Cha-cha or Die (Part 2)

This columnist’s June 2 article mentioned “a G-8 child has uttered: ‘the Empire has no clothes’” – alluding to this US financial meltdown. The US, contaminating other Western Europe developed economies, is in for more Pain; caused by delusional subprime gambling - as Collateralized Debt Obligations, insured by global behemoth AIG (Philam’s mother company) via Credit Default Swaps, rated and audited by the world's best agencies money could buy, collapsed. Investment Banker Marc Faber later posited that Asia remains the world’s only growth area; that Asians “were too stupid to understand financial derivatives,” therefore survived. Thus, “we will put our money in Asia.”

Population growth rate and Faith hobble the Philippines; Asia’s wallflower princess wobbles, overweight with open-ended constitutional provisions, while the tsunami of petrodollars (US$6 trillion at US$100/barrel, in 2008) and pension funds like Calpers inundates Asia. 1% of the former is US$6B. Cha-cha now will free us from constitutional bondage, finally making us favored by moneyed economic partners. Speed is essential to Entrepreneurial opportunity; 2010 or beyond is too late to muddle through. Money waits for no man.

Flip Hip-Hop: Been There, Doing That

The US Fed had US$881.2B (May 2008) in currency reserves, grown to US$960B. But with a US$700B bailout, US$430B of annual interest payments, US$85B for AIG, and US$200B for Freddie Mac and Fannie Mae, the Fed’s in the red, in a disaster caused by US deregulations and Wall Street, creating quasi-money - boom ad infinitum - perhaps forgetting biblical Joseph’s “7 years of prosperity, 7 years of bad;” or simply, not borrowing short for long term.

Perhaps the Administration, with the country’s US$35B reserves, could – supporting a former Mother Country and the 4M Filipinos working there – buy US$2B of Treasury Inflation Protected Securities Bills (TIPS), or Bank of America shares, a morale-boosting show of support, as China, Korea, and Japan cynically await her last gasp before buying in. This is understandable; in the 1997 Asian Currency Crisis, the US and IMF said (about Asia’s inefficient companies) “let them bleed to death.”

Classically, a post-election US and developed countries’ response is massive public-sector pump-priming on Infrastructure, R&D, and Social Safety nets, to create jobs and stimulate demand. But what Obama and Sarkozy are preaching, our Administration has, since 2005, been doing: positioning more funds for Infrastructure, Education, and Agricultural Food Security. Further, this Administration had foreseen the Global food and financial crises, and set-up safety nets: advance rice purchases in December, subsidized rice, cash for the poorest, scholarships, and fertilizer coupons. Living within one’s means was, and is so unpopular, like E-Vat. The President’s wisdom of frugal financial engineering bears truth, now.

Cha-cha step #3: Tourism Swing

Philippine tourism industry, projecting 10% growth through 2010, requires provisions - and legislation - towards making her Asia’s Tourism or Retirement Haven. 3.09M tourists arrived in 2007; just US$100 spent daily is US$309M! With money like that, we can buy real, fresh milk.

India prioritizes tourism. Its 2002 National Tourism Policy recommended constitutional incorporation, providing the tourism sector “constitutional recognition” and “[enabling] central government to legislate…tourism development.”

Cha-cha step#4: Nuclear Tango

The Charter states that the Philippine’s “national interest”, will maintain “freedom from nuclear weapons in its territory.” No provision limits Nuclear power development.

Maybe the reasons for the Bataan Nuclear Power Plant’s mothballing were fears of a Three Mile Island, or Chernobyl. But Russia, despite Chernobyl, is constructing 28 more reactors - nowadays safer - with French or Japanese Pebble-Bed Reactor technology.

Other Asian countries (including Bangladesh) have pursued it. Cheap, nuclear-generated kilowatt hours (US$0.0172 vs. oil’s US$0.081), combined with say, mining, create highly competitive processed products for nearby, growing, China and India.

Cha-cha step#5: Waltzing Overseas Filipinos

The Overseas Filipino Workers (OFWs) are a Philippine economic backbone. Latest estimates show 11M deployed, remitting US$14.5B in 2007, expected to increase 26% in 2008, to US$18.3B.

This alone merits a Constitutional provision supporting and protecting Overseas Filipinos and their families’ welfare (especially in the US), and laws could produce globally-oriented nursing or construction training; or psychological centers for “single-parent” families left by OFWs. Laws stimulating private sector-created Welfare, bolstering government social security, would ease family separation woes, generate jobs, and entice more remittances.

Dual-citizen OFWs could aggressively be informed of their Philippine land ownership rights. With well-placed connections, they could enter mining or real-estate. With the Twin Nightmares - the US Social Security System and Medicare in shambles, its time to aggressively attract 1M Fil-Ams to retire here. If they spent their US$1,000 pensions here, that’s US$1B monthly, guaranteed, compared to piecemeal remittances and balikbayan boxes.

Cha-cha 3-Step

Our Constitution, among the world’s longest, should lose weight, becoming nimble as we maximize our core competencies in this increasingly Globalizing era, emerging ahead despite the Global Economic Storm: Asia’s muddler turned Tiger Cub in this Pacific Century (at least before Burma).

It’s three steps. The first is Charter change; the second requires laws, for business opportunities. The third is attractiveness for partners with foreign investments. Like attracts like: attractiveness invites attractive investors; wallflowers are left with the rest.