Tuesday, April 23, 2019

Climate Tricks 79, Alarmism on 'Earth Day'

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

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

The original article was published here,

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

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

Three more interesting papers:

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

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

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

And a satire from Babylon Bee :-)

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

Climate alarmism simply wants more government, more UN, more taxes, more regulations (environment, energy, transportation, agriculture, etc.). More global ecological central planning.
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Monday, April 22, 2019

BWorld 314, MORE de-bureaucratizing laws, please

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


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


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

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

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

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

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

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

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

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



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



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



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



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



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

Sunday, April 21, 2019

BWorld 313, MORE international tourism

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


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

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


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

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

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

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

MCIA, NAIA are now more beautiful compared to their previous structures but they are not the destination of passengers, local and foreign. They stay at the departure lounge only one or two hours before their flights. The three suggested reforms will further enhance tourism and everything there that generates jobs — hotels and restaurants, airlines and shipping lines, malls and shops, travel guides and boatmen.
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Saturday, April 20, 2019

Energy 123, Gasoline prices in selected ASEAN

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

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


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


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


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


5. Thailand. Perhaps no oil subsidy too.

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BWorld 312, MORE price decline please

* This is my article in BusinessWorld on April 8, 2019.


The good news in Philippine inflation is that the numbers are declining in the past three months of 2019. The bad news is that even such “low inflation” is actually the highest in East Asia, among the more mature economies with updated numbers. Dutertenomics should be ashamed of this.

And even in the Bangko Sentral ng Pilipinas (BSP) quarterly Business Confidence Survey, the trend is a continuing decline from 46.8 in 2015 to 34.0 in 2018. Again, Dutertenomics should be ashamed of this continuing erosion of business confidence in the country (see table).


Meanwhile, we see President Duterte doing U-turns in major policies. First, his centerpiece program drug war, the kill-kill-kill policy, has resulted in some 25,000 murders but recently he admitted that he cannot control illegal drugs in his term.

Second, the shift from integrated PPP to hybrid PPP just to favor China contractors and financing — the need for more taxes to pay for more loans when many infrastructure projects can be financed entirely by private contractors under integrated PPP. Among the casualties of this shift is the delayed construction of Kaliwa Dam and additional 600 million liters per day for Metro Manila.

Third, his avowed fight against corruption is contradicted by the release from jail of two former senators linked to plunder, Sen. Bong Revilla and Jinggoy Estrada, who are each seeking a fresh term under the Hugpong/Duterte slate.
  
And fourth, his economic team’s avowed promise of economic stability is contradicted by deterioration in macro fundamentals. GDP growth is decelerating, 6.9% in 2016, 6.7% in 2017, and 6.3% in 2018. Inflation rate worsened ever since TRAIN law was implemented in 2018 with its high oil-coal tax hikes among other tax hikes, and business confidence index continues to decline.

The Duterte government’s economic management is poor while its political bragging is high. It has a chance to reverse this by at least targeting a 1-2% inflation rate this midterm election year via suspension of oil tax hikes part 2, or a tax cut somewhere. Instead, it continued its economic and political arrogance by expanding the spend-spend-spend, tax-tax-tax, borrow-borrow-borrow mantra.

I hope that voters will take note of these and punish the Duterte senatorial lineup, as well as their congressional and local government candidates.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.
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Lion Rock 25, A Man, A Plan, A Canal, Panama

Another good article from Nick Smith, Chairman of Lion Rock Institute, the only free market think tank in Hong Kong. Reposting in full, enjoy.
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Nick Sallnow-Smith 31/05/2018

I hope my title this month will at least intrigue you. This phrase is perhaps the longest palindrome ( it reads the same backwards as forwards) that has a meaning. It refers to the building of the Panama Canal over 100 years ago; perhaps referring to Ferdinand de Lesseps, whose attempt failed, or to Theodore Roosevelt, whose American led attempt succeeded. It can be argued that De Lesseps failed because he did not have a complete plan. (For example he had no plan to manage the flow of the Chagres River in the wet season. The Americans did.)

Why am I writing about planning? Central planning of a country, or indeed a city, should have been completely discredited by the Soviet “experiment” 100 years ago. One might have expected that the breakup of the Soviet Union in 1989 would have marked the last we would hear of central planning. Yet so called “liberal” economies move further and further towards planned economies today, with regulations and legislation controlling more and more economic activity. Why?

My guess is that the obvious need for each of us to plan our days to meet objectives, and for each enterprise to do the same, tempts the belief that what makes sense for an individual or company must also make sense for the entire community. Most citizens not only accept that the City should plan, but that it must plan. In other words, the Government is expected to plan. It must have an IT plan, a plan for youth, a plan for the elderly, a plan for everything.

But this makes no sense. Central plans don’t work for two main reasons. First, no Government can have enough currently applicable information to implement any plan effectively. (Moreover plans tend to be fixed while the world constantly changes.) Second, and more important, there is no single plan that can satisfy the myriad of different preferences and desires of the population. Laissez faire economies work because each of us can make our own decisions; about what to eat, where to live, what to read, who to befriend, etc. The outcome of millions of these daily decisions is not planned and cannot be planned. We each have our own plan based on our own knowledge of our needs and desires, as they change every day.

The city of “Hong Kong” is not a single entity. It is simply the aggregated outcome of what all of us living here decide to do every day. Yet so much debate of public policy seems to assume that a single “policy” can be discovered that represents what “Hong Kong” wants/needs. The administration continually searches for “public consensus” on such policies and seems surprised that it is so hard to build such a consensus. But with a population of 7 million people, this is a fool’s errand. There will never ever be a consensus on anything interventionist or coercive. This means if the social structure of Government is based on imposing single monolithic “policies” on all, there will always be division and discontent.

The only avenue that leads away from such a divided society is a free economy where each of us pursues his own preferences (as long as we don’t impose on our choices on others). Yet we have an administration that believes its mandate is to find solutions for all of “us”, instead of allowing citizens to find their own solutions. There one consensus that is possible. A laissez faire consensus that Government’s role is to defend citizens against coercive acts of others. That is, to provide for policing and the courts. It seems to me that when most citizens say how important the rule of law is, they are reflecting an underlying consensus of this type. But this is in effect a consensus that no one should coerce others. In complete contrast, Government today (globally, not only in Hong Kong) seems to involve a whole range of coercive acts where some members of the population are forced to accept a policy they dislike because the Government wants to implement its “Plan”.

Let’s look at a couple of examples to see where this approach leads. Education systems across the world demonstrate how consensus can never be achieved. Rather than restraining Government invention to redistributive taxation, to provide poorer citizens the means to buy education in the private sector, most governments operate the educational institutions themselves. This results in a monopolistic sector with the usual consequences of monopolies; poor service and high cost. It is ironic that all Governments rail against any monopoly in the private sector. Yet inside the public sector, the perils of monopolies are ignored. But beyond the inefficiencies of this, the lack of choice that results is perhaps even more insidious and damaging to public contentment.

Think of the constant debate in the media about curricula issues; national education and liberal studies to name only two. Because the school system is state owned and monolithic, all kids will receive the same form of teaching and curriculum. Some parents and children may like it,  some may not. But the latter group cannot vote with their feet and move to another school that teaches differently. All they can do is to move into the sphere of “politics” to seek ways to change Government “policy” on these matters. Those who lament how politics everywhere are always so aggressive and confrontational miss the point. Since the aim is to win power and force others to accept something they dislike, of course it will be confrontational. Politics is confrontation. Yet if the provision of education was left to the private sector, many different types of learning arrangements and content would be offered, precisely because there are differing demands. Parents could make their own choices and the supply side would adapt to this. No one would think of the Government deciding we should all eat pork and never chicken. No one would accept a Government “policy” for every dinner menu. Yet this is what happens in schools. The consequence is a never ending search for consensus where none exists, and endless discontent throughout society.

Let me take transport as another example. At first sight this industry appears to be in the private sector. The franchised buses, PLBs, taxis, ferries and even the MTR are run by private companies. But through regulation the Government control almost everything. Fares, routes, type of vehicle, are all subject to Government approval. You might think that bus routes should be decided by public demand, met by competing providers. Yet closing an unprofitable routes is subject to Government approval. The industry is prevented from responding to those countless individual travel “plans” we all might have every day, that I spoke about earlier. Routes are kept going because of “political” pressure even where demand is lacking.

As I noted earlier, the sad aspect of this for me is that citizens themselves do not see the value of the market. A few months ago there were proposals to run ferry services across the harbor between new locations. In the debate some commented that this should not be tried because it may not be wanted. Yet a market economy works precisely because it tests whether there is demand. If there is not, the business will fail. The correspondent writing to the newspaper took the view, however, that the Government should assess whether it thinks there will be demand and if it does not, the service will never even be trialled. In other words the Government should plan, and then implement their plan. The market test should never be tried. Free choice should not be tried.

More and more Government planning inevitably means that personal choices will be reduced. Next time you are tempted to demand the Government comes up with a “plan” for this or that, please remember the part of cost will be fewer choices for you as a citizen. Do you really want that?
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Monday, April 08, 2019

BWorld 311, MORE ride-hailing competition

* This is my article in BusinessWorld last April 05, 2019.


The ride-hailing, food- and cargo-delivery, other technology-based service sector is a modern and fast-rising one in the Philippines and in Asia. It helps people and companies conduct their travels and businesses become more convenient and safe. The sector should get further Market-Oriented Reforms for Efficiency (MORE) to aid further modernization and competition, which will benefit the public.

The Philippines has a good outlook in the ride hailing business based on Statista projections. The compounded annual growth rate (CAGR) in 2019-2023 is estimated at 25% and should be among the highest in the world. Indonesia is the biggest market in the region, followed by Singapore and Thailand (see table).


I checked recent reports in BusinessWorld about the sector, I found two:

(1) Ayala Corp. in talks with Go-Jek for PHL venture (March 5, 2019):

“Go-Jek is awaiting regulatory approval to enter the Philippine market after its initial application was denied for breaching foreign ownership restrictions. Ride-hailing apps are considered public transport utilities in the Philippines and must have at least 60% local equity.”

(2) Go-Jek appeal against ride-hailing license ban junked (March 20, 2019):

“The firm applied for a license to operate in Manila in August through wholly owned subsidiary Velox but was denied in January, after ride-hailing was added to a list of industries where foreign ownership is limited to 40%. ‘They filed a motion for reconsideration, but failed to fix Filipino ownership requirement,’ Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Martin Delgra told Reuters.”

So it was the 60-40 constitutional restriction that prevents the entry of Go-Jec in the Philippines. Other big global players like Lyft might consider coming in too someday and they must also endure the 40% maximum foreign equity restrictions.

This is indeed a bad law and constitutional provision that must be corrected and lifted. But while it is still there, we have to live with it. The Philippines’ 30% corporate income tax is a bad and ugly law (vs our neighbors’ 16%-25% rate), the 12% VAT is another bad law, as ours is the highest in East Asia. But we have to live with them until these laws are revised and the tax rates are adjusted downwards and we can join the tax competition in the region. That is how the rule of law works.

We should have more ride-hailing competition in the country, we should attract the big global players as the sector is highly technology- and capital-intensive. These will benefit the public as they will have more choices. But players and the public must respect existing laws then work to amend and liberalize them soon.
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