bullying.

See also:

Sunday, April 28, 2019

BWorld 319, MORE tourism via PSA liberalization

* This is my article in BusinessWorld last Friday, April 26, 2019.

The Philippines’ tourism sector is among the more dynamic ones in the economy. The Department of Tourism (DoT) targeted 89.2 million domestic tourists in 2022 but this was already surpassed in 2017 with 97 million.

I checked tourism data from the Philippine Statistics Authority (PSA) and I was happily surprised with what I discovered — all indicators like foreign and domestic tourism expenditures as percent of household consumption and exports, tourism employment as percent of total employment, are increasing from 2000 to 2017 (see table).

Those are the good news. The bad news is that recently the country has been experiencing some hiccups in public utilities — insufficient water in Metro Manila due to high demand, insufficient power supply in the Luzon grid due to unscheduled shutdown of several old but big power plants, and even short-period unscheduled disservice by one local telecom firm.

These are bad news for both locals and foreigners, especially short-term visitors. And this prompted the Senate leadership to announce prioritizing the amendment of the 82-year-old Public Service Act (PSA) via SB 1754, when Congress resumes sessions for three weeks after the May elections. The Senate Committee on Public Services is chaired by Sen. Grace Poe, currently running for reelection.

Both the House and Senate versions intend to remove transportation (sea, land, air) and telecommunications from the list of “public utilities” where foreign capital is either banned or limited to 40% maximum of corporate equity. Only three sectors will be retained as public utilities — electricity transmission, electricity distribution, and water supply and sewerage system.
While there is general agreement in Congress and the public to liberalize transportation (more bus lines, more shipping lines, more airlines competing), there are many doubts and reservations about liberalizing telecom because of the entry of China telecom via the third telco Mislatel.

A compromise solution perhaps is to drop telecom for now and proceed with transportation liberalization as this will greatly help boost the country’s tourism and investment environment. More competing shipping lines and airlines will attract more businesses and passengers into the country.

This compromise may not be easy because Malacañang is gung-ho about becoming much closer to Beijing. So Malacañang will settle this issue quick with the Senate leadership as time is too short to enact the PSA Amendment bill into a law.

After the PSA Amendment and liberalization law, next steps would be to have more airports, build bigger airports with two or more passenger terminals to include budget terminals and attract more budget airlines, domestic and foreign. Have more big and new conventional power plants that can give stable, 24/7 electricity at competitive prices, more wide roads going to airports, improved peace and order nationwide.

See also:  

Presentation in Singapore 2009, access to medicines

The event was mainly sponsored by the Americans for Tax Reforms (ATR), Property Rights Alliance (PRA), International Policy Network (IPN) and about one or two other free market think tanks.

1. Philosophical basis of price control

Price control is rooted on the populist belief that competitive capitalism is not happening in some sectors, that it is not possible to happen even at the theoretical level. Therefore, government should come in to protect the poor and marginalized sectors of society.

Big capitalists are painted as evil, the poor are  exploited, government is a savior, so the savior should intervene to temper the capitalists and ensure there is justice and equity in society.

In medicines, multinational pharmaceutical companies (MPCs) are often seen as foreign capitalists whose main business is to make as much profit as possible by bleeding the poor patients in poor countries

MPCs are seldom seen by the public as revolutionary innovators who create and produce new medicines for both old and new diseases.

2. Legal basis of drug price control

Republic Act (RA) 9502, “The Universally Accessible Cheaper and Quality Medicine Act of 2008” or Cheaper medicines law, enacted June 2008

Long and tedious list of factors to consider in recommending the maximum retail price (MRP)

Effect of price control

A “hollowing out” and abolition of price competition and price segmentation above the horizontal supply curve.
Level of competition among different manufacturers and their respective drug products is reduced and shrunk.
Producers of more powerful but more expensive drugs will not be encouraged to bring such drugs into the country, constant threat of confiscation by the government of the success of innovation.

4. Politics of drug price control in the Philippines

No apparent national health emergency in the country at the time the price control provision was pushed hard, sometime in May to July this year.
Only “political emergency” as the Presidential election, once every 6 years, was only one year away.
Senator who was the main author of the Senate version of the law was then running for President but his ranking in various surveys was low. Need to champion something that is very emotional to voters.

5. Preliminary assessment of effects

5.1. Multinational pharma companies (MPCs)

“Not just a price control measure. It was a confiscatory price cut of 50%, in many cases for patented products! Even in countries that have this type of mechanisms, it usually applies once a patent expires, and only gradually. The impact, of course, is very negative: the rebates to the trade, and the impact in the price cut itself, both of which will run into several hundred millions of pesos. Also, it has added a level of uncertainty in our operations, since there is the threat of more price cuts still to come, with no clear understanding of what potential products could be affected, or what is the clear rationale to demand a straight 50% cut.”

MPCs will be unintentionally “raiding” a portion of the niche market of many LPCs,  poorer consumers who will now consider buying the “more affordable” products of the MPCs.

5.2 Local pharma companies (LPCs)

Also adversely affected. If they used to sell at say, 30 percent up to 49 percent lower than the equivalent products of MPCs under the previous free market set-up, they would find themselves that they are now the “expensive” sellers.
So they will be pressured to further bring down the price of their products. If they have some  allowance for such further price reduction, fine. If none, then either they stop selling their products affected by the price control to avoid losses, or continue selling at a loss, just to retain and protect their overall market share in the industry

5.3 Drugstores

Big drugstores are not affected much, have computerized system so MPCs can give the rebates more quickly
Small drugstores are greatly affected, non-computerized system, drug inventory is slow and may be unreliable, rebates by MPCs are delayed, so they suffer losses
Double price control: mandatory 50% under the new policy, plus another mandatory 20% discount for senior citizens and persons with disability (PWDs), draining their financial bottomline.

5.4 Hospitals

Experience difficulty recovering their administrative costs in the process of prescription + dispensation + monitoring + change of medication if necessary.
“We are in the business of world class health care, not in retailing medicines. We hire good people and give them good pay to educate patients. We not only prescribe medicines for our patients, we also monitor if the given medicines produce the desired results or not. If not, then we have to immediately change the medication to get the desirable health results that we want for our patients. There are costs to this.”

6. Conclusions and Recommendations

6.1 Government in general
Policies that turn off and discourage the entry of more players and competitors – like price control, heavy regulation and bureaucracies, high taxation and disrespect of private property rights – should be avoided.
Government targeting of the more expensive products which are branded, even patented products that are used by the wealthy population that can afford them, is not wise, more driven by envy.  Such policy has penalized successful brands and distorted the market.

6.2 DOH

“If the intention of the government was to really provide affordable medicines for the poor, they should have looked at the list of essential medicines from WHO, which consists mainly of off-patent, older products that are genericized and can be purchased at very low prices, both here and abroad, cut those prices and offer those products... Instead of spending money on expensive advertisements on "MDRP" and "GMA", they could have used that money to advertise those generic alternatives.”
Do NOT expand the list of drugs under government price control. Tantamount to expanding the distortions in the economy.

6.3 Congress

Do not create a new drug price control body, replace the current system where the DOH Secretary makes the recommendation, the President signs an Executive Order issuing price control on certain drugs.
Do not require drug manufacturers to submit annual reports of their marketing expenses to the DOH Secretary to monitor such expenses.
Do not introduce new mandatory discounts for certain groups of people where the costs are borne entirely by the drugstores.

6.4 Civil society and the public

Objectively monitor and assess both ST and LT implications of drug price control policy. It is the public, not the politicians, who will suffer from lack of competition among players and lack of choice among drugs.
So long as alternative drugs, so long as generic competitors are present, then public welfare is assured.
Push for more competition among drug producers and retailers, so that the public will have more choices. More choice means more freedom.

See also: 3rd PRPX, October 2009, Singapore, October 17, 2009

Friday, April 26, 2019

BWorld 318, Earthquakes and MORE sturdy buildings

* This is my column in BusinessWorld on April 24, 2019.

Earthquakes and volcanic eruptions are 100% part of the Philippines’ “geological DNA.” This is because we are in the “Pacific Ring of Fire” and our entire archipelago seems to have protruded from under the sea. Thus, if there were no “violent” volcanic activities, there would be no Philippines.

A strong earthquake with magnitude 6.1 rocked Zambales and neighboring provinces in Central Luzon plus Metro Manila last Monday, April 22. Many public and private structures were damaged, a few deaths and many injuries were recorded. That day, there were 72 earthquakes nationwide that occurred.

But compared to previous earthquakes in the country, it was not that strong actually. On average we get about 30 earthquakes a day nationwide. Numbers for the past few days are shown (see table 1).

There are many alarmist claims here, with no scientific or historical basis, that the “Big One” (8.0 +) for the Philippines is coming soon and will lead to “tens of thousands of deaths.” Even earthquakes of 7-7.9 are still rare worldwide, the more common movements are in the 5-5.9 and lower. And note that after 2010, the number of estimated deaths globally from this disaster is declining (table 2).

Number of earthquakes worldwide

The main reason for this is that people now live in stronger structures, not because the number of earthquakes is declining.

For the Philippines, the market-oriented reforms for efficiency (MORE) to deal with our geological reality is for government to reduce taxes in construction materials (especially steel and cement), do not invent new taxes and tariffs, and/or reduce real property tax for strong buildings and structures per sq.m. area.

In short, reverse the taxation regime, let the people spend big on sturdy and strong buildings, save more lives and properties and people’s pockets. Then government need not worry much about people’s well-being when strong earthquakes occur and reoccur.

See also:  

Thursday, April 25, 2019

Lion Rock 26, Peter Wong as new Chairman of LRI

Starting this month, the new Chairman of Hong Kong's only free market think tank, the Lion Rock Institute, is my friend Peter Wong.

Above photo, with Fred Mcmahon of Fraser Institute (Canada) and Peter during the EFN Asia conference 2014 in Hong Kong. Lower photo, with Peter and Grover Norquist of the Americans for Tax Reforms (ATR) during the 4th Pacific Rim Policy Exchange 2010 in Sydney.

Some people ask, "HK is already a free market economy, why do they need a free market institute?" Well, the quick answer is that HK is free marketer enough compared to most economies in the world but it is still under the political jurisdiction of the China communist government. And many of its policies are populist (freebies here and there) and regulations are rising. So I repost here Peter's message, enjoy.

Peter Wong
April 1, 2019

My friend, Nick Sallnow-Smith, stepped down as the Chairman of the Lion Rock Institute in March, completing a three-year term. It is my honour to take over the Chairmanship of the Institute.

Three and a half years ago, I was appointed as the interim chairman for six months. The task was to find the right person to chair the Institute. At the time, I was attending an international conference with Nick in Turkey. The last day of the trip was a cruise in the Aegean sea. Knowing that he would soon step down as Chairman of the LINK REIT and is planning his retirement, an opportunity not to be missed, I immediately invited him to be our Chairman, which he accepted right away.

As time flies, and the three-year term has quickly passed, Nick summed up the experience and found that engagement with the state in any form is a waste of time and smacks of immorality. Our presence there made no difference to policy as the government already made up their mind what to do. But it did, however, enable the Commision to claim they had “consulted” many parties. Our presence had helped legitimate this ridiculous and damaging policy.

After witnessing the transformation of the SAR Government since the handover, I have long proposed that it is meaningless to getting too close to the government because what is the point, as a Chinese proverb suggests, to “ask a tiger for its own skin”?

Note that I am not targeting the SAR government specifically, but all worldwide governments around the world have a tendency to betray their voters. Even the British Parliament has tried to veto the Brexit plan passed by the referendum. It goes to show that the idea of the government serving the people, and the people are in control is nothing but a joke.

As Nick stepped down as chairman, I as the successor will continue to inherit his spirit. In the next three years, we will no longer actively lobby the government, but instead strive to alert the public how fierce and dangerous is this tiger (government). Educating the public on how to protect oneself under the tiger’s mouth will be our biggest goal ahead.

BWorld 317, MORE Senators for rule of law

* This is my article in BusinessWorld on April 22, 2019.

Rule of law means the law applies equally to unequal people, no one is exempted and no one can grant an exemption. Granting exemptions, say, in the law against stealing or murder automatically leads to the rule of men where the powerful and the mob are exempted from penalties for violating certain rules.

The World Justice Project (WJP) produces an annual study, the “Rule of Law Index” (RoLI), and ranks countries based on their performance on 8 factors and 44 sub-factors. The RoLI 2017-2018 Report involved more than 110,000 households as respondents and 3,000 expert surveyors in 113 countries and jurisdictions, whereas the RoLI 2019 involved more than 120,000 households and 3,800 surveyors in 126 countries and jurisdictions.

Bad news #1 is that the Philippines’ global ranking has been deteriorating. From 51st in the RoLI 2015 Report, it is already down to 90th in the RoLI 2019 Report.

These four sub-factors are among the “downers” for the Philippines that dragged down its overall score and ranking:

4.2 The right to life and security of the person is effectively guaranteed.
4.3 Due process of the law and rights of the accused.
8.3 Correctional system is effective in reducing criminal behavior.
8.4 Criminal system is impartial.

Now comes bad news #2: in this coming May 2019 Senatorial elections, many of those in the Top 12 based on the SWS March 2019 survey may worsen the rule of law in the country if elected. On the other hand, the Otso-Diretso team has a good line up of human rights advocates (Chel Diokno, Gary Alejano, Erin Tañada, Samira Gutoc, Bam Aquino), experts in electoral and international law (Romy Macalintal, Florin Hilbay) and entrepreneurship (Mar Roxas). I wish that many of them will win but many are not in the Top 12, not even in the Top 18.

Independent candidate and former senator Serge Osmeña is another good candidate who should win but is not among the Top 12 in the recent surveys.

A number of recent legislations under the Duterte administration are violations of the rule of law. Like the free tuition in all state universities. If the state should give education subsidy, it should apply this to all tertiary students and not exclude those in private universities.

A pre-requisite market-oriented reforms for efficiency (MORE) in this case is for senatorial candidates with high respect for the rule of law to win. Further deterioration of the Philippines’ ranking, even a standstill in RoLI, is bad news.

See also:  

Wednesday, April 24, 2019

ALF 14, The Atlas-FNF events in 2004-2006

The first Asia Liberty Forum (ALF) by Atlas was held in October 2004 in Hong Kong and it was  originally titled "Asia Resource Bank Meeting" (ARBM). It was a two-days conference that preceded the two-days and bigger Economic Freedom Network (EFN) Asia conference, mainly sponsored by the Friedrich Naumann Foundation (FNF). The ARBM was a joint project of the Atlas Economic Research Foundation (now simply Atlas Network) and FNF.

In 2005, the Atlas-FNF event was downscaled to a small group one-day RTD on the book of Friedrich Hayek, "The Constitution of Liberty" (1960). It also preceded the two-days EFN Asia conference held in Phuket, Thailand.

In 2006, the Atlas-FNF event was called the "Asia Liberty Forum", it was back to a bigger, one-day conference and again, preceded EFN Asia conference 2006, held in Kuala Lumpur.

In 2007, Atlas stopped co-sponsoring the ALF, so it was the regular EFN Asia conference 2007. I think it was held in Cambodia.

May 2007, our friend Colleen Dyble, Director for Coalition Relations of Atlas, wrote us, portions of it here:

"Dear Friends,

I just wanted to let you know that Atlas is making some revisions in its program schedule this year.  One of the big changes it that we will not be hosting an Asian Liberty Forum this year.  After three successful years of partnering with the Friedrich Naumann Foundation to hold our Asian Liberty Forum in conjunction with their annual Economic Freedom Network meeting, Atlas has decided to move onto other programs for the moment.  

As you know, Atlas began working with FNF to develop this Forum as a way to cultivate and expand the free market think tank network in Asia and to serve as a catalyst in helping it to get it to the point where it was able to thrive with limited assistance from Atlas.  After three fruitful meetings in Hong Kong, Phuket and Kuala Lumpur, Atlas has been very pleased to see significant growth in the number of new contacts from across Asia and is confident that the Asian network is now able to harness its internal leadership and momentum to develop its own networking meetings.   Of course, if one of you decides to host a future Asian Liberty Forum, let me know so we can explore potential opportunities to collaborate.   Atlas remains very interested in continuing to be involved in your efforts and to provide opportunities for you to get together with donors and others in the network to share ideas and collaborate on projects...."

I wrote to Colleen saying that somehow I had a feeling that the annual ALF will come to an end, and it has become true. I thanked her and Jo Kwong.

In May 2007, the Americans for Tax Reforms (ATR), its partner Property Rights Alliance (PRA), International Policy Network (IPN, UK) and four other institutes jointly sponsored the first Pacific Rim Policy Exchange (PRPX) held in Honolulu, Hawaii.

June 2008, the second PRPX was held in Hong Kong. The participation of Asian free market think tanks in Honolulu was small -- difficult to get US visa, expensive to go to Hawaii, etc. So for the 2nd conference, it was held in HK, mainly to attract more think tanks and business orgs from Asia to attend.

This month marked my 15th year involvement in the free market movement. It started when an Atlas staff in the US, Priscilla Tacujan, met me in February or March 2004 in Manila and recommended me to be one of two international fellows from the Philippines (the other one was Ellen Cain of FEF) to undergo one-month training and meetings in the US.

So around mid-2004, I and Ellen went to Midland, Michigan, to attend the Mackinac Leadership Conference. Mackinac President that time was Larry Reed. From Michigan we went to Chicago to attend the Atlas Liberty Forum 2004, also the Heritage Foundation's annual Resource Bank Meeting.

Those were my first exposure to the free market movement. Prior to that, I never knew anyone outside the Philippines who were free marketers.

And I also met Jo Kwong, then Atlas VP for Institute Relations. Jo is cool, aside from the fact that she's an Asian-American. It was Jo who recommended me to participate in ALF 2004-2006.

Then Jo also granted me a travel scholarship to attend the Atlas Liberty Forum 2008 in Atlanta, Georgia, then the Atlas Liberty Forum 2009 (around March) in Los Angeles, California. And finally the Atlas "Tear down the wall" big conference in NYC in November 2009.

In 2010, Jo resigned from Atlas. I also received zero travel grant from Atlas ever since. Perhaps the new team disliked me, hehehe. No problem because other institutes and groups appreciated what I was doing here in Manila and they invited me to various regional and global seminars, meetings. Like the FNF, IPN, ATR, PRA, Heartland, IDEAS, WTA, Lion Rock, Geneva Network, etc. Thank you guys.

See also:

Four years as BWorld columnist

Exactly four years today that I have been a contributor/columnist in BusinessWorld, the Philippines' premier business newspaper, about 32 years old. I started with Weekender then Opinion sections.  Three guys helped me -- my former editor in interaksyon.com, Arnold Tenorio, then Weekender (now Opinion) editor Ricky Torre, and Boojie Basilio (resigned Opinion editor). BWorld editor in chief Roby Alampay agreed of course when Ricky and Boojie accepted my regular contributions.

Today's issue of BWorld.

This is my first article, published on April 24, 2015 in Weekender. Just a repost because the orig link no longer works,

http://www.interaksyon.com/ is a sister, online only media of BWorld. My column there was entitled "Fat Free Economics" and my first article was posted on March 8, 2012. My editor then was Arnold Tenorio, http://funwithgovernment.blogspot.com/2012/03/fat-free-econ-1-macroeconomics-for.html

Thank you for the continuing trust, BusinessWorld.

BWorld 316, MORE IPR protection

* This is my column in BusinessWorld on April 17, 2019.

Unlike physical property which is tangible, intellectual property rights (IPR) are intangible, like copyrights of songs, patents of newly invented medicine molecules, trademarks of known brands, and trade secrets. Thus, public appreciation of IPR protection is not as high as physical property protection.

A report in BusinessWorld, “Bill to be pushed strengthening intellectual property rights” (April 13, 2019) showed some data from the government Intellectual Property Office (IPOPHL) that piracy and counterfeiting of known brands were high in 2018:

“… pirated and counterfeit goods seized in 2018… worth P23.6 billion… Of the fake items seized in 2018, 85% were cigarettes.”

Compared to neighbors in the region, the Philippines ranks low in IPR protection in certain international reports. Numbers below are from three sources: (1) Property Rights Alliance’s (PRA, US) International Property Rights Index (IPRI) 2018 Report, (2) World Economic Forum’s (WEF) Global Competitiveness Index (GCI) 2018 report, and (3) IMF’s World Economic Outlook (WEO) 2019.

Notice the top seven countries and economies — they have higher global ranking in property rights protection (out of 125 countries), also in Patent and Trademark per million population ranking (out of 140 countries), and higher per capita income of at least $9,600 in 2018.

Middle of next month, the Geneva Network (UK) will hold a one-day seminar and meeting of some Asian free market think tanks and academics about IPR protection and trade to be held in Kuala Lumpur. And a week after, PRA (US) will hold a side event on IPR and investment promotion in Sydney during the bigger event, the 17th meeting of the World Taxpayers Association (WTA) conference.

IPR issues often crop up in public health policy debates. Like the continuing push in some Asian countries for compulsory licensing (CL) of newly invented drug molecules that are successful in controlling certain diseases. These are very expensive drugs to develop (many stages of clinical trials involving thousands of patients) and yet governments with the implicit aid of the WHO will quickly confiscate the patent and allow mass production by local generic manufacturers. This pours cold water on further medicines innovation that can help control existing and emerging diseases.

Then there are trademark-busting policies like plain packaging of certain products deemed “unhealthy” like tobacco, soda and sugary foods. Abolition of the many elaborate branding by competing companies and forcing only one generic packaging will make counterfeiting of these products so much easier. When cheap counterfeits come in, they will encourage, not discourage, more consumption of “unhealthy” products.

The “law of unintended consequences” often kicks in when the sanctity of private property is disregarded. The market-oriented reforms for efficiency (MORE) to promote public health, entice more investments and generate higher per capita income are also aimed at further protecting private property, physical or intellectual, not dishonor them.

See also:  

Thoughts in 2006, an AFMF

In early November  2006, I suggested to some Asian free market friends the formation of an Asian Free Marketers Alliance (AFMA), or an Asian Free Market Forum (AFMF). These were my thoughts then. This image I got from a WSJ graphics, "the United States of Trade."

The statists, politicians and bureaucrats in our continent and the rest of the world have their own formal alliances or associations, why can't free marketer groups and institutes form their own, especially in our continent?

Groups like APEC, ASEAN (now ASEAN + 6), ASEM (Asia-Europe Meeting), blocs within WTO, UN, etc., they have annual or bi-annual meetings. The politicians are spending our tax money for their expensive summit and meetings, and they decide how much trade and economic liberalization they can give or deny us.

So, why don't we form our own alliance? A formal alliance? Currently we are loosely connected through Atlas' Asian Liberty Forum, or some regional and international conferences and meetings where we bump onto each other.

If this is ok with you, here's what I have in my mind:

1) It will mainly be an alliance of organizations or institutes; for individuals who do not represent a free-marketer institute, we'll discuss their status of membership

2) it will have a board, and rotating presidency (say 1 term for a year).

3) contribution from each institute, or we'll ask "foreign aid" from Atlas or FNF or other big foundations to support a very lean regional secretariat office.

4) main activities: launch few and limited but coordinated political campaigns. for instance:
i) a coordinated campaign to pressure Asian governments and trade negotiators in the WTO for some unilateral trade liberalization.
ii) humanitarian campaign against persecuted free marketer individuals anywhere in Asia.

My friend from Delhi, Parth Shah, agreed. He said that "it's an idea worth serious thinking.  The World Social Forum (WSF) is hosting an India Social Forum this month in Delhi.  So they have WSF, the crony capitalists have the WEF, we need to start a World Liberal Forum!  Let it start from Asia and then spread to the rest of the world.”

One reason why I have thought of this is because the Philippines will host the 12th ASEAN summit this coming December. It is now regularly called "ASEAN + 6" summit – the 10 members of ASEAN + China, Japan, s. Korea, India, Australia, New Zealand.

And those summits are never cheap. They cost taxpayers of the host countries several million $ for their two-days summit, plus several days Ministerial summit on certain issues.

So I thought there is a need for a more coordinated alliance of free marketer guys and institutes from our continent, to issue at least 1 or 2 position papers, say on international trade and taxes (or migration, health, environment, etc.), that we shall raise during the ASEAN + 8 summit next month. We can disseminate our position papers to media, not only in the Phils. but in your respective countries as well.

No rallies and demos, only making our presence known and felt. No "parallel summit" either because that will be very costly too. Let the annual Atlas' Asian meeting and FNF's EFN conferences be our
loud "Asian Liberty Forum", which can possibly evolve to a "World Liberty Forum" -- in contrast with the various fora by the statists and politicians -- UN, WB-IMF joint meeting, APEC, WEF, WSF, and many others.

Again, these were my thoughts in November 2006. We were not able to push it though. Just posting them here to retrace my thoughts more than a decade ago.

Tuesday, April 23, 2019

BWorld 315, MORE power supply needed: Attention ERC

* This is my column in BusinessWorld last week, April 15, 2019.

After the water shortage in many areas in Metro Manila last March, next is power shortage and brownouts in many areas of Luzon including Metro Manila this month.

Yellow alerts (insufficient and thin reserves) were issued early this month due to high electricity demand and unplanned, unscheduled outages of several power plants (boiler tube leak, piping leak, boiler slagging, other causes). Red alert (insufficient supply) was issued last Friday, April 12, and many areas in Luzon including Metro Manila experienced a 1-3-hours rotating power interruption. Below are the affected power plants, their commissioned/operation years and affected days.

Note that of the 11 power plants mentioned above, seven are above 19 years old, especially the huge Sual, Pagbilao, Masinloc and Calaca coal plants, and Malaya oil plant.

Many of our big power plants are old, especially the geothermal, oil and hydro plants: 74% of these plants in the Luzon grid are 15 years or older. Which makes them more prone to UFOs.

The Market-oriented reforms for efficiency (MORE) needed are to have more new power plants, especially the conventionals. We should depoliticize the approval process of many power supply agreements or PSAs (about 5,000 MW) that are languishing at the Energy Regulatory Commission (ERC).

Last April 2, I participated in a roundtable discussion on “Challenges to the Philippines power sector” organized by the Arangkada Philippines Project (TAPP). Among the debate points was whether the Philippines has enough or insufficient generation capacity both in the short- and medium-term.
The series of yellow and red alerts early this month seems to suggest that there is indeed insufficient supply of stable power.

Attention, the following agencies and groups: (1) ERC, please hasten the approval process of new power plants’ PSAs. (2) Various agencies, please control your bureaucratism and hasten the permitting process of new power plants, DOE can use the new EVOSS law for this. And (3) environmentalist NGOs and anti-fossil fuel groups, you are barking at the wrong tree. Frequent brownouts will force the people to use the really non-clean power sources — candles for the poor and gensets for the rich and middle class. More candles means more fires while more gensets mean more air and noise pollution.

Stories of “collusion” among big power companies are comparable to the “Trump-Russia collusion” hoax and dishonesty.

See also:  

Climate Tricks 79, Alarmism on 'Earth Day'

Hi environmentalists, planet saviours, tree huggers, fossil fuel haters, subsidize renewables lobbyists, etc. -- your batting average for correct prediction of climate gloom and doom for the past half century is zero. Time to calm down, ok? Cheers

Earth Day: Not a Single Environmental Prediction of the Last 50 Years Has Come True
Anthony Watts / 21 hours ago April 22, 2019

The original article was published here,

On Earth Day, gloomy predictions haven’t come to pass
By Nicolas Loris, Tribune News Service • April 20, 2019 10:00 am

Population crisis, oil crisis/peak oil, food crisis/peak food, none. Population keeps expanding, but also oil, gas, coal, food production (and beer, hamburger, bacon,...) keeps expanding. We experienced global cooling, global warming, more flood, no flood, more storms, few storms, and we are fine.

Three more interesting papers:

18 spectacularly wrong predictions made around the time of first Earth Day in 1970, expect more this year
Mark J. Perry April 21, 2019 12:47 pm | AEIdeas

Mark J. Perry is a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem.

Ending climate change requires the end of capitalism. Have we got the stomach for it?
Phil McDuff  Mon 18 Mar 2019 12.09 GMT Last modified on Mon 18 Mar 2019 12.11 GMT

And a satire from Babylon Bee :-)

Al Gore Commemorates Earth Day By Using Private Jet To Write 'Save The Planet' In The Sky
April 22nd, 2019

Climate alarmism simply wants more government, more UN, more taxes, more regulations (environment, energy, transportation, agriculture, etc.). More global ecological central planning.

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Monday, April 22, 2019

BWorld 314, MORE de-bureaucratizing laws, please

* This is my article in BusinessWorld last April 12, 2019.

From January to March 11 this year, Congress has created and passed 77 new laws, 28 of national application (table below) and 49 being local or franchise laws. The dates when they were approved by the President this year are also here.

From the perspective of tax-conscious taxpayers and regulations-wary entrepreneurs, five of the 28 national laws are good laws on lesser bureaucracies, lesser taxes required: RA 11203, 11231, 11232, 11234, and 11239.

There are 15 bad laws on more bureaucracies needing more taxes, more regulations: 11180, 11194, 11199, 11200, 11201, 11206, 11210, 11214, 11215, 11223, 11228 to 11230, 11235, and 11241.

And eight are somehow neutral laws: RA 11168, 11188, 11202, 11207, 11211, 11216, 11222, and 11227.

Laws of local application include: creating another legislative district, another barangay, high school, polytechnic institute, state university, sports training center, city prosecution office, creating or upgrading a district hospital, granting citizenship to foreigners, extending or renewing a franchise, recognizing an Academy, special provincial/city holidays, renaming a public school, etc.

Majority of these are certainly bad laws because they further expand bureaucracies and offices that require expanded taxes and fees. There is endless welfarism with no timetable at the local and national levels. Congressmen, Governors and Mayors create or convert new schools, news hospitals, new barangays in their locality without spending their local resources because they pass funding to the national government via the General Appropriations Act.

In this midterm election campaign, do we see more national and local politicians promising less burden to taxpayers and entrepreneurs? From their various campaign promises and legislative agenda, the answer is No. Bad.

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Top exports by selected rich countries

Original data is from the UN COMTRADE database on international trade, reposted in https://tradingeconomics.com/countries?g=exports-by-category.

1. USA. Good mixture of products, it is not highly dependent on just one or two major export products.

2. Japan. Known for exporting cars, buses, tractors, bulldozers, nuke tech.

3. China. There is no graphics shown, only table, here.

4. Germany. Somehow similar to Japan, exporting cars, buses, heavy machineries, nuke tech.

5. Russia. Nearly one half of its total exports are fossil fuel products -- oil, gas, coal.

Now if we go back to the "Trump is Putin puppet" aka "Trump-Russia collusion" hoax, the numbers above would show that it is an idiotic proposition. Russia is too dependent on fossil fuel exports and Trump campaigned to expand the US' fossil fuel exports. Why would Russia support Trump who can potentially cripple their main business? HRC, Obama and the Dems are the closer friends of Russia because of their "save the planet" and "keep oil on the ground" policy, explicit or implicit.

Sunday, April 21, 2019

BWorld 313, MORE international tourism

* This is my article in BusinessWorld on April 11, 2019.

The Philippines, with more than 7,500 islands and islets, lots of white sand beaches, waterfalls and mountain resorts, has a huge potential in tourism yet we are not optimizing it due to certain policy and infrastructure bottlenecks like small airports and small number of airlines per airport.

The busiest airports in the world are those in the US and China. In 2018, of the top 50 busiest airports in Asia, China had 19; Japan, five; India, four; South Korea, three. The numbers on average daily airplane takeoffs are also presented here.

The Mactan-Cebu International Airport (MCIA) has 144 flights a day, #70 in Asia in average daily takeoffs. Last week I went to Cebu. The first thing I did upon landing was to feed my curiosity, check the new Terminal 2 for international flights. Since I was not an international passenger, I could not go inside but I took a peek and it is indeed beautiful — both exterior and interior, check in area — compared to the previous one. There is a new vehicle ramp going to the 2nd floor departure area and the hallway before entering the terminal is wide and huge.

I like the integrated PPP scheme of MCIA, the private sector shouldered the cost of construction then operation and maintenance (O&M), unlike the hybrid PPP scheme of Dutertenomics where construction is funded via foreign loans or the annual budget (i.e., paid by taxpayers) and the private sector only undertakes the O&M.

But the terminal fee here is expensive, P850 per departing international passenger, higher than P750 in NAIA. This is on top of P1,620 travel tax for Filipinos traveling abroad. Budget-conscious travelers then must endure paying P2,470 each and they have not left the country yet, the air fare with VAT and other taxes not included yet. This high cost of not-flying-yet should be one of the many reasons why the Philippines is not able to optimize its tourism potential. 

Among the Market-Oriented Reforms for Efficiency (MORE) in the country’s tourism and aviation sector are (1) abolition of the travel tax, (2) more airlines liberalization, and (3) lower terminal fee, perhaps only P400 or less via more budget terminals, less glitzy but fine, like the budget terminals in Changi-Singapore and Kuala Lumpur.

MCIA, NAIA are now more beautiful compared to their previous structures but they are not the destination of passengers, local and foreign. They stay at the departure lounge only one or two hours before their flights. The three suggested reforms will further enhance tourism and everything there that generates jobs — hotels and restaurants, airlines and shipping lines, malls and shops, travel guides and boatmen.

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Saturday, April 20, 2019

Energy 123, Gasoline prices in selected ASEAN

Here are the recent gasoline prices in selected ASEAN economies, in US$ per liter. Domestic prices are affected by (a) exchange rate with the US$, (b) local subsidies or taxes, (c) local production if any, (d) other factors. Data is from https://tradingeconomics.com/country-list/gasoline-prices.

1. Indonesia. I think they still retain the oil price subsidy until today although at a lower rate than before. While expensive oil is bad,f subsidized oil can also be bad because people would use more than necessary. Thus, instead of having only one car for the family, get two.

2. Malaysia. Also has oil price subsidy but not as high as those in Indonesia.

3. Vietnam. Perhaps they do not have oil subsidy, and neither distorting the price upwards via oil taxes?

4. Philippines. Distorted oil prices via TRAIN law, part 1 implemented in January 2018, part 2 in January 2019, and part 3 in January 2020. Diesel tax was zero until 2017, P2.50/liter in 2018, P4.50 this year, and P6.00 next year.

5. Thailand. Perhaps no oil subsidy too.


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