FORMER bankers and economists, like this author are usually trained to think in terms of a particular logic. Balance sheets are supposed to balance; income statements are supposed to reflect positive outcomes; national accounts are expected to be healthy and be an indicator of good fiscal and monetary management. However, what is happening worldwide seems to show that many of the world’s financial mavens have thrown the book on good economic management out of the window.

For many a decade, the following economies were acknowledged to be the economic locomotives of the world: The United States for much of the world; Germany for Europe; and Japan for Asia and many of the world’s countries. The past decade has seen the scales tip the other way, with the International Moneary Fund (IMF) now pronouncing that China will rapidly overtake the United States as the world’s prime economic powerhouse. Its hollowed-out production facilities have long relied on countries like China to supply their consumption-driven economy to imagined greatness.

With consumption still to recover because of the housing bubble, the US will have to rely only on its military might to keep its enemies at bay. The US can no longer dictate like they used to since it cannot dispense largesse to bait or tempt policy to lean to their side.  Japan is literally in the doldrums, having had to deal with a long period of little or no growth. Furthermore, it will have to spend mightily just to restore and renovate its damaged northeast area that is still reeling from the recent earthquake, tsunami and nuclear meltdown. Its much-vaunted “just-in-time” production formula is sorely stressed out with suppliers and factories out of the loop due to the damage caused by recent disasters. Germany is still a force to reckon with, but has had to worry immensely because of the pressure on them and the Euro with the failing fortunes of Iceland, Ireland, Portugal, Spain and now Greece.

That brings us to another safe anchorage that seems to have been disrupted. Previously, people used to think that the almighty dollar was a safe haven and would plunk down hard-earned savings in that currency instead of their national currencies. The knowledge of the $13-trillion debt of the US had not fazed many currency investors or speculators, citing that the dollar is still the main instrument of trade worldwide and is still used as a reserve currency by most of the world’s economies. The Euro was looked upon as a possible safer alternative, backed up as it was by the (now mythical) solid fortress European economies. With the way many of the European economies are tanking, one would hesitate to bet on the euro being a safer alternative to the dollar.

What is a little country like ours to do then, now that its traditional partners are severely wounded? For many years, our economy has been kept literally afloat by three main drivers: the much-hated but needed value-added tax (VAT), the large foreign- currency remittances from abroad because of our large pool of overseas Filipino workers (OFWs), and a substantial amount of development assistance from multilateral and bilateral donors and lenders.

However, just as the joke about any ship sinking bound to have Filipino sailors onboard is a truism, it is also becoming fairly evident that the current state of flux and unrest in Middle Eastern and North African economies has served to disturb and displace an inordinately large segment of those OFWs who have been reliably remitting their earnings back home. Many of them, including those in Northeastern Honshu, have had to relocate back to this country, which cannot find enough jobs for them locally. It is hoped that some semblance of equilibrium returns so that our OFWs can be redeployed once again, perhaps in the need to rebuild the infrastructure destroyed by civil war or natural disasters.

Tourism usually is touted as a safe way of generating foreign exchange until one realizes that we have not attracted the high rollers of tourist traffic, those who stay longer and spend more. Instead, we have mostly budget tours that bring their charges in using their carriers, booking into their related hotels, and using their own tourist facilities, leaving little else to fuel the local economy. Until we can truly benefit from the new open-skies policy of the government, we still have a major job of cleaning up our house by making sure that foreign visitors are not mugged on arrival or threatened by unscrupulous touts out to make a quick buck. We also have to build the necessary infrastructure in terms of facilities and access roads that will bring said visitors—both foreign and domestic—to the many nice places that our country has to offer.

Meanwhile, our economic managers are fast realizing that the current reliance on ODA for development funds may come to an end, especially since the major sources of ODA funds have been Japan and Europe, two wounded tigers who will have to weigh their own national interests against the need to fund countries like ours. That will mean that our country will have to move away from a national budget that is geared more to paying salaries of government workers and the rest to operations and maintenance. Thus, the reliance of the PPP program to attract would-be investors. For this program to work properly, our government managers will have to decide that the old days of negotiated contracts and insider deals have to give way to more transparent and open bidding, one that will truly get the best deal for the country and for the projects concerned.

We can no longer look to safe anchorages abroad. We will have to rely on our own spirit to struggle and survive in a world of turmoil and uncertainty, using our best asset, an educated and willing people and work force, to supply the gaps in the world’s economic needs.