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The Binary World of James Robinson: a rebuttal to Why Nations Fail

He came at the invitation of the Angara Centre for Law and Economics to present his ideas from the book Why Nations Fail which he co-authored with Daron Acemoglu. This pair along with Simon Johnson had originally published back in 2001 an article in the American Economic Review entitled The Colonial Origins of Comparative Development: An Empirical Investigation.

Their book could be seen as an essay expounding on the themes uncovered by their earlier research which credits economic development to the institution-building conducted during the colonial era between the fifteenth and nineteenth centuries. It begins by drawing our attention to the differences between Nogales, Arizona and Nogales, Sonora, towns on opposite sides of the US-Mexican border.

The basic thesis of the book is that nations with institutions that promote greater inclusion in both political and economic spheres prosper while those that foster extractive or predatory policies wind up becoming impoverished and backward. The seminal moment in history, according to the book, happened in England back in 1688 during the Glorious Revolution.

For those not familiar with this event, I provide a brief background here. The basic argument goes a little like this: security of ownership and property rights is essential to investor certainty; investor certainty is needed to foster capital markets, and a set of political checks and balances that guarantee this is best suited for capitalism to flourish.

These principles were essentially what The Glorious Revolution was supposedly fought on and why the Industrial Revolution subsequently took place first in Britain, rather than in Continental Europe. The rights and ideals that Englishmen fought for were transplanted to their American colonies and became the basis for the American declaration of Independence in 1776.

Acemoglu, Johnson and Robinson (AJR) sought to prove empirically that institutions mattered to development. Previously, it was argued that climate and geography had a lot to do with it, i.e. that the industrious, temperate, northern states of Europe were more prosperous than the sluggish states in the southern Mediterranean and the tropics.

AJR sought to dispel this using colonial history. Why was it that not all colonised countries developed along the path of the United States? The difference lay in institutions. Their article demonstrated that in places where diseases led to high mortality rates among early European settlers, and where consequently hardly any permanent settlements were planted, centuries later, the lack of institutional legacy was found to be significantly correlated with low development.

The main lesson was that geography was not destiny, and that even history was not destiny. Less developed nations could begin adopting the institutions that promoted greater inclusiveness and discard extractive policies that left them in squalor. This dove-tailed with the agenda promoted by Washington on good governance, as it searched for a way to rescue the failed Washington Consensus from repudiation.

What came about was the augmented consensus that said free markets and good governance promote economic growth and development. After decades of telling less developed countries to shrink the role and capacity of the state and let markets rip, they were now saying that government needed to be strengthened once again.

The liberal democratic states of the West act as an ideal to which other societies need to aspire to. No other path leads to sustainable economic growth other than this. Just as Calvinist preachers of old would proclaim that no one cometh to the Father, but by His Son, these economists present a case that no other path leads to economic Nirvana, but through the Market (with Institutions performing the role of the Holy Ghost).

This rather binary view of the world is actually contradicted if you go deeper into the colonial history of the Americas which is what John H. Elliott did in Empires of the Atlantic World: Britain and Spain in America 1492 to 1830.

Here he wrote that it was actually the exclusionary racial policies fostered by the English settlers that led to greater social cohesion among settlers around Enlightenment principles of individual rights and liberties, which in turn led to greater independence and prosperity.

Meanwhile in the Southern hemisphere, the Spanish settlers had an “organic conception of a divinely ordained society dedicated to the achievement of the common good” which was “more inclusive rather than exclusive in approach”. The granting of rights both economic and political to natives consisting of mestizos, creoles and freed slaves led to a mixed-race society prone to greater divisions than existed in the North.

The irony here is that a more inclusive colonial policy led to greater exclusivity as subsequent societies were stratified and organised into “pigmentocracies” which made it harder to achieve the egalitarian principles espoused by the Enlightenment. In the Philippines, the outpost of New Spain, the situation was worse in that apart from developing this multi-racial caste-like system, the facility of a common language was not provided as it was in the Americas.

This is the difficulty of using colonial history to prove or disprove that institutions matter in the way attempted by the authors of Why Nations Fail. They do matter, but in different ways, which is the point I highlighted previously in this column (see here).

Secondly, there is the anomaly of the benign dictators of East Asia and the desarollista states of Latin America. Robinson has taken the view that the East Asian growth formula, what is termed the BeST Consensus (BeST consisting of Beijing, Seoul and Tokyo), represent a unique moment in history that cannot really be duplicated or sustained.

Peter Evans disputes this saying that just because the East Asian miracle emerged from a unique blend created by the Cold War policy of the United States, it does not mean that we cannot distil a few basic principles and emulate them today. Just because these states were predominantly autocratic does not mean that weak democratic states cannot adopt the policies that made them succeed in fostering rapid industrialisation (see here for a deeper discussion).

What’s more is that both Germany and the United States, late industrialising Western nations after Britain and France, followed the same industrial policies a century earlier. It was just that after scaling the development wall, they felt the need to “kick the ladder” away to prevent others from following them up because not doing so would disadvantage them.

In Latin America, the record of developmental or desarrollista states of the 1970s and 1980s in Brazil and Mexico is more spotty than in Chile but nonetheless more successful than in Africa or South Asia as these countries made their way into middle income status ahead of countries like Malaysia, Indonesia and Thailand. This is the evidence that Robinson conveniently sidesteps.

Another point James Robinson makes in the book and in interviews is that collective action, which he equates to people power, is key to expanding opportunity for people if the system is closed. He cites the experience of the Philippines and of the Middle East a la Arab Spring to underscore his point. Again, the use of people power is problematic. Why?

Well as Elliott points out, people power features in Spanish colonial traditions as well because

(b)y the laws of medieval Castile the community could, in certain circumstances, take collective action against a ‘tyrannical’ monarch or minister.

Cortes in fact used this against governor Velasquez who ordered him to survey and not to invade the territory of Montezuma in the Yucatan peninsula. It was based on the notion of a social contract between the prince and his subjects which if broken gave the right of the governed to say, “I obey, but I do not comply” (se obedece pero no se cumple).

From time to time, commoners or comuneros resorted to acts of dissent bordering on revolution. But these were simply seen as a way to get the authorities to the bargaining table. Once their grievances were heard and the tyrannical laws or ministers were replaced, they would go back to living as loyal subjects of the monarch. Direct democracy rather than representative democracy ruled until very late in the piece, which left them with very little in terms of a genuine parliamentary tradition.

This swinging of the pendulum from uprising to dictatorship and then back again is exactly what we are witnessing in Egypt today. The problem with equating collective action, i.e. people power, with greater openness, is that the relationship does not always hold.

Finally, let me address the fallacy that only the Anglo-American form of capitalism works well. Francis Fukuyama is right to point out that this is not the only successful Western model that exists. Scandinavia demonstrated another path, which did not require revolts against oppressive monarchs. Theirs was more along the lines of an enlightened, benevolent monarch based on egalitarian religious rather than secular beliefs.

What I hope to point out through this discussion is that the world that we live in is more complex, more multifaceted than what Robinson tries to portray. While it is easy for him to be parachuted into the Philippines to spread his brand of institutional economics, we don’t necessarily have to buy into his whole message.

I agree that the Philippines needs greater openness and participation in political and the economic life, and that collective action to widen the sphere of participation probably needs to be organised, because elites won’t surrender their privileges willingly, but that is as far as I would go.

We don’t need a whole theory based on a faulty or perhaps selective reading of history to back this up. We have seen how people power can be hijacked or used for narrow political ends. We need to guard ourselves against simplistic arguments that say unseating this corrupt ruler here or that autocrat there is going to bring about nirvana for us. Institution-building is not accomplished by this alone, but through a sustained, deliberate, evolutionary process.

The social innovation of Oportunidades and Bolsa Familia more widely known as conditional cash transfers which have been credited with reducing poverty in Mexico and Brazil were not developed by the World Bank or the IMF.

They were experiments conceived by indigenous policy makers who were thinking ‘outside the box’. The East Asian industrial policies responsible for creating economic prosperity and convergence were pursued against the advice of international economists from the IMF and the West. Japan’s Ministry of International Trade and Industry sought to deceive their Western minders that they were complying when in fact they were doing their own thing.

Similarly if the Philippines were to find its way in the world, it will have to be by taking into account its own unique blend of ideas, capacities and institutions. It won’t be by applying some universal one size fits all formula promoted by a Western economist armed with some statistical regressions, a few case studies and a loose reading of history.

Since the era of Martial Law we have had technocrats sing from the same hymn sheet as their Western counterparts while ironically supporting a system that undermined the very principles they were espousing. We need to be smarter and wiser this time around.

We need to accept that the world is not a binary system, comprised of dummy variables that say you are either inclusive or exclusive, free or unfree, open or closed. We need to admit that we live in a multi-polar world, where things are not as clear cut, as some experts would have us believe, and that many paths lead to development. Ours in fact still needs to be found.

Use your coconut: Of investment gaps and how to fill them (conclusion)

The Philippines has been trying to crack open the investment nut by lifting its competitiveness for such a long time but has not been getting very far. Here’s why.

Continuing on from the first part where we looked at the country’s investment gap of over half a trillion pesos a year, we now turn to the problem of how to fill it and bring unemployment down. The imperative to boost competitiveness is based on the notion that low social returns on investment are due to a lack of opportunities to invest due to poor governance, inadequate infrastructure, and bad local finance.

Government failures caused by macro risks like poor fiscal, monetary and financial policies along with micro-risks including corruption, high taxes and weak property rights lead to a lack of incentives for investing in new ideas. These failures block the supply of innovation and investment. While this forms conceivably part of the problem, it does not necessarily explain the entire puzzle.

A missing piece is the demand not forthcoming from entrepreneurs for existing technology and capital even when it is available due to market failures. Dani Rodrik and Ricardo Hausmann talk about how this comes about when there are significant hidden costs associated with information and coordination. I will try to explain these failures using the coconut analogy.

Imagine that several decades after Robinson Crusoe left the island of Despair, a number of coconut plantations were established. The owners of these plantations were competing for a shrinking share of the coconut trade that existed between several islands in the vicinity. To improve their earnings, they each could find different ways of using the coconut. The process of discovering what types of products could be made comes with a cost caused by free-riders.

The evidence shows that low income countries actually develop first by diversifying their exports. The degree of specialization follows a U-shaped curve with income (diversifying more until reaching about the same level of income as Ireland before specializing). They do this by imitating technology already developed in rich countries. Instead of competing by creating new technology, they find cheaper ways of using existing modes of production in diverse sectors.

This process of “self-discovery” as Rodrik termed it often comes at a cost to the first-mover within a country, a cost which imitators do not incur. This creates a market failure because no one is willing to invest in this process since the information generated by it (“which goods can be produced more cheaply at home”) usually cannot be protected by patents.

This random process of discovery is why such countries as Pakistan and Bangladesh with similar levels of development and competitiveness produce very different products (the former produces soccer balls while the other produces hats). Korea and Taiwan also offer the same lesson (one produces microwave ovens and hardly any bicycles unlike the other). For the entrepreneurs who first ventured into these markets and were protected from the free-riding copycats, huge profits were on offer.

Bailey Klinger and Daniel Lederman have shown that their measure of export diversification, the frequency a country introduces new products into its export mix, is directly related to the height of entry barriers. This is a stunning result since it goes against the prevailing consensus on efficient and well-functioning markets.

Rather than the Global Competitiveness Index cited in the first part of this piece, which is based on subjective surveys, Klinger and Lederman used the World Bank’s Doing Business indicators for measuring barriers to entry which are based on objective measures like the number of days for starting and closing a business. They found that the higher the cost, the greater the returns to innovation from self-discovery.

The barriers in effect performed the role of greenhouses, protecting fragile innovative start-ups from the harsh winds of the free market. This counter-intuitive conclusion robustly supported by the evidence is consistent with the market failure argument. It violates the prevailing theory that increased specialization for poor countries and lowering costs of doing business is the way they should attract investments.

This is also borne out by the development experience of Japan which used “administrative guidance” to encourage many players within emerging industries to consolidate into oligopolies, Korea which offered loan guarantees as a way to subsidize the discovery costs of large diversified business conglomerates, India with its licensing raj which allowed a few pioneering software companies to gain economies of scale without the fear of new entrants, and Brazil which sponsored competitions for innovation with significant exclusive licenses going to the winner.

Klinger and Lederman state that this does not imply that there are no negative effects due to protection. What their study shows is that the positive effects swamp them. This means that rather than justifying protectionism, what it does is build a case for state support for emerging industries. I will have more to say regarding this in a moment.

Moving on to the second form of market failure which is due to coordination costs, picture the island once again. To transport various coconut products to other parts of the area, investments in seafaring ships and the training of sailors are necessary. These complementary investments are needed for an expansion of production to occur. Unfortunately, no one is willing to coordinate with the other inhabitants who live near the shore who could profit from such activities, so nothing happens.

Taiwan’s experience with the orchid industry is illustrative. When the world price of sugar declined, the state figured that shifting farm production to this high end product would prove beneficial. This required coordinated investments in things like greenhouses and storage facilities which the state encouraged and subsidized. The same type of intervention was performed by Fundacion Chile a partly state-owned enterprise which gave rise to a new salmon exporting sector.

The faltering seaweed industry located mostly in the Autonomous Region of Muslim Mindanao and the nascent industry of coco juice seem to be suffering a combination of the market failure problems discussed above. Our electronics industry which is highly specialized in “screwdriver” assembly operations as South Korea once was could be expanded likewise to incorporate more value adding steps in the manufacturing process.

The usual ways by which governments address these market failures is by offering subsidies to defray the costs of “self-discovery” (by sponsoring contests which award a prize to the best solutions for example), financing high risk ventures at the pre-commercialization phase and coordinating complementary investments in specific areas such as research and development, infrastructure and general training.

Think of it this way: instead of borrowing from foreign governments to pay their suppliers to develop our infrastructure (think broadband and high-speed rail) we should be licensing their technologies and awarding these to local firms which can prove they can use it cost effectively to build what we need. This should also apply to contracts awarded to private firms partnered with foreign companies. They should be conditioned on meeting certain local content requirements. Defense contracts should increasingly source local producers as well.

The Department of Transportation and Communication is already on the right track by seeking to borrow to pay for the build while privatizing the operations and maintenance of certain projects like light railways. In time we could be exporting some of these products and services if we create local expertise. South Korea did this with its ship building industry in the 1970s with Hyundai Heavy Industries becoming the world’s leading exporter within a decade. It did this even as global demand for ships declined.

Where will the government get the money to do all this? From itself, by using the savings remitted by overseas Filipinos and stored with the central bank in the form of foreign currency reserves–an unorthodox view that even the “humbled” former dean of the UP Economics School holds! If the government were to set aside a third of the currency surplus flowing in each year (see previous posts on this) amounting to around fifteen billion dollars to fund these activities and assuming a one-for-one investment multiplier, a total of four hundred and fifty billion pesos worth of spending could be generated annually (adding 4.5% points to GDP growth!). This would fill up to eighty percent of the investment gap.

The need to diversify our exports is already apparent with an inordinately high specialization in electronics posing a huge risk to future growth in the face of uncertainty of demand from advanced economies. It is also clear that despite very benign inflation and low real interest rates, private firms fail to undertake investments that would lift the productivity of their idle capital. This underinvestment problem is why such a large proportion of our workforce remains unemployed or underutilized.

Stimulating demand for innovation and investment by addressing market failures should be the priority. The biggest barrier for the Philippines to adopting such a strategy will not be an inadequate bureaucracy as many of our top bureaucrats are well-informed and educated; it won’t be for lack of funds as a substantial amount of national savings remain untapped; it won’t be for lack of ideas as there is a wide gap between domestic and foreign technology that can be filled.

The biggest barrier will be attitudinal as it would mean countering the development mindset that has dominated for such a long time which is largely donor-driven. Having drunk the policy “cocktail” put together according to their orthodoxies to no avail, giving us the title of being “the sick man of Asia”, it is about time we developed our own recipes for stimulating economic dynamism in line with local conditions. I now leave you with a song about the coconut which should punctuate this final thought.

The Tyrrany of Cousins

Altruism towards other people of the same blood-line is widely practiced and literally embedded in our DNA. The Hamilton Rule named after the British evolutionary biologist William Hamilton states that we are pre-disposed to behave altruistically to those with with whom we share a greater proportion of genes. This biological imperative to pass on our genetic code to the next generation is quite powerful.

Hunter gatherer societies tended to exhibit a high degree of inter-locking marriages based on kinship. Alliances between tribes were sealed through bridal exchange allowing genes to be distributed across a wider area. This had implications for early rulers and states. As agricultural societies gew within a defined space, its rulers found it more and more difficult to govern independently sufferering what is called the “tyranny of cousins” which puts the needs of the tribe above the rest.

China is credited with forming the first modern state to address this problem. The Qin and Han dynasties (221 BCE-220 CE) instituted a civil service staffed based on a rigorous examinations process. It was tasked with raising taxes used to secure the populace against enemy invasion or domestic exploitation as distinct from local lords who extracted rents from their serfs. China’s political history from then on can be told on the basis of how this tension arose between the state and elite families. Following a few “bad emperors” it eventually succumbed to repatrimonialization.

Medieval Islamic rulers sought to counteract tribal rivalry by erecting a warrior caste made up of slaves. The Mamluk slave warriors and their Ottoman Janissary counterparts were responsible for the administration and protection of Islamic civilization because they acted as a coherent ruling class looking after the broader interests of society and not any one particular tribe. Just as in China, however, the integrity of this institution began to erode over time.

Altruism based on reciprocal relationships rather than kinship played an active role in the modernization of East Asia. The Japanese keiretsus were organized on the basis of inter-locking boards led by former bureaucrats who were parachuted into senior executive positions. Korean chaebols had a reciprocal relationship with state finance and grew into large corporate family-owned entities with high debt-equity ratios. The management style of these conglomerates was based on consensus between parties. Life-time employment was the norm.

In communist China, investors partnered with local Township and Village Enterprises to gain access and participation in China’s economy. Going to bed with local governments protected assets from expropriation for as long as they continued to reciprocate with profitable performance. There was no formal recognition of property rights or an independent judiciary to enforce contracts, just a tacit agreement based on reciprocity and credible commitment based on mutual interest.

Guanxi a term denoting close networks has been behind informal credit markets supplying start-up capital to Chinese entrepreneurs the world over. Again, no formal agreements eforceable through the courts operates here. Trade and credit has been made possible through closely linked networks built on family and kin relations or reciprocal relationships based on one’s honor and reputation.

From trust to contracts

The West took a very different more protracted route. After the conversion of Germanic tribes to Christianity in the sixth century, the church promoted changes to interlocking marriages based on kinship. This tended to weaken in the long-run political and economic ties based on kin selection. They moved away from trust to contracts through the centuries.

In the twelfth century the English common law administered by the king’s court to which subjects could appeal the decisions of local lords established a system known as “the rule of law” to which eventually even the monarch was made subject by the nobles who feared expropriation by the state. Contracts became enforceable and property rights made more secure without the need for personal connections or networks.

Across the English Channel, the Dutch established the first stock exchange in the early seventeenth century. This made corporate management distinct from its owners and spread risk through tradable certificates lowering their average exposure and leading firms (such as the Dutch East India Company) to be less conservative in business expansion. Capital-raising went through an impersonal market rather than through personal networks.

Management in the West tended to be more individualistic than consensual motivated by incentives rather than trust. Short-term, risk-taking behavior leading to rich rewards and bonuses became more prevalent. Maintaining reputation continued to be important, but only in terms of improving one’s value in the impersonal labor market rather than protecting one’s “word of honor” within a tightly knit community.

Where to begin?

The Philippines is obviously stuck in transition. Many formal institutions have been transplanted from the West, but they remain weak and porous to the tyranny of cousins. It has been difficult for a strong central state to emerge where one’s loyalty to the country ends where one’s loyalty to one’s family begins. The thick network of kumpadres, kamag-anak, and kaibigan (now augmented by kaklase, kabarkada and kabarilan) makes it difficulty to determine where to even begin the reform process.

Getting to Denmark” is the problem to be grappled with: how to emulate Scandinavia which has the highest levels of human development and cleanest governments in the world. It almost sounds tautological. In order to gain the living standards of the West, we need to adopt their political and economic institutions including a strong state, rule of law and democratic accountability. If our society had the means to create and maintain such institutions, it wouldn’t be poor to begin with.

Earlier in a separate post, I commented on the preponderance of avowed bachelors or males with no offspring holding sensitive posts in the current government, the president being one of them. This harks back to the time of Mamluks, Jannisaries and Imperial Chinese eunuchs. This is purely coincidental and fleeting in the broad scheme of things.

Prescribing Western-style political institutions again might have its pitfalls. Public finance of parties does not necessarily weaken the influence of campaign donors even in the US where it is practiced. It might dampen but not eliminate it. And, at any rate, the need for donors features more at the national level. At the local level, political and economic dynasties are one and the same.

A majority of seats in Congress is dominated by dynasties including within the president’s Liberal Party (albeit by a smaller majority). Rather than decoupling the political from the economic classes or dismantling dynasties, shouldn’t we like Japan, Korea and Taiwan find a way to make this coupling work for our country by directing it to more productive ventures?

Yes, we can

The problem is not reform incapacity by our leaders. I would argue that under Mrs Aquino, the state exhibited a considerable degree of efficacy in achieving substantial economic reforms under difficult situations. From tax reform to foreign investments deregulation, flexible currency exchange to trade liberalization, wage decentralization to monetary independence, privatization to democratization, the list is quite impressive from a Western perspective.

The problem was that the agenda was perhaps too comprehensive instead of building one reform on the proven success of another. We shouldn’t blame Mrs Aquino for this. Her government was put in an institutional strait jacket by the IMF which today is imposing a heavy burden on some weak European countries. What EDSA-I demonstrated is that the country can achieve a consensus over a broad set of reforms and pursue it diligently.

The difficulty of governing in the shadow of one so revered as Mrs Aquino is much like the dilemma faced by the successor to Apple’s visionary CEO Steve Jobs. His mission now is not to “stuff up” the legacy. The overly cautious approach this breeds could prevent the sort of imaginative thinking that led to success in the first place.

East Asia didn’t buy into the comprehensive reform package that international donors, aid agencies and multilateral organizations were foisting on them. It opted to target areas that were more appropriate for its needs and developed its own recipe based on local ingredients. It caught up with Western living standards and then reformed some of its earlier idiosyncratic institutions which had by then become less useful.

Rather than applying the “second generation” reforms of the augmented Washington Consensus, following the “first generation” reforms tackled by Aquino I, the policymakers in advising Aquino II need to escape the poverty of ideas this represents. They should develop imaginative arrangements that will immediately unlock the productive capacity of our country. Only then can the son escape another sort of tyranny that seems to be afflicting us…the tyranny of low expectations.

Guanxi diagram courtesy of: China Australia consult

TEPCO release images from inside Fukushima Nuclear plant

Tokyo Electric Power Company (TEPCO) released images from inside their stricken Fukushima Daiichi Nuclear power plant, NHK revealed.

“This photo of the first floor of the No.3 reactor building shows a sheet-like object hanging from the ceiling and what appears to be equipment for moving the control rods. TEPCO says it cannot identify whether there are any pools of water on the floor.

The bright area at the innermost part of the building is an entrance for vehicles to bring in large machinery and materials.”

Fukushima Daiichi nuclear power plant suffered heavy damage following a massive 9.0 magnitude Earthquake, and tsunami that struck Northeastern Japan in early March 2011. The International Atomic Agency rated the catastrophe at Fukushima as a Level 7 on its Nuclear Event Scale, the highest level, and describes it as a major accident.

Taming Chaos with a Personal Plan

By Scott Stewart

Over the past week we’ve seen a massive earthquake and tsunami in Japan that caused a nuclear accident, the Saudis sending troops into Bahrain to quell civil unrest there and the government of Yemen taking measures to expel foreign media as protests have swelled against Yemeni President Ali Abdullah Saleh.

We have also recently seen large-scale evacuations of expatriates from Tunisia, Egypt and Libya, and it is not unreasonable to assume that we might see a similar exodus from Bahrain and Yemen if developments in those countries deteriorate. Moreover, in Japan, the risk of radiation and conditions that are not yet under control at the Fukushima Daiichi nuclear power plant could force further evacuations there.

In light of this uncertain environment, STRATFOR thought it prudent to address once again the topic of personal contingency planning. Indeed, we also made this topic the subject of this week’s  Above the Tearline video. While we have often discussed this topic in relation to terrorist attacks, its principles are also readily applicable to crises caused by natural disaster, war and civil unrest. When a crisis erupts, having an established personal contingency plan provides people with a head start and a set of tools that can help them avoid, or at least mitigate, the effects of the chaos and panic that accompany crisis events.

 

When Chaos Reigns

When a crisis erupts due to civil unrest, natural disaster or a major terrorist attack, a number of things happen rapidly and sometimes simultaneously. First, panic ensues as people attempt to flee the immediate scene of the disaster, usually seeking safety using the same escape routes. At the same time, police, fire and emergency medical units all attempt to respond to the scene, so there can be terrible traffic and pedestrian crowd-control problems. In the event of large civil disturbances, roads can also be clogged with protesters, troops and panicked civilians. This can be magnified by smoke and fire, which can reduce visibility, affect breathing and increase panic.

In many instances, an attack or natural disaster will cause damage to electrical lines, or the electricity will be cut off as a precautionary measure. Natural gas, water and sewer lines can be damaged, causing leaks, and in the case of natural gas lines raising the threat of explosions and fire. Earthquakes and mudslides can cut roads and shut down mass transit. Often, people find themselves trapped in subway tunnels or in high-rise buildings, and they are sometimes forced to escape through smoke-filled tunnels or stairwells. Depending on the incident, bridges, tunnels, subway lines and airports can be closed or jammed to a standstill. Grocery stores are frequently inundated by people scrambling (and sometimes fighting) to obtain food and supplies.

In the midst of this confusion and panic, telephone and cell-phone usage soars. Even if the main trunk lines and cell towers are not damaged by the event or otherwise affected by the loss of electricity, this huge spike in activity quickly overloads the exchanges and cell networks. This means the ripples of chaos and disruption roll outward from the scene of the crisis as people outside the immediate vicinity of the crisis zone hear about the situation via the media and wonder what has become of loved ones who were in or near the crisis zone.

 

The Need to Plan

Those caught in close proximity to such a disaster site have the best chance of escaping and reconnecting with loved ones if they have a personal contingency plan. While such planning is critically important for people who live and work overseas in high-threat locations, recent events have demonstrated that even people residing in places considered safe, like Cairo and Tokyo, can be caught in the vortex of a crisis. Taking this one step farther, sudden disasters, such as tornadoes, earthquakes, school shootings or the derailment of train cars carrying chlorine, can strike almost anywhere. This means that everyone should have a personal contingency plan.

Emergency plans are vital not only for corporations and for schools but also for families and individuals. Such plans should be in place for each regular location — home, work and school — that an individual frequents and should cover what that person will do and where he or she will go should an evacuation be necessary. This means establishing meeting points for family members who might be split up — and backup points in case the first or second point also is affected by the disaster.

When school-aged children are involved, parents need to take the time to coordinate with the school to learn what the school’s crisis plans are so any measures the school employs can be accounted for during the planning process. A crisis plan should also account for any pets a family may have.

The lack of ability to communicate with loved ones because of circuit overload or other phone-service problems can greatly enhance the sense of panic during a crisis — especially in this age, when people are so dependent on almost-constant communications via the ubiquitous smart phone. Perhaps one of the foremost benefits of having personal and family contingency plans in place is the reduction of stress that results from not being able to contact a loved one immediately. Knowing that everyone is following the plan frees each person to concentrate on the more pressing challenges presented by their personal evacuation. This is critical because someone who waits until he or she has contacted all loved ones before evacuating might not make it out.

It also is important to have a communications plan, which should include the contact information for the designated rallying site as well as an alternate communications hub outside of the area. It might be difficult to communicate from point A to point B, but someone at point A or B might be able to get through to a person at point C. For example, it may be impossible to call from Tripoli to New York, but both parties may be able to call through to Rome.

Alternative means of communication also should be included in the communications plan. If the phone lines and cell phones are clogged, many times text messages can still get through and Internet connections may work to send e-mail. Satellite telephones, though expensive, are also very useful in a communications blackout, as are two-way radios. Analog fax lines can also prove useful when other forms of communication are shut down.

People who are going to serve as communications hubs need to be briefed on the evacuation plan and have contact information (landline and cell phone numbers, e-mail addresses, etc.) for each person who will be participating in the evacuation. The communications hub should also be provided with important personal data on each person, including full name, date of birth, passport numbers, etc. The communications plan also will be helpful in case one member of the family is unable to evacuate immediately or finds it unwise to evacuate at all. In that case, he or she will know where the rest of the family is going and how to contact them once communications are restored.

Planning is important because, when confronted with a dire situation, many people simply do not know what to do or where to start. It is not unusual to find people wandering aimlessly at the scene of a disaster. Not having determined their options in advance — and in state of shock over the events of the day — people quite often find themselves unable to think clearly enough to establish a logical plan, so they just drift around or collapse in helplessness. Having a plan in place gives even a person who is in shock or denial and unable to think clearly a framework to lean on and a path to follow.

 

Evacuating

One of the keys to surviving a catastrophe is situational awareness. Situational awareness allows people to recognizing a potential threat at an early stage and take measures to avoid it. Situational awareness also helps people know where to go when an unforeseen disaster strikes. For example, if the airport is closed by the crisis, situational awareness enables one to understand the alternate means of leaving the country, and if a bridge is damaged on an alternative land route, you can locate another way out. Being aware of the layouts of your residence and workplace is also critical. If an office building is hit by an incident of workplace violence or catches fire, people with a plan will know where the fire exits are and where they lead. Situational awareness will then help them realize when an exit could lead them out of the frying pan and into the fire.

Situational awareness also aids in reacting to a dangerous situation while on the move. If a subway tunnel is filling with smoke from a fire or bombing, situational awareness tells one to keep low in order to avoid being overcome by smoke. Better still, proper preparation can lead people to carry important items such as a smoke hood that can be worn to protect against smoke and a flashlight to help navigate a dark place like a tunnel.

For individuals who work in high-rise buildings, frequently travel or routinely take a commuter train or subway, these two items can greatly assist you if the need to evacuate arises. Smoke hoods are relatively inexpensive devices that can be carried in a briefcase or purse and quickly donned in case of emergency. They will usually provide around 20 to 30 minutes of breathing time, which could quite literally mean the difference between life and death in a smoke-filled hallway, stairway or subway tunnel. Likewise, a small flashlight could prove to be invaluable in a crisis situation at night or when the power goes out in a large building or subway. Some of the small aluminum flashlights can also double as a handy self-defense weapon.

Of course, in some situations, evacuation might not be the best idea. If there is no immediate threat at a specific location, it may be more dangerous to join a crowd of panicked people on the street. In some cases, it might be safest to just stay in place and wait for order to return — especially if the shelter is stocked with food, water and other basic necessities. Situational awareness will allow you to make the call on whether to stay or go.

As part of a contingency plan, it is also prudent to prepare a small “fly-away” kit containing clothes, water, a first-aid kit, nutritional bars, medications and toiletry items for each member of the family. It also is a good idea to include a battery-powered or crank-powered radio and other items such as appropriate maps, multi-tool knives and duct tape. An appropriate amount of cash can also prove quite useful. The kit should be kept in a convenient place, ready to grab on the way out. Even if it is impractical to keep all these items in constant readiness, keeping most of them together and using a prepared list to collect the other items quickly can help get one out the door in seconds. Maintaining important papers, such as vehicle titles, deeds, licenses, birth certificates, passports and credit card information, in a central file allows it to be quickly retrieved in case of an evacuation. Of course, passports are of vital importance in an overseas situation.

Another important part of situational awareness is having the means to receive instructions and information from the authorities. In addition to radio and television, many locations have emergency text and e-mail alert systems that can provide critical information. Overseas, embassies also maintain networks for disseminating information to expatriates such as the U.S. Department of State’s warden system. Individuals should register for such services and ensure they know how information is disseminated before the crisis hits and results in communication disruptions.

When it comes to information pertaining to emergency plans and fly-away kits, the U.S. Federal Emergency Management Administration’s ready.gov site is an excellent resource. For people residing overseas, the U.S. Department of State’s travel information site and the Overseas Security Advisory Council are also valuable resources filled with helpful information.

Now, while it is important to listen to authorities in the case of an emergency, individuals cannot rely on the government to take care of them in every situation because the resources simply may not be available. This means that individuals must have a plan in place designed to take care of themselves and their families.

 

Flexibility Required

In order to be effective, an emergency plan must be fluid and flexible. It is important to recognize that even a good plan can be worthless if reactive measures taken by authorities during an emergency impede execution of the plan, or if the catastrophe itself closes down the airport or a section of a primary escape route. For these reasons, it is best to have several alternate contingency plans that account for multiple scenarios and include various routes and modes of evacuation. Once the emergency is announced, it likely is too late to start devising a back-up plan.

Plans must be also reviewed periodically, at least once a year. A plan made following 9/11 might no longer be valid. Bridges and roads included in the original plan might be closed for construction at the present time or could have been changed to a one-way traffic pattern. Communication plans may also need to be updated if family members move or change telephone numbers.

The contents of fly-away kits should be checked periodically to ensure the kits are functional. Flashlight and radio batteries can lose their charge and need to be replaced. Items such as smoke hoods can become damaged by being carried around in a purse or briefcase for too many years. Food can become stale and inedible. Medications can expire. Children can grow and require different sizes of clothing.

Finally, while having a contingency plan on paper is better than having nothing, those plans that are tested in the real world prove to be far superior to plans that are never tested. Running through an evacuation plan (especially during a high-traffic time such as rush hour) will help to identify weaknesses that will not appear on paper. It also will help ensure that all those involved know what they are supposed to do and where they are supposed to go. A plan is of limited use if half of the people it is designed for do not understand their respective roles and responsibilities.

No plan is perfect, and chances are that individuals will find themselves “shifting on the fly” as conditions on the ground change in the event of an actual emergency. However, having a plan and being prepared allows a person to be more focused and less panicked and confused than those who have left their fate to chance.
Taming Chaos with a Personal Plan is republished with permission of STRATFOR.”

Japan, the Persian Gulf and Energy

y George Friedman

Over the past week, everything seemed to converge on energy. The unrest in the Persian Gulf raised the specter of the disruption of oil supplies to the rest of the world, and an earthquake in Japan knocked out a string of nuclear reactors with potentially devastating effect. Japan depends on nuclear energy and it depends on the Persian Gulf, which is where it gets most of its oil. It was, therefore, a profoundly bad week for Japan, not only because of the extensive damage and human suffering but also because Japan was being shown that it can’t readily escape the realities of geography.

Japan is the world’s third-largest economy, a bit behind China now. It is also the third-largest industrial economy, behind only the United States and China. Japan’s problem is that its enormous industrial plant is built in a country almost totally devoid of mineral resources. It must import virtually all of the metals and energy that it uses to manufacture industrial products. It maintains stockpiles, but should those stockpiles be depleted and no new imports arrive, Japan stops being an industrial power.

 

The Geography of Oil

 

There are multiple sources for many of the metals Japan imports, so that if supplies stop flowing from one place it can get them from other places. The geography of oil is more limited. In order to access the amount of oil Japan needs, the only place to get it is the Persian Gulf. There are other places to get some of what Japan needs, but it cannot do without the Persian Gulf for its oil.

This past week, we saw that this was a potentially vulnerable source. The unrest that swept the western littoral of the Arabian Peninsula and the ongoing tension between the Saudis and Iranians, as well as the tension between Iran and the United States, raised the possibility of disruptions. The geography of the Persian Gulf is extraordinary. It is a narrow body of water opening into a narrow channel through the Strait of Hormuz. Any diminution of the flow from any source in the region, let alone the complete closure of the Strait of Hormuz, would have profound implications for the global economy.

For Japan it could mean more than higher prices. It could mean being unable to secure the amount of oil needed at any price. The movement of tankers, the limits on port facilities and long-term contracts that commit oil to other places could make it impossible for Japan to physically secure the oil it needs to run its industrial plant. On an extended basis, this would draw down reserves and constrain Japan’s economy dramatically. And, obviously, when the world’s third-largest industrial plant drastically slows, the impact on the global supply chain is both dramatic and complex.

In 1973, the Arab countries imposed an oil embargo on the world. Japan, entirely dependent on imported oil, was hit not only by high prices but also by the fact that it could not obtain enough fuel to keep going. While the embargo lasted only five months, the oil shock, as the Japanese called it, threatened Japan’s industrial capability and shocked it into remembering its vulnerability. Japan relied on the United States to guarantee its oil supplies. The realization that the United States couldn’t guarantee those supplies created a political crisis parallel to the economic one. It is one reason the Japanese are hypersensitive to events in the Persian Gulf and to the security of the supply lines running out of the region.

Regardless of other supplies, Japan will always import nearly 100 percent of its oil from other countries. If it cuts its consumption by 90 percent, it still imports nearly 100 percent of its oil. And to the extent that the Japanese economy requires oil — which it does — it is highly vulnerable to events in the Persian Gulf.

It is to mitigate the risk of oil dependency — which cannot be eliminated altogether by any means — that Japan employs two alternative fuels: It is the world’s largest importer of seaborne coal, and it has become the third-largest producer of electricity from nuclear reactors, ranking after the United States and France in total amount produced. One-third of its electricity production comes from nuclear power plants. Nuclear power was critical to both Japan’s industrial and national security strategy. It did not make Japan self-sufficient, since it needed to import coal and nuclear fuel, but access to these resources made it dependent on countries like Australia, which does not have choke points like Hormuz.

It is in this context that we need to understand the Japanese prime minister’s statement that Japan was facing its worst crisis since World War II. First, the earthquake and the resulting damage to several of Japan’s nuclear reactors created a long-term regional energy shortage in Japan that, along with the other damage caused by the earthquake, would certainly affect the economy. But the events in the Persian Gulf also raised the 1973 nightmare scenario for the Japanese. Depending how events evolved, the Japanese pipeline from the Persian Gulf could be threatened in a way that it had not been since 1973. Combined with the failure of several nuclear reactors, the Japanese economy is at risk.

The comparison with World War II was apt since it also began, in a way, with an energy crisis. The Japanese had invaded China, and after the fall of the Netherlands (which controlled today’s Indonesia) and France (which controlled Indochina), Japan was concerned about agreements with France and the Netherlands continuing to be honored. Indochina supplied Japan with tin and rubber, among other raw materials. The Netherlands East Indies supplied oil. When the Japanese invaded Indochina, the United States both cut off oil shipments from the United States and started buying up oil from the Netherlands East Indies to keep Japan from getting it. The Japanese were faced with the collapse of their economy or war with the United States. They chose Pearl Harbor.

Today’s situation is in no way comparable to what happened in 1941 except for the core geopolitical reality. Japan is dependent on imports of raw materials and particularly oil. Anything that interferes with the flow of oil creates a crisis in Japan. Anything that risks a cutoff makes Japan uneasy. Add an earthquake destroying part of its energy-producing plant and you force Japan into a profound internal crisis. However, it is essential to understand what energy has meant to Japan historically — miscalculation about it led to national disaster and access to it remains Japan’s psychological as well as physical pivot.

 

Japan’s Nuclear Safety Net

 

Japan is still struggling with the consequences of its economic meltdown in the early 1990s. Rapid growth with low rates of return on capital created a massive financial crisis. Rather than allow a recession to force a wave of bankruptcies and unemployment, the Japanese sought to maintain their tradition of lifetime employment. To do that Japan had to keep interest rates extremely low and accept little or no economic growth. It achieved its goal, relatively low unemployment, but at the cost of a large debt burden and a long-term sluggish economy.

The Japanese were beginning to struggle with the question of what would come after a generation of economic stagnation and full employment. They had clearly not yet defined a path, although there was some recognition that a generation’s economic reality could not sustain itself. The changes that Japan would face were going to be wrenching, and even under the best of circumstances, they would be politically difficult to manage. Suddenly, Japan is not facing the best of circumstances.

It is not yet clear how devastating the nuclear-reactor damage will prove to be, but the situation appears to be worsening. What is clear is that the potential crisis in the Persian Gulf, the loss of nuclear reactors and the rising radiation levels will undermine the confidence of the Japanese. Beyond the human toll, these reactors were Japan’s hedge against an unpredictable world. They gave it control of a substantial amount of its energy production. Even if the Japanese still had to import coal and oil, there at least a part of their energy structure was largely under their own control and secure. Japan’s nuclear power sector seemed invulnerable, which no other part of its energy infrastructure was. For Japan, a country that went to war with the United States over energy in 1941 and was devastated as a result, this was no small thing. Japan had a safety net.

The safety net was psychological as much as anything. The destruction of a series of nuclear reactors not only creates energy shortages and fear of radiation; it also drives home the profound and very real vulnerability underlying all of Japan’s success. Japan does not control the source of its oil, it does not control the sea lanes over which coal and other minerals travel, and it cannot be certain that its nuclear reactors will not suddenly be destroyed. To the extent that economics and politics are psychological, this is a huge blow. Japan lives in constant danger, both from nature and from geopolitics. What the earthquake drove home was just how profound and how dangerous Japan’s world is. It is difficult to imagine another industrial economy as inherently insecure as Japan’s. The earthquake will impose many economic constraints on Japan that will significantly complicate its emergence from its post-boom economy, but one important question is the impact on the political system. Since World War II, Japan has coped with its vulnerability by avoiding international entanglements and relying on its relationship with the United States. It sometimes wondered whether the United States, with its sometimes-unpredictable military operations, was more of a danger than a guarantor, but its policy remained intact.

It is not the loss of the reactors that will shake Japan the most but the loss of the certainty that the reactors were their path to some degree of safety, along with the added burden on the economy. The question is how the political system will respond. In dealing with the Persian Gulf, will Japan continue to follow the American lead or will it decide to take a greater degree of control and follow its own path? The likelihood is that a shaken self-confidence will make Japan more cautious and even more vulnerable. But it is interesting to look at Japanese history and realize that sometimes, and not always predictably, Japan takes insecurity as a goad to self-assertion.

This was no ordinary earthquake in magnitude or in the potential impact on Japan’s view of the world. The earthquake shook a lot of pieces loose, not the least of which were in the Japanese psyche. Japan has tried to convince itself that it had provided a measure of security with nuclear plants and an alliance with the United States. Given the earthquake and situation in the Persian Gulf, recalculation is in order. But Japan is a country that has avoided recalculation for a long time. The question now is whether the extraordinary vulnerability exposed by the quake will be powerful enough to shake Japan into recalculating its long-standing political system.

Japan, the Persian Gulf and Energy is republished with permission of STRATFOR.

The Sendai Earthquake and Tsunami / The 3rd Chinese View on Aquino and the Philippines

I would like to express my most sincere sympathies, condolence, and solidarity to the great loss, devastation, and suffering that befell Japan following Friday’s magnitude 8.9 earthquake and ensuing tsunami that struck several northeastern Japanese prefectures. As I’m writing this article, CCTV News (China) reported that there have been about 1,000 deaths, 10,000 people missing in six prefectures, 190 people exposed to radioactive materials following the meltdown of nuclear power plants, and millions of people displaced and affected. I never thought that I would see again in my lifetime such an enormous wrath of nature would hit Japan since the terrifying 1995 Kobe earthquake which claimed 6,434 lives.

The international community is in solidarity with the unprecedented natural disaster that struck Japan. Several government leaders from the European Union, United States, United Kingdom, South Korea, China, and the Philippines have expressed that Japan is not alone in its national grief. The Japanese government who has a record of deferring foreign aid in times of natural disasters just like in the case of the 1995 Kobe earthquake have for the first time allowed foreign assistance especially from China.

Amid the great grief hovering over Japan, I thank God there were no reported Filipino and Chinese casualties or injuries. I’m relieved as well to know that my Japanese friends and their families living in Japan were not affected. My Japanese friend from Yokosuka told me that though her prefecture was not badly hit by the earthquake and tsunami they felt strong tremors and that their electric and telephone lines were cut.

May the people and government of Japan and its people recover soon from the enormous damage, loss, and suffering the Sendai earthquake and tsunami have inflicted upon them. May God forbid that the Big One would hit China again just like what happened in Wenchuan in 2008. May God spare the Philippines from the Big One even as Japanese scientists have concluded several years ago that Metro Manila is sitting in one of the world’s most volatile seismic fault lines.

The 3rd Chinese View on Aquino & the Philippines

Because of the strong affinity Singapore has with both China (PROC) and Taiwan (ROC) many diplomats have dubbed the tiny yet prosperous Southeast Asian country as the “third Chinese state” and just like China and Taiwan, Singapore has a rich relationship with the Philippines ranging from people-to-people interaction, sports and education, commerce and trade, and formal diplomatic ties. Singapore is currently the 10th largest trading partner and a major export market of of the Philippines.

Last year Singapore and the Philippines marked its 40th year of diplomatic relations. To commemorate the anniversary of diplomatic relations between the two countries, both governments released a set of collector’s item post stamps featuring significant bridges in Singapore and the Philippines. The theme, ‘Bridges’ was chosen to signify the strong, multi-faceted ties between both countries.

For old generation Singaporeans, their first impression with Filipinos was quiet impressive. In 1960’s Filipino professionals who are mostly American-educated would usually go to Singapore to impart to Singaporeans corporate best practices and management. In 1980’s up until late 1990’s the image of Filipinos in Singapore has dramatically shifted from the brown-skinned English speaking professionals to the naïve-looking domestic helpers. The sensational case of Flor Contemplacion in 1995 has cemented the image of Filipinos in Singapore in the 90’s era as nannies. These past several years, the image of Filipinos in Singapore has changed again. Now, Filipinos in Singapore are not merely known as domestic helpers but professionals, corporate managers, teachers, and engineers who have helped tremendously in propelling the economy of the city-state.

Last week, Philippine President Benigno Aquino II visited Singapore to further the diplomatic and economic ties between the two countries and surprise of all surprises the Philippine president had encountered an unexpected even on his first day in Singapore that would impress upon the Singaporean people what kind of attitude the Philippine leader has. Ben Nadarajan of the Singapore-based Straits Times wrote:

“PHILIPPINE President Benigno Aquino had an eventful first day in Singapore –  having to climb 20 flights of stairs after a lift broke down.  His first stop after arriving from Jakarta was the Changi Water Reclamation Plant in Tanah Merah. The 51-year-old was shown the facility by senior executives of national water agency PUB, and was accompanied by members of his delegation as well as Minister in the Prime Minister’s Office Lim Swee Say.

The tour included going 60m underground to view some used-water pumps. But as the group prepared to head back up, the only lift broke down – the first time this has happened since the plant opened more than two years ago. Technicians scurried to get it working again but after 20 minutes, Mr Aquino removed his jacket, loosened his tie and took to the stairs. Accompanied by Mr Lim, he remained in good spirits, taking short breaks along the way. An aide said Mr Aquino had a slight cough.

Members of his delegation helped keep the mood buoyant, with one Cabinet secretary quipping: ‘We’re okay, Mr President, we’ll follow you anywhere you go.’ Reaching the top after a 10-minute climb, Mr Aquino was given a towel and some water, along with apologies from Mr Lim and PUB executives. His reply: ‘No problem at all.'”

I’ve read from Singaporean dailies that many Singaporeans were impressed by the humility shown by the Philippine president. A Chinese whom I’ve spoken with said “The Philippine president showed greatness by showing humility”. Online forum members of the Singapore-based Channel News Asia have made the following reactions following the embarrassing incident: “I think this shows very well on President Aquino.”, “By climbing the stairs, Philipines President has proven himself to be faster, better and cheaper than our president and ministers”, “As an as apology, Singapore must offer 5,000 more jobs to Pinoys”, “Why did they have to report it in the front page? It’s not very flattering for the host to have to make the guest do this.”,  “Better make sure there is no power black out during the State Dinner tonight.”, “This was embarrassing and a disgrace! It would open up to all sorts of speculation back in Philippines.”, “A classic “third world” incident in what we call as a “first world” country.”, “If MM Lee Kwan Yew is trapped below, I am sure they will carry him up”, “All I can say is that it is fortunate that LKY was not in the helm now, otherwise heads will roll”

Speaking of Singaporean’s impression on President Aquino, Former Prime Minister Lee Kwan Yew on his memoir “From Third World to First” has made a penetrating insight on the Philippines-  its presidents, culture, and political system. For my reader’s pleasure, below is the complete text of Lee Kwan Yew’s view on the Philippines.

“The Philippines was a world apart from us, running a different style of politics and government under an American military umbrella. It was not until January 1974 that I visited President Marcos in Manila. When my Singapore Airlines plane flew into Philippine airspace, a small squadron of Philippine Air Force jet fighters escorted it to Manila Airport. There Marcos received me in great style – the Filipino way. I was put up at the guest wing of Malacañang Palace in lavishly furnished rooms, valuable objects of art bought in Europe strewn all over. Our hosts were gracious, extravagant in hospitality, flamboyant. Over a thousand miles of water separated us. There was no friction and little trade. We played golf, talked about the future of ASEAN, and promised to keep in touch.

His foreign minister, Carlos P. Romulo, was a small man of about five feet some 20 years my senior, with a ready wit and a self-deprecating manner about his size and other limitations. Romulo had a good sense of humor, an eloquent tongue, and a sharp pen, and was an excellent dinner companion because he was a wonderful raconteur, with a vast repertoire of anecdotes and witticisms. He did not hide his great admiration for the Americans. One of his favourite stories was about his return to the Philippines with General MacArthur. As MacArthur waded ashore at Leyte, the water reached his knees but came up to Romulo’s chest and he had to swim ashore. His good standing with ASEAN leaders and with Americans increased the prestige of the Marcos administration. Marcos had in Romulo a man of honor and integrity who helped give a gloss of respectability to his regime as it fell into disrepute in the 1980s.

In Bali in 1976, at the first ASEAN summit held after the fall of Saigon, I found Marcos keen to push for greater economic cooperation in ASEAN. But we could not go faster than the others. To set the pace, Marcos and I agreed to implement a bilateral Philippines-Singapore across-the-board 10 percent reduction of existing tariffs on all products and to promote intra-ASEAN trade. We also agreed to lay a Philippines-Singapore submarine cable. I was to discover that for him, the communiqué was the accomplishment itself; its implementation was secondary, an extra to be discussed at another conference.

We met every two to three years. He once took me on a tour of his library at Malacañang, its shelves filled with bound volumes of newspapers reporting his activities over the years since he first stood for elections. There were encyclopedia-size volumes on the history and culture of the Philippines with his name as the author. His campaign medals as an anti-Japanese guerrilla leader were displayed in glass cupboards. He was the undisputed boss of all Filipinos. Imelda, his wife, had a penchant for luxury and opulence. When they visited Singapore before the Bali summit they came in stye in two DC8’s, his and hers.

Marcos did not consider China a threat for the immediate future, unlike Japan. He did not rule out the possibility of an aggressive Japan, if circumstances changed. He had memories of the horrors the Imperial Army had inflicted on Manila. We had strongly divergent views on the Vietnamese invasion and occupation of Cambodia. While he, pro forma, condemned the Vietnamese occupation, he did not consider it a danger to the Philippines. There was the South China Sea separating them and the American navy guaranteed their security. As a result, Marcos was not active on the Cambodian question. Moreover, he was to become preoccupied with the deteriorating security in his country.

Marcos, ruling under martial law, had detained opposition leader Benigno (Ninoy) Aquino, reputed to be as charismatic and powerful a campaigner as he was. He freed Aquino and allowed him to go to the United States. As the economic situation in the Philippines deteriorated, Aquino announced his decision to return. Mrs. Marcos issued several veiled warnings. When the plane arrived at Manila Airport from Taipei in August 1983, he was shot as he descended from the aircraft. A whole posse of foreign correspondents with television camera crews accompanying him on the aircraft was not enough protection.

International outrage over the killing resulted in foreign banks stopping all loans to the Philippines, which owed over US$25 billion and could not pay the interest due. This brought Marcos to the crunch. He sent his minister for trade and industry, Bobby Ongpin, to ask me for a loan of US$300-500 million to meet the interest payments. I looked him straight in the eye and said, “We will never see that money back.” Moreover, I added, everyone knew that Marcos was seriously ill and under constant medication for a wasting disease. What was needed was a strong, healthy leader, not more loans.

Shortly afterward, in February 1984, Marcos met me in Brunei at the sultanate’s independence celebrations. He had undergone a dramatic physical change. Although less puffy than he had appeared on television, his complexion was dark as if he had been out in the sun. He was breathing hard as he spoke, his voice was soft, eyes bleary, and hair thinning. He looked most unhealthy. An ambulance with all the necessary equipment and a team of Filipino doctors were on standby outside his guest bungalow. Marcos spent much of the time giving me a most improbable story of how Aquino had been shot.

As soon as all our aides left, I went straight to the point, that no bank was going to lend him any money. They wanted to know who was going to succeed him if anything were to happen to him; all the bankers could see that he no longer looked healthy. Singapore banks had lent US$8 billion of the US$25 billion owing. The hard fact was they were not likely to get repayment for some 20 years. He countered that it would be only eight years. I said the bankers wanted to see a strong leader in the Philippines who could restore stability, and the Americans hoped the election in May would throw up someone who could be such a leader. I asked whom he would nominate for the election. He said Prime Minister Cesar Virata. I was blunt. Virata was a nonstarter, a first-class administrator but no political leader; further, his most politically astute colleague, defense minister Juan Ponce Enrile, was out of favour. Marcos was silent, then he admitted that succession was the nub of the problem. If he could find a successor, there would be a solution. As I left, he said, “You are a true friend.” I did not understand him. It was a strange meeting.

With medical care, Marcos dragged on. Cesar Virata met me in Singapore in January the following year. He was completely guileless, a political innocent. He said that Mrs. Imelda Marcos was likely to be nominated as the presidential candidate. I asked how that could be when there were other weighty candidates, including Juan Ponce Enrile and Blas Ople, the labor minister. Virata replied it had to do with “flow of money; she would have more money than other candidates to pay for the votes needed for nomination by the party and to win the election. He added that if she were the candidate, the opposition would put up Mrs. Cory Aquino and work up the people’s feelings. He said the economy was going down with no political stability.

The denouement came in February 1986 when Marcos held presidential elections which he claimed he won. Cory Aquino, the opposition candidate, disputed this and launched a civil disobedience campaign. Defense Minister Juan Enrile defected and admitted election fraud had taken place, and the head of the Philippine constabulary, Lieutenant General Fidel Ramos, joined him. A massive show of “people power” in the streets of Manila led to a spectacular overthrow of a dictatorship. The final indignity was on 25 February 1986, when Marcos and his wife fled in U.S. Air Force helicopters from Malacañang Palace to Clark Air Base and were flown to Hawaii. This Hollywood-style melodrama could only have happened in the Philippines.

Mrs. Aquino was sworn in as president amid jubilation. I had hopes that this honest, God-fearing woman would help regain confidence for the Philippines and get the country back on track. I visited her that June, three months after the event. She was a sincere, devout Catholic who wanted to do her best for her country by carrying out what she believed her husband would have done had he been alive, namely, restore democracy to the Philippines. Democracy would then solve their economic and social problems. At dinner, Mrs. Aquino seated the chairman of the constitutional commission, Chief Justice Cecilia Muñoz-Palma, next to me. I asked the learned lady what lessons her commission had learned from the experience of the last 40 years since independence in 1946 would guide her in drafting the constitution. She answered without hesitation, “We will not have any reservations or limitations on our democracy. We must make sure that no dictator can ever emerge to subvert the constitution.” Was there no incompatibility of the American-type separation of powers with the culture and habits of the Filipino people that had caused problems before Marcos? Apparently none.

Endless attempted coups added to Mrs. Aquino’s problems. The army and the constabulary had been politicized. Before the ASEAN summit in December 1987, a coup was threatened. Without President Suharto’s firm support the summit would have been postponed and confidence in Aquino’s government undermined. The Philippine government agreed that the responsibility for security should be shared between them and the other ASEAN governments, in particular the Indonesian government. General Benny Moerdani, President Suharto’s trusted aide, took charge. He positioned an Indonesian warship in the middle of Manila Bay with helicopters and a commando team ready to rescue the ASEAN heads of government if there should be a coup attempt during the summit. I was included in their rescue plans. I wondered if such a rescue could work but decided to go along with the arrangements, hoping that the show of force would scare off the coup leaders. We were all confined to the Philippine Plaza Hotel by the seafront facing Manila Bay where we could see the Indonesian warship at anchor. The hotel was completely sealed off and guarded. The summit went off without any mishap. We all hoped that this show of united support for Mrs. Aquino’s government at a time when there were many attempts to destabilize it would calm the situation.

It made no difference. There were more coup attempts, discouraging investments badly needed to create jobs. This was a pity because they had so many able people, educated in the Philippines and the United States. Their workers were English-speaking, at least in Manila. There was no reason why the Philippines should not have been one of the more successful of the ASEAN countries. In the 1950s and 1960s, it was the most developed, because America had been generous in rehabilitating the country after the war. Something was missing, a gel to hold society together. The people at the top, the elite mestizos, had the same detached attitude to the native peasants as the mestizos in their haciendas in Latin America had toward their peons. They were two different societies: Those at the top lived a life of extreme luxury and comfort while the peasants scraped a living, and in the Philippines it was a hard living. They had no land but worked on sugar and coconut plantations. They had many children because the church discouraged birth control. The result was increasing poverty.

It was obvious that the Philippines would never take off unless there was substantial aid from the United States. George Shultz, the secretary of state, was sympathetic and wanted to help but made clear to me that the United States would be better able to do something if ASEAN showed support by making its contribution. The United States was reluctant to go it alone and adopt the Philippines as its special problem. Shultz wanted ASEAN to play a more prominent role to make it easier for the president to get the necessary votes in Congress. I persuaded Shultz to get the aid project off the ground in 1988, before President Reagan’s second term of office ended. He did. There were two meetings for a Multilateral Assistance Initiative (Philippines Assistance Programme): The first in Tokyo in 1989 brought US$3.5 billion in pledges, and the second in Hong Kong in 1991, under the Bush administration, yielded US$14 billion in pledges. But instability in the Philippines did not abate. This made donors hesitant and delayed the implementation of projects.

Mrs. Aquino’s successor, Fidel Ramos, whom she had backed, was more practical and established greater stability. In November 1992, I visited him. In a speech to the 18th Philippine Business Conference, I said, “I do not believe democracy necessarily leads to development. I believe what a country needs to develop is discipline more than democracy.” In private, President Ramos said he agreed with that British parliamentary-type constitutions worked better because the majority party in the legislature was also the government. . Publicly, Ramos had to differ. He knew well the difficulties of trying to govern with strict American-style separation of powers. The senate had already defeated Mrs. Aquino’s proposal to retain the American bases. The Philippines had a rambunctious press but it did not check corruption.

Individual press reporters could be bought, as could many judges. Something had gone seriously wrong. Millions of Filipino men and women had to leave their country for jobs abroad beneath their level of education. Filipino professionals whom we recruited to work in Singapore are as good as our own. Indeed, their architects, artists, and musicians are more artistic and creative than ours. Hundreds of thousands of them have left for Hawaii and for the American mainland. It is a problem the solution to which has not been made easier by the workings of a Philippine version of the American constitution.

The difference lies in the culture of the Filipino people. It is a soft, forgiving culture. Only in the Philippines could a leader like Ferdinand Marcos, who pillaged his country for over 20 years, still be considered for a national burial. Insignificant amounts of the loot have been recovered, yet his wife and children were allowed to return and engage in politics. They supported the winning presidential and congressional candidates with their considerable resources and reappeared in the political and social limelight after the 1998 election that returned President Joseph Estrada. General Fabian Ver, Marcos’s commander-in-chief who had been in charge of security when Aquino was assassinated, had fled the Philippines together with Marcos in 1986. When he died in Bangkok, the Estrada government gave the general military honors at his burial. One Filipino newspaper, Today, wrote on 22 November 1998, “Ver, Marcos and the rest of the official family plunged the country into two decades of lies, torture, and plunder. Over the next decade, Marcos’s cronies and immediate family would tiptoe back into the country, one by one – always to the public’s revulsion and disgust, though they showed that there was nothing that hidden money and thick hides could not withstand.” Some Filipinos write and speak with passion. If they could get their elite to share their sentiments and act, what could they not have achieved?”

Japan Fukushima Daiichi Nuclear Power Station meltdown

The Fukushima Daiichi Nuclear power station in quake and tsunami devastated Miyagi prefecture suffered a meltdown of the reactor core, Japan’s Nuclear and Industrial Safety Agency (NISA) announced. In a last ditched effort to avoid a full meltdown, the Japanese government ordered that seawater flood the reactor core to avoid a full meltdown.

The Japanese Nuclear and Industrial safety agency revealed that at least 160 people may have been exposed to radiation. Japanese officials also revealed that while no major health risk is anticipated, they have informed the International Atomic Energy Agency that they are distributing iodine to people living near Daiichi, as well as a second plant. Iodine would help protect thyroid gland from radiation exposure.

Flooding the plant with seawater means it is effectively scrapped. Fukushima Daiichi nuclear power station is almost 40 years old. The exact sequence of failures have not been explained.

NISA is the Japanese agency that reports to the Agency for Natural Resources and Energy, a branch of the Ministry of Economy, Trade and Industry. NISA works with the International Atomic Energy Agency, and provides oversight to Japan’s Nuclear industry. NISA have been criticized for approving nuclear plants near fault lines, and it was also NISA who issued the order to open valves to release pressure from the plant.

What to put in an earthquake survival kit

Last night, in the wake of the news surrounding the earthquake and tsunami in Japan, and with the realization that a Big One in Manila is imminent, my husband and I started discussing what we would put in our own earthquake survival kit.

Our initial list consisted of the following:

  • Phones and phone chargers
  • Laptops, laptop chargers, external hard drive that contains seven years’ worth of memories
  • Copies of important documents (birth and marriage certificates, passports)
  • Checkbook (just so it’s secure)
  • Flashlights and extra batteries
  • Changes of clothes and basic toilettries
  • Drinking water
  • Crackers and some canned goods
  • Alcohol and insect repellent
  • Paper, pens, Swiss knife and basic tools

We didn’t get to finish our list, but other online resources showed that following should also be included in an earthquake survival kit:

  • Can opener – Of course, to open the canned goods (Why didn’t I think of that?)
  • Money – Another “of course” (although I had already assumed that my wallet and organizers would be in my bag
  • First-aid kit
  • Blankets
  • Grill or camp stove
  • Fire extinguisher
  • Water should be at least three days’ worth
  • Water purification tablets
  • Wrench – To switch off water and gas supply at home
  • Disinfectant (like chlorine)
  • Heavy-duty gloves
  • Gas/dust mask
  • Trash bags
  • Portable (or solar-powered) radio
  • Photos of family members – in case people go missing and you need references to locate them

 

President Aquino's letter of condolence to Japan for Earthquake

Letter
of
His Excellency Benigno S. Aquino III
President of the Philippines
to
Japanese Prime Minister Naoto Kan

Expressing condolences for the Earthquake that struck Japan on March 11, 2011

[Dated March 11, 2011]

Excellency,

It is with great sadness that we learned of the massive earthquake and tsunami that devastated Japan a few hours ago, causing a great deal of loss and damages.

The Government of the Republic of the Philippines and the entire Filipino nation join me in expressing both our most profound condolences and sympathies, as well as our solidarity with Your Excellency and the people of Japan, as you strive to cope with this tragedy whose devastation, it pains us, are still unfolding.

As a close friend and neighbor, Japan has constantly stood by the Philippines, as we dealt with past tribulations wrought by nature. Our extensive and long-standing ties of friendship means that Japan is also home to a vast number of Filipinos, whose welfare also represents a paramount concern. During this difficult time, I assure Your Excellency that the Philippine Government stands ready, to extend any support and assistance within its capability, as Japan strives to cope with the aftermath of this tragic event.

Please accept, Excellency, the renewed assurances of my highest esteem and consideration.

(Sgd.) BENIGNO S. AQUINO III
President of the Republic of the Philippines

His Excellency
NAOTO KAN
Prime Minister
Japan

Source: gov.ph