Rene E. Ofreneo

The global trend is unmistakable. Majority of the UN Member States who have signed on to the Paris Agreement of 2015 are racing to fulfill their commitment to become zero carbon emitters in order to stop the rise of global temperature by 1.5 degrees above the pre-industrial levels. The United Kingdom and France, in partnership with Chile and Italy, convened this month a Climate Ambition Summit to highlight the progress they have made in the twin areas of mitigation and adaptation to climate change.

Typhoon Ulysses bared the grim reality: The government has failed to stop the loggers and miners in killing our forest, as President Duterte himself said. The forest is our first line of defense against typhoons disgorging so much flood water.

The Philippines is facing triple emergencies: Climate, environment and transition.

IN a situation briefing on the large-scale flooding that hit Cagayan Valley and Isabela, President Duterte fumed:  the government has not done anything to stop illegal logging and mining. He then ordered Environment Secretary Roy Cimatu to investigate and stop the nefarious characters behind these criminal activities.

On November 5 to 7, over 1,200 delegates from over a hundred CSOs in 11 Southeast Asian countries gathered in a “virtual conference” to discuss grassroots people’s issues across the region. The theme of the Asean People’s Forum 2020 has a very clear message to the Asean governments: “Southeast Asian People’s Solidarity for an inclusive, cohesive and responsive community.”

For three long days, November 5 to 7, the broad civil society movement in Southeast Asia is holding the annual Asean People’s Forum. The theme of the APF is “Southeast Asian People Solidarity for an Inclusive, Cohesive and Responsive Community.” This theme takes off from the official Asean 2020 theme—“Cohesive and Responsive Community”—adopted by the Asean Leaders as the guide in the work program of the Association of Southeast Asian Nations (Asean) for this year.

IN his Nelson Mandela lecture last July in New York, UN Secretary-General Antonio Guterres issued a very important call: the world needs a new social contract for a new system of global governance.

Last week saw a divided world on the issue of debt.

IN the name of “debt relief” for the poor developing countries, the International Monetary Fund (IMF) and World Bank have been packaging debt rescheduling programs which, ironically, can lead to the accumulation of more debts by the “beneficiary” countries.

The global financial twins, the International Monetary Fund (IMF) and the World Bank (WB), will have their annual spring conference next week, October 12 to 18, 2020. Virtual.

Another pandemic is sweeping the world: The ballooning debt of developing economies.

IN 2008, at the height of the global financial crisis (GFC), the UN Environment Programme (UNEP) proposed to the G-20 countries that stimulus spending be focused on making their economies green and sustainable. The idea was christened as the “Global Green New Deal” (GGND).

IN the ADB’s approval of the Philippine application for a $1.5 billion loan under the Bank’s Covid-19 Active Response and Expenditure Support program, the Bank cited an International Monetary Fund assessment of the country’s debt management capacity as follows:

“Going back to normal” is the mantra of Philippine officials who seek a return to the pre-Covid economic situation. Going back to normal means going back to yesterday’s economy.

In a previous column, we reported the study of United Nations Conference on Trade and Development (Unctad), the international agency monitoring the flow of foreign direct investment across the globe, on the FDC flows this year. Their World Investment Report 2020 (June 2020) gave a dire forecast on FDI flows: decline by up to 40 percent from the 2019 aggregate value of $1.54 trillion, and a further decrease of 5 to 10 percent the following year.

Quo vadis Department of Trade and Industry? Does the Department still view Philippine participation in the global value chain (GVC) manufacturing of multinationals (MNCs) central in the growth of the economy? Is this participation critical in ushering recovery in these difficult Covid times?

AT the height of the enhanced community quarantine (ECQ) in April, Enrique Razon told ANC: “The globalization that we have now, that is over.” Razon happens to be the most global in outlook among the dozen or so Filipino taipans dominating the Philippine economy. He controls International Container Terminal Services Inc., which operates in all the continents of the world—Asia-Pacific, the Americas, Europe, the Middle East and Africa.

“Whose tomorrow is tomorrow? “And whose world is the world?”—From “Solidarity Song” by Bertolt Brecht

The school year 2020-2021 is extraordinary. Instruction for the Covid generation will be conducted under new teaching formats using new education technologies and tools. Hence, the education vocabulary now carries terms such as distance education, flexible learning, blended learning, online teaching, e-learning, and so on. Instead of chalks, blackboards and notebooks, students are being asked to be ready with their computers and tablets. But for those who cannot afford such gadgets, they are told not to worry because they can still get instruction via their family television and radio sets.

The Senate Committee on Energy headed by Sen. Win Gatchalian conducted on July 6 a hearing on the “electric shock” that Meralco and other power distribution utility firms delivered to their customers in the months of May and June. According to Chairman Agnes Devanadera, the Energy Regulatory Commission was swamped by almost 50,000 customer complaints on the inexplicable doubling, trebling, quadrupling and quintupling of their electricity bills.  

The economic response of many countries to the Covid-19 pandemic is to close their national borders. The idea is not only to prevent the spread of the virus but also to preserve their domestic markets, industries and jobs amid a global recession. In crisis times, countries become protectionist. This was amply illustrated during the 2008-2010 global financial crisis, when governments of developed countries set aside a large amount of their stimulus budgets to save industries deemed “too big to fail” or too valuable to be taken over by outside barbarians.

Jayati Ghosh, the Executive Secretary of the International Development Economics Association, explained that under a pandemic, the health of the richest depends on the health of the poorest. She wrote:

Like in the 2008-2010 global financial crisis, the response of most governments to the Covid-19 pandemic is to craft and implement a stimulus package. The laissez faire style of economic management has given way to the Keynesian approach, which rationalizes government intervention in the market processes. The rationale for government interventionism is to save lives, jobs and livelihoods of the people under a very uncertain and volatile environment.

The Philippine Statistics Authority (PSA) released last week the results for the April round of the quarterly labor force survey. There were no surprises. Only horrible numbers pointing to the sad state of unemployment and underemployment in the country under the Covid-19 pandemic. The unemployment rate reached 17.7 percent, which is comparable to the rates recorded by the country in the late 1940s and early 1950s, which were years of recovery from World War II.

The government has been rushing a new package of tax reforms called Corporate Recovery and Tax Incentives for Enterprises, originally dubbed as TRABAHO and subsequently re-christened as Citira. As advertised by the Department of Finance, CREATE should attract new investments, FDIs in particular, because the corporate income tax (CIT) is lowered at a rate comparable with those of the Asean neighbors.

With the Covid-19 pandemic, global de-industrialization is now happening.

Conclusion

First of two parts

The Covid-19 pandemic is giving countries around the world a golden opportunity to correct the social and economic “discontents” that aimless and unregulated globalization has generated—environmental degradation and ozone-busting GHG emissions, labor precarity and informality, overt and covert wars for resources and markets, and social and economic inequality that is a direct outcome of trickle-down neoliberal growth economics. These “discontents” are amply documented by scores of development economists led by Joseph Stiglitz, former Chief Economist of the World Bank, and Robert Reid, former US Labor Secretary.

Perish the thought that we are now to enter the “post-Covid” period. Not after the enhanced community quarantine (ECQ)/general community quarantine (GCQ) arrangement. Nor after the flattening of the present infection curve.

IN the April 14 strategy meeting of the Cabinet on how to manage the economy amid the Covid-19 crisis, the Department of Finance (DOF) cited a quotation from John Maynard Keynes, which reads: “The long run is a misleading guide to current affairs….In the long run we are all dead.”

The International Monetary Fund issued its verdict on the Covid-19-stricken global economy: worst downturn since the Great Depression of the 1920s. Gita Gopinath, Chief IMF Economist, projected a growth rate of minus 3 for the world economy, a minus 6 for the developed countries, and a minus 1 for emerging and developing countries for the entire year of 2020 (“The Great Lockdown,” IMF Blog, April 14, 2020). The Philippines, one of the countries waiting for the Covid-19 infection curve to fall and flatten, belongs to the last category; it is also one of the worst hit in Asia.

“There really is such a thing as society,” said the Covid-stricken UK Prime Minister Boris Johnson during his medical isolation. After his ICU recovery, Johnson thanked profusely the UK’s community of health workers and told the larger British society—repeatedly—that, “we are going to do it together.”

IN their response to the Covid-19 threat, a number of countries have adopted a holistic whole-of-government program of slowing and containing the virus spread. Whole-of-government means different government agencies, with varying mandates, work together to combat the common enemy. Covid-19, a public health issue, is also an economic, employment, food, security and growth issue. Hence, the major departments involved in the Philippines’s Inter-Agency Task Force to prevent the spread of the dreaded virus are the Departments of Health;  Trade and Industry; Agriculture; Labor and Employment; the Interior and Local Government; and the National Economic and Development Authority.

The Covid-19 pandemic has a way of making visible the plight of the nation’s working poor. They are the hardest hit by the government’s lockdown decision.  Locking up the working poor in their homes or residential areas is like a prison sentence. On TV, you see them pleading with the police and the military, explaining why they need to go out and work despite the threat of getting the dreaded virus. They ask: which is worse—dying from starvation or getting infected by the coronavirus?