Rule of Law 19: How to Strengthen RoL?

* This is my 4th guest post in antipinoy.com
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This is a puzzle that all administrations in the Philippines have answered or attempted to answer. And it seems that almost all of them have provided the wrong answer, or partially correct answer.

I had a long discourse last week with a friend who teaches Political Science at UP Diliman, Prof. Amado “Bong” Mendoza, and some friends in his facebook wall.

Bong wrote,

I agree with you Nonoy Oplas that we do not have a rule of law culture and situation in our country. The question to be asked and answered: why is it the case? Some economists (like Noel de Dios) point to the mismatch between what is provided by law and what is socially acceptable–corruption is okay as long as the loot is shared. Randy David opines, following Niklas Luhman, that the rule of men is a key feature of pre-modern as well as societies in transition to modernity. Foreign scholars (Douglass North, Daron Acemoglu, etc.) argue that the Philippines either has a limited access (rather than an open) or an extractive rather than an inclusive society. The malaise is not limited to the Philippines. Indeed, very few political scientists are in mainstream political studies. We should take off from Temy Rivera’s explanation of the incoherence of the Philippine state’s policy. If policy is incoherent, it will be perceived as irrational, impermanent, and changeable. The situation offers numberless opportunities for negotiations, importuning, bargaining, and horse trading. This is the environment where the administrator, the lawyer will flourish and prosper.

Politicians and lawyers love more laws because laws by nature, are prohibitions. For instance, there are laws against expired foods but there are no laws on eating  outdoors. Meaning there are prohibitions against selling or manufacturing adulterated, unsafe foods, but there are no prohibitions on eating outdoors, except when a private place would say so. So more laws means more prohibitions, and thus, more arbitrary powers to administrators and legislators to whom they can grant exemptions of those prohibitions.

If people are serious in seeing a society with strong rule of law culture, then one solution is to stop supporting the expansion of laws. Scrapping or abolishing existing laws is too hard, but stopping the creation of new laws is easier. Some flexibility, support just a few laws amending existing ones. Unfortunately, for many political and social scientists, economists, civil society leaders, they support if not write, more new laws so long as those legislative proposals or administrative orders conform with their “grand ideas”.

Rule of law means no exception. The law applies to all, no one is exempted, and no one can grant an exemption. The law applies equally to unequal people. Thus, the law against stealing should apply to the richest and poorest man on earth. Exempting the very poor from penalties against stealing will encourage people to become lazy, they will have no jobs, they become poor, and thus, their stealing can be considered as “understandable”. No Sir. The law against stealing applies to you. It applies equally to unequal people.

Rule of men is the reverse of the above.

Equating “rule of law = good governance” is lousy. For instance, the law on subsidies, like tertiary education subsidy. Classic rule of law says that if the state should provide subsidy to one group of students, it should extend that subsidy to all students, no exemption. But the state violates this, grants subsidy to students of UP and other SUCs but not to students of UE, UST, etc. The state is a violator of the rule of law. Good governance means making this violation well executed.

About the big number of lawyers or their prominent role in PH society, that’s a result of the “rule of men” and not “rule of law” culture in the country. In the latter, you need only very few laws — law against murder and shooting, law against stealing and carnapping, law against rape and abduction, etc. The law applies to all.

In a rule of men society, administrators and governors make rules that apply to some but not to others. Administrators have arbitrary powers to whom the laws will apply and to whom they don’t. One would need a battery of lawyers in that environment, to know the various loopholes of the thousands of new laws, from LGU regulations to Department Orders and/or Circulars to Executive Orders, Republic Acts, Presidential Decrees.

Anarchist Kropotkin said, “The law has no claim to human respect. It has no civilizing mission; its only purpose is to protect exploitation.” 

I disagree, even partially, on that statement. The purpose of the law is to impose coercion and prohibitions. Like the law against killing and murder. It says that murder is prohibited, and violators will meet the full force of coercion of the state. I like that kind of coercion and prohibition.

It’s another thing though, when the law and the state says, “No one moves, no one can start putting up a barber shop or bakery shop or a taxi company, unless he will get these permits and pay these taxes and fees: barangay permit, electrical permit, fire department permit, health and sanitation permit, Mayor’s permit, BIR permit, DTI or SEC permit,…” This expansion of laws and prohibitions results in limitation, not expansion, of individual freedom.

It’s weird how left anarchy (communist) and right anarchy (libertarian anarchy) can have similarity. And that is one difference between the libertarian anarchist vs minarchist. I belong to the latter. I don’t believe in anarchy. Some state coercion and prohibition are useful in protecting and expanding individual freedom. Like the law against murder.

The libertarian minarchist position recognizes there is a role for government, and that is to protect the citizens’ right to life (against murder and physical aggression), right to private property (against stealing, land grabbing, etc.) and the right to liberty (freedom of expression). But all other extended functions of the state are either secondary or unnecessary, and tend to restrict and limit, not respect, individual freedom.

“To the powerless, the rule of law is abstract and cannot be eaten.” This statement is wrong. The poor also have private property – some pigs, goats, carabao or cow, motorcycle, tractor, tricycle, house, tv, cellphone, etc. When these simple private properties are stolen, it means a lot for them. The law against stealing, if properly and strictly implemented, zero exception, is something that the poor really look up to.

Having rule of law, more than various subsidies, would mean a lot to the poor. Of what use it is to receive free education, free medicines, subsidized MRT fare, subsidized housing, etc., if one’s kids can be abducted and raped or killed anytime? Or his cows or tricycle or piece of land can be stolen/grabbed by bullies or people with strong political and police connection? Income redistribution, welfarism and subsidies are meaningless if one’s right to life, right to private property, are being violated and disrespected.

On “stop supporting the expansion of laws”, if one will check the list of old and new laws, about 90 percent are local laws (creating or renaming a new municipality or city, creating a new RTC or drug rehab center, declaring ____ (date) as provincial holiday for ___ province, etc. For the national laws, among the things that legislators do is expand the Executive bureaucracy like creating a new commission or a new regulation authority. Or expanding the legislative bureaucracy like creating a new Oversight Committee, usually with a budget of P10 M a year, and that committee will meet just once or twice a year and spend little, the balance will go to the discretionary fund of the legislators.

If we have to support new laws, they should be amending existing laws, like amending the NIRC and cutting income tax from 32 percent top rate to say, 15 percent flat rate.

Someone commented that  “rule of law has an embedded liberal ideology, biased towards individualistic notion of life and society… progressive notion of negative liberties or social rights are more appropriate for the Philippines and other Third World countries.”

Well, if some criminals enter his house and steal many things and even sexually abuse his wife or daughter or sister, perhaps that’s the time that he will appreciate rule of law and its strict implementation, that the laws against stealing and sexual abuse should be applied in full force, and that the implementer of the law, the government, is doing this job religiously and not side tracked with concerns like running casinos, universities, banks, and so on.

Rights should be coupled with responsibilities, always. Entitlements should be coupled with obligations, always. People who over-eat, over-sit, over-drink, over-smoke, and when their body becomes bloated and sickly they run to the state to demand that “health is a right” are lousy, if not idiots. No one put a gun on their heads so they will over-eat and over-drink, now they want the state to put a gun on the heads of responsible people to finance their healthcare via more taxes and fees.

What many people call as “rights” are actually privileges. That is how students in UP and other SUCs get subsidies while students in FEU, Mapua, CEU, other private universities don’t. Some are given privileges which they call rights, while others are simply denied of such privilege.

Someone commented, "In our society, the source of order is not the law but human relations. Social order does not come from the state but from the community."

I disagree with the first sentence, somehow agree with the second. Strictly speaking, laws do not only come from government, national and local. Private enterprises, CSOs, also have their own laws. A mall is a private place, it has its own rules, like everyone who enters is subject to physical check of bags; thieves who will be caught will be photographed first before they will be turned over to the police, and so on. These rules, at the micro level (villages, companies, households, etc.) help create order in society, beyond human relations. The state has its own laws too, like the laws against killing and stealing.

On laws by the state and why they are not the source of social order, I can partially agree with this. My earlier comments above centered on it actually — when laws have become too numerous (Republic Acts, Executive Orders, Department Orders, plus City and Provincial Ordinances) and complicated, that’s where the rule of men and not rule of law prevail. Legislators and administrators/implementers of those laws have leeway and arbitrary powers who can be explicitly exempted from regulations via loopholes in the law, or be implicitly exempted via official and personal prerogatives.

So back to the original question on how to strengthen the rule of law, in the Philippines or elsewhere. I think the simple answer is that government laws should be as few as possible, and as generally applicable to all people as possible. This way, people will easily remember those restrictions and the penalties for their violations.

Where there are few laws and prohibitions, society will be more free and more peaceful.

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See also:
Rule of Law 15: RoL and Government Failure, August 16, 2012
Rule of Law 16: On the New SC Chief Justice Ma. Lourdes Sereno, August 25, 2012
Rule of Law 17: Justice Without Discrimination, October 18, 2012
Rule of Law 18: Damaso and Carlos Celdran Conviction, February 04, 2013

Math, Number Theory and Philippine Media

I have a good friend, a true blue academic scientist currently teaching at UP Diliman. He got his BS Math also from UP Diliman in the 80s, he did not graduate on time though because he was an activist. One time, he was shot by the police in one of the anti-Marcos rallies. If he was not athletic – he was a marathoner too, finished several 42K runs then – he should have died that day as the bullet pierced a number of his vital internal organs. His name is Dr. Fidel R. Nemenzo.

Fidel toned down his involvement in student activism and pursued his real love – Math. He got his PhD Math from Sophia University I think, in Japan, specializing in number theory. When he came back to the Philippines, he was the only person here who has that specialization. I do not know now. Fidel teaches at the UP Math Department, Diliman campus.

Last week, he got a very prestigious and coveted award for most science researchers, the Achievement Award (for Mathematics) given by the National Research Council of the Philippines (NRCP), DOST. The event was held at the Manila Hotel. Most awardees in the past were from the applied sciences/math, doing research that is immediately applicable to problems of the nation. So Fidel felt good that his work as a pure theorist, sometimes referred to as “useless, far out” work is being recognized.

Portion of the plaque says,

For his significant researches in mathematics published in high impact journals, numerous citations of his scholarly work, mentorship, and contribution to mathematics education and development; 

for pioneering the research on algebraic number theory, theory of elliptical curves, and applications to algebraic coding theory in the country, and

for elevating the status of Philippine mathematics through his engagements as visiting professor and researcher in prestigious institutions, speaker in various conferences, and election as President of the Mathematics Society and the South East Asian Mathematical Society – positions that he has served with distinction…

Congrats Fidel.

There should be a few  other Filipino researchers and academics in the basic science and math field, whose work are more appreciated abroad than here.  Big brains who get published in prestigious journals but never land in the front page of the Inquirer and other mainstream media.

In contrast, bar exam topnotchers and PMA top 10 graduates, even PNPA top 10 graduates – their names and faces -- always land in the front page of these big local media every year, no exception. do. Which speaks of the shallowness of PH media. Much, much brighter Filipino minds who come back with a PhD in molecular biology or PhD in particle physics, computer algebra, etc. never make it to the front page. Maybe in small inside pages, if ever.

Which speaks of the shallowness of the mainstream media, and even among civil society organizations (CSOs). Too much focus on lawyers and those who wield guns and bombs. 

See also previous blog posts here that featured Fidel:

An ever-expanding universe, June 25, 2010 
Pilipinas Forum 14: Math, Infinity and Limit, October 04, 2011 
Pilipinas Forum 20: Turbulence, Chaos Theory and the Stockmarket, November 13, 2011

Health Spending 6: Health/GDP Ratio 2010

In my blog post the other day, On Inequality and Inclusive Business in HC, I wrote:

On government health spending, I think the ADB, WHO, UN, etc. data on PH public health spending is understated and wrong. They usually count only DOH + PhilHealth spending. They do not include some or all of other govt spending such as:

1. LGUs, with provincial and city health centers and hospitals. Manila City alone has six city-owned hospitals.
2. Philippine General Hospital (PGH), budget about P2 billion a year, part of the UP annual budget; hence, it is not counted as health spending but education spending…. 

This table is from the World Health Organization (WHO)  which I copied today. It says that the Philippines’ health spending / GDP ratio as of 2010 was only 3.6 percent.

Table 1. Philippines Basic Health Stats, from WHO 

  
source: http://www.who.int/countries/phl/en/

I posted the above observation (in italics) in the email loop among members of the Medicines Transparency Alliance (MeTA) Philippines, where an official of the WHO West Pacific Regional Office (WHO-WPRO), Ms. Klara Tisocki, is among the members.

Klara was kind enough to reply. She said, 

Regarding your comments  please note that WHO collects health expenditure related data in countries via the  national health accounts (NHA).  NHA constitute a systematic, comprehensive and consistent monitoring of resource flows in a country’s health system for a given period. NHAs use classification schemes, which are designed to be compatible with those practiced internationally; most importantly, the System of national accounts (SNA), to make cross-national comparisons possible.  

The International Classification for Health Accounts (ICHA) is a comprehensive system which classifies NHA into four dimensions: Financing sources (FS)-contributions by different actors; Financing agents (HF)-entities who manage health expenditures; Providers (HP)-entities that provide health care services and goods; and Functions (HC)-types of health care activities. You can read more about NHA at WHO webpage: http://www.who.int/nha/what/en/index.html  

More specifically  regarding the Philippines health expenditures these are collected via the Philippines National Health Account  (PNHA)  (which in turn reports to WHO for inclusion of Philippines data in WHO databases).   

The methodology and current statistics of PNHA are available on the website of  Philippines National Statistical Coordination Board  http://www.nscb.gov.ph/stats/pnha/.  

I would also like to refer you to the technical notes,  http://www.nscb.gov.ph/stats/pnha/technotes.asp on sources of data for the Philippines health financing, with regard to  your assumption that WHO, ADB, UN etc. count only DOH and Philhealth spending.  In these notes you will find the detailed description of Data Sources and Estimation Procedures as approved by NSCB Resolution No. 8 Series of 2011, that shows  what data  from which sources  are included under the different sectors and you can see the wide range of data sources considered.  

I thanked Klara for her reply as it provided useful links. From the NSCB link, here are the numbers:

Table 2. Philippines Health Expenditures by Sources of Funds

source:  http://www.nscb.gov.ph/stats/pnha/.

Foreign Aid 15: Shrink the IMF

I forwarded my article in interaksyon, Why the IMF is irrelevant in thePhilippines, to Dr. Josef “Jop” Yap, the President of the Philippine Institute for Development Studies (PIDS) because it was the PIDS that sponsored the forum where the IMF regional officer, Dr. Anoop Singh, spoke. Jop replied that he shared my article with the PIDS staff, thanks Jop.

He added that the IMF need not be dismantled, that it only has to refocus and should have been done in the past, but the Fund has no clout over the major country credits including the US.

I replied to Jop saying that when the IMF is into solving inequality and ensuring inclusive growth, it is simply feeling hollow and shallow and tries to step into WB and ADB forte just to make itself feel relevant in countries that do not need it. IMF should make its presence be felt strongly in Europe and North America where current account and BOP problems are annual if not daily realities.

When an economy is bleeding in its current account and overall BOP, its monetary and fiscal authorities panic and engage in heavy currency, interest rates, and capital account manipulations, plus tinkering with their taxpayers' level of patience or anger.

So I think the IMF is abolishable, or at least shrinkable. Say, dismantle their country offices even temporarily, in countries like the Philippines and many Asian economies where they are not needed now and in the short term. 

Europe and even North America are staring them in the face point blank. The bank run in tiny Cyprus and public anger over the bailout conditions, a high tax on bank deposits, is challenging the IMF to address problems on huge BOP imbalances. Uncertainty in that tiny European economy (1 million people and now needing $10 B bailout money from ECB and IMF) even has negative repercussions in the PH stockmarket. 

It is simply lousy for the IMF to announce its migration of function to solving inequality and "non-inclusive" growth, when many European economies are wobbly precisely because of their very expensive welfare system to solve inequality and non-inclusive growth there.

In the said interaksyon article, some comments were posted. I am reposting the more substantial comments and my reply to them.

Socialized Healthcare 13: On Inequality and Inclusive Business in HC

Two weeks ago, I attended this forum at the Asian Institute of Management in Makati, sponsored by the AIM-Zuellig Center for Asian Business Transformation, ACCESS Health, ASSIST and Globe Telecom.  Perhaps a coincidence, another forum that same day, same time, was held in Discovery Suites in Ortigas, about "inclusive democracy" starrring the UN and other groups. And this forum is about "inclusive business" starring the ADB and other groups.

Dr. Moser showed several slides how inequitable the Philippines' healthcare system is.  The Under 5 years old mortality rate (U5MR) is high in the lowest quintile of the population, and skilled birth attendance is highest in Metro Manila and other Luzon regions and provinces, and lowest in Mindanao regions. For the total healthcare expenditure (THE), more than half came from out of pocket or personal and household spending.

Health sector spending here refers to DOH budget only.

Financial protection by income. The two poorest quintiles are protected by the government, national and local, while the middle class and richer groups have private health insurance, on top of their PhilHealth membership contribution as this is mandatory especially for those in the formal sector. Ms. Moser's next slide is interesting. Many if not all ASEAN countries have strong private sector presence in healthcare even though their governments' health spending is substantial. Any discrepancy between actual spending and actual delivery can be attributed to bad governance and/or corruption.

EFN Asia 16: Participation in Jeju Forum for Peace 2013

The Economic Freedom Network (EFN) Asia will be participating in the Jeju Forum for Peace and Prosperity 2013 Conference this coming May 29-31, 2013, to be held at Haevichi Hotel and Resort Jeju, S. Korea. I think this will be the first time that the network  will join this big international conference held yearly in the southern island of Jeju. The Friedrich Naumann Foundation for Liberty (FNF) Korea Office is working with the EFN Asia Secretariat in Bangkok in the network's participation.

This forum was invented in 2001 meant for a regional dialogue to promote peace and prosperity in Asia, the Korean Peninsula in particular. Then it became successful in attracting more regional and international participants, it later became a big international conference held every two years, then made an annual event since 2011.

I have heard and read about this forum in some news reports in the past, but I did not pay much attention to it. I thought it is just an extension dialogue of the famous World Economic Forum (WEF) held annually in Davos, Switzerland.

Early this month, the Regional Programme Officer of FNF for Economic Freedom and Human Rights, Pett Jurapaiboon, invited me to be the rapporteur of one of the panels in the Jeju Forum, and that panel will feature important and known speakers within EFN Asia.  I immediately said Yes to Pett. Well, my batting average for all FNF invites, whether here in Manila or the regional office, has been 100 percent so far. I will be a rapporteur, not speaker, in a panel on Economic Prosperity in Asia : Dealing with Economic Nationalism, to be held in the afternoon of May 30. Thanks much, Pett. I am very excited to attend this big international conference.

My interest in joining this and other regional events like the EFN Asia annual conferences, is simple: learn more how we can achieve regional and global peace and prosperity. Peace and economic prosperity.

Enough of war, armed conflict and militarization of disputes that can be peacefully resolved through diplomacy and serious, honest dialogues. Enough of spending huge amount of taxpayers money to buy heavy instruments of war and destruction.

Enough of economic restrictions and prohibitions that create poverty. If people, rich and poor alike, want to start a food shop ala "carinderia" in the Philippines or a modest housing or big residential condo, so be it. Governments should not put too many regulations, restrictions and taxes for these useful human endeavor that create jobs and provide useful goods and services to the people.

So EFN Asia's chosen topic, dealing with economic nationalism, is timely and important. Economic nationalism and protectionism means only one thing: reduction of choices and options, reduction of human freedom, to choose products and services that can best serve their personal and enterprise needs and priorities. When national governments say to its people, "You cannot buy these goods from other countries at these prices. Better buy only from locally-made products, or buy the imported ones at high prices and limited quantity", that is limiting choice and freedom.

The same way, when national governments also declare to its citizens, "You cannot study or work abroad unless you comply with these requirements..." and list down a dozen prerequisites, taxes and fees to pay as if one is applying to be a criminal abroad, that too, is limiting choice and freedom. Some poor job applicants to work abroad become poorer as they sell some personal and family properties so they can pay those multiple fees and taxes, both to the government and the favored job placement agencies and corporations that were accredited by the government.

The topics in the 2 1/2 days forum are wide. To accommodate those different topics, four to five simultaneous discussions will be held. Here is the list of topics on the afternoon of Day 2, May 30.

I will be writing more updates about this forum in the coming weeks.
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See also:

EFN Asia 12: Day 1 of Conference 2012, November 07, 2012

EFN Asia 13: Welfare Populism and Poverty, November 13, 2012

EFN Asia 14: Conference 2012 Resolution on Populism, November 21, 2012, 

EFN Asia 15: Distortions of Welfare Populism,  January 17, 2013

Mining 8: Rio Tuba Mining in South Palawan

I am here in Puerto Princesa City, the provincial capital of Palawan province. I joined a small group of people brought to Rio Tuba Nickel Mining Corporation (RTNMC) by Jose Bayani "JB" Baylon last Friday. JB is a friend and a classmate in one or two subjects in UP Diliman undergrad in the 80s, He is now one of the VPs of Nickel Asia Corporation (NAC), a Filipino-Japanese corporation based in Manila, that owns RTNMC and six other nickel mining and processing firms in the country.

So last Friday whole day, we were in RTNMC, a big bararangay in the southernmost Bataraza municipality, Palawan. This is about six hours by bus, and five hours by car, 260 kilometers, from Puerto Princesa. Yesterday, we went to Puerto Princesa, and this afternoon will fly back to Manila.

I joined JB's team because I have heard, read, and saw powerpoint presentations about "responsible mining" but have not actually seen one. So the opportunity came, I grabbed it.

Total mining claim of RTNMC is 5,265 hectares covering 11 of 22 barangays of Bataraza town. After 38 years in operation (actual nickel operation started in 1975), the company has mined only 658 hectares but only about 25 hectares are actively being mined and quarried every year. The other mined out areas? They have been rehabilitated and covered with trees again. More of that later.

Among my interests is how a mining company contains those ugly and unsightly "mine tailings" that spill into rivers and the sea downstream. We were brought to this abandoned, "mission accomplished" mine tailings area. This is where another NAC subsidiary and sister corporation of RTNMC, the Coral Bay Nickel Corporation (CBNC), engaged in the manufacture and export of nickel /cobalt mixed sulfide materials, dumps its mine tailings. 

When those tailings were still fresh, they looked like thick reddish blood of a monster or other giant animals, contained in an area by thick walls of soil and rocks up there, right beside the active mined areas, so they did not spill into creeks and then to Rio Tuba River, and ultimately into the Sulu Sea.

These dried tailings now look like this. Huge blocks of hardened red soil, not as soft as ordinary soil, but neither as hard as rocks. Even if they have dried up and solidified already, the thick walls of enclosure around them were retained and not removed, until now. I went down about 1.5 meters from where we were standing, where our service vehicles were parked, to this area.

Those unsightly cogons and other grass varieties now grow on these dried tailings. In some areas, various tree species just grew naturally, not planted by man. But for faster transformation from an ugly mine tailings area into productive agri land, the company put thick layers of ordinary soil on them. Several hundred trips of huge trucks carrying ordinary soil to be devoted here.

Fat-Free Econ 40: IMF Irrelevance

* This is my article today in interaksyon.com.
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In a forum last Wednesday at the Philippine Institute for Development Studies (PIDS), the International Monetary Fund (IMF) director for Asia and Pacific Department, Dr. Anoop Singh, revealed a little known shift in the multilateral lender's "new" role.

According to him, their main concerns now are (a)  the rising inequality in the Philippines and other Asian economies that have been growing rather fast recently, (b) unstable macroeconomic fundamentals that can restrict potential growth, and (c) raising public finance to develop human capital and public infrastructures.

Here is one of the charts Singh showed in his talk. While inequality has stabilized in sub-Saharan Africa, or declined in the Middle East and North Africa, as well as in Latin America, inequality in the Philippines and other Asian economies has increased.

Another slide he showed pertains to the difficulty of doing business in the country -- with the Philippines ranking in the 140s globally -- and the low level of public investment in infrastructure as seen from the country's low infrastructure score.

During the open forum, I asked Singh two questions. The first is: Has the IMF become irrelevant to many Asian economies? Its focus on solving inequality and inadequate public spending on education and healthcare betrays a shift away from the lender's original mandate of helping countries suffering from balance of payments (BOP) difficulties.

The IMF was organized in 1945 to “promote international monetary cooperation… facilitate the expansion and balanced growth of international trade… promote exchange stability and avoid competitive exchange depreciation… assist in the establishment of a multilateral system of payments… and in the elimination of foreign exchange restrictions which hamper the growth of world trade… give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards… (and) shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.” This is contained in the Articles of Agreement of the IMF, Article I.

There is hardly any BOP difficulty in Asia these days , making the region the envy of the US and the EU. In fact, in the wake of the Asian financial crisis of 1997-1998, the Asean and its three biggest neighbors -- China, Japan and Korea -- organized the Chiang Mai Initiative,  which pooled money that any signatory to the agreement can draw from in case of BOP problems.

In the case of the Philippines, it no longer owes the IMF, having graduated from the lender's fiscal and macroeconomic tutelage a few years back. On the contrary, the Philippines lent $1 billion last year to the IMF to help the EU address its fiscal difficulties.

So if the problem is back in the US and the EU -- the so-called developed regions that organized the IMF and two other institutions at Bretton Woods after the Great Depression -- the million-dollar question is why the IMF persists in sending "experts" to countries like the Philippines to pontificate about issues we already know about and the solutions to which have been discussed ad naseum?

In the same vein, is it wise for the Philippines to lend money to the IMF so it could maintain a representative in the country? Why pay so much for a bureacrat, especially when talking can be done more efficiently, if not effectively, over the Internet?

In his reply to my query, Singh said addressing social inequality can help economies sustain their growth through a more productive labor force. Sounds like someone from the World Bank or the Asian Development Bank (ADB), right?

This betrays more than just irrelevance on the part of the IMF in so far as countries like the Philippines are concerned. If you check the IMF website, then you'd discover that the lender has adopted the same line as that of the World Bank and ADB: "To foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”

Now this raises the issue of redundancy, which was the second question I raised during last Wednesday's forum. The IMF's fellow Bretton Woods institution, theWorld Bank was organized precisely for that: “Our work is challenging, but our mission is simple: Help reduce poverty.”

As for the ADB: “The ADB aims for an Asia and Pacific free from poverty… alleviate poverty and help create a world in which everyone can share in the benefits of sustained and inclusive growth.”

Perhaps it's time to dismantle the IMF? Enough said.

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See also:
Foreign Aid 2: Circuitous and Leaky Process, November 03, 2005
Foreign Aid 6: IMF is Engineerable and Abolishable, September 05, 2006
Foreign Aid 8: Abolish the IMF, August 08, 2007
IMF socialism, January 04, 2009
IMF dinosaur, let it fade away, June 16, 2009

Fiscal Irresponsibility 26: On the $1 B Philippine Loan to the IMF, June 27, 2012
Fat-Free Econ 15: IMF and Freedom From Debt, July 01, 2012

Fat-Free Econ 38: Jobless Growth vs. Jobless Non-Growth, February 12, 2012

Fat Free Econ 39: P57,000 Public Debt Per Filipino, February 25, 2013