Business Bureaucracy 11, SEANET workshop on business-friendly regulations

I am reposting this short summary of the SEANET meeting in Kuala Lumpur, a day after the 4th Asia Liberty Forum (ALF) ended.
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SEANET Workshop: Business-friendly regulations

21 February 2016

Following the three-day Asia Liberty Forum organised by ATLAS Network, the Centre for Civil Society and the Institute for Democracy and Economic Affairs (IDEAS), the Southeast Asia Network for Development (SEANET) held a workshop for think tank and business leaders, and academicians from around the world. The focus of the workshop was the development of business-friendly regulations in Southeast Asia.

The structure of the workshop was divided into presentations from various experts in free trade, followed by an open discussion between all workshop attendees. Julian Morris, of the Reason Foundation, shared how the introduction of innovative business models, combined with scale-backs on regulations, have led to massive improvements in quality of life, such as the greater travel convenience offered by companies such as GrabCar and Uber. Morris also highlighted how free market innovation has led to market solutions for harmful products, such as alternatives to cigarettes in the form of e-cigarettes. Such examples demonstrate that there are more viable alternatives to aggressive government centralisation.

Following Morris’ presentation, various attendees related of the threats to freedom of choice and the market inefficiencies caused by heavy regulations on tobacco. They mentioned how organisations such as the WHO’s Framework Convention on Tobacco Control (FCTC) are creating a forceful environment where there is an abuse of lawful processes and a neglect of the sovereignty of governments. Le Dang Doanh, an economist from Vietnam, shared how the vast amount of regulations on private sector industries has bred a culture of corruption in Vietnam, where business leaders are coerced to paying off public officials simply to obtain an operation permit. Such regulations have also severely limited the contribution of the private sector to the country’s GDP, which now stands at only 11.2%.

The workshop attendees then shifted gears from the current situation of regulations on businesses to share ideas on advancing the liberal agenda for the future. Sethaput Suthiwart-Narueput, of Thailand Future Foundation, offered three suggestions as to how think tanks can enhance a business friendly environment in their countries.

Firstly, Suthiwart-Narueput emphasised the need to reframe the current debate in a way that is applicable to the Asian context, in that the jargon used and the issues addressed must be localised for Asian societies. In addition, think tanks have to choose their battles and issues carefully, aiming to persuade parties caught in the middle ground rather than battling hard against opposing NGOs or governments. Lastly, there is need for regional collaboration between think tanks in different countries.

Wan Saiful Wan Jan, CEO of IDEAS, urged businesses and think tanks alike to establish connections with governments so as to open avenues for collaboration for market liberalisation, while Azrul Khalib from IDEAS mentioned the importance of research on the benefits of deregulation in persuading civil society to embrace free market principles. Various participants also pointed out the impact of media in advocating deregulation through applying public pressure on politicians.

In conclusion, the exchange of ideas, experiences and challenges between the diverse body of attendees in this workshop served to reaffirm the importance of collaboration between think tanks, businesses and academic institutions in championing liberal ideals in Southeast Asia.

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See also:

Business Bureaucracy 8: Exchanges at Imperium et Populi (Philippines), June 12, 2013 

Business Bureaucracy 9, Land title registration, July 29, 2015 

Business Bureaucracy 10, WB's Doing Business 2016 Report, October 29, 2015

Energy Econ 12: EPIRA, WESM, PSALM and DOE Bureaucracy, January 28, 2014 

BWorld 5, Transportation Bureaucracy and Uber, June 16, 2015

BWorld 19, Taxation and regulations in PH mining industry, September 24, 2015 

BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015
IPR and Innovation 31, On TPP, medicines patent and tobacco trademark, February 29, 2016

Business taxes, Makati vs. Taguig

Compare business permit taxes for small companies in Makati vs. Taguig.

In Makati (I took these photos sometime in April 2015), Barangay + City taxes and fees = P1,900 + P23,785 = P25,685.

In Taguig, posted by friend in facebook last July 2015 after she registered her new company. I covered the name of her firm.

City hall taxes and fees = P2,253. Only 1/10 of what Makati City hall collects, wow. Among the reasons why many business locators in Taguig Fort Bonifacio do not want Makati City Hall to have power over them. Taxes and fees are a lot higher.

Meanwhile, I wrote this on August 04, 2011.

Fragmentation vs. Consolidation of local governments

A friend asked me about my thoughts on whether there should be more fragmentation or more consolidation of local government units (LGUs) in the Philippines.

Being an advocate of less government, more personal responsibility and free market, my quick answer is more consolidation of LGUs, not the creation of new ones. But before expanding further, here is a rundown of the number of LGUs in the country.

I read in one publication that as of June 30, 2007, the following are the number of LGUs:

Provinces -- 81
Cities -- 131
Municipalities -- 1,497
Barangays -- 41,994

I don't remember the source of those numbers. I checked with DBM's Budget of Expenditures and Sources of Financing 2012, LGUs section, I counted 80 provinces and 122 cities. I also learned that only Pateros remains a municipality in Metro Manila, the 16 other LGUs are now cities.

I once discussed with my Indonesian friend my idea that with more than 21,000 islands and islets (vs. the Philippines' 7,100+) covering 4 time zones, Indonesia should break up into several countries and republics in order to spare the far away provinces and islands from the bureaucratism of the central government in Jakarta. He reminded me that despite its size, Indonesia has only 33 provinces vs. the Philippines' 80. Good point there.

Many politicians tend to view an LGU as a "mini-republic". A Congressman who finishes his 3-terms limit (3 years per term) and cannot fight another candidate for Governor with a good chance of winning, and does not want to run for Mayor of any of the cities or municipalities, would tend to propose the creation of a new province in an existing province so that he can run there as a provincial Governor with a good chance of victory. At some point, this is one reason why the number of provinces nationwide has expanded.

To create a new LGU, say a new province out of an existing big province, or a new city out of an existing big city, would mean doubling the number of local government officials (elected and appointed) and other lower-level personnel.

The Union of Local Authorities of the Philippines (ULAP) boasted sometime in 2006 that they have 1.7 million membership nationwide. The Civil Service Commission (CSC) at that time said there were only 400,000+ LGU personnel nationwide. I think the ULAP figure included personnel down to the barangay level while the CSC figure did not include barangay personnel, as well as temporary or contractual personnel in municipalities, cities and provinces, vut I'm not sure of these.

A friend of mine who was an HR official of the Paranaque City Hall once told me that the city government alone has more than 5,000 employees, both permanent and contractual. Excluded from that figure are officials and employees of the many barangays in the city. That was several years ago. The city would probably have 6,000 personnel by now.

Paranaque is a big city, like the cities of Manila, Makati, Quezon, Cebu, Davao, Baguio, Dagupan, etc. These big cities would have around about 5,000 or more personnel each. If we assume that an average city would have about 2,000 personnel, multiplied by 122 cities, that's around 244,000 personnel.

The municipalities. If we assume that an average municipality would have around 1,000 personnel, multiplied by 1,500 nationwide, that's around 1.5 million people.

Provinces would have bigger number of personnel than cities. If they would have 2,500 people each on average, multiplied by 80 provinces, that's another 200,000 personnel.

The barangays. I think there are at least 20 officials in each barangay (8 elected, at least 7 appointed, like the barangay secretary, treasurer, health officer, tanod head, etc.). Some barangays have more than a hundred employees, to include traffic officers, barangay tanods, brgy office staff, etc. At 20 personnel x 42,000 barangays, that's another 840,000 personnel.

These numbers are rough estimates. I will try to find other papers that can give more definitive figures. But assuming that the above estimates are close to their actual numbers, that's a total number of 2.78 million officials and personnel in LGUs alone.

Is it advisable to keep expanding this number through the creation of more LGUs, aside from the natural increase of existing LGUs by virtue of natural expansion of the bureaucracy?

Excluded from the above estimates are employees of national government agencies (soldiers, teachers, policemen, firemen, social workers, etc.) in the Executive branch. Then there are several hundred thousand more employees from the Judiciary (Supreme Court to lower courts), the Legislature (Senate, Congress, Batasan + district office staff, electoral tribunals), the Constitutional bodies (COA, CSC, COMELEC, CHR, Ombudsman, etc.).

Then there are several tens of thousands (or hundred thousand plus?) personnel of government corporations and financial institutions (BSP, SSS, GSIS, Pag-IBIG, PhilHealth, PAGCOR, PCSO, NPC, DBP, LBP, MWSS, etc.)

Then there are also several thousand personnel in the foreign aid and multilateral government bodies like the UN, WB, ADB, etc.

Government, from national down to local government, even not counting those working in the multilaterals, is the biggest employer in the economy. Probably about 12 to 15 percent of the total employed people in the country.

Since most functions in government are regulatory in nature, like telling people that they cannot start a bakeshop or barbershop or foodshop, unless they get the signatures and permits first of people from the barangay municipal/city hall to the national agencies like the BIR, SSS, DTI, SEC, etc., it is NOT good to expand government. From the local to national government.

On Airport Terminal Fee

I fly at least 5x a year, 3x international (mainly to attend conferences and seminars) and 2x domestic (visit our folks in Negros Occ. and Iloilo). So I pay the government many taxes and fees related to flying, like travel tax for international trips, and airport terminal fee for either international or local trips.

This Christmas holiday season, many people will fly. Like me, they will pay lots of terminal fee in Philippine airports -- P750 for international trip and P200 for domestic trips. And the airport does not even have a single drinking water fountain, passengers have to buy bottled water from the shops.

If the government is more sensitive and less extortionist, it should provide more services to the passengers after it has collected so many taxes and fees from them. See my earlier discussion on travel tax, Migration and Freedom 13: Travel Tax Robbery, December 06, 2011.

I am reposting my two articles written six years ago.
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(1) On Terminal Fees

November 15, 2005:

On top of many types of taxes such as personal and corporate income tax, value added tax (VAT), there are dozens of regulatory fees from various government agencies, national and local. Among these are business permit fee, inspection fee, permit fee, registration fee, processing fee, fines and penalties fee, franchising and licensing fee, clearance and certification fee, laboratory fee, land registration fee, notarial fee, filing fee, fire code fee, market and post-mortem fee, terminal fee, and so on.

If you travel domestically, whether by plane or boat or bus (via roll-on roll-off or RORO boats), you will pay a number of terminal fees in various ports of departure.

If you fly from Manila domestic airport, the previous P100 per passenger terminal fee has been hiked to P200 effective September this year. The amount is big as airlines already pay certain fees to the airports authority, shops inside the departure lounge pay high rental fees, and the services given to passengers -- a plain air-con departure lounge with tv and toilet -- are not really extra-ordinary. Me thinks the hike has something to do with servicing an ever-bloating government expenditures and public debt.

The President's SONA 2011

(This is my article yesterday in the lobbyist.biz with original title, SONA bath and the liberal challenge)

The President’s annual State Of the Nation Address (SONA) is always an occasion to enumerate what it has done the previous year/s, what are its goals in the coming year/s, and what it wants from Congress and other sectors to achieve its remaining goals.

Thus, the SONA is an important political event every year where so many people in government meet and talk about past achievements and short-term goals, then only one person talks and almost the entire nation listens, then almost everyone talks as they analyze what the President said and did not say.

In a sense, the SONA is a brief embodiment of central planning thinking in the country. It is the main “roadmap” of the government for the year and the remaining years of its term, and every major economic, social and political actors in the country are watching if their respective sectoral agenda are being upheld, ignored, or contradicted by the President in power.

The President will deliver his second SONA this Monday. I have little idea what he will say or not say in his Address. I only wish that he will speak as a liberal political leader. After all, he comes from the Liberal Party, not from a socialist or nationalist or populist or other political party and ideology.

Liberalism in theory, is opposed to socialism, anti-globalization nationalism, and the populism of forced collectivism. Because liberalism stands for individual freedom, lean government, free market, rule of law and civil society self-reliance. “Good governance” is not the distinctive ideology of liberalism; it is a populist goal by all political parties. Even dictators, despots and authoritarian leaders talk about “good governance.” It is the belief in individual liberty and freer markets that distinguish liberalism from socialism and many other political ideologies.

It is wrong, therefore, for so many sectors to demand that the President should promise them all sorts of “free” or highly subsidized services. When they demand free or highly-subsidized education, healthcare, housing, credit, unemployment insurance, pension, transportation, public works, agricultural machineries and so on, they are asking for socialism. And as mentioned above, the President did not run on a socialist platform during the campaign.

One of the good promises of the President in his 1st SONA last year when he was just three weeks in office, was this:

Ang walang-katapusang pabalik-balik sa proseso ng pagrehistro ng pangalan ng kumpanya, na kada dalaw ay umaabot ng apat hanggang walong oras, ibababa na natin sa labinlimang minuto. Ang dating listahan ng tatlumpu't anim na dokumento, ibababa natin sa anim. Ang dating walong pahinang application form, ibababa natin sa isang pahina.

(Translation: The endless procedures in registering a business name, which takes between four to eight hours a day, we will reduce it to 15 minutes. The old requirement of 36 documents, we will bring it down to six. The eight pages application form, we will make it one page.)

I considered it a real liberal policy and promise. Simply reduce the bureaucracies, reduce the number of signatures by government officials and bureaucrats, and that will enhance individual freedom, the freedom to become economically productive and create jobs for the jobless. And that policy alone will drastically reduce (but not totally eliminate) corruption in the country.

As expected, some groups and individuals considered that policy as “elitist” and “pro-big business.” I don’t think so. That policy is both pro-big business and pro-small business. When there are plenty of bakeshops and food shops, internet and book shops, parlor and barber shops, vulcanizing and machine shops and so on, more jobs will be created. When people have jobs, they tend to become more independent of government. In emergencies, they have their own savings and do not easily run to politicians and government welfare offices. They have the resources and self-respect, self-confidence, to take care of themselves, their families and friends.

After a year, did the President deliver that promise? Sadly, the answer is No. The volume of business bureaucracies did not seem to have decreased. It even increased in some local governments as those units have the power and capacity to create their own business regulations on top of national government business regulations.

I just hope that the next SONA will not sound like sauna bath cleansing or “pagmamalinis” why the previous year’s promise was not delivered. Rather, there is recognition of failure to deliver, and that a stronger resolve will be made to really implement that and other liberal promises.

But honestly, judging from the way many Filipino liberal politicians themselves speak and behave, and from the way they have allied with so many populists and socialists, liberalism as a philosophy has been largely compromised. This is not the way to lift the economy and many poor Filipinos from the endless disease of bureaucratism, corruption and underdevelopment.
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See also The President's SONA 2010

Migration and Freedom 9: Immigration bureaucracy

Last July 6, Atty. Gregorio "Goyo" Larrazabal (@GoYoLarrazabal), a former COMELEC Commissioner, tweeted the following:

Did I hear it right that immigration officials will start profiling OUTGOING Filipinos, presumably to help curb human trafficking? And the immigration official may prevent the Filipino traveller from leaving the Philippines.

The point is d prevention of free movement. So if d immigration does't like ur answer and prevents you from flying what do YOU do?

A few minutes before I saw his tweet, I also saw this from philoquotes' tweet:
Free people, remember this maxim: we may acquire liberty, but it is never recovered if it is once lost. ~ Rousseau

I replied to Atty. Goyo that most government agencies can actually profile us citizens anytime they want to because they centralize many information about us -- the SSS, LTO, BIR, DFA, etc. That there is danger when government bureaucrats will use their power of prohibition, like prohibiting us from travelling, etc. And that government bureaucracies' profiling of citizens is idiotic and unfair if they themselves are not transparent. I went to the Bureau of Immigration website, there are no names or pictures of officials and other personnel. It is sort of a secret club with a website because it has to have one.

I also saw this report, Philippine Justice Secretary Sacked 18 Bureau of Immigration Personnel

Meanwhile, I have a friend who is going as a UN volunteer in one of the poorer countries in Asia. I asked him why he has not flown yet, he said that he and his batch of other Filipino volunteers are still waiting for the go-signal of the Bureau of Immigration.

I asked further why the Philippines' immigration office will hold them and not the immigration office of their destination country. The latter will decide if they are good and desirable aliens.

It turns out that BI made a wholesale suspicion of volunteers going abroad. BI caught 1 (or more?) Filipina/s who was posing as nun and UN volunteer, gave questionable papers, and BI presumed that many volunteers are now part of the human trafficking racket, even including UN Volunteers.

My friend said that some of his fellow UN volunteers were already about to board a plane, then they were prevented by the BI, not once but twice. They have to unload their baggage from the plane, got out of the departure lounge in embarrassment, and the flight of the remaining passengers was delayed.

Since those were legitimate UN volunteers, did the BI give an apology, or reimburse their unused plane ticket? I heard that BI gave neither. The organization/s that finance the trip of those Filipino volunteers has to spend extra for the flight re-booking of the volunteers.

There is a supposed memorandum of agreement (MOA) among BI, NEDA and the Philippine National Volunteer Service Agency (PNVSA) after that fake nun incident. But as of this week, the MOA has not been signed yet as the BI Chair is on leave.

The fake nun incident and the "profiling of outgoing Filipinos" that Atty. Goyo mentioned above could be related. It is a dangerous risk if BI personnel will prevent someone with legitimate trip abroad to be prevented from flying because of mere suspicion of something.

BI or other government agencies that will cause such unpleasant and unnecessary prevention of flying should get some penalty if their "intelligence" is wrong. Like suspending or sacking a whole team of officials who made the false accusation.
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See also Migration and Freedom 7: Restrictions to OFWs, April 13, 2011

Business Bureaucracy 3: Their Rules and Life

I tweeted these "bureaucracy rules". Now I will elaborate or give examples on them. Bureaucracy here means government bureaucracy.

1. Once a bureaucracy is created, its 1st act is to perpetuate itself. It has no allowance for self-destruction someday.

2. When one coalition of governments and bureaucracies don't work to one's advantage or agenda, create a new one.

3. If threatened w/ abolition, bureaucracy's main defense is counting d no. of bureaucrats who'll lose job, social tension.

4. Before the main mandate is accomplished, create new functions, prgrams and "needs" to perpetuate itself forever.

5. Create one admin or regulations order, monitor how ineffective it is, create a revised regulations order, monitor...
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On #1, this is a universal rule of the bureaucracy in possibly all countries and governments. And this largely explains why many bureaucracies, from local to national governments, to multilateral and inter-governmental bodies, keep expanding.

On #2, good examples are the new US government initiatives, the Partnership for Growth (PFG) and the Trans-Pacific Strategic Economic Partnership (TPP). Many if not all countries invited for this new economic coalition are also members of the Asia Pacific Economic Cooperation (APEC). Since the US does not get all its demands and economic agenda from APEC, then it created a new coalition where member-countries and governments will be indebted to it for such new "initiative" and thus, agree to a number of US government demands and political-economic agenda.

On #3, many agencies, departments and bureaus whose mandate has been outdated or irrelevant, cannot be abolished because they have already packed those offices with many employees and directors. Abolishing the office would means several dozens, if not hundreds or thousands, of bureaucrats who will be displaced.

On #4, one option for the bureaucracies whose original mandate has become outdated, is to expand its mandate so that it will remain "relevant and needed." One good example is the Department of Agrarian Reform. The Comprehensive Agrarian Reform (CARP) was enacted in 1988 and was given 10 years to be implemented. DAR is supposed to evaporate once CARP has been fully implemented. Then CARP was not fully implemented for various reasons, so it was extended for another 10 years, to end in 2008. Then it was not fully implemented again, extended again for another 5 years, until 2013. It is safe to assume that there will be another 5 years (or longer) extension as DAR has created more programs like "urban land reform" and there is no limit to those urban land redistribution.

On #5, this is how various Administrative Orders (AOs), Executive Orders (EOs), Republic Acts (RAs) and other laws and regulations keep expanding. The previous regulations allow certain loopholes for the regulated sectors and businesses, so the next administration and officials create new regulations and orders to amend and revised the previous ones. And another change of administration and officials would mean new changes and revisions to recent revisions.
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I wrote this last December 16, 2009:

Unemployment and Statism

The National Statistics Office (NSO) released yesterday its October 2009 Labor Force Survey (LFS), http://census.gov.ph/data/pressrelease/2009/lf0904tx.html.

One ugly result is this: Out of 45.08 million Filipinos in the labor force, 2.72 million were unemployed, and 6.88 million were underemployed (have jobs but need additional work, mainly to augment current small income).

That's a total of 9.6 million Filipinos were either jobless and poor, or have jobs but feel poor enough and look for additional work and additional income. They constituted 21.3 percent of those in the labor force.

Now, there are also people who can be economically productive, but are not looking for a job, mainly because they think they can't find a job anyway. Or they may find a job but not at a salary that they wish to receive. So either they become idle ("tambay"), or pursue new studies to acquire new skills. Say an engineering graduate who cannot be hired as an engineer, so he studied BS Nursing to be hired as a nurse abroad someday, where expected income is a lot higher than local jobs.

For this group of people, they are not part of the labor force at the time of the survey. And this has the tendency of not worsening the already bad unemployment situation.

Who hire workers? The entrepreneurs, the investors, the capitalists. Local or foreign, corporations or single proprietors (or partnerships). They are the main job creators.

"Wait, wait, we are also job creators!" Say government. Oh Yes, thousands of government agencies and bureaucracies, national and local, also hire people. My estimate is that there are almost 4 million Filipinos who are working in government, both national and local government units.

But government hire people not as food producers or transporter of people, food, and other commodities. But mainly as politicians and their staff; as regulators and tax inspectors and collectors. The people who oftentimes give the entrepreneurs and private sector job creators a hard time.

So in a period of high unemployment and high underemployment, the best policy tool is to relax or abolish certain regulations and taxes that discourage the entrepreneurs, the capitalists and job creators. More job creation by private entrepreneurs in exchange for less bureaucracies and less taxes. But this is not happening. Rather, there is more bureaucratism, more regulation, more taxation.

Statism and heavy State intervention in business is a scourge. It drives millions of people to poverty and hopelessness.

I hope more people and voters will realize it in this coming national and local elections on May 2010. Then they will demand for a team of less interventionist candidates who will minimize and reduce the scourge of statism.

* See also:
Business Bureaucracy 1: Avoiding government: Egyptian experience, March 12, 2007
Business Bureaucracy 2: We don't need a new DICT bureaucracy, July 13, 2010
Welfarism 11: Bureaucratizing Entrepreneurs, April 11, 2011

Labor Econ 5: On Extending Minimum Wage Law Abroad

(This is my article yesterday in the lobbyist.biz with original title, Extending certain labor laws abroad is wrong)

A nanny state has a big illusion of protecting its citizens and overlook the harm that its nanny policies create on the people. Like the minimum wage law. That law is supposed to protect workers from "capitalist exploitation", thus, even the unskilled should be given the minimum wage by their employers that the state has declared or imposed. It looks cute and very “caring” for the workers, except that when that minimum wage level is high for many enterprises, plus many other costly labor regulations, businessmen hire as few workers as possible, and will not hire the unskilled, the young and little or no job experience yet. And this expands the level of unemployment in the economy.

Recently, the Saudi Arabia government stopped giving work visa for Filipinos trying to work as domestic helpers. This is after the Philippine government issued a new regulation that the minimum wage that Filipino helpers should get is $400, and that employers should provide family information and the layout of the residence where the domestic helper will be working.

The Philippine government is wrong here. Employment is a private contract between the employer and would-be employee. Government intervention in domestic labor market by setting a minimum wage law is already wrong, how much more extending such interventionist policy abroad, to cover foreign employers?

Migrant workers have other reasons to work abroad aside from getting salary higher than what they can possibly get here. Thus, they will accept salaries lower than $400 as they have other reasons for working abroad. Among them:

One, opportunity to travel abroad, to see a foreign country, its people, culture, main economic activities.

Two, opportunity to move to another work once they get there. For instance, some applicants as domestic helpers are actually teachers, nurses, other professionals. Once they get to their destination country, their employers or other friends might give them another job opportunity with a higher pay.

Three, opportunity to work in another country or employer that offers a higher pay for a similar job once they get some experience working abroad.

Four, to be reunited with other family members, relatives or friends who have stable job or settled already in destination country. There are many other personal or social reasons that the individuals have in mind.

That is why government should step out of regulating private contracts between employers and employees. Governments can come in to implement the rule of law – the contract between employers and employees, say if one party is not following the stipulated contract.

Certain sectors in the Philippines even cheered the decision of the Saudi government to stop hiring domestic helpers from the Philippines, even if there are an estimated 180,000 domestic helpers currently working there. These sectors add that the Philippine government should create domestic employment opportunities for those who will be displaced, ie, will not be deployed to Saudi.

What do they mean, that government should hire more employees and expand its already bloated bureaucracy? This will mean more taxes from the public as government spending will definitely jump.

Or they mean that the displaced workers can start their own business locally here? Many people who say this are not fully aware of how the national and local bureaucracies treat local entrepreneurs. See these photos below which I took from various small and medium establishments.

The number of business permits that micro, small and medium enterprises must secure even before they can start a business are plenty. Among them: barangay permit, location permit, health and sanitation permit, fire department permit, electrical permit, Mayor’s permit, etc. At the national government agencies level, entrepreneurs must also secure permits from the BIR, DTI or SEC, SSS, other agencies depending on their line of business (eg, get NFA permit if selling rice, get DOH and FDA permit if selling medicines, etc.) Then there are mandatory membership in other government agencies like PhilHealth and Pag-IBIG.

It is not only the cost and fees of those multiple permits, people have to spend money and time to go to those offices, wait several days or weeks before they can finally start a business.

So if the government is not friendly to local entrepreneurs, limiting their potential employment generation capacity, why should government intervene again to regulate foreign employers who intend to hire Filipino workers who cannot be absorbed by the local labor market?

Last year, the Hong Kong government also protested a Philippine government regulation requiring HK employers of Filipino domestic helpers to get various insurance for their helpers costing US$144 for two years. The HK government already requires its citizens to get local insurance for their foreign workers. The Philippine regulation therefore, was an additional imposition, additional cost, to foreign employers. This made many HK households to get Indonesian, Malaysian, or mainland Chinese helpers even if they wish to get Filipino helpers. See my discussion about that case here, Restrictions to OFWs.

I suspect that a local mafia are working with the POEA or DOLE to make otherwise simple procedures become more complicated. These are the guys who sell insurance, in the HK case, and recruitment agencies who charge even higher “placement fee” from aspiring OFWs as the latter are supposed to receive higher salaries abroad because of those new Philippine government regulations, in the Saudi Arabia case. Now they have seen how their treachery would backfire. But the bigger loser are aspiring OFWs who want to work abroad.

Government should learn to step back as most if not all of its interventions have adverse consequences to the people.
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See also:

Labor Econ 1: What Determines Wage? May 26, 2006

Labor Econ 2: Labor Laws and Employee Forever, May 04, 2010

Labor Econ 3: Wages and Marginal Product of Labor, April 18, 2011

Labor Econ 4: Minimum Wage Law is Wrong, July 05, 2011

Welfarism 11: Bureaucratizing Entrepreneurs

The main problem with government-sponsored population control measures like the proposed RH bill is that it starts from the premise of a nanny or welfare state: education is government responsibility, healthcare is government responsibility, housing is government responsibility, credit, public works, justice, traffic, cash transfer, etc. are all government responsibility. So the bigger the population, the bigger the public spending for social and economic services. So to reduce public spending and the high public debt in the future, controlling fast population growth is also government responsibility.

Theoretically, it is possible to have 3 or more kids and be an irresponsible parent. Why? government has feeding program, it has free education from elementary to high school, and cheap/highly subsidized uninversity education, even free if one is a government scholar; there are lots of mass/social housing, there are free medicines, free healthcare for the poor, cash transfer for the poor, agrarian reform for the poor, and so on.

One adverse effect of all these nannyism is the corruption of parental values. Why assume more parental responsibility when there are lots of government responsibility that are already in the laws and are regularly budget every year? So drink and party as often as possible, smoke as many cigarettes as much as possible. If their internal organs get dilapidated, they can run to the state because "health is a right".

Most problems related to high unemployment, high poverty, are caused by government through bureaucratism, high taxation, lots of prohibitions and regulations. Corruption is just an icing on the cake.

Take this report, Doing Business 2011: Philippines produced annually by the WB and IFC. For average companies in the Phlippines: To start a business, it will take 15 procedures (with various government agencies) in 38 working days, costing nearly 30 percent of the per capita income. Take note that the assumption here is zero corruption. If certain bureaucracies will insist on getting bribes, otherwise the waiting period will not just be 38 working days but 2x or 3x that period.

Paying taxes for an average corporation, 47 different taxes and fees per year(!) that will require 196 hours (or 24.5 working days or more than 1 month). Profit tax is 21.3 percent, but when various mandatory or obligatory labor and social security contributions are included, the total tax rate would rise to 45.8 percent of a corporation's profit.

So government creates lots of direct taxation, mandatory contributions (which are indirect taxation) and other forms of regulations and prohibitions (one is prohibited by law to conduct any business unless those regulations are obeyed and followed). When these restrictions and prohibitions are enforced, many people and entrepreneurs will be forced to kneel and bow before certain government officials, pay bribes or what just to hasten a supposedly non-criminal, non-prohibitive action like putting up a small business, or hiring new workers.

(I took this picture of various government permits in a water purifying/distilling shop near our place in Makati). If the poor and the lower middle class want to stand on their own and not depend on government welfare, they put up a vulcanizing shop or barber shop or carinderia or fishball/barbeque stall, the government officially says NO. Unless the trying-hard entrepreneur will first get barangay permit, sanitation permit, garbage collection permit, fire department permit, mayor's business permit, DTI permit, SSS permit, BIR permit, Pag-IBIG permit, etc. Most of the "underground or informal" economy that we see are tolerated by some national government agencies but not by the local govt and local police. That is why "arkabala" and bribes to certain city hall or police officers are practiced.

After succeeding to create lots of poverty and high unemployment, government and its multilateral patrons (the UN, WB, EC, ADB, etc.) would blame high population growth.

Government would rather see the poor begging for more welfare, more subsidies, because the endless welfare programs -- education for the poor, healthcare for the poor, housing for the poor, credit for the poor, cash transfer for the poor, condoms and ligation for the poor, etc. -- will be continued and all the hundreds of billions of pesos of annual budget and new loans (and ever-rising interest payment) to the foreign aid banks will continue.
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See also:
Welfarism 9: Conditional Cash Transfer (CCT), November 12, 2010
Welfarism 10: Spanish Problem, the Euro or the State?, December 01, 2010

Pol. Ideology 19: What is the Role of Government?

A friend in facebook, wrote me today. She asked,

Hi Noy, Been reading your blog, carefully weighing your arguments against Big Government for a couple of months now. While I do agree with a lot of your arguments, I am left to wonder, in your framework, where should government be?

In a minimal government, what roles does it play?

I thanked my friend for asking that question. It allowed me to re-articulate my ideas and advocacies in the most spontaneous manner. Here they go.

What is the role of Government?

I think it boils down to only one important function: Promulgate the rule of law.

Government has laws against killing, against stealing, against kidnapping, against corruption, against plunder, against carnapping, etc. Let government implement ALL of them, ZERO EXCEPTION. No one is exempted from the law, and no one can grant excemption from the law. The law applies equally to unequal people.

I think most people will easily see that logic. Next questions will be: what about the very poor? Who will take care of them? What about big businesses, who will regulate them if they abuse their power and exploit the consumers, exploit their workers?

Well, if the poor will put up a vulcanizing shop, a barbeque stand, a barber shop, or plant kamote and pechay in vacant lots, or buy those farm products and sell in a corner stall, government should get out. Do NOT require these small and micro entrepreneurs to secure costly and bureaucractic business permit, barangay permit, sanitation permit, location permit, various other permits and pay lots of taxes and fees.

In short, if the poor will become industrious and would want to stand on their own, government should step back. If the poor will become lazy and steal, government should arrest them and put them behind bars. The rule of law says NO STEALING. It does not matter if the theft is the President of the country or a Congressman or the poorest man on earth. No one should steal, period. No ifs, no buts, no preconditions, no exceptions.

If the poor will become half-lazy and become irresponsible entrepreneurs, say they sell expired food and adulterated drinks in their carinderia and food stalls for quickie profit, resulting to food poisoning of their customers, then government comes in to haul them to prison bars as well. The rule of law says NO HARMING other people. It does not matter if the seller of adulterated food and drinks or counterfeit drugs is the biggest restaurant or hotel or pharma company in the planet, or the poorest man on earth, they should be accountable for their action, and they should be penalized for violating the law against harming the health of other people.

The big businesses and super rich people. If some other rich guys and companies will put up a competing corporation, government should step back, Do NOT require congressional franchise, NTC franchise, local government franchise, and other forms of govt-imposed monopolies and oligopolies. Let there be fierce and ruthless competition among businesses in all sectors and sub-sectors of the economy. Let there be a "perfectly contestable market" in most or all sectors of the economy.

When there is ruthless competition among players, businessmen will not exploit their workers like paying low wages. Workers and managers can quickly move to another competing company who will offer them good benefits. Or they can quit being ordinary employees and become employers and job creators themselves. They know the trade more or less, there is little or zero govt bureaucracy that will hamper them, so why not try their luck of being entrepreneurs?

What about price collusion by some companies in a particular industry? It is a possibility, but sticking to collusion for long is more cumbersome than going it their way.

Suppose all beer manufacturers will collude among themselves and set an agreed upon price even if they are competing with each other. Overall prices of beer will rise. No problem. Some beer drinkers will simply move to wine or gin or whisky or lambanog. Or they will patronize smuggled imported beer. Or they will simply reduce their drinking, or just stop taking any alcoholic drinks. Collusion will ultimately fail.

Free trade will further expand competition. That is why many vested business interests always run to government to demand protectionism. Protectionism is always a hypocrisy. Even the most protectionist producers (say, farmers) are also staunch advocate of free trade and more competition when they need hand tractors and spare parts for their farms , clothing, shoes and toys for their children, construction materials, tv and other appliances for their house, etc.

If we are to extend the "rule of law = no exception" principle, then if there should be protectionism in agricultural products, there should also be protectionism in all other commodities and services. Which means no imported shoes, clothes, cell phones, tv, computer, hand tractors, etc. Everyone should buy only what are locally produced, autarky or zero international trade.

I do not think anyone would love to live in an autarkic economy. But if they wish to try it, they can go to North Korea perhaps and while there, they should also resist the temptation of buying goods made from China or Russia.

Meanwhile, incorporating a short paper here...




Marcos and the Liberal Challenge


In one of his papers in the Philippine Star, columnist William "Billy" Esposo wrote last March 01, No way, Sen. Ferdinand R. Marcos Jr., no way!, he wrote:

If it isn’t bad enough that the late unlamented Dictator Ferdinand E. Marcos brought us through a dark and bitter chapter of our history — now here comes his son, Senator Ferdinand R. Marcos Jr., attempting to rewrite that story. No way, Sen. Marcos, absolutely no way!

When the young Marcos asserted with a straight face last week that our country would have been a Singapore by now if his father was not ousted by People Power in 1986 — thank God that I wasn’t seated as the impact of his wild imagination could have compelled me to wreck another chair. If there is anything I have consistently deplored about the sad state of affairs in our country, it is our very shallow appreciation of our real history....

I think the Senator is only doing what is "right" for him and his family -- to continue the lies and destruction that his family has slammed upon the country. It is safe to assume that the Senator will even gun for the Presidency in the 2016 or future elections. Thus, they need to start large-scale lying as early as possible.

It is our job in the civil society sector, especially the liberal -- not socialist, not nationalist and protectionist -- civil society, to help educate the public that subsuming individual liberty under forced, collective liberty is not acceptable. When Marcos declared Martial Law and similar measures, certain individual rights like freedom of expression, freedom of setting up business in a fair environment, were killed in the name of the collective, in the name of the so-called "national interest".

It is too tempting that many groups that were once trained in the liberal philosophy, would forget what liberalism really is. The Friedrich Naumann Foundation (FNF) was even re-titled as FNF fur die FREIHEIT, with huge and bold emphasis on FREIHEIT or LIBERTY. And Liberty here as defined by the Friedrich Naumann, Theodor Heusse and other liberal German thinkers, referred to individual liberty.

There is too much emphasis on anti-corruption, good governance, etc., to the point of embracing BIG government and widespread collectivism, of trampling individual liberty (like the liberty to keep more of one's earnings and savings) in favor of the collective (high and multiple taxes).
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See also:

Pol. Ideology 13: Liberty and Liberty Forum, the LP, March 19, 2009 

Pol. Ideology 14: Liberalism, Democratism and Coercion, January 18, 2010

Pol. Ideology 15: Socialism, Conservatism and Liberalism, March 08, 2010

Pol. Ideology 16: Liberalism and Social Opportunity, July 29, 2010

Pol. Ideology 17: The LP and the Philippine President, November 03, 2010

Pol. Ideology 18: John Lennon and Liberty, Purpose of the Law, December 15, 2010

The President's SONA, 2010

The new President of the Republic of the Philippines, Benigno "Noynoy" Aquino, delivered this afternoon his first State of the Nation Address (SONA). He has been in power for only 4 weeks now.

The Address is long, I will only make a few comments on some of the points he discussed.

I really expected him to say something on reducing government bureaucracies for the entrepreneurs, the job creators, the capitalists, big and small. And I was not disappointed.

Towards the middle of his address, he said, referring to the Department of Trade and Industry (DTI) and other government agencies like the BIR and SEC.

"Ang walang-katapusang pabalik-balik sa proseso ng pagrehistro ng pangalan ng kumpanya, na kada dalaw ay umaabot ng apat hanggang walong oras, ibababa na natin sa labinlimang minuto. Ang dating listahan ng tatlumpu't anim na dokumento, ibababa natin sa anim. Ang dating walong pahinang application form, ibababa natin sa isang pahina."

Translation: "The endless procedures in registering a business, which takes between four to eight hours per visit, we will reduce to 15 minutes. The old requirement of 36 documents, we will bring it down to six. The eight pages application form, we will reduce it to one page."

Bingo! Reduce the bureaucracies, reduce the number of signatures by government officials and bureaucrats, that alone will bring down corruption in the country.

Some guys though, considered the President's SONA as "elitist". They blasted it as pro-big business, and hence, worsening the inequality in Philippine society.

Consider this example. A group of OFWs with some savings wants to put up a micro-business, say a parlor or barber shop, or bake shop or internet shop or food shop. Various national and local government bureaucracies require them 3 to 4 dozens of different taxes and regulatory fees to pay every year, excluding the taxes and fees just to start a business. The President said this is wrong. The number of business regulations, the procedures in getting a business name, the number of pages of application forms, etc., should be drastically cut. Is this elitist?

I don’t think so. It is pro-small busines, it is pro-big business too. When there are lots of bakeshops, lots of internet shops, lots of parlor/barber shops, lots of food shops, lots of jobs will be created. When people have jobs, they tend to become independent of government. They do not easily run to politicians and government welfare offices, they have the resources to take care of themselves, their families, friends and relatives.

On health, the President devoted only two paragraphs in his address, and that is on expanding the Philippine Health Insurance Corporation (PhilHealth) coverage for the pooorest five million Filipino households. He said,

"Una, tutukuyin natin ang tunay na bilang ng mga nangangailangan nito. Sa ngayon, hindi magkakatugma ang datos. Sabi ng PhilHealth sa isang bibig, walumpu’t pitong porsyento na raw ang merong coverage. Sa kabilang bibig naman, singkuwenta’y tres porsyento naman. Ayon naman sa National Statistics Office, tatlumpu’t walong porsyento ang may coverage.

"Ngayon pa lang, kumikilos na si Secretary Dinky Soliman at ang DSWD upang ipatupad ang National Household Targetting System, na magtutukoy sa mga pamilyang higit na nagangailangan ng tulong. Tinatayang siyam na bilyon ang kailangan para mabigyan ng PhilHealth ang limang milyong pinakamaralitang pamilyang Pilipino."

Translation:

"First, we will identify the correct number of Filipinos who sorely need PhilHealth coverage, as current data is conflicting on this matter. On one hand, PhilHealth says that eighty-seven percent (87%) of Filipinos are covered, then lowers the number to only fifty-three percent (53%). On the other hand, the National Statistics Office says that only thirty-eight percent (38%) of Filipinos are covered by Philhealth.

"Even as we speak, Secretary Dinky Soliman and the Department of Social Welfare and Development are moving to implement the National Household Targeting System that will identify the families that most urgently need assistance. An estimated 9 billion pesos is needed in order to provide coverage for five million poor Filipinos."

There are three significant things to note here.

One, correct PhilHealth's exagerration of its actual coverage. I have written two papers in the past pointing out that PhilHealth was exagerrating the actual number of its beneficiaries. What PhilHealth does is to multiply each member (private employed, government employed, indigents, individually-paying, OFWs) by five. Thus, even a single, new college graduate with no dependent (no spouse, no kid, parents are either working and PhilHealth members too or parents are deceased or not working but below 60 yrs old, not qualified to be declared as dependent, etc.) is assumed by PhilHealth to have four dependents. This is lousy and simplistic math.

So what happened is that for the 1st quarter of 2009 for instance, total number of members excluding the "lifetime members" or the registered senior citizens who are not pensioners somewhere, was 16.35 million. But PhilHealth's count of the number of beneficiaires was 76.69 million, or about 85 percent of the total population of the country. Lazy and simplistic math, really.

To see further discussion about this number-magic by PhilHealth, check my paper,
"Health insurance and government failure" (presented in a health forum last August 17, 2009, 7 pages), http://www.minimalgovernment.net/media/mg_20090817.pdf

I sent this and another paper to some PhilHealth officials and I was wondering why they did not correct me when I said that their office is exagerrating its number of beneficiaries. Now it is the new President of the country who expresses disbelief in their numbers.

Two, no mention of the Department of Health (DOH) and drug price control policy, something that was among the highlights of the past President's last SONA a year ago. I hope that this is a signal that the President will soon abrogate Executive Order (E0) 821 by the past President imposing price control on certain medicines, starting mid-August 2009.

I have also written a number of papers why the drug price control policy is a failure in improving access of the poor to more life-saving and disease-killer drugs, all posted in the MG website, www.minimalgovernment.net.

And three, there is bigger role for the national government in providing healthcare for the poor. Before, the local government units (LGUs) need to put up a counterpart fund in financing the healthcare coverage of the really poor. Lots of problems encountered in that scheme as some poor LGUs cannot put up the counterpart fund. So the next tack of the national government is to solely shoulder the cost of healthcare of the really poor. Now they are targetting some five million households, roughly about 25 million individuals, to be covered by PhilHealth.

Further nationalization of the service is not a wise move. There is a new development in UK's healthcare where the UK government will decentralize its socialized and nationalized healthcare system, as reported in this story.
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Britain Plans to Decentralize Health Care
By SARAH LYALL
Published: July 24, 2010

LONDON — Perhaps the only consistent thing about Britain’s socialized health care system is that it is in a perpetual state of flux, its structure constantly changing as governments search for the elusive formula that will deliver the best care for the cheapest price while costs and demand escalate....

http://www.nytimes.com/2010/07/25/world/europe/25britain.html?pagewanted=1&_r=1&ref=global-home
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Of course decentralization does not mean privatization. It only means to transfer the function of healthcare delivery from the national government to the local governments. There is realization that too much bureaucracy at the national level impedes health delivery to the public.

Finally, my position on healthcare is that it is first and foremost, a personal and parental responsibility, not government responsibility. Government role is most needed in limited cases like the spread of infectious diseases.

People should not drink and drink, smoke and smoke, eat and eat, and when their internal organs are dilapidated by such vices or their blood vessels are choked by fat, they just run to the government to demand that "health is a right." Parents and guardians should also teach their kids to wash their hands well before they eat, or to keep their house and surrounding clean so that the rats and cockroaches will not hold daily and nightly general assembly in their place.

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.
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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

ASEAN 1: Asian regional bureaucracies

As mobility of people, goods and services, around the world hastens, so have government bureaucracies expand. Not contented with “national planning”, governments extend to “regional planning” and “global planning”.

In Asia, as many Asian economies grow fast – ie, relative to other countries and regions or continent in the world – Asian governments also create new regional bureaucracies fast. Consider the following bodies in Asia:

1. ASEAN – Association of South East Asian Nations, 10 countries (Indonesia, Singapore, Malaysia, Brunei, Philippines, Thailand, Laos, Cambodia, Vietnam, Myanmar). Presidents and/or Prime Ministers of these countries meet annually.

2. ASEAN Plus Three (APT) – composed of Asean10 + China, S. Korea, Japan. Since the late 90s, there has been no strict or exclusive “Asean summit” because they have always been APT. And more recently, it has become “Asean Plus Six”, composed of APT + India, Australia and New Zealand.

3. APEC – Asia-Pacific Economic Cooperation. This is an expanded Asean + 6, to also include the US, Canada, Russia, Mexico, Chile, Peru, other Pacific countries. They hold summit meeting every 2 years.

4. ASEM – Asia-Europe Meeting; composed of APT + EU 25. They also hold summit meeting every 2 years.

5. CSCAP – Council for Security Cooperation in the Asia Pacific

6. NPCSD – North Pacific Cooperative Security Dialogue

7. NEACD – North East Asia Cooperation Dialogue

Proposed new bodies:

1. AMF – Asian Monetary Fund; this is different from the existing Asian Development Bank (ADB).

2. CNEA – Concert of North East Asia

3. NEASD – North East Asia Security Dialogue

Not included above are the various regional free trade agreements (FTAs) like AFTA (Asean FTA), SAFTA (South Asia FTA), NEAFTA (North East Asia FTA, and so on. Also not included are dozens of bilateral FTAs (existing and proposed), or EPAs (economic partnership agreement) by Japan with selected Asean countries.

Annual or biennial summit meetings of those heads of states and their ministers are never cheap. Taxpayers of host governments spend a lot for those meetings, including preparations and post-meeting monitoring.

The main goal of those various bureaucracies and trade agreements is “more economic and security cooperation” among governments of member-countries. This sounds lofty and holy, except that they are agreements AMONG GOVERNMENTS, and not exactly among the citizens of those countries. People to people voluntary arrangement is still restricted by their own governments. For instance, despite the Japan-Philippines EPA (JPEPA), an average old and aging Japanese household who cannot find younger private Japanese caretakers and nurses, cannot hire a Filipino caretaker or health professional anytime they want because the Japanese government has restricted to only X number the entry of Filipino (and other foreign) health professionals every year.

It has been noted that the single important rule of a bureaucracy, is that once created, it does not die on its own; rather, it seeks to expand and perpetuate itself. After all, the cost of maintaining and expanding it does not come from its own bureaucrats, but from the taxpayers in the private sector.