OBAMAGIC AND JUAN DE LA CRUZ (Part 2)

Despite our US culture obsession - our NBA devoted media and our PX addiction, we should take a longer view to see if Obama and the Democratic party, which limits outsourcing, and favors the return of jobs and manufacturing to US soil, is good for us. Obama probably will not endorse the creation of special Free Trade Areas (e.g., US-RP) outside of the WTO. And if the US still chooses the Atlantic over the economies of the East, this could be another failure to meet Toynbee's challenge, and could lead to further, hastened decline.

EXTERNAL REALIGNMENT

We should therefore start linking our economies – and cementing ties - with the New East, Asian Mainland, and India, whose GDP is growing with the Global economic shift. We cannot wait for US GDP to grow, squandering the 5-10 years until the subprime abates, continental shelf drilling for more oil has commenced, windmills and solar energy are mainstream, and they can provide 4G networks cheaper than a ZTE.

Does this mean sending OFWs to the energy producing countries, like Siberia or Alberta (where the shale oil lies)? Why not, if the exchange rate (the AUS$ is at P42.11, the NZ$ at P32.6, and the CA$ is at 43.27, at this writing), and the environment are immigrant friendlier? Strengthening Asia – Pacific economies will indicate that these rates will improve, as the US dollar suffers while the subprime crisis peaks. These growing economies represent a viable, emerging market for our core competency “exports”: the BPOs, Tourism, and skilled labor.

INTERNAL ORGANIZATION

But we should also be self-reliant, because in the end, no one but us can help ourselves. Like in oil dependence, for instance. In the recently concluded SONA, the President reported that Philippines is “successful in increasing energy self-sufficiency – 56%, the highest in our history, using renewable, alternative sources like gas, biofuels, geothermal, and wind.”

Contrastingly, the US is still 65% foreign oil dependent. Of her current energy profile, she uses 60% alternative power, but only 30% is from Gas and renewable sources. The rest is attributed to Nuclear (8%) and Coal (22%).

Financial responsibility is also something we must do ourselves. Under the present Administration, we have been quite astute. Public debt has dropped from 72% of GDP in 2005, to 51.7% in 2008. In past years, there was a general despair about solving this problem, to the point that a Cory Administration Finance Minister even committed suicide. Exhibiting good stewardship and excellent, if difficult judgment, the Administration has put the house in order by prepaying our debts, improving our credit rating, and our credibility to international investors. If this goes down to 20%, either by raising GDP or lowering debt, then that will be a true legacy.

Consider that, without the Government's prudent, financial management the exchange would have escalated to Php110 to the Dollar, based on historical trends over decades. Imagine Diesel at double the current prices and a hyperinflated pan de sal at, say P15.00 per piece.

Combined with todays oil prices and food troubles, that would have ushered in an era of hyperinflation, like the 10 year Brazil situation in the 80s-90s. But without the natural resources to alleviate it, we would have returned to an economic stone-age were money would mean nothing and goods would merely be bartered.

But with the precise financial management of this Administration, we have instead accomplished the improbable - an era of growth while the Global situation was worsening - with GDP rising 5.1% in 2005, 5.4% in 2006, and 7.3% in 2007. So why the subliminal ads of monopolies with soldiers in the background? Is this a call to rise against Government?

To put things in perspective, the US debt to GDP ratio was at 36.8% in 2007, and is expected to hit 37.9% in 2008: a rising trend.

Who wins in November is ultimately a US concern. After that, they can lead. But with a new Global Economic Order, the world is unconvinced. I wonder if we should follow. We certainly have more pressing concerns closer to home.

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