Monday, July 12, 2010

Forex reserves and government responsibility

(This is my article for "People's Brigada News", July 10, 2010)

The other side of the “heavily-indebted” countries in the world, somehow, are the “high foreign exchange (forex) reserves” courtries. Although many countries with high forex reserves also have high foreign debt, especially their private corporations and financial institutions. Below are some recent data.

World's biggest forex reserves* in $ billion, May 2010 (unless specified):

1. China, 2,447 (March '10)
2. Saudi Arabia, 429 (April '10)
2. Russia, 429
4. Taiwan, 360
5. S. Korea, 279 (April '10)
6. Hong Kong, 256
7. India, 252
8. Brazil, 248
9. Singapore, 198
10. Thailand, 144 (April '10)

11. Mexico, 104 (April '10)
12. Malaysia, 94 (April '10)
13. Poland, 83
14. Turkey, 73 (April '10)
15. Indonesia, 72
16. Israel, 63
17. Argentina, 46 (April ’10)
18. Hungary, 43
19. Philippines, 41
20. S. Africa, 37

* excluding gold, except Singapore and China.

source: The Economist, July 1st 2010
http://www.economist.com/node/16488913?story_id=16488913

Note that out of the top 10 countries above, 8 are from Asia (including Saudi Arabia), especially the Confucian Asia-5: China, Taiwan, S. Korea, Hong Kong and Singapore.

According to Standard Chartered Bank, the combined forex reserves of ASEAN’s 5 biggest economies (Indonesia, Thailand, Malaysia, Singapore, Philippines) were $452 B by end-2008, $518 B by end-2009, and $545 B by end-May 2010. These are significant amount of money that can help stabilize an economy in cases of uncertainties in global finance.

Governments, like individuals and households, should learn to save and live within their means. If the projected revenues (taxes, privatization proceeds, income from some state enterprises) are low, then expenditures like various government subsidies should be kept low too.

Among the teachings of the great Chinese philosopher, Confucius, savings and frugality is a virtue. And living beyond one's means is wrong.

This is something that the governments of G7 countries and many other countries, need to keep in their minds. Responsible and frugal government will be a good inspiration for the citizens.
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Note: this is The Economist's graph:


Sunday, July 11, 2010

CSOs and State 11: Rights and Responsibilities, Liberal Civil Society

(This is my article for www.thelobbyist.biz, July 10, 2010 with original title, "More Statist than the State")
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A statist view is one arguing that things and social processes, as much as possible, should be done by the State and not by individuals, households, their voluntary organizations, or private enterprises. This view therefore, belittles if not removes the role of personal and parental responsibility in running our own lives, our own households, our own community.

There is an often-quoted phrase, “more popish than the pope”, to refer to persons and institutions who seem to be more fundamentalist in Catholic belief than the Pope. The phrase “more statist than the state” may as well apply to people who seem to be more fundamentalist in their belief of the big role of the state than the administrators of the state itself.

In my personal observation, these “more statist than the state” individuals and leaders have certain characteristics.

One, they are seldom found in mainstream political parties. Rather, they are found among mainstream NGOs and civil society organizations (CSOs), media and the academe. Check for instance the paper, “Why do intellectuals oppose capitalism” by Robert Nozick, and I wrote a brief discussion about the paper here, http://www.minimalgovernment.net/media/nozick.pdf.

Two, these individuals and leaders are obviously driven by socialist belief and deep hatred of the profit motive and social inequity under capitalism. But they do not belong to a Socialist or Communist political party. Rather, they espouse socialism on a sectoral basis. Like health socialism, education socialism, ecological socialism, land redistribution socialism, and so on.

Three, while they may not explicitly admit that they are socialist or driven by socialist philosophy, they are explicit and unequivocal in demanding that “health is a right”, “education is a right”, “pension is a right”, “clean environment is a right”, “social insurance is a right”, “land ownership is a right”, and so on. For them, almost everything is a right, an entitlement from society via the state and its various subsidies. Even if some citizens are lazy and irresponsible, they are still entitled to certain subsidies by the state because “life is a right.”

Four, one will seldom or never hear from them the words “personal responsibility.” As almost everything is “government or state responsibility”, then there is little role for personal and parental responsibility in running their own lives. The state should allocate v percent of GDP for education, w percent of GDP for healthcare, x percent for environmental protection, y percent for food security, and so on. They may not be explicit in advocating for central planning but that is exactly what they want the state should do.

Five and a corollary to #4 above, one will seldom or never hear from them the advocacy for individual liberty and individual rights. What is paramount for them are national and collective freedom and collective rights. Individualism is taboo and the individual can only realize his/her growth potential if the collective is well-taken cared of by the political administrator of the collective, the state.

As a former Marxist-socialist myself more than two decades ago, it is somehow easy for me to identify such kind of attitude as I used to harbor such sentiments too. And having abandoned that statist philosophy several years ago, I have learned to embrace the value of individual liberty and its sacredness not to be subsumed most of the time under collective liberty.

People should assume more personal and parental (or guardian) responsibility in running their own lives, their own households and communities, if they wish to realize more individual freedom. Freedom and responsibility are two sides of the same coin.

At the end of the day, fear of responsibility is fear of freedom itself.
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Meanwhile, here's a related short paper from the FNF, sometime in October 2008:


The Vision of a Liberal Civil Society

The term “Civil Society” is used with many different meanings in the political discussion at different political levels. In our context, we are only concerned with the local level and the idea of a liberal civil society.

Inhabitants and citizens of a community generally have to accept specific restrictions in their individual freedom to guarantee peaceful living within their community. They agree to these limitations and accept the given laws, decrees and regulations in a wide range, which are set up by their local government.

Administrations have the tendency of covering the society with a dense network of regulations, as they tend to say in “the best of the citizens”. These regulations not only define what is not
allowed, but in many cases, what is allowed or what a citizen can do.

Through these networks of regulations, the administration tends to limit the citizen’s responsibility for acting and, at the same time, takes away certain aspects of his or her personal freedom. And this can happen in a way which exceeds necessary limitations by far.

But an individual can only keep his dignity through personal responsibility. Therefore the citizens in a community need to trust each other, so that all individuals are able to act and live without unnecessary regulations affecting their freedom or self-responsibility.

This is the image of a liberal civil society, to live in a community/municipality with as few regulations as necessary. However, a liberal civil society is characterized by an active citizenship where each individual feels responsible for the general public, demonstrated through free activities, voluntary co-operation and work, as well as taking responsibility.

This ideal image of a broad self-responsibility requires as many ways of influencing the structure  of the local government. The Swiss model with a high degree of plebiscitary elements is one example of such a model.

To adopt the Swiss model is almost impossible in most countries of the world. However, there
are some visible ways of increasing citizen’s participation. Such means to improve public participation can be found in the work fields of “city development” and in some cases through the setting up of the municipality’s budget, which can be called the citizen’s budget.

We can imagine that this can be extended to many more areas of citizens’ participation initiatives.

From a liberal perspective, the goal of municipal politics has to be that voluntary and private initiatives dominate the public life, and public administration only intervenes for subsidiary reasons. But we know that today this is just a vision.
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See also:



Tuesday, July 06, 2010

Ecological dictatorship and local governments

This news report caught my attention: a known Filipino environmental lawyer and activist has asked the Supreme Court to issue a "special order to compel local government units to construct anti-flooding facilities before the rainy season." See the news report here,
http://newsinfo.inquirer.net/topstories/topstories/view/20100705-279302/Climate-change-petition-prem

The SC to "compel" LGUs to construct anti-flooding activities? This is too statist and dictatorial. And to think that the warmer-leaders are preparing for "unequivocal" global warming, of melting polar ice and rising ocean and temperature rise of up to 6 deg C just 90 yrs from now. Severe rains and severe winter are symptoms of global cooling, not global warming.

A friend asked, should the SC compel the LGUs instead to buy heaters due to the coming global cooling? That's another statist and dictatorial move. The SC or any other national government body should NOT compel the LGUs or anyone to buy anything.

We need to adapt either in global warming or cooling. But carbon regulation has zero impact on it. The Sun, the ocean, galactic cosmic rays, volcanoes and other natural factors, are the main regulators of the Earth's climate. So why do we need carbon tax and trade? It's a multi-billion dollar robbery scheme. Carbon cap and trade in 2008 alone was worth $128 B, even with zero participation yet by US companies and government.

Meanwhile, a new report, "China's 2,000 year temperature history" was posted in the World Climate Report blog, http://www.worldclimatereport.com/index.php/2010/06/30/china%e2%80%99s-2000-year-temperature-history/



The five regions in China covered by the study are NorthEast (NE), NorthWest (NW), Tibet, Central East (CE) and South-East (SE) China.

The medieval warm period (MWP) that occured about 800 yrs ago, as well as the little ice age (LIA) that occured some 400 and 200 yrs ago, were confirmed by their data. Almost zero industrial emission some 800 yrs ago and yet global temp was much warmer than the past century's warming. How come? Because CO2 emission is never the main factor for climate cycles of warming-cooling-warming-cooling.

Monday, July 05, 2010

Airline Competition 1: Standing Room Flights

A friend posted this interesting news report, below:
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http://www.telegraph.co.uk/travel/travelnews/7864921/Ryanair-to-sell-5-tickets-for-standing-room-only-flights.html

Ryanair to sell £5 tickets for standing-room only flights

Michael O'Leary, the airline's chief executive, will set out proposals today that include charging customers to use the loo.

A standing area with "vertical seats" will be introduced at the back of its fleet of 250 planes.

He said that charging customers £1 to make use of facilities would encourage travellers on one hour flights to use lavatories at the airport instead of on the aircraft.

The Irishman said he intended to introduce coin-operated loos and added: "The other change we've been looking at is taking out the last 10 rows of seats so we will have 15 rows of seats and the equivalent of 10 rows of standing area."....
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This is an interesting development in the process of capitalist competition in the airline industry. The competition among many airlines is pushing companies to provide more varied services at varied prices. Market segmentation works always. Those who want full comfort, they get business class seats and pay high. Those who economize, get economy class seats and pay the standard rates. And for those who want to economize further, get standing room ticket and pay even lower. There is a market for everyone, rich and poor, producers and consumers.

That's the beauty of free market capitalism. People accept inequality and they do not call for a revolution in order to have "equality for all." Governments, upon the prodding of the bleeding-heart groups, usually come in to correct the "market failure" of social inequity. And that's where waste, inefficiencies and corruption occur, and people's dissatisfaction in society and governments.

Sunday, July 04, 2010

Rule of Law 10: On Wang-wang and Government Laws

(Note: This is my article for "People's Brigada News", July 3, 2010)


After the inauguration of the new Philippine President last June 30, the Philippine National Police (PNP) leadership announced that no more civilian sirens or “wang-wang” will be tolerated. Only the top five officials of the country are authorized to have it, and ambulances, fire trucks, police cars can use their wang-wang only on emergencies.

This is a good news for ordinary citizens and motorists. Those loud and blaring sirens by civilian cars, or private vehicles escorted by police motorcycles and cars with blaring sirens, are clear and loud examples of the rule of (politically-influential) people.

In facebook, a new identity was created, “Isumbong mo ang wang-wang dito” (“Report those sirens here”). I think it was created only last June 30. By midnight of July 1, it has attracted 7,000+ fans who liked it, including me. It is a big number, and it shows how exasperated the Filipinos are in seeing serious changes in government. The comments by people who “liked” it are both serious and funny.


A number of fans of this site have reported the vehicles – plate number, model, when and where they were seen – which have wang-wang. A few posted pictures and/or videos. Since facebook has millions of fans and account holders among Filipinos, both in the country and abroad, it should be shameful for the owners of those vehicles that were caught and reported to be blaring their wang-wang until now.

The government should not only run after those vehicles with wang-wang, the government should also discontinue and dishonor special car plates that exempt those cars from the number-coding in Metro Manila. Such car plates include LEAP, PNP-CSG, Lead-PNP, PNPA-PMA, others.

Government officials and employees should properly understand the meaning of the “rule of law”: rules are rules, no one is above the law, no one is exempted from the law, and no one can grant exemption from the law.

The “change” that ordinary citizens clamor from the government is not really “miraculous change” like giving away certain services for free, say regular free food and drinks. Rather, the average citizens only want to see the rule of law, that everyone will follow the rules and laws that have been enacted. Like stopping on red light; not going against the traffic flow (or no unauthorized counter-flow), not parking on “no parking” areas. Like not having blaring wang-wang that implicitly says, “Get out of my way. I am a more important person than you and I have high political connections and power.”

Having wang-wang, special car plates, car stickers and/or IDs that bear the logo of a powerful government agency, is a short-term and short-sighted solution to heavy traffic problems in the metropolis. Instead of addressing certain cultural and engineering problems that cause heavy traffic congestion, those people use politics and political connections in bailing themselves out of the regular and daily misery that average citizens and motorists experience.

Once we as a people learn to respect the laws and prohibitions, both governors and governed, administrators and administered, politicians and voters, we can expect economic progress and better peace and order in society. If no one steals or kills, then the people’s entrepreneurial energy and potential will be unleashed. People can work until midnight if they want, and not worry that some criminals may be waiting for them when they go back home, or criminals that may victimize their family members and friends while they are working.

The “no more unauthorized wang-wang” program of the new administration is a simple but concrete step to remind people to respect the rule of law. To respect the Office of the President and the various law enforcement agencies under it.

Let us hope that the new government will keep this and related policies until the end of its six-years term. By then, self-discipline should have permeated into the hearts and minds of the citizens. Awareness of personal responsibility and respect for individual rights and individual freedom should have filtered through the hearts and minds of the citizens; young and old, rich and poor alike.

Then we shall be proud once again of the Filipino. As a race, as a nation, as a people.
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A related note, I wrote this last June 30, 2010:

Government Laws vs. Voluntary Associations' laws

To keep a free society, it is better to have many voluntary associations and each association will have its on set of rules and "laws". A cycling club or badminton club or rotary club, for instance, will have its own set of constitution and by-laws, with rules that need to be folllowed and there are penalties for not following the rules. Like being kicked out of the club for not paying the annual dues, for not reaching the minimum number of attendance in meetings, and so on.

The law on anti-Violence Against Women and Children (VAWC) would fall into that category. Although it was the State, through the legislative branch, that crafted and enacted that law, its enforcement is delegated to the micro and household level, and not so much to the state police and bureaucrats.

In such situation of voluntary associations, say a labor union or a sports or civic club or a church group, the individual can opt to get out. The beauty of this is that such voluntary associations which were created to improve the condition of their members (to become good cyclists, to become good tennis players, good community leaders, good religious and lay leaders, etc.), live on voluntary support by members. If the members find their voluntary organization/s not worth supporting anymore, that association will die a natural death. No taxes and fees needed to bail them out. No rallies by affected employees and bureaucrats who will lose their job.

And if a voluntary association performs well and caters to the expectations of members, then such association will thrive and expand. Despite the fact that such voluntary associations will soon have a long set of rules and regulations as they grows bigger and bigger. The point is that individuals have the option to get out and discontinue paying the financial contributions, attend meetings and organizational or club activities.

It is on laws crafted and institutionalized by the State that can create more damage to society, if such laws and prohibitions become plentier and more complicated. Because individuals cannot opt out, unless they will ask for political favors like exemption from the application of the laws, which is tantamount to corrption and the rule of men. Or an individual can migrate to escape the multitude of laws and prohibitions in his home country.
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See also:
Rule of Law 4: On Thailand Crackdown, April 18, 2009
Rule of Law 5: Lawless State, Corruption and Coercion, August 01, 2009
Rule of Law 6: Discussions in Facebook, January 10, 2010
Rule of Law 9: Laws, Prohibitions and Corruption, June 30, 2010

Saturday, July 03, 2010

Government and personal responsibility

(Note: this is my article for www.thelobbyist.biz, July 3, 2010)

A new government, a new challenge, a new hope, and a new responsibility. These are among the things that will preoccupy the minds of Filipinos starting this week and the coming months and years.

The new President of the country has made some unconventional and even risky announcements during his formal inauguration this week. “No wang-wang (sirens), no counterflow, no short-cuts.”


(source: http://images2.layoutsparks.com/1/96987/police-car-siren-courage.jpg)

A number of my friends reacted negatively to those pronouncements, saying that while they are populist and will not infuriate ordinary motorists, they are also very risky for the security of the President, especially on stopping at red lights. But I think that these simple acts of following ordinary laws, traffic rules, radiate a message and symbolism which are stronger and louder than any press release.

The rule of law is very simple. No one is above the law. No one is exempted from the law and its prohibitions, and no one can grant exemption from the law. If the new President can sustain this even for a year, of stopping at red lights, then ALL politicians, policemen, soldiers and other bureaucrats should do the same. Otherwise, they should be apprehended for violating the rule of law on traffic.

Being stuck in traffic can also not be considered as a "waste of time". Inside the car, the President can make or receive phone calls, check emails, pour over documents, meet a staff, drink coffee, and so on.

Someone suggested that the President “needs help specially from those who supported and voted for him. That those who supported him should volunteer to work in government for free.”

Easy, no big deal, to take this challenge. As a supporter and voter of the President in the last elections, I do my work in helping government for free. How?

I encourage people to take more personal and parental responsibilities in running their own lives. They should not drink and drink, smoke and smoke, eat and eat, and when their internal organs are dilapidated or they become fat as a pig and become sickly, they run to the government and demand that "health is a right." If they want that way, they should put up a Socialist party or a Communist party and not support a Liberal party.

I also help show other people to obey the rules. Do not steal, stop on red lights, do not left turn on ‘No left-turn” corners, do not counter-flow, do not park on "No parking" areas. And I do not get paid as a government or traffic aid employee.

More personal responsibility in taking care of our own lives, our households, our schools and offices, our communities. This is also the essence of civil society. A state of civil society is one where citizens take more freedom and more responsibility in running their personal and community affairs, where government is kept to the minimum and only does functions which neither the individual nor his/her voluntary associations cannot handle. Like dealing with various criminals, thieves and killers.

More than helping the new government and the new President, we are helping ourselves to more social and political maturity if we rely more on ourselves and less on government, in managing our own lives.

This is “new politics”, the politics of less government and more personal and community responsibility. The politics of less taxation and less rigid regulations. The politics of “change coming from within, from each and everyone of us.”

This should give us more hope because hope and respect for other fellowmen will come not much from the government, but from each of us.

Thursday, July 01, 2010

Ethanol and climate irrationality

There is one news report today in the Philippines that "Supply lack may derail biofuels thrust", http://www.bworldonline.com/main/content.php?id=13495.

The Energy department is worried that the lack of supply of ethanol and biodiesel will derail the "Biofuels Act of 2006" as there is very low domestic supply of biofuels. And yet the law requires that ethanol should consitute at least 10 percent of gasoline products by next year.


(picture downloaded from the web)

So what will the government do now, convert more forest land into ethanol and biodiesel plantation to "save the planet"? Or convert more lands from coconut, rice, corn, sugarcane, banana, etc., we will have less food for people and farm animals to feed cars? Climate alarmism is wrecking more irrationality on the people.

There is huge political and business interests capitalizing on climate alarmism, that is why they pushed hard the mandatory ethanol and biodiesel content local fuel products in the law. They make huge money from this. Poor Filipinos, will suffer rising food prices as more lands will be diverted to feeding cars and trucks, not people.

Agri Econ 5: Land Reform Without Timetable is Wrong

A number of people commented on the new Philippine President's inauguration address that he did not mention about land reform, that land reform is mandatory for social and economic development.

I countered that land reform with no timetable is junk. Land reform in the Philippines was first initiated by the government in the 60s. Then a "new" land reform was implemented in the early 70s during the Martial Law period. Then another "new" land reform was implemented in 1988 when the new government took over from the dictatorship that ruled the country for 20 years.

The 1988 land/agrarian reform law, or the Comprehensive Agrarian Reform Law (CARL) has a timetable, that land redistribution should be over by 1998. By 1998, under another administration, the law was extended to end by 2008. By 2008, another extension was made. There is only extension to an extension.


The land socialists do not realize it. Try developing even 10 hectares of idle and grassland into a productive fruit orchard. After several years, when the land has become productive and you begin harvesting the fruits to recoup your effort, time and money, some bureaucrats from the Department of Agrarian Reform (DAR) will come to say, "we will redistribute your land to landless workers." It happened to a number of my friends. That is why land reform without timetable is formula for uncertainty. Land reform should have final-final timetable, zero extension.

Land socialists think it is a crime to own an agricultural land even 5 or 10 hectares out of their hard work and years of savings. That is why they believe that the government should confiscate those lands and give to the landless. They really believe that it is wrong and a crime to own some productive "means of production."

Japan, Korea and Taiwan land reform was successful because it was done in one sweep. Just a few years and it's over. Not 30 or 50 years as in the case of the Philippines, and still no real timetable.

See also:
Agri Econ 1: Food Prices and Government, April 13, 2008
Agri Econ 2: Rice Laissez Faire vs. Subsidies, May 06, 2008
Agri Econ 3: Dr. Samran Sombatpanit and WASWC, July 03, 2008 
Agri Econ 4: Government Agricultural Interventions, October 21, 2008