Boa Live - LaLaLa Love Song

Another clip from BoA's concert this time performing an old Japanese hit by Toshinobu Kubota. When watching concerts, i usually like the portion when the band gets introduced. I must say that BoA does this part well. The band itself is good, especially the keyboardist and the grandpa drummer.

Philippine Senatorial Elections: Namfrel vs. Comelec Tallies

Maybe there's a completely reasonable explanation for this but looking at today's running tally (as of 12:20pm) for the Senatorial race by NAMFREL and COMELEC at Inquirer.net's Election Tally page, i find it odd that while the COMELEC tally is ahead of NAMFREL, the number of votes for the bottom nine Senatorial candidates are lower than that of NAMFREL's figures. (Refer to the circled area in the graphic.)

Click on the graphic to enlarge.

My worry is that the votes for these cellar dwelling candidates are being reallocated to boost the chances of other candidates who are within striking distance of the Top 12. For anyone who has a more in-depth working knowledge of the counting and tallying procedures, I would appreciate any clarifications on this.

Philippine Society and the Elitist Mindset

An exchange this morning with Benign0 over at mlq3's blog provides an insight on the way Filipino elitists think. This remark was particularly revealing:

"Now that you mentioned it, I’m quite a superstar where I work as well. But the question is this: are we really representative of the *average* Pinoy schmoe? Do you think people like us got to where we were thinking and acting like a typical Pinoy?" - Benign0 at May 24th, 2007 10:05 am

This echoes what he said to me earlier over at Ellen Tordesillas' blog:

"But do you really think that people like you and I are truly representative of the Filipino people? Just because there are a handfull of brilliant individuals does not necessarily mean that the society to which said individuals belong to is collectively brilliant.

Walk the streets of Tokyo and you will see quite a number of homeless bums. But to draw the conclusion that the Japanese are a bunch of lazy winos just because of a few homeless individuals is a fallacy.

Don’t presume to know the Pinoy masses, simply because you yourself are Pinoy." -Benigno at February 5th, 2007 6:55 am

A Filipino elitist believes that he or she is somehow better than the typical Pinoy. While this observation is unremarkable in itself (to the point of being trite), this mindset when combined with a flawed understanding of Philippine society leads to all sorts of attribution errors. While everyone recognizes that we have a highly unequal society, the typical elitist somehow accepts that we live in a meritocracy, with the prosperity they enjoy owing nothing to their lucky circumstance and everything to their own or their parent's (or ancestors) hardwork. Once again, Benign0 expresses this view when he told me that:

"Unfortunately I do not see you or myself as “lucky”. We are merely the culmination of the hardwork of our ancestors and, hopefully, continuing to build upon the capital of this hardwork by working hard and smart ourselves so that our own offspring will benefit and pass on this capital to the next. Let’s not be-little what our parents, grandparents, and great-grandparents achieved by considering ourselves “lucky”. - Benign0 at February 5th, 2007 1:56 pm"

The Filipino elitist's view of society can therefore be represented in the form of the diagram below, with the yellow icons representing the hardworking and smart members of our society: Given this scenario, the elitist comes to the self-serving conclusion that there is nothing unjust in having resources (as depicted by the 'moneybags' in the diagram) concentrated among the smaller proportion of capable Filipinos who belong to the members of the Upper and Middle classes since these have been obtained through merit. Furthermore, since these segments represent the so-called cream, it would be advantageous to concentrate political and economic decision-making to this group. However, I doubt that the above picture matches reality since we know that our society is a long way from being a meritocracy.

Since I believe that in the Philippines one's position in life is determined to a large extent by factors other than individual merit, a more realistic picture would be the one below where the smart and hardworking segment of the population (as represented by the yellow icons) proportionally distributed across all classes: One major consequence is that our full potential for development is not realized because the capable people who belong to the masa have fewer resources to work with (again as depicted by the 'moneybags'). An important policy imperative therefore is to make available to these individuals the resources that will allow them to maximize their capabiities and maximize their contribution to our country's progress.

Speculation on a Post-GMA Scenario

Here's one possible sequence of events leading to a post-GMA scenario:

1. Reelected speaker Jose de Venecia (JDV) relaunches the initiative for Charter Change towards a Unicameral Parliamentary system.
   
2. To get the cooperation of the Senate, JDV approaches the opposition Senators offering his Party's (Lakas-CMD) support for Gloria's impeachment.
   
3. Gloria is impeached. Noli de Castro takes over.
   
4. The House and Senate votes to change to a hybrid Presidential-Parliamentary model with powers divided among the two.
   
5. The proposed revision is approved in a Plebiscite.
   
6. Noli de Castro stays on as President under the new constitution and JDV becomes Prime Minister.
   
7. A few months later, JDV suffers a no-confidence vote and Chiz Escudero takes over as Prime Minister.

From Baycas: A Short History of "Let's Move On"

At the comments section over at mlq3's, Baycas provides a timely chronicle of the occassions where Gloria Arroyo has used the 'move on' mantra:

"Time and again, gloria has asked the Filipino people to forget the past and move forward instead. she even jumpstarted the “moving on” process in April of last year when, on Good Friday, she ordered the commutation of death penalty of a thousand convicts to life imprisonment. the palace’s statement then was: “We understand the deep hurt inflicted upon the families of the victims of heinous crimes, but the President believes that learning to forgive without compromising criminal justice would be a good start for the nation to move on.”

However, it is apparent that the country failed to move on due to the fact that the four words “Let Us Move On” is coming from gloria…who, i personally believe, is unforgivable owing to her bleak past…especially that the depressing past came from the highest official in the land!

Justice will certainly be compromised when we’ll learn to forgive the president…the lady who wrecked our fundamental institutions.

If only she can move on without the ghosts of her past then truly the nation will also be able to move on to a bright future – AS ONE.

—–

Move On
an Executive Order by gloria macapagal-arroyo

May 2001, after ending the “state of rebellion” – “It’s time to move on,” Arroyo told reporters. “It’s time to start the healing process.”

June 2001, as Arroyo warns of attempts to disrupt Estrada trial – “We cannot pin everything on Estrada as if the whole future of the Philippines depends on his rise and fall. We have to move on,” she said.

July 26, 2004, SONA – “Once we have proved to our people that we have done what we can within the present structure of government, we can move on to changing the system to one that enhances our freedom and flexibility to do more.”

“I expect that next year, Congress will start considering the resolutions for charter change.”

June 27, 2005, Statement on the Issue of the Tape Recordings – “That is why I want to close this chapter and move on with the business of governing.”

July 2005, after she was accused of bribing legislators with money and positions in the government to derail her impeachment – Arroyo criticized her opponents Wednesday, accusing them of dwelling in negativism. “That is their niche,” she said in her first news conference in two months. “I have an economy to run and we have to move on.”

September 19, 2005, Statement on the Venable deal – The President has scrapped the deal and no government money went into it. The National Security adviser will deal with residual issues in the proper forum.

The Palace considers the case closed as we move on to more important business affecting the people and the nation.

August 2006, after comfortably beating her political opponents (by the numbers game) on the second round of her impeachment – “Even her detractors knew that the impeachment complaint was defeated and dead from the start,” said Ignacio Bunye, Arroyo’s spokesman. “Let us now bury this issue and just move on.”

August 16, 2006, again, after winning the numbers game in the HOR – “The President said last week that she was happy that the people’s mindset now is for us to just move on with life and our work. To be fixated in the events of the past, will guarantee us a future of disruption, of interrupted growth and overlooked opportunities.” (Bunye speaking)

May 14, 2007, Arroyo at the close of the midterm elections – “May matitinding pagtutunggali sa lahat ng kampanya, subalit magmagandang-loob tayo, manalo man o matalo. Para sa kapakanan ng bansa, dapat isara ang mga kabanata ng hidwaan sa pagtutunggali paglabas ng hatol ng bayan at buksan ang pinto ng pambansang pagkakaisa at pagkakapit-bisig,” she said in the vernacular."

Expect more such appeals to the Filipino middle class' bias for apathy from Gloria Arroyo and her allies in the days and weeks to come.

MBC and MAP Joint Statement on Election Irregularities in Maguindanao

Via our friends at Black & White Movement, here's a joint statement from the Makati Business Club (MBC) and the Management Association of the Philippines (MAP) on the reported irregularities in Maguindanao during the recent local elections.

"MAKATI BUSINESS CLUB E-NEWSLETTER
22 MAY 2007
MBC and MAP Joint Statement

Let the People Decide

We are deeply disturbed by reports that no actual voting took place in some parts of Maguindanao and that teachers were instructed to fill up ballots. If true, we are appalled that such spurious votes are now being canvassed at the municipal and provincial levels.

These reports gain credence as the COMELEC-accredited poll watchers have complained that they were not allowed to carry out their responsibilities. The NAMFREL Maguindanao head reported that his volunteers were not given their copies of election returns or certificates of canvass.

If indeed there has been a failure of elections in Maguindanao and possibly in other provinces in the ARMM, yet the votes are canvassed up to the national level, the outcome of the senatorial election could be materially affected.

By contrast, the local elections appear to have been credible in many other places in the country. The people's will has been respected, the losing candidates have accepted the results graciously and the markets have responded positively. If the process in the Senate race is as credible, we will have achieved success as a democratic nation.

Even as the nation awaits the results of the 2007 elections, we in the business sector are more keenly interested in the integrity of the electoral process. If the elections are not credible, there will be political instability which will affect overall confidence and our economic momentum. Businesses may grow, but certainly they will not grow at their full potential.

We therefore welcome the decision of the COMELEC to motu propio investigate the situation in Maguindanao but urge them to do so as soon as possible and not wait until after the special election in Lanao del Sur. These anomalies have happened in previous elections in the same place. We cannot afford for it to happen again. If nothing is done to uncover what truly happened, it will be a travesty.

Democracy in the Philippines is on trial today and much of our country's well-being depends on the credibility of this election. We call on all those involved to respect the true will of the people.


RAMON R. DEL ROSARIO JR.
Chairman
Makati Business Club

ALBERT F. DEL ROSARIO
President
Management Association of the Philippines


22 May 2007

Copyright 2007 © Makati Business Club"

Tina Arena - Dare You To Be Happy

Philippine Senatorial Election Results: Singapore

This afternoon, I took down the results for the Senatorial elections (directly from the tally sheets) in the Philippine Embassy here in Singapore. Out of 26,835 registered voters, 6,247 voted, a 23 percent participation rate. You can click on the graphic for the details per candidate and precinct.


What is clear from the graphic is the damage done by nuisance candidate Joselito Cayetano to Alan Peter Cayetano of GO. A total of 881 votes was counted in favor of the nuisance candidate which if added to Alan Peter Cayetano's own vote count of 1700 would be enough to propel him to the top 9 slot. Instead, Alan Peter Cayetano is ranked 21st. As mentioned in the Black and White Movement's Statement, the COMELEC must rectify this unjust outcome.

As it stands, among the top twelve, six are from the Genuine Opposition (GO), five are from the Administration's Team Unity (TU) and one Independent. The top twelve rankings are as follows:

Candidate	Party	Rank	Vote Count
Legarda	GO	1	4320
Pangilinan	Ind	2	4262
Recto	TU	3	3530
Angara	TU	4	3457
Sotto	TU	5	3147
Aquino	GO	6	3054
Pimentel	GO	7	3013
Lacson	GO	8	2806
Defensor	TU	9	2391
Coseteng	GO	10	2312
Villar	GO	11	2308
Magsaysay	TU	12	2208

Update 05-26-2007 : For those who are looking for the Senatorial results for the whole country, you can go to the tally page of Inquirer.net. You can also get the results for the House of Representatives as reported here by PCIJ.org.

Statement of Namfrel on Maguindanao Quick Count

Earlier this week, it was reported that Gloria Arroyo's Senatorial slate Team Unity (TU) achieved a 12-0 victory over the Genuine Opposition (GO) in the southern province of Maguindanao. Below is a statement from the National Movement for Free Elections (NAMFREL), a citizen's watchdog group tasked with conducting a 'quick-count' of the just concluded elections:

"From: "Namfrel National Secretariat"
Sent: Saturday, May 19, 2007 6:52 PM
Subject: Official statement of Namfrel-Maguindanao on the Quick Count of Elections in the Province of Maguindanao

To date, NAMFREL-Maguindanao does not have NAMFREL's 6th copy of election returns from 22 municipalities of Maguindanao. Our volunteers reported the following:

1. Except for members of the Board of Election Inspectors (BEI), no other persons or organizations, including NAMFREL volunteers, were allowed access to the centralized counting of votes for all municipalities in the Maguindanao Provincial Capitol.

2. Our volunteers were told that municipal election officers issued a verbal order to withhold release of all copies of the ERs, including NAMFREL's 6th copy. In most cases, municipal COMELEC officers did not recognize the appointment of our NAMFREL municipal chairpersons.

Since our quick count is based on the NAMFREL copies which were not made available to us, NAMFREL-Maguindanao will not be able to announce quick count results for the elections in the province. In view of what we perceive as systematic withholding of the ERs to NAMFREL that casts doubts on the integrity of the 6th copy of the election returns, we will still not include the Maguindanao results in our quick count even if they are not[sic] made available to us in the following days.

May 19, 2007, Cotabato City.

(Sgd.) Fr. Eduardo G. Tanudtanud, OMI
Chairman, NAMFREL Maguindanao and
Shariff Kabungsuan"

This is just one of the more glaring examples of the Gloria Macapagal Arroyo Administration's cheating machinery at work.

Mobile Phones and Economic Growth: Growth vs. Level Effects

Via Political Theory Daily Review, a paper* in the Economist about how mobile phones have helped fishermen in Kerala. It explains the "ways in which mobile phones promote more efficient markets and encourage economic activity." In a nutshell, the mobile phone allows the fisherman to identify the market where fish is in demand so he does not have to sell the fish at a give-away price or otherwise throw them away. This of course results in higher income for the fishermen. This provides concrete support to previous studies linking mobile phone penetration to economic growth:

"A well known example is the finding in 2005 by Leonard Waverman, of the London Business School, an extra 10 mobile phones per 100 people in a typical developing country leads to an additional 0.59 percentage points of growth in GDP per person."**

The above is relevant to the Philippine situation as the deregulation of the Telecoms industry in the 90's resulted in the widespread adoption of mobile phones so if the same pattern is followed here, then some of the growth over the past few years could at least be attributed to FVR's Telecoms deregulation. The Waverman finding cited above states that:

"Indeed, the results suggest that long-run growth in the Philippines could be as much as 1 percent higher than in Indonesia, were the gap in mobile penetration evident in 2003 to be maintained. The Philippines had 27 mobile phones per 100 inhabitants in 2003, compared to 9 per 100 in Indonesia."

While i find it easy to believe that mobile phones do contribute to economic growth by removing economic inefficiencies (e.g. fishermen not being able to go to the right fish market to sell their catch), the contention that the contribution to growth will be for the long-run will depend on whether the increase in mobile phone penetration contributes to economic growth via growth (or rate) effects or level effects. According to economist Robert Lucas***, growth effects are...

", changes in parameters that alter growth rates along balanced paths"[see diagram below]

...in which case the change in the rate of growth is expected to persist for a longer period (as depicted by the dashed portion of the blue line) while level effects are...

"changes that raise or lower balanced growth paths without affecting their slope"[see diagram below]

...in which case the rate of growth will taper off sooner rather than later (as depicted by the dashed portion of the orange line). The ability to distinguish between the two effects would, among other things, help us find out for how much more longer can we benefit from telecoms (and other similar) deregulation.

Update April-17-2008: Jessica Zafra points to (and helpfully summarizes) a New York Times article on how cellphones can help eradicate poverty, which is closely related, but should not be mistaken as identical to, promoting economic growth.

*The Digital Provide: Information (technology), market performance and welfare in the South Indian fisheries sector”, by Robert Jensen. To be published in the Quarterly Journal of Economics, August 2007.
**Leonard Waverman & Geoff A. Edwards, The Effects of Public Ownership and Regulatory Independence on Regulatory Outcomes: A Study of Interconnect Rates in EU Telecommunications, January 2005
***Robert E. Lucas Jr., Lectures on Economic Growth, 2002, Harvard University Press

More Volunteers needed for Namfrel Tabulation and Bantay Canvass

A call for volunteers from VforCE: 1 million Volunteers for Clean Elections:

"Gabay Halalan again wishes to thank all volunteers and supporters for time, talent and treasure shared. Your contributions have made many great things possible through this year's operations.

As we begin to scale down the operations for Gabay Halalan, please doconsider other avenues for continued service. Should you still want tovolunteer, the Bantay Bilang Namfrel Quick-Count operations for Quezon City and Namfrel Quick-Count National Operations in La Salle Greenhillsare still in need of volunteers to help staff their operations in the MVP Student Leadership Center at the Ateneo Katipunan campus and at Greenhills.

The Ateneo Human Rights Center at the Rockwell campus is the Operations hub of Bantay Canvass of the Legal Network for Truthful Elections (LENTE)/PPCRV. Lawyers, law students and other trained volunteers from the Integrated Bar of the Philippines, various law schools and civic organizations are closely watching the canvassing process and making sure that the Certificates of Canvass (COCs) at the municipal and provincial levels are consistent with the Election Returns (ERs) at the precinct level. The election period is not yet over. Systematic fraud can take place at the point of canvassing, and we need to continue to watch over the process.

The following are the available shifts for the Namfrel QC operations:

8pm-12MN; 12MN-4am; and 4am-8am

For the Namfrel Greenhills National tabulations, the available shifts are the following:

10am - 6pm, 6pm - 2am, and 2am to 10am

If you are interested to volunteer for the Namfrel QC operations, you may contact Bea at (0927) 265-9837 or go directly to the MVP lobby, 30-45 minutes before your preferred shift (for proper training and orientation.)

If you are interested to volunteer for the Namfrel National Tabulation in Greenhills, you may contact Ms. Marjorie Tejada at 426-6101 local 3441 or 426-5968. Volunteers may also be needed for other tabulation centers and you may be assigned where volunteers are most needed.

If you are interested to volunteer or to support Lente's Bantay Canvass in any way (including food donations and other logistical support to Lente operations in Rockwell and in the field), please contact Anna Carillo at 899-7691 ext. 2123; telefax 899-4342; email: aacunesco@yahoo.com. Lente Hotlines: 0921-5355949 (Smart); 0927-3037122 (Globe).

We need clean elections. We need genuine democracy. We need you.

Thank you very much.

Benjamin T. Tolosa, Jr., Ph.D.
Associate Professor
Department of Political Science
School of Social Sciences
Ateneo de Manila University
Loyola Heights, Quezon City 1108
Philippines

Co-Convenor, VforCE: 1 million Volunteers for Clean Elections
www.vforce.multiply.com; vforce2007@gmail.com; 0922-8600-SLB

From The Black & White Movement: Cayetano - Victim of Sinister Cheating or Incompetence?

Press Statement from our friends at the Black & White Movement:

"The Black and White Movement deplores the COMELEC ruling (misruling, is probably more appropriate) regarding its decision on the nuisance candidate case against Joselito "Jojo" Cayetano.

While it is not surprising that Joselito CAyetano was declared a nuisance candidate, it is mind blowing that COMELEC decided to keep "Jojo" on the official list of candidates, arguing that Joselito Cayetano was well within his rights to appeal the ruling within 5 days, and therefore allowed his inclusion on the senatorial list of candidates until the completion of the appeal process. Even more fabulous is the ruling that votes cast as simply "Cayetano" would be considered stray votes.

Is this just another "lapse" in judgment on the part of the COMELEC? Or is COMELEC being used by sinister forces as a weapon against Alan Peter Cayetano, an uncompromising critic of government?

We can only conclude that either the commissioners are grossly incompetent for not deciding on the matter earlier to avoid this unjust and prejudicial situation to an opposition candidate, or they maliciously delayed the decision to put Alan Peter Cayetano at a gross disadvantage.

The Black & White Movement believes that the COMELEC must rectify this situation by ruling that all "Cayetano" only votes be counted in favor of Alan Peter, and invalidate these votes should the appeal of Joselito Cayetano be later upheld. Why should Alan Peter be penalized and suffer the burden of a recount when it is the COMELEC that caused this untenable situation in the first place?"

Election Day, 2007

Thanks to the COMELEC staff who promptly resent my 'Returned to Sender' absentee ballot via DHL, i was able to vote yesterday morning. The Philippine Embassy here in Singapore, even with a previous announcement that they would be closed, remained open. Kudos goes to them as well. FWIW, i voted for the eleven Genuine Opposition Candidates...

Trillanes - A genuine Filipino hero. He has chosen to suffer for his beliefs. On criticisms that he is just another military adventurer like Gringo, as one commenter 'freewheel' over at MLQ3's said, "...both do wear fatigues, yes, and both were accused of mutiny but the similarities end just after they started".

Alan Peter S. Cayetano - If you plan to vote for him, be sure to put in his full name. He upset the first couple so he must be doing something right.

Noynoy Aquino - Heir to Ninoy's legacy. Certainly a better choice than his Tita.

Chiz Escudero - Possible future President (or Prime Minister). As one of the leading voices of the opposition, i will forgive him his own lapse of judgement in not prioritizing math subjects. I just hope he does not put Danding Cojuangco's interest over that of the Filipino people.

Panfilo Lacson - In any other election, i would not have imagined voting for him. However, as i've said before, the circumstances require that i shelve those reservations for now.

Loren Legarda - My only beef against her was that she chose to run under FPJ. Turns out she was right, i was wrong.

John Osmena - I realize that he is not popular (and with good reason), but one time, his convoy did stop to rush one of my office mates to the hospital when the latter met with a fatal car accident. So he can't be all that bad.

Nikki Coseteng - After all, she's part of GO.

Aquilino Pimentel III - I hope he takes after his father in terms of sticking to principles.

Sonia Roco - Widow of the late Presidential candidate, but an accomplished individual on her own right.

Manuel Villar - Another possible future President (or Prime Minister). Independently wealthy.

...and one Ang Kapatiran candidate:

Martin Bautista - I like his advocacy of capping debt payments and refocusing on Healthcare, but what clinched it for me was his take on Gloria's legitimacy issue (a response to a question asked by John Marzan) where he said "We cannot afford to have an illegitimate President who tampered with the one sacred duty we must all perform."

As for the other Kapatiran bets, maybe next time but for now, it is not the time to divide the vote.

BTW, Schumey has an update on the inventive ways some politicians plan to cheat.

BoA the Live "Kimi no Tonari de"

Korean singer BoA with a live rendition of one of her Japanese songs Kimi no Tonari de.

Taiwan: Land Reform, Food Security and Industrialization

Fellow blogger Jego, in a comment to my previous entry, shares his thoughts on food security and industrialization:

"Personally, I think we shouldve gone for food security first, self-sufficiency in food, before we tried to industrialize. But it might be too late now. We've been caught up in the globalization / industrialization whirlwind, hence those problems you enumerated. We're importing rice! That is a travesty, imo. Taiwan can feed itself, export food, and industrialize. They had their priorities straight. We might have to abandon primary production and industrialize just to keep up. Our farmers will be left out in the cold if they dont adjust to the new realities."

I have a slightly different conception of food security and i also wouldn't exactly frame it as a choice between food security and industrialization. Since Jego mentioned Taiwan, it would be instructive to see how they approached these matters of food security, agricultural productivity and industrialization.

Amsden(1985) pointed out (in The State and Taiwan's Economic Development*) that upon arriving in Taiwan, security was also foremost in the minds of the Chang Kai Shek's Chinese Nationalist Military:

"When Taiwan was occupied by the vanquished Nationalist government in 1949, the Goumindang (the Nationalist Party) was obsessed with one objective: military build-up in order to retake the Mainland."

One other major security concern was the potential for the Taiwanese peasantry to rise up against their new rulers just as Mao's peasants did in the Mainland:

"The potential threat of an impoverished peasantry had been driven home to the Nationalists on the Mainland, and they were concerned with restructuring agriculture accordingly."

This provided one of the leading motivations to Land Reform, which was implemented from 1949 to 1953:

"Agriculture was reformed in three stages.

• First, farm rent was limited to a maximum of 37.5 percent of the total main crop yield.
• Second,public land formerly owned by Japanese Nationals was distributed on easy terms, with preference given to the tenant claimants.
• Third,landlords were obliged to divest themselves of their holdings above a minimal size and to sell out to their tenants under the Land-to-the-Tiller Act...Landlords were given land bonds in kind and stocks in public enterprise in exchange for compulsory divestiture of their holdings.

Some landlords profited from their stock ownership and became successful industrialists. The landlord class, however, sank into social oblivion..." [IMHO, which on its own, is a favorable development]

Land Reform was followed by rapid agricultural growth which in turn provided capital to drive industrial growth:

"The years 1953-1968 witnessed annual growth rates in agricultural output that were impressive by any standard. Equally impressive was the spillover effect on industry...Whereas net real capital outflow from agriculture increased at a rate of 3.8 percent annually between 1911 and 1940, it rose on average by 10 percent annually between 1951 and 1960."

Amsden emphasizes that this spillover effect was not due to market forces left on their own, but was in fact, a deliberate strategy of exploiting the farmers by the State:

"...The fertilizer monopoly was the key to extracting surplus from agriculture. Fertilizer was bartered for rice, and the barter ratio was highly unfavorable to farmers. The price that Taiwanese farmers paid for 100 kilograms of ammonium sulfate in 1964-65 was higher by almost 40 percent than the price that Japanese, Dutch, Belgian, American, or Indian farmers paid..."

The above combination of policies resulted in food security, capital and market demand that drove industrialization.

• "Even during the immediate postwar years of economic chaos and a world record rate of population growth, agriculture managed to produce a food supply sufficient to meet minimum domestic consumption requirements as well as residual for export...
• Agriculture also managed to provide an important source of demand for Taiwan's industrial output, particularly chemicals and tools, and a mass market for consumption goods.
• The agrarian structure provided a degree of political stability sufficient to draw the most timid of foreign firms to the island."

The prosperity in the countryside also had an indirect effect on the welfare of the industrial workers:

"Agriculture has even been sufficiently productive to set a floor on industrial wages. Factory women who returned home to the farm during the sharp depression of 1974-75 subsequently refused to return to wage employment at prevailing rates."

Eventually, however, as it grew more prosperous and less focused on retaking the Mainland, Taiwan gave up on the idea of food security:

"Taiwan ceased being self-sufficient in basic foodstuffs because it was more profitable to specialize in cash crops for export."

Whenever, i hear the term food security, what i envision is emergency stocks of canned goods, noodles and grains (along with water supplies) hidden in caves or underground. Other than that, i think the best form of food security under non-emergency situations would be the ability to source food from our trading partners. Instead of food security, the main reason for wanting rapid increases in agricultural productivity would be that it supports and complements industrial growth.

*As found in George T. Crane and Abla Amawi's (editors), The Theoretical Evolution of International Political Economy: A Reader, 1991, 1997, Oxford Press Inc.

Missing Nuclear Material: Life Imitates The Onion

It's unnerving how news nowadays seem to come straight out of The Onion. Here's a report by the BBC about Pakistan's Nuclear Authority placing an ad soliciting information about lost radioactive material. (via 3quarksdaily)

Here's the featured report published in The Onion from eight years ago.

Rodrik on Trade Liberalization and Favorable Economic Outcomes

Dan Rodrik offers sound advice to free trade boosters (which includes me). Specifically, he answers the question "under what conditions will trade liberalization enhance economic performance?" and offers the following list:

• The liberalization must be complete or else the reduction in import restrictions must take into account the potentially quite complicated structure of substitutability and complementarity across restricted commodities.
• There must be no externalities or microeconomic market imperfections other than the trade restrictions in question, or if there are some, the second-best interactions that are entailed must not be adverse.
• There must not be any increasing returns to scale, or else activities with scale economies must expand "on average."
• The home economy must be “small” in world markets, or else the liberalization must not put the economy on the wrong side of the “optimum tariff.”
  
• The economy must be in reasonably full employment, or if not, the monetary and fiscal authorities must have effective tools of demand management at their disposal.
  
• The income-redistributive effects of the liberalization should not be judged undesirable by society at large, or if they are, there must be compensatory tax-transfer schemes with low enough excess burden.
  
• There must be no adverse effects on the fiscal balance, or if there are, there must be alternative and expedient ways of making up for the lost fiscal revenues.
  
• The economy must not have a trade deficit that is already "too large," or else nominal wages or the exchange rate must adjust to compensate.
  
• The liberalization must be politically sustainable and hence credible so that economic agents do not fear or anticipate a reversal.

[Source: Dan Rodrik's weblog, May 04 2007]

I have highlighted the items and phrases i do not yet understand for future study.

Update (05-10-2007 8:05pm): Thanks to commenter Gabby D. for his explanation on optimum tariffs. (I will be highlighting in green the items that i begin to understand.) I also got some further explanation on how a large country benefits from such a policy.

"Large countries are defined as those with the ability to significantly affect world prices. In other words, a large country faces upward sloping foreign supply curves for the agricultural commodities it imports. Thus, changes in domestic policies and other variables in the country would, by definition under a large country scenario, alter international prices and trade flows, implying the exercise of market power...For example, Chinese restriction of imports following the 1995 world grain price increases may be justified within an optimal tariff framework. Chinese limitations on imports may have helped to keep world prices lower than they would have otherwise been since 1996, reducing Chinese import costs. Hence, self-sufficiency may be defended not only on political economy grounds, but also for reasons of trade policy efficacy."

[Source: Zhuang Renan, 2005, China's agricultural trade: An optimal tariff framework perspective, Purdue University]

Manolo Quezon's Interview With Sonny Trillanes

Highly recommended, listen to Manuel Quezon III's interview with Genuine Opposition candidate Sonny Trillanes. Here's some noteworthy excerpts:

On his legislative agenda: "...the first order of the day legislatively is to have her impeached and once she is impeached i'm going to convict her..."

On Gloria Arroyo's highest crime: "She has a policy of genocide in Mindanao, people are dying there...we're talking about mass killings there...you have barrios bombarded deliberately or mistakenly and they get buried the next day according to Muslim customs..."

On the 'all out war' policy against the Communist Insurgency: "Political killings in particular is being conducted by a special unit...and it's being run by Secretary Norberto Gonzalez."

On the Philippines' National Security Policy : "We don't have any."

On the Administration's claims on making the economy work: "they should try telling that line to the squatters...living under the bridge eating instant noodles everyday"

On his priorities once elected to the Senate:
1. Get rid of Gloria (via impeachment).
2. Support Noli de Castro if and when he takes over.
3. Get rid of corruption in the bureaucracy.

On how to prevent the Armed Forces' intervention in politics: "(1) address internal causes...salary, poor medical equipment, lack of housing...(2) good government"

Sweet Soul Revue Sukiyaki Live

A live performance of a 90's hit by Pizzicato Five. Lead singer Nomiya Maki is joined by two other veteran Japanese singers Kyoko Koizumi* and Natsuki Mari.

Update Oct-26-2007: The original video i posted was taken down, good thing there's still a similar video in Youtube.

Update Nov-23-2007: Unfortunately the video was taken down again. I'm posting the group's live performance of Sukiyaki instead.

*Who incidentally, played the role of Yota and Kaoru's mother in Tears for You, the movie which i posted about two weekends back. (It's her hand you see in the first shot.)

Unconditional Convergence and a Theory of Economic Miracles

Economist-blogger Dani Rodrik points to a paper by one of his students which concludes that:

"Rapidly growing countries are those that are, counterintuitively, farther away from the productivity frontier of the goods that they export. Diversification of production acts like a convergence machine: it enables countries to get into the lower rungs of taller ladders."

The above seems to support what Nobel Prize winner Robert Lucas wrote* when he did a comparison between the diverging growth trajectory of the Philippines and South Korea:

"Consider two small economies facing the same world prices and similarly endowed, like Korea and the Philippines in 1960. Suppose that Korea somehow shifts its workforce onto the production of goods not formerly produced there, and continues to do so, while the Philippines continues to produce its traditional goods. Then according to learning spillover theory, Korean production will grow more rapidly. But in 1960, Korean and Philippine incomes were about the same, so the mix of goods their consumers demanded was about the same. For this scenario to be possible, Korea needed to open up a large difference betweeen the mix of goods produced and the mix consumed, a difference that could widen over time.Thus a large volume of trade is essential to a learning-based growth episode"

Will have to study further and, if i can, blog more about this later, but in the meantime, this entry serves as a placeholder.

*Source: Making A Miracle from Lectures on Economic Growth, Robert E. Lucas Jr, 2002.

Willy Prilles on Variants of Populism

In his second post about New Public Management (NPM), Willy Prilles distinguishes between two kinds of populism:

"1. politics unfavorable to elite: politics or political ideology based on the perceived interests of ordinary people, as opposed to those of a privileged elite; and 2. focus on ordinary people: focus or emphasis on the lives of ordinary people, e.g. in the arts and in politics."

He then tackles the question on whether the Robredo administration in Naga is populist:

"It will depend on which meaning of populism one uses: it definitely is not if the label carries the first meaning, which essentially demonizes the elite. In this case, such a divisive rhetoric is actually an exercise in hypocrisy as the entire leadership, comprised mostly of specialists with high degree of education, in fact belong to the elite.

But if populism were to take the second meaning, then the administration is certainly populist -- by virtue of creating innovative mechanisms through which ordinary people's social, political and economic needs are addressed more effectively."

I highly recommend reading the entire entry. (I also recommend that you download the linked PowerPoint presentation of Mayor Robredo.)

Just a few observations:

(1) The attitude that Luis Leonardo (one of the fellow participants of Willy Prilles in the NPM Seminar) exhibits i.e. his willingness to trade off productivity for hunger, as well as...
(2) the presence of exemplars of NPM among Local Government Units (LGU's) and the corresponding lack of at the National Level (as stated in Mayor Robredo's PowerPoint presentation)...

...are further manifestations of the trifucation of the State.

Update (05-03-2007 9:15pm): Willy Prilles reports that Mayor Robredo has been disqualified from running for reelection by the Comelec. Just goes to show what's in store in terms of good governance under the present dispensation as well as the limits of a trifurcated state. I hope the people of Naga don't take this travesty lying down. I can't but help think though that this kind of abuse would not have happened if men and women of goodwill have not given too much slack to the current occupant of Malacanang. Without vigorous opposition at the outset, impunity has a way of catching on and catching up.

Industrial Development: Hamilton vs. Hamilton

Two weeks back, i promised to post my feedback on Abe Margallos's The Fiction of American Free Market Model. Abe's main point is that the United States, in order to industrialize early in its history as an independent nation, followed a mercantilist approach as advocated by Alexander Hamilton:

"Alexander Hamilton, instead of pursuing laissez-faire free trade capitalism reverted to mercantilism, or neo-mercantilism. Although opposed by Jefferson* who believed that which governs least governs best, Hamilton succeeded in calling for an active (federal) government in infrastructure development and industrialization fortified by tariff protection against British manufactured goods. Hamiltonian economics later became known as the “National System” of the USA, Inc., the key postulates of which were:

1) Protecting industry (new factories or infant industries) through selective high tariffs and later via government subsidies;

2) Government expenditures in infrastructure development targeting internal improvements such as road building and other public works;

3) Creation of big banking such as national banks along with policies promoting productive enterprises."

He then cited Japan as following the same model:

"Little wonder the first Miracle of Asia, Japan, Inc., was built by its own founding fathers, the Meiji leaders, according to Hamiltonian economics under the guiding hand of the state. And the roaring “Tiger, Inc.” and now the awakened Dragon, Inc. simply followed suit in adopting the American way."

While i agree that Japan followed Hamilton's approach, i also believe that there are important differences that have to do with Abe's point #1 above. For one thing, Japan's tariffs were never as high as that of the United States during a similar stage in its development. Going back to what Amsden states in her book The Rise of the Rest:

"In one critical - and ironical - respect the American pattern was very easy to follow: it had high tariffs" [emphasis on the original] "In its early stage of development, the United States adopted tariffs that were among the world's highest. In 1913, the United States average was almost twice that of Japan."

Indicators of Tariff Levels in 1913, USA and Japan

Country	Tariffs 1908-1912(%)	Tariffs on Manufactures (%)
U.S.	0.21	44
Japan	0.09	25-30

Source: 'The Rise of the Rest', Table 7.6 page 175

"Japan's tariff (and its variance) rose between 1893 and 1938, but overall remained 'moderate' - only 24 percent at its peak in 1931 compared to a peak of 50-60 percent in the United States."

Moreover, Amsden notes that Japan had a stronger link between its import substitution and export activities:

"The linkage between import substitution and export activity in Japan began to be forged soon after the Meiji restoration. All modern industries were started as import substitutes, but exporting became concentrated in a small number of products and bean almost at once...In 1913, the production-export ratio was 77 percent for raw silk, 25 percent for cotton fabrics, and 30 percent for cotton yarn. Persistently high production-export ratios signal an orientation on the part of producers that trade is not just a 'vent-for-surplus' or a means to dispose of inventory that cannot be sold in the domestic market. Instead exports are built into import substitutes through long-range capacity planning." [Emphasis on the original]

Incidentally, with its success in following a combination of import substitution and export-led growth, Japan's Meiji government has in effect demonstrated what Tyler Cowen points to as the key benefit of international trade i.e. additional output or, in other words, contribution to economic growth. Conversely, it also means that to a certain extent, Cowen (who is known for his libertarian leanings), is employing the logic behind import substitution, something that Dan Rodrik notes with some perceptible degree of glee in his post, where he says: "the reason the" [Tyler Cowen's explanation] "made me jump is the similarity it has to arguments that proponents of import substitution often make in support of trade protection."

[By contrast], "...export promotion in American history was largely restricted to information-gathering by diplomatic consuls, externsive technical assistance for agriculture, and military expenditures to develop defense-related products...These supports apart, American export promotion was virtually nil: 'Foreign sales (in 1893-1921) were achieved for the most part without assistance from the US government'**"

Amsden then states the reason why this is so:

"American exports began to be undertaken primarily by big businesses on the basis of innovative technologies. Therefore, U.S. exporters required little government help and the United States became a poor model for export promotion."

The United States did not need government initiated export promotion because its businesses , This, among other things, enabled American firmsto possess first mover advantage. Japan, being a latecomer early in its development history, by necessity, followed the approach of a second mover.

There is clearly a difference in applying Hamilton's approach depending on whether one is a first- or a second-mover. Amsden and Chu, in their book Beyond Late Development: Taiwan's Upgrading Policies summarize both the challenge and potential benefit to a latecomer country:

"The first latecomer firm to make a three-progned investment - in optimal size plants, technology and management, and distribution - gains 'second-mover advantage' in world markets." [Emphasis in the original] "The more numerous a latecomer's second movers, the better its national economic performance is likely to be."

In choosing which model to replicate, we have to answer the question, to which category do we belong? (Of course, we also have to be open to the question of whether we need to create another category for ourselves.)

*I posted about the distinction between Hamilton's and Jefferson's approach here.
**As cited in W.H. Becker (1982), The Dynamics of Business-Government Relations: Industry and Exports, 1893-1921, Chicago: University of Chicago

Thoughts on Trade: Effect on Prices, Output and the Relevant Moral Communities

As reported by Tyler Cowen of Marginal Revolution, there is currently an exchange of blog posts on International Trade among eminent economists. Following the chain of entries, i believe this latest round was started by Dan Drezner which is itself a reaction to a thought experiment by the recent Albert Hirchsmann prize awardee Dani Rodrik on Trade and Procedural Fairness. Basically, Drezner pointed out that Rodrik's thought experiment was incomplete. Rodrik responded by scoring Drezner on the claim that Free Trade Lowers Prices.

"Consider your typical Argentinian for example, who consumes a lot of wheat and beef. Since these are export products for Argentina, free trade implies a rise in the relative price of the Argentine consumption basket. (The gains from trade are still there, of course, but they derive from the usual allocative efficiency improvements, not from lower prices across the board.) And in the U.S., the Wal-Mart effect has to be qualified to take into account the fact that the relative price of the goods that the U.S. exports (including for example agricultural commodities) is higher than it would have been absent trade. Similarly, when the U.S. gets better market access abroad for its agricultural exports (a key demand under the Doha round), you can be sure that this will raise domestic prices for these goods, not lower them."

In the Philippine context, i guess it's similar to our experience in buying local products that are supposed to be for export or export quality.

To the above Tyler Cowen responds that the above discussion is not nearly as relevant as the output effect of trade:

"The real gain from trade is the additional output; it should not be surprising if the pecuniary externalities (higher and lower prices) should prove a wash rather than an additional net gain." [Emphasis mine]

More trade results in more economic growth (something which countries like South Korea and Taiwan took advantage of as i will discuss in my next entry) regardless of its effects in terms of greater inequality and poverty for some.

The discussion comes to a sort of full circle when Alex Tabarrok, also from Marginal Revolution reflects upon the question of what is the Relevant Moral Community to consider when discussing the winners and losers of trade. He makes a distinction between the individualist, nationalist and liberal internationalist viewpoints.

Along the way economist Greg Mankiw shares his thoughts on the various trade models, i.e. the Ricardian Model which emphasizes Comparative Advantage as the reason behind international trade, the Stolper-Samuelson_theorem and the Heckscher-Ohlin model. (Incidentally, my previous entries on Political Coalitions and Free Trade is based on the latter two models.) Mankiw still favors the first trade model:

"As a tentative conclusion, therefore, I am inclined to think that in a world with significant capital mobility, the Ricardian theory of trade is more useful than Heckscher-Olin."

Paul Krugman (as published in the Economist's View) blog, counters...

"For those who like their jargon, by the way, I'm basically saying that the right model for thinking about this has gone from many-good specific factors to Heckscher-Ohlin."

...and ends with a humble plea to Americans on which relevant moral community to consider:

"I don't have answers to this. The moral case for open markets is their importance to poor countries: America would do OK even in a highly protectionist world, but Bangladesh wouldn't. The domestic politics of trade, however, are now very hard, and getting harder."

Brad de Long, weighs in with his two-cents and by way of conclusion states:

"The narrow pure-economics case for freer trade is harder to make these days because it is less true than it was in the 1960s or the 1950s or the 1930s or the 1910s. But the broader political-economy case for freer trade is still strong and true."

Mark Thoma of the Economist's View blog has been keeping track of the discussions in more detail and depth so you can continue to follow it over there.

All i can say is that having the opportunity to listen in to these economists via their blogs, today is a great time to be alive.