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Archive for the ‘Foreign Relations’ Category

The nuances of the working visit of President Benigno S. Aquino III to Washington DC showed the intents on both sides more clearly than in the public statements on both sides. Some of them can be gleaned from the statements themselves while others are in the hosting itself.

Both President Aquino and President Obama affirmed the historic ties. President Aquino said that “Ours is a shared history, shared values, and that’s why America is just one of two that we have strategic partnerships with. Today’s meeting has really even deepened and strengthened a very long relationship we have, especially as we face the challenges that are before both our countries in the current situation.” 

President Obama, on his part, remarked that “[H]ow important the U.S.-Philippine relationship was, the historic ties, the 60 years of a mutual defense treaty, the extraordinary links between Filipino-Americans that have brought our two countries so closely together. And we pledged to work on a whole host of issues that would continue to strengthen and deepen the relationship for the 21st century.”

However, President Obama kicked off his remarks with economic issues, citing the Millennium Challenge Grant and the Open Government Partnership as their contributions to developing trade and commerce as well as to the anti-corruption campaign in the Philippines. President Aquino, on the other hand, touched only the strategic and historic ties.

In the official government statement later, Secretary Ramon Carandang would later stressed the “U.S. Government’s strong support for Philippine efforts to build a minimum credible defense posture…” Secretary of State Hillary Clinton only committed that “the United States will support the construction, outfitting, and training of a new National Coast Watch Center in the Philippines.”

Both are more in tune with regards to regional issues. According to Secretary Clinton, “[W]e do … have a clear interest in the maintenance of peace and stability, freedom of navigation, respect for international law, and unimpeded lawful commerce in the South China Sea.”

The visit did not answer the old question of the Mutual Defense Treaty, that is: Will the United States automatically come to our aid if we are attacked by any foreign power? It did not also provide an answer to the newer question, that is: Will the US help us if our vessels and aircraft are attacked in disputed territories of the West Philippine Sea?

The message is clear: The United States will still follow its own national interests in the Southeast Asia region and will only act with or in support of the Philippines if these are consistent with its own interests. Granted, there is a wide latitude of common interests at the moment, particularly in the areas of “the maintenance of peace and stability, freedom of navigation, respect for international law, and unimpeded lawful commerce in the South China Sea.”

A working visit is one rank below a formal state visit. It can be construed as one befitting a strategic ally–for the moment. It is definitely not in the same league as the state visits of real strategic allies such as Britain, Japan, Australia or even Israel. The Philippines still does not qualify.

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Events are moving fast in the national political front even as trends firm up for the rest of the term of the Aquino government. The center of the tempest, of course, is the current attempt of former president Gloria Macapagal-Arroyo and the rest of  the Arroyo faction to evade the inevitable criminal cases being prepared against them and their impending arrest. Though the fight is being fought in medical opinions, in legal petitions before the Supreme Court, and in media blasts, the real arena is political.

On the one hand, there is the Aquino government drive, with a clear political will behind it, to address the unfinished issues of the Arroyo administration, including the issues of massive corruption and electoral shenanigans in the 2004 and 2007 national and local elections. In the majority of these issues, the key figures are none other than former president Gloria Macapagal-Arroyo and the erstwhile First Gentleman, Atty. Miguel Arroyo.

On the other hand, there is the Arroyo clique that has ruled the country for almost a decade, weakened and almost brought down the post-Marcos democratic regime, suspected to have systematically amassed illegal wealth in billions of dollars, and is now exerting efforts to defend itself and its gains.

Despite the various attempts to derail the 2010 elections and–when this failed–to prevent an Aquino victory, the people threw out the former Arroyo administration. Despite the  midnight appointments, laws, executive orders, and other maneuvers, the Arroyo clique failed to stop the consolidation of power by the Aquino administration.

Erstwhile allies of the Arroyos changed sides in droves even as its own hardcore supporters tried desperately to challenge, even futile trying out out possible destabilization campaigns. The Arroyo clique tried to maintain their dominance in Lakas and in the House of Representatives but even this ended in futility.

The lone apparent Arroyo-influenced institution is the Supreme Court. The current Arroyo petitions for a Temporary Restraining Order (TRO) and a favorable ruling on the constitutionality of the Department of Justice Order No. 41 is certain to be seen as a test of the political position of the  Arroyo appointees in the court. This is unfortunate but the high court is still under a cloud of doubt in the public mind because of its previous pro-Arroyo rulings.

Whatever the SC decision is, the political battle develops to the advantage of the Aquino government. There is a great amount of public support for the closure of the issues against the Arroyos.

The basic options open to the Arroyos, if they chose not to admit their guilt, are only two: flight or fight. The latter–the path taken by former president Estrada–would mean political humiliation and a long stay in a detention resthouse while the case is being tried, and, if convicted, a probable long stay in the penintentiary.

Flight means going on an asylum in a friendly country with no extradition treaty with the Philippines and waiting out an unfriendly Philippine government such as the Aquino administration. Then, negotiate when conditions are favorable. This was the Marcos strategy.

At the end of the day, the politics of it will determine the option.

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[My forthcoming column in Catalyst].

The predicament of Philippine Air Lines, the nation’s flag carrier essentially parallels the problem of the Philippine National Bank, the erstwhile government’s own bank (which is in the process of a merger with Tan’s own Allied Bank). In both cases, the cause of the problem was named Lucio Tan.

The essence of the Tan strategy was to buy into the government asset at a minimum share percentage to establish a bridgehead, cajole the government (or as some put it, put forward an offer some key public officials cannot resist) into deciding for the privatization of the asset. When the asset is sold to the Tan group, the most profitable components of the asset are stripped away or transferred to a similar Tan-controlled company. Then, the now-unprofitable government asset is left withering on the vine and eventually dies.

Or, if it can still be cajoled further, the government infuses more money into the asset and the asset redirected to new markets (with the big advantage of having the government on its side). Eventually, the asset is still merged into a Tan-controlled company and is left to die.

PAL has always been a problem for the TAN group because it has been milked before by the past managements and it miscalculated the effects of the Asian crisis of 1997 and the rising oil prices. It has also to contend with various new competitors, notably the Cebu-Pacific Air. Its own Air Philippines languishes.

Tan has an additional problem with PAL. As a national carrier, it has certain advantages in the international routes, such as preferential treatment for national carriers, first choice in newly-opened routes, and as official government carrier. However, these advantages cannot be carried over to Air Philippines in a merger, and if Tan continues to operate PAL, it would only compete against Air Philippines and cause losses for both. Additionally, it has to contend with stricter requirements for air travel as a national carrier, suffer stricter government supervision (it is still partly owned by government), and cannot compete favorably against the new king of the sky—the budget airlines such as Cebu-Pacific Air.

Tan’s solution is to squeeze PAL more within these limits while attempting to convince government to assist it in its merger plan (straightforward or de facto) and to transfer the national carrier status to Air Philippines. This is the context of the move to emasculate PAL’s independent capability for various services such as catering, maintenance, and other ground operations by outsourcing these to other TAN companies (which also service Air Philippines). At the end of the day, the two TAN airline companies will have been indistinguishable from each other.

In the meantime, the 2,600 PAL ground-based workers are forced into early retirement or re-hired into TAN’s service companies at reduced benefits. The fate of PAL’s pilots and air stewards and stewardesses is not far behind.

PAL should not have been outrightly privatized and should have remained under government control, not only for economic reasons but also for political and security reasons. Tan himself is heavily investing in China and has partnered with prominent Chinese businessmen identified with the Chinese government. Just like in the ZTE-NBN case –in which security concerns have been raised—the PAL case also has a security angle, especially in the light of tensions in relations with China.

The PAL case demands a longer-term solution from government. So far, the Aquino administration has sided with Lucio Tan. What magic does Tan have to inveigle Philippine presidents, all the way from Marcos, into agreeing with his schemes?

Remember, in PAL’s case, greed does not fly planes.

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[My column in the Catalyst]

San Francisco, USA. Midway in the current direct democracy tour sponsored by the Initiative and Referendum Institute-Europe, Democracy International and Zocalo (Public Square), I realized the relevance of direct democracy in our current situation. The direct democracy mechanisms of people’s initiative, recall, referendum, plebiscite, and, at the local level, the barangay assembly have been introduced almost simultaneously in the American western states of California, Arizona, and Oregon during the first decades of the 20th century.

Certainly, these were asserted by the people in these states as a response to the capture of the State by the “robber barons” of the period, most notably the railroad companies and their owners. The period was marked by the massive corruption of public officials. The resulting failure of state governance institutions led many to espouse the strengthening of democracy by direct democratic actions. Inspired by the Swiss example of direct democracy, Hiram Johnson, a Californian lawyer campaigned for the inclusion of initiative, recall, and referendum in the state constitution. Similar movements appeared in Arizona and Oregon.

Direct democracy largely curbed the powers of elected officials, both executive and legislative, and made them more accountable to the people. Up to the present, these have played an important role in strengthening people’s participation in these states and form part of the practice of their democracy.

The current state of affairs in Philippine politics and governance roughly parallels the American West in the late 19th and early 20th century. Traditional politics, as we know it, has been made a preserve of the political and economic elite, who wield the instruments of “guns, goons, and gold” in order to maintain or grab power from each other through electoral fraud and violence.

Increasingly, money—including those coming from illegal gambling, drugs, smuggling, and other criminal activities—defined the arena and outcome of political contests. It is an open secret that candidates at all levels spent vast sums of money in order to bid for the posts they contest. A mayoral candidate of an average town now normally spends a minimum of five to ten million pesos in an electoral campaign he or she may not even win.

Many big business—be they foreign or local—are drawn to the game of electoral campaign financing as they themselves become attracted to the possibilities of vast profits offered by public-private partnership with corrupt public officials. Through every administration, these businessmen have built their businesses through government infrastructure contracts, licenses to exploit oil, mining and other resources, privatization of lucrative public assets, and services to the government.

Direct democracy provides the additional means (other than periodic elections) for the people to discipline their elected officials and the “robber barons” within the framework of strengthening Philippine democracy.  The American West direct democracy experience says it can be done.

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[My Catalyst column]

The world pauses on September 11, 2011. It remembers the fateful events of September 11, 2001 when a group of Al-Queda terrorists hijacked four American planes and dive-bombed the two World Trade Center’s towers and the Pentagon. A fourth plane would have hit either the White House or Congress had not the plane’s courageous passengers forced its hijackers to crash the plane prematurely.

Ten years after, we take stock of the reverberations, sans the rhetoric of both the fanatic bombers and the wounded American nation. Ten years after, the world sees 9/11 as a turning point for America and its global mission.

Ten years ago, America enjoyed an unchallenged superpower status—a status verging on a global Pax Americana. However, its preoccupation with the global anti-terrorist campaign against Al Queda and its network of disparate and local insurgent rebels, the Iraq and Afghanistan wars, and the security of the Homeland against terrorist threats from abroad cost it—according to some economists—at least $3 trillion dollars. It also resulted in its declining capability to resist present-day recessionary threats to the US-led world capitalist economy.

Today, the United States still maintains its number one status in terms of its economic strength, military prowess, scientific and technological edge, and social cosmopolitanism. However, the borders are already frayed and torn. In the global arena, new players rise to challenge US dominance or influence in every region of the world. Brazil in Latin America, India in South Asia, France and Germany in Europe, China, Japan and South Korea in Asia, Iran in the Middle East—these have made great gains in the past decade even as Russia makes its own comeback to the world stage.

9/11 united America. Yet it also ushered in the bitter debate on Iraq, human rights, and American foreign policy. Ultimately, it led to a nation politically divided, its economy gasping, and its international standing lessened. America treated international terrorism as a global war; and it paid the price.

It is no coincidence that the intensifying competition for resources, such as oil and gas and rare earth minerals, affects the agenda against global terrorism and vice-versa. It is no coincidence that wars, conflicts, and terrorism is correlated with areas of concentrated deposits of these resources. The Bush administration has been suspected, from the start, to be interested in Iraqi oil more than in Saddam Hussein’s mythic “weapons of mass destruction.” Ironically, the Al-Queda Iraqi presence grew only after the Iraqi invasion by the Coalition of the Willing, led by the US.

In a sense, America—10 years after 9/11—needs to take a deep breath and assess the premise of its post-9/11 policy. 9/11 was not a Pearl Harbor nor the sinking of the RMS Lusitania nor a Tonkin Gulf incident. 9/11, however great its casualties, was an attack by a terrorist group. As such, police action as well as intelligence/special operation would have been an adequate response.

As it is, America declared war on the wrong enemy and the rest was history.

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So far, the China visit of President Aquino has produced agreements on the economic and business side but minimal on the political and boundary issues. There is a definite toning down of expectations regarding the latter although much hype has been done on the former.

Of course, this is as it should be, given the complexity of the territorial claims issue, intertwined as it is with strategic geopolitical ones and the prospects of huge gas and oil deposits in the areas being claimed. To the extent that they can play down the tensions associated with widely-varying positions on the claims, the two sides evidently relegated the issue to future negotiations, including the latter’s terms of reference.

What the two sides are doing is still in the confidence-building stage. Aside from the obvious business and economic benefits derived from the agreements so far, the visit conveyed to each party the other side’s willingness to talk over the territorial claim issue.

The Philippines, in addition, also offers its own incentive to include the possibility of a joint oil exploration in the contested areas outside of its own exclusive economic zone. China seems hesitant so far but the offer is tempting since it does not bind future arrangements.

China also tempts the Philippines with prospects of more economic ties, including a US$60 billion investment, a US$7.7 billion development investment loan, and a ten-fold increase in tourist arrivals. On its own, this economic package, if realized, offers a huge safety net in the face of the worsening global recession. If used wisely, this can stabilize and expand the domestic industries and lay the foundations for sustained economic growth, at least in the medium term.

The visit will not, of course, stop the current military, diplomatic, and political strategies being pursued by each party in relation to the claims in the South China Sea (also called West Philippine Sea). However, it should lead to a more manageable future negotiation and less tension in the area.

China has made a major move in the Chinese checkers game with the economic and business gambit. And it seems, the Philippines wants to be part of the play, rather than be a mere chip on the board. It wants to reconfigure its ties with China—as a friend and partner rather than as a perceived minor power with overweening ambitions.

How will the United States, a close Philippine ally with considerable interests of its own in the area, craft its reposté? Definitely, it will not let its own bargaining power weaken in the face of the success of President Aquino’s China visit. An official visit to the US perhaps?

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[My next Catalyst article].

The upcoming Beijing trip of President Aquino reminds me of the game of Chinese checkers. This game has the objective akin to Pacman where winner takes all by eating all opponents. Chinese checkers has the additional tactical moves such as by blocking an “eat” by positioning two chips in the path of the opponent’s chip or putting one chip with its back against the board border, by putting out or sacrificing one chip in a trap to eat two or more chips of the opponent, or by strategic positioning to set up a trap the opponent cannot but walk into.

The asymmetrical balance of political and resource factors between world power China and the Philippine puny state define the parameters of the Aquino state visit. There is, of course, the unseen-but-cannot-be-ignored superpower United States that has its own interests in Southeast Asia and elsewhere in the world that frequently clash with Chinese interests. It is this reality that pushed the Philippines, perhaps unwillingly, from local or regional diplomatic arena into the unfamiliar great-power plays that all-too-frequently crushes the small player.

The crux of the matter here is control or access to the potentially bountiful riches of oil and mineral resources in or around the Philippine territory, the control or access to strategic sea lanes which Philippines straddle, and the strengthening or breaking of the “containment ring” allied Western powers have put around China. Unfortunately, the Philippines is a key chip in this checkers game.

It is undoubtedly in the national interests of all parties involved to maintain their viability in the game. Most of the time, preserving the status quo suffices. However, there may come a time when there is a need to redefine the relationships of these parties and establish a new reality. Such, I think, is the present moment.

China, in this case, caused the changing of the balance of power not only in the region but globally. It is now entering the stage as a world power, second only to the United States. It is now flexing its muscle to have this recognized against a backdrop of severe economic stresses of the capitalist system centered in the Western developed economies. Ironically, China is looked upon by most of these countries as a possible savior to prevent a serious global recession because of its massive domestic market, strong currency and reserve position, and high technology base.

The downside to China’s growth is its insatiable appetite for raw materials and energy sources, huge foreign reserves and external holdings, and its export-oriented economy, making it a major competitor to the Western countries in terms of their own game. The Philippines is a classic case of a chip caught in the middle of powerful contending plays of dominant players.

How to survive or even profit from this situation is a political, economic and diplomatic challenge to President Aquino and his administration. The forthcoming visit therefore by a new president presents an opportunity to set up new plays and redefine China-Philippine relations according to principles of mutual benefit, friendship, and respect for each other’s sovereignty. This even as the Philippines needs to assure Western friends of its own respect for their interests.

Chinese checkers is a game of foresight and maneuver. Yet, at the end, one must lose and the other will win. Creating a situation where no one loses but everybody wins requires thinking beyond the game. Will PNoy and his foreign policy advisers deliver the goods?

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