More on wiretapping
On wiretapping:

http://news.inq7.net/opinion/index.php?index=2&story_id=40817&col=75

I won't go as far as saying the entire country is breaking the law here! But Congress must put a stop to any proceeding remotely dependent on information that is illegally obtained. Else each one of us is in trouble.

Poison
Been a while, but I'm back. Missed a lot of stuff in the long hiatus, but now the crisis of the moment is ... what else, the Tapes.

Lost in the hoopla about the cheating President and what-not, is a very fundamental issue of a violation of civil liberties. Where are the zealous advocates of human rights? Why the double-standard on wiretapping - it’s bad, but not if it’s to dignify allegations of cheating about a President we like to dislike?

Commentators are invoking Truth and Democracy to gloss over this issue. But precisely, the established procedures on wiretapping (court order first) protect every one of us, from the lowliest jueteng collector to the President, from being pilloried by lies, or worse, oppressed by agents of a state willing to justify the means with the ends. It’s not called a poisoned tree for nothing.

What makes for a Strong Republic is not pandering to popular demand, but educating people about their basic rights. Nobody disputes that the tape is inadmissible in a legal court. Well I argue that neither is it admissible in the court of public opinion. I agree that the President’s silence is the way to educate people about their basic rights. Time to take a stand, whatever it costs.

Cultural Christmas
Christmas day has just passed. For Christians this day holds great religious significance; but Christmas has become a cultural icon, and has penetrated numerous societies, not all dominated by Christians or Christian religiosity. In doing so its celebration has been greatly secularized. Cultural Christmas now denotes a season of celebration and good will, marking the end of the solar year. I'm not sure this is a bad thing, even from a Christian viewpoint, seeing how their salt and light have scattered far and wide.

Cultural Christmas has however also been associated with crass materialism and commercialization. Many Christians (and even those of other faiths) object to this. This protest strikes a deep chord - most people find the confusion of market values with religious or other, deeply human values, as somehow wrong and dehumanizing. The tide of human prosperity has indeed risen primarily with the commercialization of traditional, subsistence-oriented economic life. I am certainly not one to throw out the baby with the bathwater. There should however be limits. To paraphrase Oscar Wilde, "price" is not identical to "value". Or as Jesus as Nazareth said, "what does it profit a man if he gains the whole world but loses his own life?"

Happy New Year!

some amendments
In my current feature article ("the fiscal crisis"), I said that the household's options are the same options available to the government. Actually the state has one more option: that is to print money. In technical parlance this is to "monetize" the deficit. Essentially the BSP (Bangko Sentral ng Pilipinas or Central Bank) takes over the liability and pays for it by drawing against its own reserves. This is equivalent to printing new currency to pay off expenses. Which is equivalent to a bad idea. Nobody seriously considers this option anyway.

updating my site
Spending some time updating my website, giving it a new look and feel. Still offers economics content. New - I have a feature articles section right at the home page. Let me know if you like it.

The Underperforming Filipino Economy
Luzon has just endured a massive supertyphoon leaving hundreds dead, thousands more in life-or-death crises, and billions of pesos in lost property. I've just lived two years in Malaysia where there are no typhoons, hardly any floods, no earthquakes, and no active volcanos. (Kinda like Mindanao, only bigger). One is tempted to say that overall economic performance has suffered because of the country's proneness to natural calamities - indeed Malaysia has experienced rapid growth from the early 80s onward, so there might be something to it.

But let's put things in perspective. It's a 4 trillion peso-plus economy folks. Even a 1 percent growth p.a. means roughly 40 billion pesos per year. So a 10 billion peso setback is only going to shave off a fraction of a percentage point. The problem basically is that our growth has been hovering closer to zero, while that of Malaysia (and other emerging or accomplished Dragons) have been soaring closer to double-digit rates. What gives?

Balisacan and Hill (2003), in the most recent volume of readings on the Philippine economy, go through a comprehensive checklist of reasons. In the end they conclude: "As is usually the case in the search for explanations of complex phenomena, we are left with elements of the case but no grand and all-encompassing answer."

I know what you're thinking - it's the corruption, isn't it? But worldwide there have been a number of corrupt governments, whose economies have nevertheless progressed remarkably. Italy comes to mind, and Indonesia under Suharto grew rapidly until the spectacular implosion of the Asian crisis. Even the western Dragon of Northern Ireland has been cited as another exception. Of course corruption is highly correlated with underdevelopment, especially when you weigh in the examples from the Sub-Saharan Africa, that confirm the rule. I suspect that corruption is one of the reasons, but it is not decisive. There is even the feedback from mediocre growth, as a poor economy can hardly afford the sleek and efficient justice system that can deter the dishonest official.

What about peace and order? Again, Malaysia is a Mindanao sans the danger and the open war in some areas. Yes, insecurity problems is a problem. But since the early 90s India has been growing while dealing with its own share of insurgency and ethnic unrest, topped off with prospective war with a co-nuclear neighbor. And again the mutual causation pops up - because the economy has been growing poorly, particularly that part benefiting the poor, individuals lose a sense of stake in a harmonious society. In that sense of hopelessness, preyed upon by demogogic visionaries, they seek to carve out their own utopias. So in this case a growing economy is part of the solution.

Is it "damaged culture"? (Remember the stir caused by Fallows some years back?) The problem with the damaged culture theory is that it is so hard to measure, and causation is so hard to trace. Every culture is going to have "defects" relative to other cultures. So when one society ends up with mediocre economic performance, it is easy to blame "culture" - when there is really no rigorous way to test this. For example, many Filipinos are tardy. They seem to share this trait with Hispanic cultures. But Spain itself is an affluent European country. Yes, tardiness and other such traits are problems, but it's hard to say that overall performance is significantly retarded by a set of stereotyped traits typically ascribed to "culture". (By the way there are plenty of Filipinos who are more punctual than Westerners. How many percent? Dunno. That's the measurement problem, see?)

Let me approach this from an analogy: suppose an erstwhile good business has been slumping in the last few years. Management hires a a consultant. Consultant comes up normally with a list of problems and a list of recommendations. In the complex system that is a company, there is usually no one reason that underpins the breakdown. And a management with the right attitude, can lead the way to solving the problems, with the cooperation of the entire organization, and act on that checklist in order of priority. Well we now have do have a checklist. And we know who management is. Then it's back to us, the rank and file. Of course individually we can't solve the problem. But it's time to ask the question - am I going to be part of the solution?

So let me correct myself - there is one thing that we can point to solve our problems (which is actually a label for many things). And that is a can-do, down-to-business, problem-solving attitude, or culture, if you wish, permeating a critical mass of people in just the right places of influence, acting on that checklist that experts have been enumerting to death over the years.

And that means - you.


Reference: A. Balisacan, H. Hill (2003). "An Introduction to the Key Issues." In The Philippine Economy: Development, Policies, and Challenges. Quezon City: Ateneo de Manila University Press.

Whoa, this is my first blog. I plan to devote this blog to topics in economics. As far as I can tell I seem to be the first Filipino economics blogger. There's history for ya. First up - the perrenial problem of mediocre Philippine economic performance. More on this later. Hasta luego!