Breakdown Leads to Systems Loss

There's a noticeable increase in crime rate over the past few weeks. This phenomenon validates an earlier PNP intel report which predicts a sharp rise in crime due to the food crisis. However, I do believe that things will turn from bad to worse given that oil prices are starting to get unreasonably high. A higher oil price means higher commodity prices. Higher commodity prices means greater impact on inflation, which affects overall economic growth.

In Indonesia, people are starting to rise up against high fuel and food costs. In some countries in Africa, riots have broken out. In the United States, a rise in property-related incidents have been observed.

Some would say, this is inevitable since the crisis has now reached global proportions. Local market reactions do reflect current global sentiments. However, compared with the handling of our neighbours, we pale considerably especially in food and energy security.

We have the resources and the wherewithal to weather this crisis. We were insulated from the Asian financial crisis during Ramos time. This time though, too much government inaction to fundamental flaws in the system have weakened our state considerably. Too much legislation but too little implementation have exposed us to these dangers. We now face the prospect of an economic breakdown of the entire state economic apparatus. This could lead to a systems loss.

Imagine a situation where people can't buy enough food because of low wages. I expect a widening gap between the rich and the poor. I expect a situation where more and more members of the middle class going down the social stratum due to high inflation.

More than ever, we need a strong government that promotes national welfare instead of a few aristocratic interests. We need a government that creates rather than destroy enterprises. We need a government with a strong political will that will fight the enemies of the state with the full force of the law.

Sadly, our system right now is a decrepit one. Its nature is that of a patronage system where the rich enjoys more privileges than the rest of Filipinos. Whatever other theorists might say, this system can be described as semi-capitalist with neo-feudalist tendencies. Aristocrats hold too much power, which affects the democratic processes.

There's a big chance that an implosion might occur in the immediate future. Implosion means internal forces gobbling up the state. This, surely, will result to a system-wide breakdown. If diesel prices reach 50 per liter leading to higher food costs, expect subtle yet dangerous forms of dissent showing up in the crime rate radar.

A Revolutionary Situation

What are the conditions that constitute a revolutionary situation? Applying chaos theory and studying Philippine history, we find that majority of revolts that occurred in the Philippines were caused by a sudden rise in food costs. Filipinos, a sociological study reveals, may tolerate political infractions or even some form of corruption. When faced with a prospect of hunger, which, we find to be not of our own making, but attributable to government, we revolt. We observe these during the Spanish, American and even in the Japanese occupation periods.

Second, Filipinos revolt when government exercises extreme unwarranted and irrational control over their lives. And third, we find Filipinos taking part in revolts when led by a figure or a group of personalities perceived to have been victims of injustices themselves.

Anyone who can put forward a swift solution to the crisis in food and gasoline affecting this country right now deserves the top post now or in 2010. What Filipinos need right now is their own version of a Lenin. The existing conditions are ripe for an outbreak of dissent. Why?

1. Most of us are angry or desperate because the start of classes is just around the corner.
2. High food prices are causing so much strain and problems even in middle class families.
3. Politicians seems to be the cause of the problem, most of the people believe.
4. Too much politicking is being perceived as causing all these problems.

Gloria is lucky that we don't have somebody right now who encapsulates a Pinoy Lenin. Otherwise, she's out.

Pressing Concerns of the Times

There's an interesting book which you, my friends, should read in the weekend. It's George Soros' book entitled, " The New Paradigm of Financial Markets". It's available on line, about 24 dollars for e-books. Soros explained why we are now facing the worst financial crisis of the century and how we will be able to avoid the effects of this.

I commend Gloria for her "tutok" policy in the Customs bureau. However, more than just a propaganda ploy, Gloria should immediately fire Morales. This will make us happier. It was obvious during the press con that there were violations of the Customs and Tariff Code made by his men. He should be fired immediately.

People should really go out in the streets now due to this food crisis. As for rice, there's an apparent attempt to really jack up the price of this cereal to an average of 25 pesos. Government propagandists are trying to justify this by further releasing statements about the crisis. I think this is the height of government apathy on the plight of the poor because they should not allow rice to break the 20 pesos per kilo barrier because as they said, the main issue is not stocks but price. If it's price, they should at least shoulder the burden of the price difference for the meantime because people nowadays lack the capacity to buy food.

Gloria should not be held hostage by these giant rice traders. By the way, 3 big-time traders were allegedly arrested in Isabela. GMA should parade them before the media. That would make my day.

Implications of RP Food Crisis

Government announced it has allocated P 43 billion to solve the food crisis. Economic adviser Joey Salceda warns that this food crisis is "worse than political" and it may last until 2010. His boss, Mrs. Arroyo quickly corrected Joey's statement to say that it's not a "food" crisis; rather, it's just a "rice price" crisis. Former NEDA secretary Diokno rebuked Mrs. Arroyo by saying that this crisis has put an enormous strain on the economy, which Catholic Bishops Conference of the Philippines (CBCP) attributed to a "governance crisis".

What has been gleaned so far, based on my readings on the issue is this:

1. There's really a global food crisis. Prices of commodities have risen to unaffordable levels. Peoples of non-industrialized countries are finding it extremely hard to buy their staple commodities. Explanations were given by various government and research institutions. There's an increase in demand which can't be solved by production. Global warming is said to have caused massive infrastructural and production damages. Rising prices of agricultural feeds & fertilizers, lack of irrigation systems and shortage of farmlands impact on production.

2. Personal incomes cannot support food prices. People line up at NFA warehouses because they can't afford buying commercial rice which has risen to astronomical proportions since government announced a rice shortage. Prior to this though, suppliers and traders of flour, cooking oil, lpg and meats already told government that they can't avoid raising their prices.

3. It is really a food crisis, not only a rice crisis. Mrs. Arroyo's claim that what's happening is not a food crisis is outright baloney. Bull. There's a food crisis, not because there's a lack of stocks. No. It's a crisis because people can't buy food. Simple. You don't need to be an economist to know that. You have a quarter of 90 million who are, right now, slowly dying because they can't eat enough food.

Prognosis

From that 90 million people, only 25 million have jobs. Philippine Chamber of Commerce and Industries president Sergio Ortiz says 70 percent of that figure belong to the informal sectors, meaning those who work menial jobs and are contractual. This sector are the ones being severely hit by this food crisis and should be given emergency assistance.

The remaining 30 percent endure the brunt of high prices. They have the capacity to buy but this is slowly being affected by high inflation.

Solution

On a short-term basis, government should immediately force food traders to take out their stocks from their warehouses. Based on reports, there are enough stocks to feed people, but unscrupulous traders are actually hiding them to force price increases. Government should arrest all of them and charge them and confiscate their stocks.

These stocks should be distributed in the market under controlled conditions. Meaning, DTI should effect price monitoring and regulate. Arrest and prosecute government officials who will be caught selling these stocks back to commercial traders and retailers.

RP Food and Power Crisis

I bought a new car last February. It's a diesel-powered vehicle. When I got it out from the casa, diesel prices were at 34 pesos per liter.

Now, look at the prices of diesel--4o pesos per liter. For a two month span, the price increased by about 5-6 pesos. Last night, I saw the price of unleaded gasoline--47 pesos per liter. I don't know how people are coping up with these injustices.

This unabated rise in fuel prices might have sparked a riot or something near to it if it happened in other countries. Here, nothing. Not even a whimper. None. Nada. Zilch.

I also did my grocery and the prices of vegetables remain very high, unusual since vegetable prices go up only in two (2) occasions--Christmas and Holy week. Now, vegetable prices are really very prohibitive.

Meat prices are also a revelation. Beef, my favorite ulam, is very high. Its between the price ranges of 250-350 pesos per kilo. Fish is also high.

You know, this is a direct assault to Mr. Palengke, who positioned himself as the penultimate consumer advocate. I remember an interview with Mr. Palengke and he knows the problem. He says the reason why prices of commodities remain very high is the machinations of middle-men. They are charging so much "bukol" to us that we, the consumers, can't buy a decent meal with our small income.

Mr. Palengke, be part of the solution.

But, you know who really should we blame for this mess? Its our weak government. This government is helpless. Why? Because it has a policy of pleasing everybody. Since it's always on survival mode, it can't really fight these middlemen for fears of them going to the other fence. There's really something wrong with our politics and we need to address this and fast!