BWorld 716, Trends in Philippines and global merchandise trade

Trends in Philippines and global merchandise trade

June 20, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

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https://www.bworldonline.com/opinion/2024/06/20/602894/trends-in-philippines-and-global-merchandise-trade/

While the Philippines has the fastest GDP growth in the ASEAN, and was the third fastest among the Top 50 largest economies in the world in 2022 and 2023, our merchandise exports remain among the smallest among those Top 50. In 2023, our merchandise or goods exports was only $73 billion (FOB, or Free on Board, value) while Malaysia’s was $313 billion and Vietnam’s was $354 billion.

For merchandise imports, in 2023 the Philippines had $133 billion (CIF, or cost insurance, and freight, value) while Thailand’s was $290 billion, and Singapore’s was $423 billion (see table).

With such a great difference between our exports minus imports, our merchandise trade deficit is big, about $60 billion a year. We somehow compensate for our low merchandise exports with high services exports, like OFW remittances, business process outsourcing (BPO) here, and inbound tourism. The combined value of these three is significant so our current account balance (merchandise plus non-merchandise or services plus primary and secondary incomes) is not suffering too much, with a deficit of $18 billion in 2022 and $11 billion in 2023.

We need to further strengthen our goods or merchandise exports to help finance our necessary merchandise imports like oil, trucks, cars, computers, and electronic products.

One factor why we cannot significantly expand our exports is the low size and capacity of our electricity generation to power big manufacturing plants, warehouses, and storage areas for both raw materials and finished products.

In 2022, the power generation in terawatt-hours (TWh) of the ASEAN-6 were as follows: Indonesia, 333 TWh; Vietnam, 260 TWh; Malaysia, 183 TWh; Thailand, 180 TWh; the Philippines, 114 TWh; Singapore, 57 TWh.

The numbers somehow correspond to the numbers in exports. While Singapore has low domestic power generation, they complement this with power imports from Malaysia, and power use is concentrated in a small land area. Plus, they produce or re-export really high-end, high-value manufactured goods.

Of the global trade picture, China remains the largest exporter in the world with $3.38 trillion in 2023, followed by the US with $2.02 trillion, then Germany with $1.69 trillion.

This has implications on the on-going saber rattling in the Philippines over the territorial dispute with China. The big source of our cheap trucks and buses, cheap tractors and irrigation pumps, cheap computers and electronic products, is China. These goods help improve our farm productivity and transportation, our electronics manufacturing and other products.

And in Europe, Russia is the largest exporter of energy products. Nearly half of its total merchandise exports of $400 billion to $600 billion are gas, oil, and coal. Germany and Italy’s industrial muscle was largely powered by cheap gas from Russia. The economic sanctions they have implemented against Russia have boomeranged on their own economies via higher energy prices, higher inflation, and flattened industrial and manufacturing output.

Considering the trade data in Asia and taking into consideration the lessons of what is happening in Europe economies, the Philippines should prioritize diplomacy over saber rattling, and prioritize trade and investments over war preparations.

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See also:

BWorld 713, Declining growth and rising unemployment: East Asia vs Europe 

BWorld 714, On the role of coal in Asia and renewing Meralco’s franchise

BWorld 715, Declining borrowings and improving credit ratings

Agri Econ 40, Food inflation higher than overall inflation

In many countries, their overall inflation rate is lower than food inflation. This is also happening in the Philippines. Below, Philippines overall monthly inflation rate the past 5 years, peak of 8.7% and 8.6% in January-February 2023.

But Philippines food inflation, peak were 10.7% and 10.8% in January-February 2023. 

For April-May 2024, overall inflation rates were 3.8% and 3.9%; food inflation rates were 6.0% and 5.8%.

On average, food inflation is about 2% higher than overall inflation. Food supply is not keeping up with food demand and it is reflected in prices. 

Philippines need to take and encourage more corporate farming, stop the endless forced and redistribution via endless, no time table agrarian reform.

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See also:
Agri Econ 37, Sri Lanka food catastrophe, July 15, 2022

Agri Econ 38, Fermin Adriano article on "Full blown food crisis", September 26, 2022 

Agri Econ 39, Land conversion to solar farms contributing to high food inflation, December 28, 2023

 

BWorld 715, Declining borrowings and improving credit ratings

Declining borrowings and improving credit ratings

June 18, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

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https://www.bworldonline.com/opinion/2024/06/18/602313/declining-borrowings-and-improving-credit-ratings/

There are two good economic developments in the Philippines recently. Let’s go straight to the numbers.

DECLINING DEFICIT AND BORROWINGS
In the first four months of 2024, revenues reached P1.47 trillion, 17% higher than P1.26 trillion a year earlier. This is significant for two reasons. One, a high percentage increase despite no tax hike this year, better tax administration and higher nontax revenues. And two, the 17% revenue increase is twice as high as the 8.8% increase in GDP at current prices in the first quarter from a year ago.

But expenditures in January to April 2024 reached P1.7 trillion, 16% higher than P1.46 trillion a year earlier. So the budget deficit was P230 billion, 12.7% higher than P204 billion a year ago but 26% lower than P312 billion in 2022 and 37% lower than P366 billion in 2021.

Financing or borrowings in January to April 2024 was only P0.79 trillion, the first time it fell below P1 trillion since 2020. There was a big drop in foreign or external financing — P8 billion in 2024 vs P277 billion in 2023, which is a good development (see Table 1).

The jump in expenditure came from National Government (NG) disbursements and interest payment due to a high public debt stock and the high interest rate policy. Interest payment this year already reached P260 billion or twice the P131 billion in 2019. There is a need to significantly reduce the public debt level to save resources for social and infrastructure needs instead of diverting these to higher interest payments. 

Related recent stories in BusinessWorld on the fiscal situation were “GOCC subsidies more than triple in April” (June 9), “LGUs to receive P1.034-trillion NTA in 2025” (June 16), “PHL gov’t should consider raising taxes, analysts say” (June 17).

In the last report where I was one of the quoted analysts, I argued that there is no need to raise taxes because there are short- to long-term sources of additional revenues. For instance, Finance Secretary Ralph G. Recto has raised the dividends that government-owned and -controlled corporations (GOCCs) should remit to NG to P100 billion in 2024 alone. Many of the GOCCs also raised their dividend payments to NG from a minimum 50% to 75%.

Better tax administration will also help control illicit trade and smuggling, especially of tobacco products. I elaborate on the privatization of several government land assets soon.

IMPROVING CREDIT RATINGS
On June 7, Fitch ratings released a report where it affirmed the Philippines at ‘BBB’, with a stable outlook. This is good news. I checked other Asian economies in Fitch Ratings, and I added two other prominent rating companies — S&P and Moody’s. The Philippines is near “A” ratings and we may be able to overtake Italy and Thailand and be at par with Malaysia soon (see Table 2).

I particularly like this part in the Fitch report where they noted that “The Finance secretary has publicly indicated that no new taxes would be imposed in 2024, and possibly until the end of the Marcos Jr. administration in 2028. Nevertheless, we note that overall budget balances have tended to be close to the targets in recent history.”

There were three reports in BusinessWorld related to this — “Finance secretary wants to keep original revenue goals” (June 5), “Recto says Philippines still on track to achieve ‘A’ credit rating” (June 10) and “Banking industry outlook is ‘improving,’ says Fitch” (June 12).

Secretary Recto is correct in making an optimistic announcement that “this affirmation is highly encouraging as it shows a strong vote of confidence in our ability to grow the Philippine economy in a higher path over the medium term… We are on the road to an ‘A’ rating. A better credit rating will help us create more jobs and reduce poverty by 2028.”

Budget Secretary Amenah F. Pangandaman expressed the same optimism, saying that “It bears noting that Fitch cited the Philippines’ strong medium-term growth as one of the reasons for our rating. We hope to sustain our momentum for growth and keep our lead as one of the fastest-growing economies in Southeast Asia.” 

On spot there, Mr. Recto and Madame Pangandaman. We just need to sustain high GDP growth of 6% or higher for several years while controlling borrowings so that the public debt/GDP ratio can be reduced and by extension, cut the budget deficit target of 3.7% of GDP by 2028. Productivity-enhancing budgetary spending like infrastructure should continue while wasteful spending like endless subsidies and freebies that lead to endless state dependence, war preparations and military and uniformed personnel pensions from the budget should be controlled.

In 2019, the debt-to-GDP ratio of the Philippines was only 37%, while Thailand had 41% and Malaysia had 57%. When the lockdown was imposed in 2020, their respective ratios jumped to 51.6%, 49.4% and 67.7%. By 2023, their respective ratios were 56.6%, 62.4% and 67.3%.

In average GDP growth from 2021-2023, the Philippines had 6.3%, Malaysia had 5.2% and Thailand had 2%. So in both reducing the debt-to-GDP ratio and raising overall growth, the Philippines had better performance than Thailand and Malaysia. From these two important metrics, the Philippines overtaking Thailand and being at par with Malaysia in credit ratings are a realistic and desirable trend.

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See also:

BWorld 712, The Laffer Curve of Philippine tobacco taxation, redux 

BWorld 713, Declining growth and rising unemployment: East Asia vs Europe 

BWorld 714, On the role of coal in Asia and renewing Meralco’s franchise

US-China 3, Dr. Francisco "Dodong" Nemenzo on the SCS territory dispute

I am reposting this paper by Dr. Francisco "Dodging" Nemenzo on the SCS territory conflict. He wrote this a decade ago. Dodong is former UP President and a highly respected academic political scientist. This is 9 1/2 pages long, enjoy. 

Fishing for Trouble in the South China Sea

Francisco Nemenzo

Professor Emeritus in Political Science University of the Philippines

Lest I sound unpatriotic for striking a discordant note in a strident anti- China chorus, let me clarify what I understand by patriotism. It simply means standing for the national interest. This is not the same as supporting our government’s foreign policy even when it is wrong.

I consider China’s claim to own 90% of the South China Sea as preposterous. I agree that we should defend the islands we now occupy. And if we can afford it without begging for US intervention, we should fortify the ones we claim but have left unguarded.

What I deplore is the mishandling of our relations with China and our traditional reliance on the United States for our own security. Demonizing China and inciting jingoism among our people will only encourage the hardliners in the Chinese leadership and provoke the People’s Liberation Army to seize what we are too weak to defend, as happened in Scarborough.

Background of the territorial dispute

The South China Sea covers an area of 3.5 million square kilometers where more than 250 islets, shoals, atolls, cays, reefs, and sandbars are clustered in two archipelagos. The Paracels are contested by China, Taiwan, and Vietnam. The Spratlys are likewise claimed by the three, but parts are claimed also by the Philippines, Malaysia, and Brunei. These islands are small and most remain uninhabited; many are submerged at high tide. None is capable of sustaining human life, unless basic necessities are supplied from outside.

These geographic formations were ignored until 1968, when China’s Ministry of Geology and Mineral Resources stumbled upon traces of petroleum and natural gas. The Chinese survey estimated the oil deposit at 17.7 billion tons. If validated, it will be the 4th largest reserve bed in the world. But succeeding surveys conducted by other countries give lower estimates. The actual volume remains a subject of conjecture.

Yet the conjecture was enough to spur a flurry of island grabbing. Taiwan grabbed the largest island, consisting of 46 hectares. At least nine other islands are now occupied by China, 28 by Vietnam, 11 by the Philippines, and seven by Malaysia. Brunei does not hold any of the islands it claims to own.

China and Taiwan cite ancient maps, chronicles of Chinese navigators, and miscellaneous pieces of discarded Chinaware. On this basis, the Kuomintang government (before its expulsion from the mainland) drew an eleven-dash line to demarcate China’s sovereign jurisdiction. The communist government inherited the eleven-dash line from the Kuomintang, but reduced it to nine as a friendly gesture to Vietnam when Vietnam was in the forefront of struggle against US imperialism. Now that China and Vietnam are no longer the best of friends, China infuriates Vietnam and the other claimants by insisting on the nine-dash line.

The nine-dash line is not recognized by the international community. Physical occupancy is the only ground for claiming sovereignty, not ancient maps, diaries and broken pottery. The Chinese cannot claim a territory just because they had been there centuries ago. Since they did not establish permanent settlements in these tiny islands, the Spratlys and the Paracels properly belong to public domain or the “world’s commons.”

Bones of contention

What made these god-forsaken islands a focus of international conflict today?

As noted earlier, the oil and gas reserves are still conjectural. What the numerous drillings have found so far is not worth a war. The Spratlys are rich in marine life; but a country need not own an area for its citizens to go there for fishing. Filipino, Chinese, Vietnamese, and Taiwanese fishermen have been fishing in the Spratlys since time immemorial without bothering about sovereign rights.

The main value of the South China Sea today is strategic. Some 300 ships cross it every day, making it the busiest sea-lane in the world; busier than the Suez and Panama canals combined. A mischievous nation that gains control of this maritime route can endow itself with authority to grant or deny passage to foreign ships.

China dreads the prospect of America policing the area. This is not a mere product of Chinese imagination. Still fresh in the memory of the Chinese is the US “containment” strategy during the Cold War, when mainland China was encircled with hostile military bases, including Subic and Clark. At that time, however, the encirclement did not pose as grave a threat to China because its foreign trade then was negligible.

But China today is a major industrial power. Foreign trade is now crucial to its economic life. Its trade with Southeast Asia, South Asia, Africa, the Middle East, and Europe goes through the South China Sea. Freedom of navigation in this trade route is therefore a matter of survival for today’s China. Understandably, China regards Barrack Obama’s strategy of “pivot to Asia” a potential menace to its security. From Beijing’s perspective, “pivot to Asia” is a revival of containment.

Who is aggressive?

Jingoistic Filipinos assert as indisputable truth that the current tensions in the South China Sea are due to China’s aggressiveness. But if we examine the sequence of events, China’s muscle flexing is a response to a US challenge, not the trigger of discord. China started demanding recognition of the nine-dash line only in 2009, a year after Obama unveiled the “pivot to Asia” strategy. Previously, China showed willingness to compromise.

For example, China signed the “UN Convention on the Law of the Sea” (UNCLOS), which recognized the exclusive economic zones of the coastal states around the South China Sea. (Incidentally, America refused to sign the UNCLOS.) Under this covenant, Scarborough and the Kalayaan islands fall within our exclusive economic zone. China did not question this until “pivot to Asia” threatened its national security.

In 2002, China also signed an agreement with the 10 ASEAN member states that designated the South China Sea as a zone of peace and neutrality. In the “Declaration on the Conduct of Parties in the South China Sea” -- as the agreement was called -- China and the ASEAN reaffirmed their commitment to UNCLOS and to freedom of navigation in the South China Sea. It also provided that: “Pending a comprehensive and durable settlement of the disputes, the Parties concerned may explore or undertake cooperative activities. These may include the following: marine environmental protection; marine scientific research; safety of navigation and communication at sea; search and rescue operation; and combating transnational crime, including but not limited to trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms.”

That was the best compromise arrangement while the overlapping territorial claims remain unresolved. While it was in effect, the Philippine coast guard occasionally apprehended Chinese poachers without engendering tension because, under the Declaration of Conduct, protection of the marine environment was acknowledged to be a common concern. The Chinese embassy would ask for extradition of their nationals and we deported them without fuss or fanfare. Neither side raised the issue of sovereignty.

“Pivot to Asia” disturbed this fragile status quo. In the ensuing conflict, the real protagonists are China and the United States. To both of them, the core issue is control of the maritime route, not oil or gas.

BWorld 714, On the role of coal in Asia and renewing Meralco’s franchise

On the role of coal in Asia and renewing Meralco’s franchise

June 13, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

Shar

https://www.bworldonline.com/opinion/2024/06/13/601320/on-the-role-of-coal-in-asia-and-renewing-meralcos-franchise/

A friend sent me a beautiful recent study, “Assessment of the Role of Coal in the ASEAN Energy Transition and Coal Phase-out,” published by the Jakarta-based ASEAN Energy Center (ACE) and guided by the ASEAN Forum on Coal (AFOC) and the ASEAN Secretariat. It is 58 pages long, released this May.

I checked my data to answer this question: What is the contribution of coal in the ASEAN, in Asia, and the industrial west?

Over the past three decades, 1992-2022, big countries in Asia including Japan were increasing their coal power generation while the US, Canada, Germany, and the UK had been downscaling their coal use. With this trend, the total power generation of the Asian nations jumped, like Vietnam, which went from 10 terawatt-hours (TWh) in 1992 to 260 TWh in 2022 or an expansion of 26 times; China, which went from 754 TWh in 1992 to 8,849 TWh in 2022, expanding by 11.7 times (see Table 1).

I computed the share of coal to total generation, then the average GDP growth of these countries over comparative years. The result shows that the use of coal in ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) is rising, like Indonesia, which went from 28% in 1992 to 62% in 2022, and the Philippines, which rose from 7% to 57% over the same period. Thailand is the exception, with its share of coal declining from 26% to 20% as it began to use more gas, which is still a fossil fuel.

As the Asian nations used more coal as a cheap and stable source of energy for their modernization and industrialization, their average GDP growth was also high, ranging from 3% to 10% (except in Japan) from the 1990s to the 2010s. In contrast, the big western nations, with their declining shares of coal/total generation, saw low average growth, only 1% to 3% over the same period (see Table 2).

Here are some important points from the paper by ACE that I mentioned at the beginning of this column: “Relying primarily on the (International Energy Agency) IEA’s Net Zero Emission (NZE) Pathway as the Taxonomy’s foundation is also overly ambitious and not sufficiently tailored to the unique circumstances found in Southeast Asia…. After all, coal phase-out poses tremendous challenges for ASEAN due to the role of coal in providing sufficient energy supplies at the lowest cost possible, its contributions to the region’s economy… coal currently outperforms other energy sources in terms of supply security, reliability, affordability and — to some extent — sustainability in ASEAN’s power generation.”

MORE NONRENEWABLES NEEDED
There were two energy reports of interest in BusinessWorld this week: “No red alerts projected in coming weeks — DoE” (June 9), and “AboitizPower says nonrenewables needed” (June 11).

During the Asia Clean Energy Forum (ACEF) on June 10 at the Asian Development Bank, one of the panel speakers was Carlos Aboitiz, the Chief Corporate Services Officer of Aboitiz Power Corp. He correctly pointed out that aside from “energy transition,” there is “another transition, a human one that aspires to lift people out of poverty and into modern society.”

Mr. Aboitiz argued — and I agree with him — that using the levelized cost of electricity (LCOE) only captures the cost of variable renewable energy (VRE) when the sources are available. But intermittency and lack of resources in solar and wind during different times of the day and year should also be considered and this should be reflected in a Levelized Full Cost of Electricity (LFCOE). The LFCOE incorporates the full costs of running the electrical grid reliably 24/7, hence it considers and includes the price and cost of technologies and capacities to fill the demand gap and minimize the intermittencies of VRE.

I particularly liked his concluding notes: “Lastly, we need to acknowledge when the narratives we use no longer serve us. The ‘renewable is hero and coal is evil’ narrative is no longer useful. It silences conversation about the need for a gradual transition and sacrifices understanding for the sake of convenience and comfort…. Holding all countries to the same standards is no longer useful. It ignores that imbalances in wealth, value, and responsibility that exist and this impedes climate politics from advancing.”

MERALCO FRANCHISE RENEWAL
One important bill currently under deliberation in Congress is on the early renewal of Meralco’s franchise. See these recent reports in BusinessWorld: “MAP urges House to renew Meralco franchise” (May 31), “House told to fast-track hearings on Meralco’s franchise renewal bid” (June 2), “Makati Business Club backs Meralco franchise renewal” (June 5), and “Meralco ownership a ‘non-issue’” (June 9).

Aside from the Management Association of the Philippines (MAP) and the Makati Business Club (MBC), I read in other newspapers that there are five other groups and industry associations that have publicly endorsed an early renewal of Meralco’s franchise. These are: the Society of Philippines Electrotechnical Constructors & Suppliers, Inc. (SPECS), the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), the Philippine Iron and Steel Institute (PISI), the IT and Business Process Association of the Philippines (IBPAP), and the Advocates and Keepers Organization of OFW, Inc. (AKO OFW).

I also support this move for many reasons, but I will mention just one — Meralco’s Interruptible Load Program (ILP). This is the voluntary participation by large power users, like big manufacturing plants, to temporarily disconnect themselves from Meralco when the power supply is insufficient and reserve margins are thin and hence may lead to blackouts. Instead, they run their generator sets on diesel, and reconnect to Meralco later when the reserve margins have increased. They are later reimbursed for the higher generation cost of their diesel gensets.

There are two reasons why the ILP is very important.

One, it helps expand the power supply by up to 300 MW when the combined capacities of the gensets of many large companies are added, even temporarily, and hence helps avoid a bigger problem of rotating blackouts.

Two, it proves that the electricity price control at the Wholesale Electricity Spot Market (WESM) is bad and blackout-inducing. “Cheap but not available” electricity is wrong. Higher prices in the short-term are necessary to incentivize power producers to buy big oil gensets or build oil peaking plants to avoid blackouts and darkness, to avoid damaging the food in refrigerators, and damaging goods in manufacturing, etc.

Meralco should be commended for this innovation and it deserves a franchise renewal so it can further improve this program.

Meanwhile, the Philippine Chamber of Commerce and Industry (PCCI) will hold a Power Summit 2024 with the theme, “Moving the Economy Forward with Energy and Power Security and Competitiveness,” on June 19 at the Makati Diamond Residences. Among the speakers will be Consul Enunina V. Mangio, the President of PCCI; David Chua and George Barcelon, Chairs for Energy and Power of PCCI, Energy Secretary Raphael P.M. Lotilla, and Energy Regulatory Commission Chairperson and CEO Monalisa Dimalanta. 

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See also:

BWorld 711, Thinning reserves and why we need nuclear energy 

BWorld 712, The Laffer Curve of Philippine tobacco taxation, redux 

BWorld 713, Declining growth and rising unemployment: East Asia vs Europe

Ukraine War 4, Jeffrey Sachs on the need for negotiation

I was not a fan of Jeffrey Sachs before with his endless Save-the-planet narratives. But during the Russia-Ukraine war, he has pivoted to Save-the-peace movement and I like him there. His latest article below, he argued many things but I just list down three of these. The news links in his article some I included here. Enjoy. 

 

Why Won’t the US Help Negotiate a Peaceful End to the War in Ukraine?

For goodness' sake, negotiate!

by Jeffrey D. Sachs, June 26, 2024

https://original.antiwar.com/Jeffrey_Sachs/2024/06/25/why-wont-the-us-help-negotiate-a-peaceful-end-to-the-war-in-ukraine/

 

(1) Dismember Russia

 

Since the end of the Cold War, the U.S. grand strategy has been to weaken Russia. As early as 1992, then Defense Secretary Richard Cheney opined that following the 1991 demise of the Soviet Union

 

Dick Cheney confirmed US goal is to break up Russia as a country, not just USSR

Former Vice President and Iraq War architect Dick Cheney wasn’t content only breaking up the Soviet Union. Balkanizing Russia (and China) is a bipartisan foreign-policy goal among top US national security state officials.

Ben Norton 2022-02-01

https://geopoliticaleconomy.com/2022/02/01/dick-cheney-us-goal-break-up-russia/

 

A Geostrategy for Eurasia

Foreign Affairs September/October 1997

By Zbigniew Brzezinski, September 1, 1997

https://www.foreignaffairs.com/articles/asia/1997-09-01/geostrategy-eurasia

 

Brzezinski opined that Russia should be divided into three loosely confederated entities in Russian Europe, Siberia, and the far east.

 

NATO Expansion: What Gorbachev Heard

Michail Gorbachev discussing German unification with Hans-Dietrich Genscher and Helmut Kohl in Russia, July 15, 1990. 

Declassified documents show security assurances against NATO expansion to Soviet leaders from Baker, Bush, Genscher, Kohl, Gates, Mitterrand, Thatcher, Hurd, Major, and Woerner

Slavic Studies Panel Addresses “Who Promised What to Whom on NATO Expansion?”

Published: Dec 12, 2017

 

Washington D.C., December 12, 2017 – U.S. Secretary of State James Baker’s famous “not one inch eastward” assurance about NATO expansion in his meeting with Soviet leader Mikhail Gorbachev on February 9, 1990, was part of a cascade of assurances about Soviet security given by Western leaders to Gorbachev and other Soviet officials throughout the process of German unification in 1990 and on into 1991, according to declassified U.S., Soviet, German, British and French documents posted today by the National Security Archive at George Washington University (http://nsarchive.gwu.edu).

 

The documents show that multiple national leaders were considering and rejecting Central and Eastern European membership in NATO as of early 1990 and through 1991, that discussions of NATO in the context of German unification negotiations in 1990 were not at all narrowly limited to the status of East German territory, and that subsequent Soviet and Russian complaints about being misled about NATO expansion were founded in written contemporaneous memcons and telcons at the highest levels.

 

NATO Expansion: What Yeltsin Heard

President Clinton and President Yeltsin toasting at the state dinner, Hall of Facets, The Kremlin, Moscow, May 1995

Russian president led to believe Partnership for Peace was alternative to expanded NATO

Documents show early Russian opposition to “neo-containment;" more U.S. assurances to Russia: “inclusion not exclusion” in new European security structures

Published: Mar 16, 2018

https://nsarchive.gwu.edu/briefing-book/russia-programs/2018-03-16/nato-expansion-what-yeltsin-heard

 

Washington, D.C., March 16, 2018 – Declassified documents from U.S. and Russian archives show that U.S. officials led Russian President Boris Yeltsin to believe in 1993 that the Partnership for Peace was the alternative to NATO expansion, rather than a precursor to it, while simultaneously planning for expansion after Yeltsin’s re-election bid in 1996 and telling the Russians repeatedly that the future European security system would include, not exclude, Russia.

 

The declassified U.S. account of one key conversation on October 22, 1993, (Document 8) shows Secretary of State Warren Christopher assuring Yeltsin in Moscow that the Partnership for Peace was about including Russia together with all European countries, not creating a new membership list of just some European countries for NATO; and Yeltsin responding, “this is genius!”

 

Covert Regime Change: America's Secret Cold War

(Cornell Studies in Security Affairs) Hardcover – December 15, 2018

by Lindsey A. O'Rourke

https://www.amazon.com/Covert-Regime-Change-Americas-Security/dp/1501730657

 

(CIA-led covert regime change operation including sixty-four episodes between 1947 and 1989)

 

(2) US-sponsored coup in Ukraine 2014

 

The second Russian proposal for negotiations came from Putin following the violent overthrow of Ukraine’s President Viktor Yanukovych in February 2014, with the active complicity if not outright leadership of the U.S. government. I happened to see the U.S. complicity up close, as the post-coup government invited me for urgent economic discussions. When I arrived in Kiev, I was taken to the Maidan, where I was told directly about U.S. funding of the Maidan protest.

 

Recorded conversation between Asst. Sec. of State Victoria Nuland and Amb. Jeffery Pyatt

A recording of Assistant Secretary of State Victoria Nuland and ambassador Geoffrey Pyatt speaking on the phone about US strategy for a political transition in Ukraine and includes a crude swipe at the European Union. The audio was posted on YouTube however the original source is unknown. Read the full story here. (Photo: Reuters)

This video was originally published on 7 February 2014

https://www.youtube.com/watch?v=JoW75J5bnnE

 

(Assistant Secretary of State Victoria Nuland on a phone line in January 2014 plotting the change of government in Ukraine.)

 

Putin: Russia ready for Ukraine deal, but partners cheated in the past

Evan Simko-Bednarski. Dec. 9, 2022

https://nypost.com/2022/12/09/vladimir-putin-russia-ready-for-ukraine-deal-but-partners-cheated-in-the-past/

 

The Russian leader referenced a comment made by former German chancellor Angela Merkel this week in which she acknowledged to German newspaper Die Zeit that the Minsk agreements had been an effort to “give Ukraine time” to build up its defenses and become stronger.

 

(3) The need for negotiation, end the war

 

The Ukrainian people have been lied to time and again by Zelensky and Biden and other leaders of NATO countries, who told them falsely and repeatedly that Ukraine would prevail on the battlefield and that there were no options to negotiate. Ukraine is now under martial law. The public is given no say about its own slaughter.

 

For the sake of Ukraine’s very survival, and to avoid nuclear war, the President of the United States has one overriding responsibility today: Negotiate.

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See also:
Ukraine War 1, Ukraine may soon surrender, then war in Europe will stop, good, Nov. 05, 2023

Peace and Prosperity, not war mongering, Feb. 19, 2024
Ukraine War 2, Two years of war and oil prices, Feb. 24, 2024

Ukraine War 3, The need for negotiations and stop the fighting, February 27, 2024

BWorld 713, Declining growth and rising unemployment: East Asia vs Europe

Declining growth and rising unemployment: East Asia vs Europe

June 11, 2024 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

Share

https://www.bworldonline.com/opinion/2024/06/11/600769/declining-growth-and-rising-unemployment-east-asia-vs-europe/

Now that most major economies in the world have reported their first quarter (Q1) 2024 GDP performance, I will resume my global economic scanning. Major economies are those with GDP size at Purchasing Power Parity (PPP) value of $600 billion and higher in 2023, and there are 43 of them.

For the purpose of brevity, I will not show all the 43 countries in the accompanying table. I excluded some due to their incomplete data in GDP growth and unemployment, plus I limited the list of European countries. The countries I excluded along with their respective rank in GDP-PPP are: Egypt 18, Iran 19, Pakistan 23, Bangladesh 25, Nigeria 27, Argentina 30, Colombia 32, the United Arab Emirates 34, Romania 36, Belgium 37, Algeria 39, and Kazakhstan 42.

I used a country’s GDP size both in Nominal and PPP values then ranked them. The Nominal values are GDP in national currencies divided by the average US$ exchange rate, while the PPP values consider the cost of living. I also included these countries’ GDP growth in Q1 2023 vs Q1 2024, and their unemployment rate in April 2023 vs April 2024 unless specified as March or Q1.

As seen in the table, the Philippines is doing fine. In 2023 GDP size, it ranked 34th in Nominal value but ranked higher at 29 in PPP value. In GDP growth, the Philippines was ranked as the 3rd fastest growing among 43 economies in 2023, next to India and Bangladesh. It was also the 3rd fastest among the 36 economies that reported their Q1 2024, next to India and Taiwan. And the unemployment rate showed improvement, from 4.5% in 2023 to 4% this year. This is a good achievement and shows good management by the Philippine economic team. Thank you, Finance Secretary Ralph G. Recto, Budget Secretary Amenah F. Pangandaman, and Economics Secretary Arsenio M. Balisacan.

In 2024, growth deceleration is evident in most of the G7 industrial countries except the US and France, with the latter having escaped deceleration but growing at only 1%. Japan and Germany have contractions this year. Growth deceleration, if not contraction, is also evident in other major economies except Turkey. Poland’s growth this year is due to base effect — it had contraction in Q1 2023. The worst contraction this year is seen in Ireland, Saudi Arabia, Austria, and the Netherlands.

The unemployment rate increased in G7 countries except Italy, while Japan had no change. Other major economies also showed an increase in their unemployment rate, or a slight decrease but still at high levels like Spain with 12%, Turkey with 8.6%, and Poland with 5%.

The BRICS countries — Brazil, Russia, India, China, and South Africa — have accelerated their growth this year except for Brazil and South Africa. They also have decreased their unemployment rate, except for South Africa.

East Asian nations in general have faster growth this year except for Thailand and Malaysia. The Philippines’ 5.7% growth this year is lower than that of last year, but it is still the third fastest among the major economies. Unemployment rates are either declining or remain at low levels (see the table).

What are the implications and opportunities for the Philippines of these global economic trends?

I see one path here — the slow migration of businesses from the G7 countries and other major economies to their smaller neighboring countries in America and Europe, and to East Asia including the Philippines.

Currently there are three major policy mistakes that afflict the G7 countries and other major economies. One, the mass immigration of illegals that sap the developed countries’ social and economic resources. Two, expensive and unstable energy from the use of more intermittent sources that require more backup power from fossil fuel and nuclear plants, plus imported energy from neighbors. And, three, the endless war in Ukraine that pulls the developed countries’ fiscal resources and further raises their public debt.

The Philippines and neighboring East Asian countries should avoid or minimize these pitfalls. One, they should encourage only legal, vetted migration and disallow unvetted illegal migration. Two, they should keep their fossil fuel plants plus nuclear, expand their power supply big time, and anticipate high power demand in the coming years. And, three, step away from taking sides in ongoing major military conflicts between the US vs. Russia in Ukraine, the US vs. China in Taiwan and the South China Sea, and the US-Israel vs. Iran in Palestine and Syria.

We should focus on sustaining high growth, more job creation, and lower unemployment and inflation rates. We should have no blackouts or yellow-red alerts and have stable electricity prices despite rising power demand from more economic activity, especially with the projected migration of businesses from G7 countries and other major economies to East Asia and the Philippines. And we should attract talented migrants and professionals from abroad while we continue expanding professional and business opportunities for our returning OFWs. 

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See also:

BWorld 710, Philippine economic expansion and endless pursuit for prosperity

BWorld 711, Thinning reserves and why we need nuclear energy 

BWorld 712, The Laffer Curve of Philippine tobacco taxation, redux