Marami akong mga kakilala na nag-aanyaya sa akin sa mga lakaran, o kaya’y magbakasyon, o sa anumang aktibidad dahil holiday daw ang Mayo Uno. Totoo ngang idineklarang holiday ang Mayo Uno bawat taon pero hindi ibig sabihin nito na bakasyon na tayo. Holiday ang Mayo Uno dahil ginugunita natin ang isang araw bawat taon bilang Pandaigdigang Araw ng Paggawa.Hindi bakasyon ang Mayo Uno pagkat mahigit labinlimang taon ko nang ginugunita ang Mayo Uno kasama ang mga manggagawa, at hindi ako nagbabakasyon sa araw na ito dahil sa dami ng gawain ditto. Nakapagpapahinga o nakapagbabakasyon lamang ako, pati ang aking mga kasama, sa ibang araw maliban sa Mayo Uno, kung paanong abala rin kami sa iba pang holiday tulad ng Araw ni Gat Andres Bonifacio (Nobyembre 30) at Pandaigdigang Araw ng Kababaihan (Marso 8). Bilang pagkilala sa kababaihan sa malaking ambag nito sa lipunan, hindi lamang mga babae ang dapat gumunita nito kundi mga kalalakihan din, paggunita rin ito sa ating inang nagluwal sa atin. Ang holiday na nakapagbabakasyon lamang ako, at ng aking mga kasama, ay ang Hunyo 12, pagkat hindi kami naniniwalang ito’y tunay na kalayaan, kundi pekeng kalayaan ayon sa mga dokumento ng kasaysayan. Ayon sa Acta de Independencia na nilagdaan noong Hunyo 12, 1898, lumaya ang Pilipinas mula sa Kastila upang magpailalim sa “mighty and humaneAmerican nation”.Hindi bakasyon ang Mayo Uno pagkat halos isang buwan din naming pinaghahandaan ang birthday na ito ng mga manggagawa, na siyang gumagawa ng ekonomya ng bansa. Kung walang manggagawa, tatakbo ba ang mga pabrika, mabubusog ba ang mga mayayaman, tutubo ba ng limpak-limpak ang mga kapitalista, uunlad ba ang bansa. Mabubuhay ang lipunan kahit walang kapitalista ngunit hindi mabubuhay ang lipunan kung walang manggagawa.Hindi bakasyon ang Mayo Uno pagkat sa sagradong araw na ito para sa mga manggagawa ay inaalala natin ang mga sakripisyo ng mga martir na manggagawang namatay sa Haymarket Square sa Chicago, Illinois noong Mayo 4, 1886, (ang ikaapat na araw ng welga) para ipaglaban ang pagsasabatas ng walong oras na paggawa bawat araw. Noong Oktubre 1884, isang kumbensyon ang ginanap ng Federation of Organized Trades and Labor Unions (FOTLU) sa Amerika at Canada at napagpasyahang sa Mayo 1, 1886 ay isabatas ang walong oras na paggawa bawat araw. Noong panahong iyon, labindalawa hanggang labing-anim na oras ang paggawa bawat araw. Noong Mayo 1, 1886, isang malawakang welga sa buong Amerika ang isinagawa ng mga manggagawa bilang pagsuporta sa kahilingang walong oas na paggawa bawat araw. May 10,000 manggagawa ang nagrali sa New York; 11,000 sa Detroit; 10,000 sa Wisconsin, at 40,000 manggagawa sa Chicago na siyang sentro ng kilusang ito. May hiwalay pang welga sa Chicago ang may 10,000manggagawa sa kakahuyan, habang may 80,000 katao naman ang sumama sa welga sa Michigan Avenue. Ang tinatayang sumatotal ng lahat ng nagwelga ay nasa 300,000 hanggang kalahating milyon. Noong Mayo 3, nagkagulo sa Chicago nang inatake ng mga pulis ang mga manggagawang welgista malapit sa planta ng McCormich Harvesting Machine Co., kung saan apat ang namatay at marami ang nasugatan.Dahil sa nangyaring ito, noong Mayo 1, 1889, hiniling ng American Federation of Labor sa unang kongreso ng Ikalawang Internasyunal na Kilusang Manggagawa sa Paris, France, na isagawa ang isang pandaigdigang welga sa Mayo 1, 1890 para sa walong oras na paggawa. Ito’y inayunan naman ng mga kinatawan ng mga kilusang paggawa mula sa iba’t ibang bansa. Ang ikalawa pang layunin nito ay upang gunitain ang alaala ng mga martir na manggagawang nakibaka para sa walong oras na paggawa na namatay sa Haymarket Square sa Chicago, Illinois. Maraming gumunita at kumilala sa Mayo 1, 1890 bilang Pandaigdigang Araw ng Paggawa, kasama na ang iba pang bansa, kabilang ang dalawampu’t apat na lunsod sa Europa, bansang Cuba, Peru at Chile.Hindi bakasyon ang Mayo Uno pagkat kailangan nating ipagdiwang at kilalanin ang sakripisyo ng mga manggagawa sa buong daigdig, at tayo’y makiisa sa lahat ng manggagawa sa mundo para sa pagbabago ng lipunan, kapayapaan, at pagkakapantay- pantay ng lahat. Sa ating bansa, ang unang pagdiriwang ng Mayo Uno ay noong 1903 nang isinagawa ng 100,000 manggagawa sa pamumuno ng Union Obrera Democratica de Filipinas (UODF). Idinaos ito sa Malacañang kung saan isinisigaw ng mga manggagawang Pilipino na “Ibagsak ang imperyalismong Amerikano!”Hindi bakasyon ang Mayo Uno pagkat marami pa tayong dapat gawin upang tiyaking ang lipunang itong kinatatayuan natin ngayon ay tiyakin nating mabago para sa kapakinabangan ng lahat, lalo na ng mga susunod na henerasyon, at hindi ng iilan lamang. Sa ngayon, ang mga manggagawa’y nagiging biktima ng salot na kontraktwalisasyon, o five-months, five-months contract, imbes na dapat ay maging regular na siyang manggagawa. Laganap ang kaswalisasyon at agensy employment upang mapanatiling mababa ang sahod ng manggagawa, imbes na sundin ang living wage provision na nakasaad sa Konstitusyon, at alisan ng batayan ang mga manggagawa sa kanilang karapatang mag-unyon. Winawasak naman ang mga nakatayo nang union sa pamamagitan ng retrenchment, closures o pagpataw ng Assumption of Jurisdiction (AJ) at madeklarang ilegal ang mga welga ng manggagawa. Ang mga regular na manggagawa ay pinapalitan ng mga batang kontraktwal o agency employees na walang mga benepisyong tulad ng regular namanggagawa. At kapag nasa edad na ng 25-taon pataas, over-age na, pahirapan nang makapasok sa pabrika o trabaho. Tulad ng mga naunang gobyernong umiral sa bansa, mas nakatuon ang mga programa’t patakaran ng bansa sa pagsasakatuparan ng mga dikta ng WTO-IMF-World Bank upang pangalagaan ang interes ng uring kapitalista. Sa pamamagitan ng mga polisiyang ito, nagkukumpetensya ang mga kapitalista sa pagpiga sa lakas-paggawa ng mga manggagawa sa pamamagitan ng murang pasahod o murang presyo ng lakas-paggawa.Hindi bakasyon ang Mayo Uno pagkat dapat nang mamulat ang mga manggagawa sa kanilang mapagpalayang papel sa lipunan. Hindi malaman ng manggagawang Pilipino, pati na mga kababayang maralita, kung saan kukuha ng pandugtong ng ikabubuhay kinabukasan. Halos trenta porsyento (30%) ang itinaas ng presyo ng pangunahing produkto tulad ng bigas at langis sa mga nagdaang buwan, habang nananatiling mababa ang sahod ng mga manggagawa. Ngunit mas kalunus-lunos ang kalagayan ng mga walang pinagkukunan ng regular na hanapbuhay. Hindi pa tapos ang laban ng manggagawa pagkat patuloy pa silang inaalipin ng capital. Panahon nang magkaisa ang uring manggagawa at itayo ang kanilang sariling gobyerno. Workers control!!! Ikaw, magbabakasyon ka pa ba tuwing Mayo Uno? Halina’t sa Mayo Uno ng bawat taon, ating kilalanin ang kadakilaan ng uring manggagawa sa buong daigdig. Halina’t sumama sa mga pagtitipon ng mga manggagawa sa Mayo Uno, makipagtalakayan sa kanila, at ipaglaban ang ating mga karapatan. Manggagawa sa lahat ng bansa, magkaisa! Walang mawawala sa inyo kundi ang tanikala ng pagkaalipin!
ni Gregorio V. Bituin Jr
my everyday bloopers,worries,joys and struggles..
Wednesday, April 30, 2008
The capitalist workday, the socialist workday
April 24, 2008 -- As May Day approaches, there are four things that are worth remembering:
1. For workers, May Day does not celebrate a state holiday or gifts from the state but commemorates the struggle of workers from below.
2. The initial focus of May Day was a struggle for the shorter workday.
3. The struggle for the shorter workday is not an isolated struggle but is the struggle against capitalist exploitation.
4. The struggle against capitalist exploitation is an essential part but not the only part of the struggle against capitalism.
What I want to do today is to set out some ideas about the capitalist workday and the socialist workday which I hope can be useful in the current struggles in Venezuela and, more immediately, in today's discussion.
The capitalist workday
What is the relation between the work the capitalist workday and exploitation? When workers work for capital, they receive a wage which allows them to purchase a certain amount of commodities. How much is that wage? There is nothing automatic about the wage level. It is determined by the struggles of workers against capital.
Those commodities which form the worker’s wage contain a certain quantity of labour, and those hours of labour on a daily basis are often described as the ``necessary labour’’ of the worker -- the hours of labour necessary for workers to produce the commodities they consume on a daily basis.
But, in capitalism workers do not just work their hours of necessary labour. Because they have been compelled to sell their ability to work to the capitalist in order to survive, the capitalist is in the position to demand they work longer than this. And the difference between their hours of necessary labour and the total work that workers perform for capital is surplus labour -- the ultimate source of capital's profits. In other words, capitalist profits are based on the difference between the workday and necessary labour; they are based upon surplus labour, unpaid labour, exploitation.So, the more the capitalist is able to drive up the workday, the greater the exploitation and the greater the profit. Marx commented that ``the capitalist is constantly tending to reduce wages to their physical minimum and extend the working day to its physical maximum’’. How true. Marx continued, though, and noted ``while the working man constantly presses in the opposite direction’’. In other words, class struggle: workers struggle to increase wages and to reduce the workday; they struggle to reduce exploitation by capitalists.
Of course, your workday is more than just the time spent between clocking in and clocking out. There is the time it takes you to get to work, the time it takes to buy the food you need to survive, the time to prepare that food -- all this is really necessary labour and part of the worker’s workday. But since this labour is free to the capitalist, since it is not a cost for him, it is therefore invisible to him. So, when the capitalists want to drive down necessary labour by driving down wages (or by increasing productivity relative to wages), it is not the labour he does not pay for that he wants to reduce. Rather, he wants as much free labour is possible, as much unpaid labour as possible.
It is not surprising that workers want to reduce their unpaid labour for capital and to do so by struggling to reduce the capitalist workday. But it is not only the unpaid labour in the workday that is a burden for workers; it is also the paid labour that they are compelled to do for capital. In other words, the problem is not only exploitation. It is the way that capitalist production deforms working people. In the capitalist workplace, the worker works for the goals of capital, under the control of capital and with an organisation of production which is designed not to permit workers to develop their capabilities but, rather, has the single goal of profits. ``All means for the development of production’’, Marx stressed about capitalism, ``distort the worker into a fragment of a man, they degrade him’’ and ``alienate from him the intellectual potentialities of the labour process’’. In other words, the process of capitalist production cripples us as human beings. Life in the capitalist workplace is a place where we are commanded from above, where we are mere tools that capital manipulates in order to get profits.
That is why we want to reduce the capitalist workday. That is why we cannot wait to escape. It is not only the exploitation, the unfairness and the injustice in the distribution of income. Time away from capitalist production appears as the only time in which we can be ourselves, a time when our activity can be free time, time for the full development of the individual.
The socialist workday
Firstly, what do we mean by socialism? The goal of socialists has always been the creation of a society which would allow for the full development of human potential. It was never seen as a society in which some people are able to develop their capabilities and others are not. That was Marx's point in stating clearly that the goal is "an association, in which the free development of each is the condition for the free development of all." And this is clearly the point, too, of Venezuela’s Bolivarian constitution where it stresses in article 20 that ``everyone has the right to the free development of his or her own personality’’ and in the explicit recognition in article 299 that the goal of a human society must be that of ``ensuring overall human development’’.
In contrast to capitalist society, where ``the worker exists to satisfy the need’’ of capital to expand, Marx envisioned a socialist society where the wealth that workers have produced ``is there to satisfy the worker’s own need for development’’. So, what is the nature of the workday in a society oriented toward ensuring overall human development?
Let us begin by talking about necessary labour -- quantitatively. There is the labour which is contained in the products we consume daily -- just like before. To this, however, we need to add the labour that workers want to devote toward expanding production in the future. In socialism, there are no capitalists who compel the performance of surplus labour and invest a portion of the profits in the search for future profits. Rather, workers themselves in their workplaces and society decide if they want to devote time and effort to expanding satisfaction of needs in the future. If they make this decision, then this labour is not surplus to their needs; it forms part of what they see as their necessary labour. Thus, the concept of necessary labour changes here.
In a socialist society, further, we recognise explicitly that part of our necessary labour is labour within the household. In other words we acknowledge that our workday does not begin after we leave the household but includes what we do within the household. Article 88 of the Bolivarian constitution recognises the importance of this labour when it notes that labour within the household is ``economic activity that creates added value and produces social welfare and wealth’’.
The concept of necessary labour and our workday within a socialist society also includes the labour which is required to self-govern our communities. After all, if socialism is about the decisions we make democratically in our communities, then the time we need to do this is part of our necessary labour. Similarly, if socialism is about creating the conditions in which we are all able to develop our potential, then the process of education and of developing our capabilities is also activity which is necessary.
When we think about the socialist workday, in short, we think about the workday differently. Our view of the quantity of necessary labour, for example, is not distorted by the capitalist perspective of treating as necessary only that labour for which capital must pay. That is the difference between the political economy of capital and the political economy of the working class. From the perspective of workers, we recognise as necessary labour all the labour that is necessary for ``the worker’s own need for development’’.
But the difference is not only quantitative. In socialism, the workday cannot be a day in which you receive orders from the top (even in strategic industries). Rather, it is only through our own activity, our practice and our protagonism that we can develop our capabilities. Article 62 of Venezuela’s constitution makes that point in its declaration that participation by people is ``the necessary way of achieving the involvement to ensure their complete development, both individual and collective’’. In other words, in every aspect of our lives (the traditional workplace, the community, the household), democratic decision making is a necessary characteristic of the socialist workday; through workers’ councils, communal councils, student councils, family councils, we produce ourselves as new socialist subjects.
Thus, when we look at the workday from the perspective of socialism, we see that the simple demand for reducing the workday is a demand from within capitalism. Its message is simple -- end this horror! This is an ``infected’’ conception of the workday. It starts from a view of labour as so miserable that the only thing you can think of doing is reducing and ending it.
When we think about building socialism, however, we recognise that the demand is to transform the workday -- to recognise all parts of our workday explicitly and to transform that day qualitatively. Rather than only ``free time’’ being time in which we can develop, from the perspective of socialism it is essential to make the whole day time for building human capacities.
In short, there are two ways of looking at the demand for the reduced workday: one way talks simply about a shorter work week and thus longer weekend vacations; in contrast, a second way stresses the reduction of the traditional workday in order to provide the time on a daily basis for education for self-managing, for our work within the household and our work within our communities. In other words, it is the demand to redefine and transform our workday.
The first of these is simply a reform within capitalism. For socialists, May Day should be the day to struggle for the whole worker's day, to struggle for the socialist workday.
Michael A. Lebowitz is professor emeritus of economics at Simon Fraser University in Vancouver, Canada, and the author of Beyond Capital: Marx's Political Economy of the Working Class and Build It Now: Socialism for the Twenty-First Century. This article was presented as initiating remarks to the ``Roundtable Discussion on the Reduction of the Workday’’ held on April 24, 2008, at the Centro International Miranda, Caracas, Venezuela. The event brought together leaders from different union federations and currents, as well as a representative from the women’s movement, to discuss the importance of the demand of the reduction of the workday in the lead up to May Day. The event was organised by the program ``Human Development and Transformatory Practise’’ coordinated by Lebowitz, at the Centro Internacional Miranda.
1. For workers, May Day does not celebrate a state holiday or gifts from the state but commemorates the struggle of workers from below.
2. The initial focus of May Day was a struggle for the shorter workday.
3. The struggle for the shorter workday is not an isolated struggle but is the struggle against capitalist exploitation.
4. The struggle against capitalist exploitation is an essential part but not the only part of the struggle against capitalism.
What I want to do today is to set out some ideas about the capitalist workday and the socialist workday which I hope can be useful in the current struggles in Venezuela and, more immediately, in today's discussion.
The capitalist workday
What is the relation between the work the capitalist workday and exploitation? When workers work for capital, they receive a wage which allows them to purchase a certain amount of commodities. How much is that wage? There is nothing automatic about the wage level. It is determined by the struggles of workers against capital.
Those commodities which form the worker’s wage contain a certain quantity of labour, and those hours of labour on a daily basis are often described as the ``necessary labour’’ of the worker -- the hours of labour necessary for workers to produce the commodities they consume on a daily basis.
But, in capitalism workers do not just work their hours of necessary labour. Because they have been compelled to sell their ability to work to the capitalist in order to survive, the capitalist is in the position to demand they work longer than this. And the difference between their hours of necessary labour and the total work that workers perform for capital is surplus labour -- the ultimate source of capital's profits. In other words, capitalist profits are based on the difference between the workday and necessary labour; they are based upon surplus labour, unpaid labour, exploitation.So, the more the capitalist is able to drive up the workday, the greater the exploitation and the greater the profit. Marx commented that ``the capitalist is constantly tending to reduce wages to their physical minimum and extend the working day to its physical maximum’’. How true. Marx continued, though, and noted ``while the working man constantly presses in the opposite direction’’. In other words, class struggle: workers struggle to increase wages and to reduce the workday; they struggle to reduce exploitation by capitalists.
Of course, your workday is more than just the time spent between clocking in and clocking out. There is the time it takes you to get to work, the time it takes to buy the food you need to survive, the time to prepare that food -- all this is really necessary labour and part of the worker’s workday. But since this labour is free to the capitalist, since it is not a cost for him, it is therefore invisible to him. So, when the capitalists want to drive down necessary labour by driving down wages (or by increasing productivity relative to wages), it is not the labour he does not pay for that he wants to reduce. Rather, he wants as much free labour is possible, as much unpaid labour as possible.
It is not surprising that workers want to reduce their unpaid labour for capital and to do so by struggling to reduce the capitalist workday. But it is not only the unpaid labour in the workday that is a burden for workers; it is also the paid labour that they are compelled to do for capital. In other words, the problem is not only exploitation. It is the way that capitalist production deforms working people. In the capitalist workplace, the worker works for the goals of capital, under the control of capital and with an organisation of production which is designed not to permit workers to develop their capabilities but, rather, has the single goal of profits. ``All means for the development of production’’, Marx stressed about capitalism, ``distort the worker into a fragment of a man, they degrade him’’ and ``alienate from him the intellectual potentialities of the labour process’’. In other words, the process of capitalist production cripples us as human beings. Life in the capitalist workplace is a place where we are commanded from above, where we are mere tools that capital manipulates in order to get profits.
That is why we want to reduce the capitalist workday. That is why we cannot wait to escape. It is not only the exploitation, the unfairness and the injustice in the distribution of income. Time away from capitalist production appears as the only time in which we can be ourselves, a time when our activity can be free time, time for the full development of the individual.
The socialist workday
Firstly, what do we mean by socialism? The goal of socialists has always been the creation of a society which would allow for the full development of human potential. It was never seen as a society in which some people are able to develop their capabilities and others are not. That was Marx's point in stating clearly that the goal is "an association, in which the free development of each is the condition for the free development of all." And this is clearly the point, too, of Venezuela’s Bolivarian constitution where it stresses in article 20 that ``everyone has the right to the free development of his or her own personality’’ and in the explicit recognition in article 299 that the goal of a human society must be that of ``ensuring overall human development’’.
In contrast to capitalist society, where ``the worker exists to satisfy the need’’ of capital to expand, Marx envisioned a socialist society where the wealth that workers have produced ``is there to satisfy the worker’s own need for development’’. So, what is the nature of the workday in a society oriented toward ensuring overall human development?
Let us begin by talking about necessary labour -- quantitatively. There is the labour which is contained in the products we consume daily -- just like before. To this, however, we need to add the labour that workers want to devote toward expanding production in the future. In socialism, there are no capitalists who compel the performance of surplus labour and invest a portion of the profits in the search for future profits. Rather, workers themselves in their workplaces and society decide if they want to devote time and effort to expanding satisfaction of needs in the future. If they make this decision, then this labour is not surplus to their needs; it forms part of what they see as their necessary labour. Thus, the concept of necessary labour changes here.
In a socialist society, further, we recognise explicitly that part of our necessary labour is labour within the household. In other words we acknowledge that our workday does not begin after we leave the household but includes what we do within the household. Article 88 of the Bolivarian constitution recognises the importance of this labour when it notes that labour within the household is ``economic activity that creates added value and produces social welfare and wealth’’.
The concept of necessary labour and our workday within a socialist society also includes the labour which is required to self-govern our communities. After all, if socialism is about the decisions we make democratically in our communities, then the time we need to do this is part of our necessary labour. Similarly, if socialism is about creating the conditions in which we are all able to develop our potential, then the process of education and of developing our capabilities is also activity which is necessary.
When we think about the socialist workday, in short, we think about the workday differently. Our view of the quantity of necessary labour, for example, is not distorted by the capitalist perspective of treating as necessary only that labour for which capital must pay. That is the difference between the political economy of capital and the political economy of the working class. From the perspective of workers, we recognise as necessary labour all the labour that is necessary for ``the worker’s own need for development’’.
But the difference is not only quantitative. In socialism, the workday cannot be a day in which you receive orders from the top (even in strategic industries). Rather, it is only through our own activity, our practice and our protagonism that we can develop our capabilities. Article 62 of Venezuela’s constitution makes that point in its declaration that participation by people is ``the necessary way of achieving the involvement to ensure their complete development, both individual and collective’’. In other words, in every aspect of our lives (the traditional workplace, the community, the household), democratic decision making is a necessary characteristic of the socialist workday; through workers’ councils, communal councils, student councils, family councils, we produce ourselves as new socialist subjects.
Thus, when we look at the workday from the perspective of socialism, we see that the simple demand for reducing the workday is a demand from within capitalism. Its message is simple -- end this horror! This is an ``infected’’ conception of the workday. It starts from a view of labour as so miserable that the only thing you can think of doing is reducing and ending it.
When we think about building socialism, however, we recognise that the demand is to transform the workday -- to recognise all parts of our workday explicitly and to transform that day qualitatively. Rather than only ``free time’’ being time in which we can develop, from the perspective of socialism it is essential to make the whole day time for building human capacities.
In short, there are two ways of looking at the demand for the reduced workday: one way talks simply about a shorter work week and thus longer weekend vacations; in contrast, a second way stresses the reduction of the traditional workday in order to provide the time on a daily basis for education for self-managing, for our work within the household and our work within our communities. In other words, it is the demand to redefine and transform our workday.
The first of these is simply a reform within capitalism. For socialists, May Day should be the day to struggle for the whole worker's day, to struggle for the socialist workday.
Michael A. Lebowitz is professor emeritus of economics at Simon Fraser University in Vancouver, Canada, and the author of Beyond Capital: Marx's Political Economy of the Working Class and Build It Now: Socialism for the Twenty-First Century. This article was presented as initiating remarks to the ``Roundtable Discussion on the Reduction of the Workday’’ held on April 24, 2008, at the Centro International Miranda, Caracas, Venezuela. The event brought together leaders from different union federations and currents, as well as a representative from the women’s movement, to discuss the importance of the demand of the reduction of the workday in the lead up to May Day. The event was organised by the program ``Human Development and Transformatory Practise’’ coordinated by Lebowitz, at the Centro Internacional Miranda.
Tuesday, April 29, 2008
The worst market crisis in 60 years
The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion- dollar credit default swap market. Investment banks' commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever before. That made the crisis more severe than any since the second world war.Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.
By George Soros
The writer is chairman of Soros Fund Management
By George Soros
The writer is chairman of Soros Fund Management
Saturday, April 26, 2008
The Worker's Maypole
World Workers, whatever may bind ye, This day let your work be undone:
Cast the clouds of the winter behind ye,
And come forth and be glad in the sun.
Now again while the green earth rejoices
In the bud and the blossom of May
Lift your hearts up again, and your voices,
And keep merry the World's Labour Day.
Let the winds lift your banners from far lands
With a message of strife and of hope:
Raise the Maypole aloft with its garlands
That gathers your cause in its scope.
It is writ on each ribbon that flies
That flutters from fair Freedom's heart:
If still far be the crown and the prize
In its winning may each take a part.
Your cause is the hope of the world,
In your strife is the life of the race,
The workers' flag Freedom unfurled
Is the veil of the bright future's face.
Be ye many or few drawn together,
Let your message be clear on this day;
Be ye birds of the spring, of one feather
In this--that ye sing on May-Day.
Of the new life that still lieth hidden,
Though its shadow is cast before;
The new birth of hope that unbidden
Surely comes, as the sea to the shore.
Stand fast, then, Oh Workers, your ground,
Together pull, strong and united:
Link your hands like a chain the world round,
If you will that your hopes be requited.
When the World's Workers, sisters and brothers,
Shall build, in the new coming years,
A lair house of life--not for others,
For the earth and its fulness is theirs.
The First of May
Symbol of a New Era in the Life and Struggle of the Toilers
In the socialist world, the first of May is considered the Labor holiday. This is a mistaken description that has so penetrated the lives of the toilers that in many countries that day is indeed celebrated as such. In fact, the first of May is not at all a holiday for the toilers. No, the toilers should not stay in their workshops or in the fields on that date. On that date, toilers all over the world should come together in every village, every town, and organize mass rallies, not to mark that date as statist socialists and especially the Bolsheviks conceive it, but rather to gauge the measure of their strength and assess the possibilities for direct armed struggle against a rotten, cowardly, slave-holding order rooted in violence and falsehood. It is easiest for all the toilers to come together on that historic date, already part of the calendar, and most convenient for them to express their collective will, as well as enter into common discussion of everything related to essential matters of the present and the future.
Over forty years ago, the American workers of Chicago and its environs assembled on the first of May. There they listened to addresses from many socialist orators, and more especially those from anarchist orators, for they fairly gobbled up libertarian ideas and openly sided with the anarchists.
That day those American workers attempted, by organizing themselves, to give expression to their protest against the iniquitous order of the State and Capital of the propertied. That was what the American libertarians Spies, Parsons and others spoke about. It was at this point that this protest rally was interrupted by provocations by the hirelings of Capital and it ended with the massacre of unarmed workers, followed by the arrest and murder of Spies, Parsons and other comrades.
The workers of Chicago and district had not assembled to celebrate the May Day holiday. They had gathered to resolve, in common, the problems of their lives and their struggles.
Today too, wheresoever the toilers have freed themselves from the tutelage of the bourgeoisie and the social democracy linked to it (Menshevik or Bolshevik, it makes no difference) or even try to do so, they regard the first of May as the occasion of a get-together when they will concern themselves with their own affairs and consider the matter of their emancipation. Through these aspirations, they give expression to their solidarity with and regard for the memory of the Chicago martyrs. Thus they sense that the first of May cannot be a holiday for them. So, despite the claims of "professional socialists," tending to portray it as the Feast of Labor, the first of May can be nothing of the sort for conscious workers.
The first of May is the symbol of a new era in the life and struggle of the toilers, an era that each year offers the toilers fresh, increasingly tough and decisive battles against the bourgeoisie, for the freedom and independence wrested from them, for their social ideal.
In the socialist world, the first of May is considered the Labor holiday. This is a mistaken description that has so penetrated the lives of the toilers that in many countries that day is indeed celebrated as such. In fact, the first of May is not at all a holiday for the toilers. No, the toilers should not stay in their workshops or in the fields on that date. On that date, toilers all over the world should come together in every village, every town, and organize mass rallies, not to mark that date as statist socialists and especially the Bolsheviks conceive it, but rather to gauge the measure of their strength and assess the possibilities for direct armed struggle against a rotten, cowardly, slave-holding order rooted in violence and falsehood. It is easiest for all the toilers to come together on that historic date, already part of the calendar, and most convenient for them to express their collective will, as well as enter into common discussion of everything related to essential matters of the present and the future.
Over forty years ago, the American workers of Chicago and its environs assembled on the first of May. There they listened to addresses from many socialist orators, and more especially those from anarchist orators, for they fairly gobbled up libertarian ideas and openly sided with the anarchists.
That day those American workers attempted, by organizing themselves, to give expression to their protest against the iniquitous order of the State and Capital of the propertied. That was what the American libertarians Spies, Parsons and others spoke about. It was at this point that this protest rally was interrupted by provocations by the hirelings of Capital and it ended with the massacre of unarmed workers, followed by the arrest and murder of Spies, Parsons and other comrades.
The workers of Chicago and district had not assembled to celebrate the May Day holiday. They had gathered to resolve, in common, the problems of their lives and their struggles.
Today too, wheresoever the toilers have freed themselves from the tutelage of the bourgeoisie and the social democracy linked to it (Menshevik or Bolshevik, it makes no difference) or even try to do so, they regard the first of May as the occasion of a get-together when they will concern themselves with their own affairs and consider the matter of their emancipation. Through these aspirations, they give expression to their solidarity with and regard for the memory of the Chicago martyrs. Thus they sense that the first of May cannot be a holiday for them. So, despite the claims of "professional socialists," tending to portray it as the Feast of Labor, the first of May can be nothing of the sort for conscious workers.
The first of May is the symbol of a new era in the life and struggle of the toilers, an era that each year offers the toilers fresh, increasingly tough and decisive battles against the bourgeoisie, for the freedom and independence wrested from them, for their social ideal.
Wednesday, April 23, 2008
Haymarket square massacre: this is we're it all started.
In 1884, the U.S. Federation of Organized Trade and Labor Unions had passed a law declaring that, as of May 1, 1886, an eight hour workday would be the full and legal workday for all U.S. workers – the ruling class had that much time to recognise this new law and put it into effect.
The owners refused.
On May 1, 1886, workers took to the streets in a general strike throughout the entire country to force the ruling class to recognise the eight-hour working day. Over 350,000 workers across the country directly participated in the general strike, with hundreds of thousands of workers joining the marches as best they could.
In the months preceding the strikes, the Chicago Police Department, the city at the heart of the labor movement, had its ranks increased and equipped with the most advanced weaponry available (including a $2000 machine gun – an extremely rare weapon in that era).
-->
In what they would later call the Haymarket riots, during the continuing strike action on May third in Chicago, the heart of the U.S. labor movement, the Chicago police opened fire on the unarmed striking workers at the McCormick Reaper Works, killing six workers and wounding untold numbers. An uproar across the nation resounded against the government and its police brutality, with workers' protest rallies and demonstrations throughout the nation set to assemble on the following day.
On May 4, Chicago members of the anarchist IWPA (International Working Peoples' Association) organized a rally of several thousand workers at Haymarket Square to protest the continuing police brutality against striking workers on the South Side. As the last speaker finished his remarks that rainy evening, with only 200 of the most dedicated workers remaining at the rally, 180 armed police marched forward and demanded the workers to disperse. Then, deep within the police ranks, a bomb exploded, killing seven cops. The police opened fire on the unarmed workers – the number of workers wounded and killed by the cops is unknown to this day. Eight anarchists were arrested on charges of "inciting riot" and murder. The retaliation of the government was enormous in the days to follow, filling every newspaper with accusations, completely drowning the government murders and brutality of days past.
Eight workers were convicted as anarchists, were convicted of murder, and were convicted of inciting a riot. Only one of the eight men accused was present at the protest, and he was attempting to address the crowd when the bomb went off. In one of the greatest show trials in the history of the working-class movement no evidence was ever produced to uphold the accusations, though all eight were convicted as guilty. Four of the prisoners – Albert Parsons, August Spies, George Engel and Adolph Fisher – were executed, Louis Lingg committed suicide, and the three remaining were pardoned due to immense working class upheaval in 1893.
On May 1, 1890, in accordance with the decision of the Paris Congress (July 1889) of the Second International to commemorate the Haymarket martyrs, mass demonstrations and strikes were held throughout Europe and America. The workers put forward the demands for an 8 hour woring day, better health conditions, and further demands set forth by the International Association of Workers. The red flag was here created as the symbol that would always remind us of the blood that the working-class has bleed, and continues to bleed, under the oppressive reign of capitalism.
"As I write these lines, the proletariat of Europe and America is holding a review of its forces; it is mobilized for the first time as one army, under one flag, and fighting for one immediate aim: an eight-hour working day."-->
From that day forward (starting in 1891 in Russia, by 1920 including China, and 1927 India) workers throughout the world began to celebrate the first of May as a day of international proletarian solidarity, fighting for the right of freedom to celebrate their past and build their future without the oppression and exploitation of the capitalist state.
The owners refused.
On May 1, 1886, workers took to the streets in a general strike throughout the entire country to force the ruling class to recognise the eight-hour working day. Over 350,000 workers across the country directly participated in the general strike, with hundreds of thousands of workers joining the marches as best they could.
In the months preceding the strikes, the Chicago Police Department, the city at the heart of the labor movement, had its ranks increased and equipped with the most advanced weaponry available (including a $2000 machine gun – an extremely rare weapon in that era).
-->
In what they would later call the Haymarket riots, during the continuing strike action on May third in Chicago, the heart of the U.S. labor movement, the Chicago police opened fire on the unarmed striking workers at the McCormick Reaper Works, killing six workers and wounding untold numbers. An uproar across the nation resounded against the government and its police brutality, with workers' protest rallies and demonstrations throughout the nation set to assemble on the following day.
On May 4, Chicago members of the anarchist IWPA (International Working Peoples' Association) organized a rally of several thousand workers at Haymarket Square to protest the continuing police brutality against striking workers on the South Side. As the last speaker finished his remarks that rainy evening, with only 200 of the most dedicated workers remaining at the rally, 180 armed police marched forward and demanded the workers to disperse. Then, deep within the police ranks, a bomb exploded, killing seven cops. The police opened fire on the unarmed workers – the number of workers wounded and killed by the cops is unknown to this day. Eight anarchists were arrested on charges of "inciting riot" and murder. The retaliation of the government was enormous in the days to follow, filling every newspaper with accusations, completely drowning the government murders and brutality of days past.
Eight workers were convicted as anarchists, were convicted of murder, and were convicted of inciting a riot. Only one of the eight men accused was present at the protest, and he was attempting to address the crowd when the bomb went off. In one of the greatest show trials in the history of the working-class movement no evidence was ever produced to uphold the accusations, though all eight were convicted as guilty. Four of the prisoners – Albert Parsons, August Spies, George Engel and Adolph Fisher – were executed, Louis Lingg committed suicide, and the three remaining were pardoned due to immense working class upheaval in 1893.
On May 1, 1890, in accordance with the decision of the Paris Congress (July 1889) of the Second International to commemorate the Haymarket martyrs, mass demonstrations and strikes were held throughout Europe and America. The workers put forward the demands for an 8 hour woring day, better health conditions, and further demands set forth by the International Association of Workers. The red flag was here created as the symbol that would always remind us of the blood that the working-class has bleed, and continues to bleed, under the oppressive reign of capitalism.
"As I write these lines, the proletariat of Europe and America is holding a review of its forces; it is mobilized for the first time as one army, under one flag, and fighting for one immediate aim: an eight-hour working day."-->
From that day forward (starting in 1891 in Russia, by 1920 including China, and 1927 India) workers throughout the world began to celebrate the first of May as a day of international proletarian solidarity, fighting for the right of freedom to celebrate their past and build their future without the oppression and exploitation of the capitalist state.
Busting myths about the food crisis
Rocketing price rises are threatening to plunge tens of millions around the world into hunger and food insecurity.
The prices of maize, wheat, soya beans and rice – staple foods for the majority of the world’s population – have more than doubled in the past few years.
Josette Sheeran, executive director of the United Nations World Food Programme, warned earlier this month, “This is leading to a new face of hunger in the world, what we call the newly hungry. These are people who have money, but have been priced out of being able to buy food.”
Many explanations have been put forward for the crisis – population growth, changing consumption patterns and climate change are some of the most popular.
But in reality it is the domination of food production by global capitalism that has reshaped agriculture and food markets and led to the crisis.
Some right wing economists argue that the current crisis is an aberration that will be corrected through the market. But starvation and food crises are inbuilt into capitalism – a system that is based on profit not need.
While millions face hunger and poverty, a tiny minority are making big profits from spiralling food prices.
Agribusiness giant Cargill – the second biggest private company in the world and a major grain trader – earlier this month announced that its quarterly profits have surged up 86 percent.
Of course the “free market” has never been entirely free – it relies on government tariffs, subsidies and economic policies.
Many governments around the world, terrified at the prospect of civil unrest, have banned exports of staple foods or looked for other ways of protecting domestic supplies.
This may give them a temporary breathing space, but it also causes sudden shortages and panics in international markets that can further inflate prices.
There is growing resistance to soaring food prices – and world leaders are right to be afraid of it. Price hikes have provoked strikes, protests and riots over the past few months in countries including Bangladesh, Burkino Faso, Cameroon, Egypt, Haiti, Ivory Coast, Yemen, Indonesia, Morocco, Senegal, Mauritania and Guinea (Conakry).
Thousands of workers are taking up the fight for the right to food. In Egypt the issue of bread prices was at the heart of recent strikes that shook the government, while in Bangladesh garment workers struck last week over the price of rice.
Surely one of the greatest indictments of the system is that capitalism can produce more than enough food but it lets people starve. Socialist Worker exposes five of the most common myths that surround the food crisis.
1. There are too many people to feed
Many people argue that a growing global population explains the current food crisis.
This idea assumes that we have a limited pot of resources to go around. It doesn’t recognise that people have the capacity to transform production methods to increase output.
The argument harks back to Thomas Malthus, an 18th century economist who claimed that increased wealth would lead to an unsustainable growth in population that would outstrip the resources available.
In fact food production has grown faster than population – global agriculture produces 17 percent more calories per person today than it did 30 years ago, despite the population of the world increasing.
Enough wheat, rice and other grains are already produced to provide every person in the world with 3,500 calories a day – before foods such as meat, vegetables, nuts or beans are taken into account.
Britain’s department of health says that the average person needs about 2,500 calories a day to maintain a healthy lifestyle.
The reality is that food production is marked by overproduction, not underproduction. People starve not because there is a lack of food but because they cannot afford to buy it.
The Russian revolutionary Lenin called Malthus’s theory a “reactionary doctrine”. He was right.
2. Economic growth in China is to blame
A favourite theme in the mainstream media is that growing wealth in China is changing consumption patterns and pushing up prices.
But even with dramatic economic changes in China, the consumption per head of the Chinese population is still around three times less than that of the US and Britain.
And while it’s true that China’s meat and dairy consumption has increased, China is still a net exporter of many foods – including rice, wheat and corn.
China’s increasing imports of food have been pushed by multinationals across the world eager to open up new markets for their produce and grab more profits.
3. The market can solve the problem
The price of many foodstuffs is already determined through international markets. The economic crisis has inflated prices by pushing investors to put their money into food, which is seen as a “safe” alternative to other forms of financial speculation. Similarly, stockbrokers are now even placing bets on future water prices.
Speculation drives up food prices – and as prices rise, this in turn encourages more speculation. It also encourages stockpiling by food traders – who buy food purely to hold on to it and sell it at a higher price.
Several long-term trends have contributed to rising food prices. All of them result from the way that global capitalism impacts on the food industry.
Poorer countries have seen huge changes in land use over the past 30 years – resulting in less food being produced for domestic consumption.
Pressure from the US government and world bodies such as the International Monetary Fund (IMF) and World Bank has been fundamental in reshaping the agriculture of poorer countries.
This pressure has been formalised through structural adjustment programmes (SAPs) – rebranded Poverty Reduction Strategies – agreements that poorer countries sign up to in order to receive aid or loans.
Key elements of the agreements include cutting public spending, increasing privatisation, and opening up the economy to global markets – with a devastating impact on agriculture.
In Senegal, for example, the government signed up to an SAP in 1986. Government programmes to support farmers were eliminated. Spending cuts and trade liberalisation meant that farmers could not compete with cheap food imports.
The effect was a decrease in the production of basic food crops for local consumption and a turn towards exports. By 1990 a third of the population was categorised as hungry – by 1992, that had risen to 40 percent.
Such policies reduce the ability of people in poorer countries to produce their own food and increase dependence on the global food industry. Over time this pushes up the average price of food.
Another factor pushing up prices is the rush to invest in biofuels – which divert food crops such as corn and wheat to be used for fuel. The US, the world’s largest corn exporter, is expected to use nearly a third of its entire crop next year for biofuels.
Governments have also allowed food stocks to fall to an all-time low. In poorer countries, the IMF has explicitly discouraged governments from building up food stocks, arguing that this interferes with the “free market”.
Some governments have been forced to sell their stocks in order to repay growing debts.
4. It is all the fault of climate change
Climate change is a serious problem that impacts on agriculture – particularly in the Global South.
Although climate change in some areas has brought chaotic weather that damaged food crops, climate change alone does not lead to poverty or hunger.
The problem lies in the way that climate change – and the resulting impact on food – is dealt with. Many poor countries do not have the infrastructure to deal with climate change.
It is estimated that Bangladesh, for example, would need to spend £2 billion to build embankments, cyclone shelters, roads and other infrastructure needed to deal with the effects of climate change.
Yet ten million poor people in Bangladesh face the devastation of flooding every year because the investment hasn’t been made.
Blaming climate change for the food crisis ignores the fact that we live in a world divided by class – rich people in countries that have seen crops destroyed by floods or droughts will still have plenty to eat.
It also lets governments off the hook. Climate change does not make hunger inevitable – but it is another urgent issue that world leaders are failing to deal with.
5. Genetically modified crops are the answer
Genetically modified (GM) crops are sometimes put forward as the solution to world hunger. GM crops are modified in ways that make them resistant to disease, changes in climate or insects and as a result can produce higher yields.
But the introduction of GM foods has not ended hunger – it has increased inequality.
It has allowed multinational biotechnology companies to increase their control over global food production and intensified the dependence of poor countries on richer ones.
New research by the University of Kansas has shown that genetic modification cuts the productivity of crops, undermining repeated claims that a switch to the controversial technology is needed to solve the growing world food crisis.
The study – carried out over the past three years in the US grain belt – has found that GM soya produces about 10 percent less food than its conventional equivalent, contradicting assertions by advocates of the technology that it increases yields.
There are also many serious question marks over the safety of GM foods.
The promotion of GM foods uses similar arguments to those used in the so-called “Green Revolution” of the 1960s and 1970s.
The Green Revolution developed varieties of seeds and crops that could produce higher yields. It was promoted in India as a way of staving off famine and dealing with hunger.
Yet today 233 million Indians are undernourished and malnutrition has increased throughout the 1990s.
Food production can grow at the same time as hunger – because hunger today is a result of how food production is organised, not the amount of food produced.
by Sadie Robinson
http://www.socialistworker.co.uk
Sunday, April 20, 2008
A Man-Made Famine
There are many causes behind the world food crisis, but one chief villain: World Bank head, Robert Zoellick. For anyone who understands the current food crisis, itis hard to listen to the head of the World Bank, RobertZoellick, without gagging.
Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat. The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we're seeing such misery as a result of this particular spike has everything to do withZoellick and his friends.Before he replaced Paul Wolfowitz at the World Bank,Zoellick was the US trade representative, their man atthe World Trade Organisation. While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckle duster.His mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically,this meant the removal of developing countries' abilityto stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own). This Zoellick did often, and enthusiastically.Without agricultural support policies, though, there's no buffer between the price shocks and the bellies of the poorest people on earth. No option to support sustainable smaller-scale farmers, because they've been driven off their land by cheap EU and US imports. No option to dip into grain reserves because they've been sold off to service debt. No way of increasing the income of the poorest, because social programmes have been cut to the bone.The reason that today's price increases hurt the poor so much is that all protection from price shocks has been flayed away, by organisations such as theInternational Monetary Fund, the World TradeOrganisation and the World Bank.Even the World Bank's own Independent Evaluation Group admits that the bank has been doing a poor job in agriculture. Part of the bank's vision was to clear away the government agricultural clutter so that the private sector could come in to make agriculture efficient. But, as the Independent Evaluation Group delicately puts it, "in most reforming countries, the private sector did not step in to fill the vacuum when the public sector withdrew." After the liberalisationof agriculture, the invisible hand was nowhere to be seen.But governments weren't allowed to return to the business of supporting agriculture. Trade liberalisation agreements and World Bank loan conditions, such as those promoted by Zoellick, havemade food sovereignty impossible.This is why, when we see Dominique Strauss-Kahn of the IMF wailing about food prices, or Zoellick using the crisis to argue with breathless urgency for more liberalisation, the only reasonable response is nausea.
Raj Patel is a visiting scholar in the Center forAfrican Studies at the University of California atBerkeley, a Fellow at the Institute of Food andDevelopment Policy and a Research Associate at theSchool of Development Studies at the University ofKwaZulu-Natal. He has worked for the World Bank, interned at the WTO, and consulted for the UNHe is the author of Stuffed and Starved: Markets, Powerand the Hidden Battle for the World's Food System.
Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat. The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we're seeing such misery as a result of this particular spike has everything to do withZoellick and his friends.Before he replaced Paul Wolfowitz at the World Bank,Zoellick was the US trade representative, their man atthe World Trade Organisation. While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckle duster.His mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically,this meant the removal of developing countries' abilityto stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own). This Zoellick did often, and enthusiastically.Without agricultural support policies, though, there's no buffer between the price shocks and the bellies of the poorest people on earth. No option to support sustainable smaller-scale farmers, because they've been driven off their land by cheap EU and US imports. No option to dip into grain reserves because they've been sold off to service debt. No way of increasing the income of the poorest, because social programmes have been cut to the bone.The reason that today's price increases hurt the poor so much is that all protection from price shocks has been flayed away, by organisations such as theInternational Monetary Fund, the World TradeOrganisation and the World Bank.Even the World Bank's own Independent Evaluation Group admits that the bank has been doing a poor job in agriculture. Part of the bank's vision was to clear away the government agricultural clutter so that the private sector could come in to make agriculture efficient. But, as the Independent Evaluation Group delicately puts it, "in most reforming countries, the private sector did not step in to fill the vacuum when the public sector withdrew." After the liberalisationof agriculture, the invisible hand was nowhere to be seen.But governments weren't allowed to return to the business of supporting agriculture. Trade liberalisation agreements and World Bank loan conditions, such as those promoted by Zoellick, havemade food sovereignty impossible.This is why, when we see Dominique Strauss-Kahn of the IMF wailing about food prices, or Zoellick using the crisis to argue with breathless urgency for more liberalisation, the only reasonable response is nausea.
Raj Patel is a visiting scholar in the Center forAfrican Studies at the University of California atBerkeley, a Fellow at the Institute of Food andDevelopment Policy and a Research Associate at theSchool of Development Studies at the University ofKwaZulu-Natal. He has worked for the World Bank, interned at the WTO, and consulted for the UNHe is the author of Stuffed and Starved: Markets, Powerand the Hidden Battle for the World's Food System.
Wednesday, April 16, 2008
Workers group rejects wage boards
The Partido ng Manggagawa on Tuesday rejected the idea of having the
regional tripartite wage boards set the pay hikes of minimum wage earners, calling instead for its abolition.
In a statement, PM chairman Renato Magtubo called on fellow workers from other labor groups "to unite behind the demand to reform the wage fixing system and for Congress to instead legislate the wage hike."
Magtubo, who as party-list House member in the 13th Congress batted for a legislated wage increase, said his proposed National Wage Commission will have the mandate to set wages at the national level and at the level of the cost of living.
"The National Wage Commission will be different from the regional wage boards in that its mandate will be to set wages at the national scope and at level of the cost of living," he said.
The regional wage boards are only mandated to set minimum wages at the regional level and only after due consultation with all the stakeholders.
"We prefer a legislated wage hike not because Congress is pro-labor. The parliament is simply a better arena of struggle since the trapos (traditional politicians) are vulnerable to popular pressure unlike the wage boards whose tripartite composition is so designed that the unholy alliance between the representatives of employers and government will always outvote their labor
counterparts," he said.
"The regional wage boards are governed by 10-point criteria in fixing wages; among them is the capacity to pay of the capitalists that it always considers paramount," he said. Magtubo reiterated that Congress has the authority to legislate wage increases. "A wage hike can be legislated by Congress -- even tomorrow if it so desires and such will be reasonable because of the crisis situation if we follow the logic of the solons who want to give [President Gloria Macapagal-Arroyo] emergency powers," he said.
He said that workers have always been bearing the brunt of economic crises, not being allowed to enjoy the fruits of economic growth.
"Despite the series of wage orders since 1989 when the wage boards were established, they still owe the workers for lost purchasing power. Minimum wages may have increased 307 percent from 1989 to 2007 but prices galloped 342 percent from 1989 to 2006," Magtubo said.
"Moreover, the wage boards have denied the wage hike from the majority of laborers through various exemptions, deferments, and creditability," he said.
Budget Secretary Rolando Andaya has said President Gloria Macapagal-Arroyo would issue an executive order by May 1 granting government employees a 10-percent increase in their basic pay starting July.
1. The government would then spend P12.05 billion for the adjustment of salaries of government employees.
By Veronica Uy
INQUIRER.net
regional tripartite wage boards set the pay hikes of minimum wage earners, calling instead for its abolition.
In a statement, PM chairman Renato Magtubo called on fellow workers from other labor groups "to unite behind the demand to reform the wage fixing system and for Congress to instead legislate the wage hike."
Magtubo, who as party-list House member in the 13th Congress batted for a legislated wage increase, said his proposed National Wage Commission will have the mandate to set wages at the national level and at the level of the cost of living.
"The National Wage Commission will be different from the regional wage boards in that its mandate will be to set wages at the national scope and at level of the cost of living," he said.
The regional wage boards are only mandated to set minimum wages at the regional level and only after due consultation with all the stakeholders.
"We prefer a legislated wage hike not because Congress is pro-labor. The parliament is simply a better arena of struggle since the trapos (traditional politicians) are vulnerable to popular pressure unlike the wage boards whose tripartite composition is so designed that the unholy alliance between the representatives of employers and government will always outvote their labor
counterparts," he said.
"The regional wage boards are governed by 10-point criteria in fixing wages; among them is the capacity to pay of the capitalists that it always considers paramount," he said. Magtubo reiterated that Congress has the authority to legislate wage increases. "A wage hike can be legislated by Congress -- even tomorrow if it so desires and such will be reasonable because of the crisis situation if we follow the logic of the solons who want to give [President Gloria Macapagal-Arroyo] emergency powers," he said.
He said that workers have always been bearing the brunt of economic crises, not being allowed to enjoy the fruits of economic growth.
"Despite the series of wage orders since 1989 when the wage boards were established, they still owe the workers for lost purchasing power. Minimum wages may have increased 307 percent from 1989 to 2007 but prices galloped 342 percent from 1989 to 2006," Magtubo said.
"Moreover, the wage boards have denied the wage hike from the majority of laborers through various exemptions, deferments, and creditability," he said.
Budget Secretary Rolando Andaya has said President Gloria Macapagal-Arroyo would issue an executive order by May 1 granting government employees a 10-percent increase in their basic pay starting July.
1. The government would then spend P12.05 billion for the adjustment of salaries of government employees.
By Veronica Uy
INQUIRER.net
As Hunger Rises, Chew on This
A diet of bread and water used to be emblematic of poverty. Now a global food crisis is transforming that meager meal into a luxury for much of the world.
The prices of the world’s three main grains — corn, rice and wheat — more than doubled last year. The causes include poor harvests linked to climate change, diversion of cropland to biofuels, population increases, rising meat consumption, emerging diseases and soaring fuel prices.
In a globalized economy, issues of food scarcity and inflation should be a matter not only of humanitarian concern, but also of national security. A food crisis is exploding.
Last year, spiraling food prices sparked protests and riots in Cameroon, Egypt, Guinea, India, Mauritania, Mexico, Morocco, Pakistan, Senegal, Uzbekistan and Yemen.
Children in Yemen marched to draw attention to their hunger. Farmers in Thailand slept in fields to prevent rice crop theft. Hundreds of construction workers in the United Arab Emirates torched cars and ransacked buildings to demand higher wages to counter surging inflation.
The problem is not just price but actual shortage. World grain stores have not been this low since the end of World War II. Argentina and Vietnam have risked treaty violations to impose protectionist trade caps and taxes aimed at stabilizing supply and stanching inflation. The Philippine government asked fast food restaurants to serve less rice to ease shortages.
The poorest are the worst hit, especially as the lifeline U.N. World Food Program (WFP) frays. In late March, it warned that unless donor countries immediately kick in $500 million to offset price hikes, WFP will start rationing food aid that feeds 73 million people — from Darfur’s genocide refugees to Haiti’s children.
Wealthy countries also feel the pangs. Despite dim-wittedly sunny U.S. government statistics on inflation, consumers — who are already staggered by fuel prices — have seen the cost of food staples soar.
In my own agriculture-heavy Vermont, Chris Barkyoumb, head of Hillcrest Foods, reports “an extreme shortage of wheat. And there’s hardly a food item that’s not going up. A lot of people are scared out there.”
The most intractable factors are the evil twins of climate change and fossil fuel dependence. Global wheat production has fallen behind demand for seven of the past eight years, as historic droughts have hit major wheat-producing countries like Australia, Canada, Russia and Uzbekistan.
Part of the price rise in Hillcrest’s wheat is due to a 30 percent fuel surcharge it passes to customers. And because most of the world’s fertilizers are petroleum-based, farmers are damned by low yield if they scrimp, and by high costs if they don’t. From January 2007 to January 2008, global fertilizer prices surged by an unprecedented 200 percent, as farmers tried to maximize production of corn — now used for ethanol. Hardest hit are African farmers, many of whom need fertilizer to replenish nutrient-depleted soils.
Adding to the shortages and price spikes is an insane policy that pits the world’s 850 million chronically hungry against its 800 million motorists. Despite the nearly even numbers, it is not a fair fight. In an October 2007 address, Jean Ziegler, the U.N. special rapporteur on the right to food, called the biofuel boom “a crime against humanity.”
Another vast diversion of world grain is animal products. One pound of meat requires up to 40 pounds of grain input. Not only does the earth have more mouths to feed every second, but more of them are chewing meat as rising living standards in China and India make it affordable. China’s per capita meat consumption jumped from 44 pounds in 1980 to 110 pounds today — still half the U.S. average. According to the Sierra Club, “America could feed most of Africa with the grains we feed to livestock.”
Adding to global fear is a virulent wheat disease that began in Uganda in 1999. It recently reached Iran and is threatening crops in India and Pakistan. The fungus, known as Ug-99, “can spread rapidly and has the potential to cause global crop epidemics,” U.N. expert Dr. Jacques Diouf said this March. In the ’50s, a similar plague killed 40 percent of North America’s spring wheat.
According to the New Scientist magazine, “U.S. Department of Homeland Security met in March 2007 to discuss the possibility that someone could transport Ug-99 deliberately.”
While the Bush administration scares the nation with visions of bin Laden lurking under our beds, greed and willful blindness are precipitating a global catastrophe of hunger that endangers not only America’s security, but the world’s.
By Terry J. Allen
The prices of the world’s three main grains — corn, rice and wheat — more than doubled last year. The causes include poor harvests linked to climate change, diversion of cropland to biofuels, population increases, rising meat consumption, emerging diseases and soaring fuel prices.
In a globalized economy, issues of food scarcity and inflation should be a matter not only of humanitarian concern, but also of national security. A food crisis is exploding.
Last year, spiraling food prices sparked protests and riots in Cameroon, Egypt, Guinea, India, Mauritania, Mexico, Morocco, Pakistan, Senegal, Uzbekistan and Yemen.
Children in Yemen marched to draw attention to their hunger. Farmers in Thailand slept in fields to prevent rice crop theft. Hundreds of construction workers in the United Arab Emirates torched cars and ransacked buildings to demand higher wages to counter surging inflation.
The problem is not just price but actual shortage. World grain stores have not been this low since the end of World War II. Argentina and Vietnam have risked treaty violations to impose protectionist trade caps and taxes aimed at stabilizing supply and stanching inflation. The Philippine government asked fast food restaurants to serve less rice to ease shortages.
The poorest are the worst hit, especially as the lifeline U.N. World Food Program (WFP) frays. In late March, it warned that unless donor countries immediately kick in $500 million to offset price hikes, WFP will start rationing food aid that feeds 73 million people — from Darfur’s genocide refugees to Haiti’s children.
Wealthy countries also feel the pangs. Despite dim-wittedly sunny U.S. government statistics on inflation, consumers — who are already staggered by fuel prices — have seen the cost of food staples soar.
In my own agriculture-heavy Vermont, Chris Barkyoumb, head of Hillcrest Foods, reports “an extreme shortage of wheat. And there’s hardly a food item that’s not going up. A lot of people are scared out there.”
The most intractable factors are the evil twins of climate change and fossil fuel dependence. Global wheat production has fallen behind demand for seven of the past eight years, as historic droughts have hit major wheat-producing countries like Australia, Canada, Russia and Uzbekistan.
Part of the price rise in Hillcrest’s wheat is due to a 30 percent fuel surcharge it passes to customers. And because most of the world’s fertilizers are petroleum-based, farmers are damned by low yield if they scrimp, and by high costs if they don’t. From January 2007 to January 2008, global fertilizer prices surged by an unprecedented 200 percent, as farmers tried to maximize production of corn — now used for ethanol. Hardest hit are African farmers, many of whom need fertilizer to replenish nutrient-depleted soils.
Adding to the shortages and price spikes is an insane policy that pits the world’s 850 million chronically hungry against its 800 million motorists. Despite the nearly even numbers, it is not a fair fight. In an October 2007 address, Jean Ziegler, the U.N. special rapporteur on the right to food, called the biofuel boom “a crime against humanity.”
Another vast diversion of world grain is animal products. One pound of meat requires up to 40 pounds of grain input. Not only does the earth have more mouths to feed every second, but more of them are chewing meat as rising living standards in China and India make it affordable. China’s per capita meat consumption jumped from 44 pounds in 1980 to 110 pounds today — still half the U.S. average. According to the Sierra Club, “America could feed most of Africa with the grains we feed to livestock.”
Adding to global fear is a virulent wheat disease that began in Uganda in 1999. It recently reached Iran and is threatening crops in India and Pakistan. The fungus, known as Ug-99, “can spread rapidly and has the potential to cause global crop epidemics,” U.N. expert Dr. Jacques Diouf said this March. In the ’50s, a similar plague killed 40 percent of North America’s spring wheat.
According to the New Scientist magazine, “U.S. Department of Homeland Security met in March 2007 to discuss the possibility that someone could transport Ug-99 deliberately.”
While the Bush administration scares the nation with visions of bin Laden lurking under our beds, greed and willful blindness are precipitating a global catastrophe of hunger that endangers not only America’s security, but the world’s.
By Terry J. Allen
Rice and Philippine politics
In the world of politics, numerous strategies have been tried and tested just to gain a lead against one’s opponents. But who would have thought that the country’s staple food would play a huge role in politicians’ pursuit of glory?
In the Philippines, rice has become more than just a staple.
A paper from Philippine Institute for Development Studies (PIDS) written by Ponciano S. Intal, Jr. and Marissa C. Garcia, shows that the price of rice has become a significant determinant of electoral results since the 1950’s with just one exception, 1998.
A previous literature used by the authors said that rice was a major electoral issue before the Martial Law regime.
"The ruling party always used its control over rice supply and distribution in order to gain more votes from the electorate. The opposition party, on the other hand, often capitalized on recurring rice crises in order to discredit the incumbent administration, " it said.
The authors have noticed that rising rice prices have preceded periods leading to presidential elections in the late 1950s up to the latter 1960s.
This scenario of rising rice prices is accompanied by long queues for the government’s low-priced but inadequate rice stock.
The opposition would then highlight this so-called failure of the incumbent administration’ s rice policy, resulting in a loss of confidence in the current government. Eventually, this translates to a shift in voters’ preference, in favor of the opposing political party.
"The electoral defeat of President [Carlos] Garcia in 1961 and President [Diosdado] Macapagal can be attributed in part to...spikes in rice prices during the run-up to the presidential elections," the authors observed. "It is to be noted also that for the 1965 elections, the Macapagal administration increased substantially the level of rice imports (in 1964-1965) apparently in an attempt to dampen the price of rice before the elections but to no avail," they added.
Meanwhile in 1992 and 2004, when the price (real and nominal) of rice was "benign", the incumbent administration or its handpicked predecessor was elected into office.
This, according to the authors, "is consistent with the hypothesized direction of the political impact of rice in presidential elections in the Philippines. "
The year 1998 could be considered a unique case as the price of rice was not influential to the outcome of the presidential elections.
Despite stable prices at the time, the candidate of the incumbent administration did not emerge as the victor in the presidential race.
A POLITICAL COMMODITY
The authors have noted that rice has been a pivotal political commodity since the Commonwealth era before the Second World War.
For one, rice is a main component of Filipinos’ diet and an important calorie source. It is also a major source of employment and income in the country.
"By the sheer magnitude of its contributions to the country’s economic development as well as the diverse and conflicting economic impacts it has on various segments of society, the sustainable supply of rice at low and stable prices has been the government’s overriding objective," the paper said.
In fact, administrations both past and present, have tried their best to keep prices stable and at a level that is both affordable for consumers yet remunerative for farmers.
However, the government’s efforts in the past two decades have shifted towards protectionism, which does not bode well at all for economic progress.
"In fact, the shift to rice protection since the 1980s has failed to stabilize domestic rice prices and has effectively penalized the poorer households. This has been traced largely to the failure of the National Food Authority to provide timely, accurate, and appropriate intervention in the country’s rice market," the authors noted.
Historical data reveal higher nominal protection rates (NPRs) towards the recent years, which indicate a movement towards protectionism.
NPR is defined as the percentage difference between domestic and border prices. High NPRs indicate high domestic prices, which benefit producers while lower NPRs mean low domestic prices, which favors consumers.
"These high rates of protection, which are expected to encourage output growth of domestically produced rice have yet to show substantial positive results," the authors said.
Between 1995 to 1998, at the time when NPRs were considerably higher, rice production moved at an average of negative 6.7%. It hardly changed, at 3.3% from 1995-2002 compared with 3.2% from 1970-1994, when NPRs were significantly lower.
Also, the country has become a growing rice importer from being a marginal exporter until the early 1990s. This indicates that the gap between production and consumption further widened while dependency on the external rice market to meet local food requirements has risen, putting food security at forefront of the country’s many problems.
"If the Philippines is to achieve sustained, stable rice supply at low prices and at the same time promote rice consumer and producer welfare, the adoption of a private-focused, market-based regulatory regime without a rice trading parastatal (but with rice emergency reserves, not for price stabilization) remains as a long-term objective," the authors said.
The authors suggest a two-pronged transitional approach to resolve the problem.
First, is to set up a tax expenditure fund ceiling for all subsidies to government- owned and- controlled corporations (GOCCs), which will limit the budgetary cost to the government.
Second, adopting a more aggressive support for productivity enhancing investments in the rice sector such as irrigation and better varieties and improved farming practices through agricultural research, development, and extension.
"The net effect is to shift the supply curve outward, resulting in the country being a marginal net rice exporter."
In the Philippines, rice has become more than just a staple.
A paper from Philippine Institute for Development Studies (PIDS) written by Ponciano S. Intal, Jr. and Marissa C. Garcia, shows that the price of rice has become a significant determinant of electoral results since the 1950’s with just one exception, 1998.
A previous literature used by the authors said that rice was a major electoral issue before the Martial Law regime.
"The ruling party always used its control over rice supply and distribution in order to gain more votes from the electorate. The opposition party, on the other hand, often capitalized on recurring rice crises in order to discredit the incumbent administration, " it said.
The authors have noticed that rising rice prices have preceded periods leading to presidential elections in the late 1950s up to the latter 1960s.
This scenario of rising rice prices is accompanied by long queues for the government’s low-priced but inadequate rice stock.
The opposition would then highlight this so-called failure of the incumbent administration’ s rice policy, resulting in a loss of confidence in the current government. Eventually, this translates to a shift in voters’ preference, in favor of the opposing political party.
"The electoral defeat of President [Carlos] Garcia in 1961 and President [Diosdado] Macapagal can be attributed in part to...spikes in rice prices during the run-up to the presidential elections," the authors observed. "It is to be noted also that for the 1965 elections, the Macapagal administration increased substantially the level of rice imports (in 1964-1965) apparently in an attempt to dampen the price of rice before the elections but to no avail," they added.
Meanwhile in 1992 and 2004, when the price (real and nominal) of rice was "benign", the incumbent administration or its handpicked predecessor was elected into office.
This, according to the authors, "is consistent with the hypothesized direction of the political impact of rice in presidential elections in the Philippines. "
The year 1998 could be considered a unique case as the price of rice was not influential to the outcome of the presidential elections.
Despite stable prices at the time, the candidate of the incumbent administration did not emerge as the victor in the presidential race.
A POLITICAL COMMODITY
The authors have noted that rice has been a pivotal political commodity since the Commonwealth era before the Second World War.
For one, rice is a main component of Filipinos’ diet and an important calorie source. It is also a major source of employment and income in the country.
"By the sheer magnitude of its contributions to the country’s economic development as well as the diverse and conflicting economic impacts it has on various segments of society, the sustainable supply of rice at low and stable prices has been the government’s overriding objective," the paper said.
In fact, administrations both past and present, have tried their best to keep prices stable and at a level that is both affordable for consumers yet remunerative for farmers.
However, the government’s efforts in the past two decades have shifted towards protectionism, which does not bode well at all for economic progress.
"In fact, the shift to rice protection since the 1980s has failed to stabilize domestic rice prices and has effectively penalized the poorer households. This has been traced largely to the failure of the National Food Authority to provide timely, accurate, and appropriate intervention in the country’s rice market," the authors noted.
Historical data reveal higher nominal protection rates (NPRs) towards the recent years, which indicate a movement towards protectionism.
NPR is defined as the percentage difference between domestic and border prices. High NPRs indicate high domestic prices, which benefit producers while lower NPRs mean low domestic prices, which favors consumers.
"These high rates of protection, which are expected to encourage output growth of domestically produced rice have yet to show substantial positive results," the authors said.
Between 1995 to 1998, at the time when NPRs were considerably higher, rice production moved at an average of negative 6.7%. It hardly changed, at 3.3% from 1995-2002 compared with 3.2% from 1970-1994, when NPRs were significantly lower.
Also, the country has become a growing rice importer from being a marginal exporter until the early 1990s. This indicates that the gap between production and consumption further widened while dependency on the external rice market to meet local food requirements has risen, putting food security at forefront of the country’s many problems.
"If the Philippines is to achieve sustained, stable rice supply at low prices and at the same time promote rice consumer and producer welfare, the adoption of a private-focused, market-based regulatory regime without a rice trading parastatal (but with rice emergency reserves, not for price stabilization) remains as a long-term objective," the authors said.
The authors suggest a two-pronged transitional approach to resolve the problem.
First, is to set up a tax expenditure fund ceiling for all subsidies to government- owned and- controlled corporations (GOCCs), which will limit the budgetary cost to the government.
Second, adopting a more aggressive support for productivity enhancing investments in the rice sector such as irrigation and better varieties and improved farming practices through agricultural research, development, and extension.
"The net effect is to shift the supply curve outward, resulting in the country being a marginal net rice exporter."
By:MA. SUZETTE R. DAQUIZ
Source:
- "Rice and Philippine Politics" by Ponciano S. Intal, Jr. and Marissa C. Garcia, Philippine Institute for Development Studies Discussion Paper No. 2005-13, July 2005.
- "Rice and Philippine Politics" by Ponciano S. Intal, Jr. and Marissa C. Garcia, Philippine Institute for Development Studies Discussion Paper No. 2005-13, July 2005.
Mother of all bubbles prepares to burst
IAIN MACWHIRTER
WHAT has the food crisis got to do with Northern Rock? Quite a lot, actually. The rocketing price of wheat, soya beans, sugar, coffee etc is all part of the credit crisis which has caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value". Put another way, the Western banks are exporting their debts to the third world.
The phenomenal increases in food prices are only in part a consequence of climate change and population. Most of the recent rises have been the result of speculation and the collapse in the value of the dollar.
This is being tacitly encouraged by the central banks, such as the US Federal Reserve, who are trying to ignite another asset bubble to replace the real estate and dotcom bubbles which have burst in spectacular fashion. It's the third bubble and it's hitting the third world hard.
Desperate for quick returns, trillions of dollars are being taken out of private equity and financial derivatives and ploughed into food and raw materials.
The financial websites call it the "commodities super-cycle" . It ranges from precious metals at one end, to corn, cocoa and cattle at the other - speculators are even placing their bets on water prices.
The collapse in the price of the dollar means that most international commodities are more expensive for poor people. The dollar's decline is a result of the low interest rate policy of the Federal Reserve. When rates are set below the rate of inflation, investors have to keep moving their massive funds from sector to sector in search of higher returns.
They piled into the internet stocks in the 1990s as the boom in dotcoms got under way. Then they shifted into real estate and complex financial derivatives such as collateralised debt obligations based on sub-prime US mortgages. Now, with the collapse of the property bubble across the world, investors are on the move again, and the only place left is commodities.
Of course, long-term factors such as the depletion of oil, population and the changing eating habits of Southeast Asia are putting long-term pressure on agricultural resources. But the Fed has thrown fuel on the fire by dramatically cutting interest rates, even as inflation grows, in a desperate race to revive the American economy on the back of a commodities boom. The people who suffer most will be on the other side of the world.
Will it work? In the short term, possibly. But the US may be cutting its own throat. Once speculative prices get out of control, there is no knowing when they will stop. Oil is over dollars-100 a barrel, which is causing gas prices and fertilisers to rocket in the US.
They depend on these as much as sub-Saharan Africa. This might be the bubble to end all bubbles.
WHAT has the food crisis got to do with Northern Rock? Quite a lot, actually. The rocketing price of wheat, soya beans, sugar, coffee etc is all part of the credit crisis which has caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value". Put another way, the Western banks are exporting their debts to the third world.
The phenomenal increases in food prices are only in part a consequence of climate change and population. Most of the recent rises have been the result of speculation and the collapse in the value of the dollar.
This is being tacitly encouraged by the central banks, such as the US Federal Reserve, who are trying to ignite another asset bubble to replace the real estate and dotcom bubbles which have burst in spectacular fashion. It's the third bubble and it's hitting the third world hard.
Desperate for quick returns, trillions of dollars are being taken out of private equity and financial derivatives and ploughed into food and raw materials.
The financial websites call it the "commodities super-cycle" . It ranges from precious metals at one end, to corn, cocoa and cattle at the other - speculators are even placing their bets on water prices.
The collapse in the price of the dollar means that most international commodities are more expensive for poor people. The dollar's decline is a result of the low interest rate policy of the Federal Reserve. When rates are set below the rate of inflation, investors have to keep moving their massive funds from sector to sector in search of higher returns.
They piled into the internet stocks in the 1990s as the boom in dotcoms got under way. Then they shifted into real estate and complex financial derivatives such as collateralised debt obligations based on sub-prime US mortgages. Now, with the collapse of the property bubble across the world, investors are on the move again, and the only place left is commodities.
Of course, long-term factors such as the depletion of oil, population and the changing eating habits of Southeast Asia are putting long-term pressure on agricultural resources. But the Fed has thrown fuel on the fire by dramatically cutting interest rates, even as inflation grows, in a desperate race to revive the American economy on the back of a commodities boom. The people who suffer most will be on the other side of the world.
Will it work? In the short term, possibly. But the US may be cutting its own throat. Once speculative prices get out of control, there is no knowing when they will stop. Oil is over dollars-100 a barrel, which is causing gas prices and fertilisers to rocket in the US.
They depend on these as much as sub-Saharan Africa. This might be the bubble to end all bubbles.
Friday, April 11, 2008
Rice prices spark fight for the right to food
The crisis around spiralling rice prices starkly demonstrates how food insecurity and hunger are built into the global system of food production.
Rice prices have shot up in the past few months. Thai rice, seen as the global benchmark, has almost doubled in price from January to March this year.
Rice is a staple food for more than half the world's population. In countries such as Bangladesh, Cambodia, Thailand, Burma and Vietnam, the majority of the population rely on rice for up to 80 percent of their calorie intake.
Millions consequently face food insecurity or severe hunger. Governments are desperate to stop riots and protests developing over rice prices.
In Bangladesh the army is overseeing the distribution of discounted rice. In the Philippines the government has called on restaurants to cut rice portions to protect stocks.
The most common response is to ban exports. Governments including China, India, Vietnam, Egypt and Cambodia have in recent months imposed total bans or serious curbs on rice exports.
This allows governments to temporarily protect their domestic supplies, but it is worsening the overall problem by pushing up rice prices further as traders rush to buy up and stockpile any available rice.
Rice is mostly produced for a domestic market – only 6 or 7 percent is traded on the world market.
But this international trade plays a crucial role in determining world rice prices. It is also where countries turn to for imports if they face rice shortages.
Rice stocks are at their lowest levels since the 1970s, so every market shortage becomes a crisis – or an opportunity, if you a trader.
As prices started rising, many rice traders started stockpiling and hoarding rice to sell at inflated prices when the crisis becomes more acute.
Commodity markets are the main factor behind price rises. But rising fuel prices and a lack of infrastructure to deal with extreme weather in countries such as Bangladesh have also played their part.
Long term trends in land use have also seen rice cultivation become static or even decline. In many countries land has been shifted in past years into more profitable crops, or taken over for commercial development.
The rising costs of wheat, corn and soya, are making the crisis worse for millions as it becomes impossible to switch to a cheaper food staple.
The problem is not just in Asia. Many countries in Africa were forced after 1995 by the World Trade Organisation to drop import controls and open borders to rice imports. This created an increased reliance on rice in those countries.
As Robert Zeigler from the International Rice Research Institute points out, we already know the devastating human costs of rising food prices.
"We have seen this before in the 1970s, associated with the oil price shocks," he says. "There was a serious spike in food price rises, in particular rice. The consequences were very serious.
"Bangladesh shortly after its independence could not source rice on the world market – it had no stocks and couldn't access credit – and according to colleagues in Bangladesh, up to three million died as a result."
It is obscene that the drive for profits is threatening to deny basic foods to millions today. The fight for the right to food is set to become a defining feature of our era.
Esme Choonara
Rice prices have shot up in the past few months. Thai rice, seen as the global benchmark, has almost doubled in price from January to March this year.
Rice is a staple food for more than half the world's population. In countries such as Bangladesh, Cambodia, Thailand, Burma and Vietnam, the majority of the population rely on rice for up to 80 percent of their calorie intake.
Millions consequently face food insecurity or severe hunger. Governments are desperate to stop riots and protests developing over rice prices.
In Bangladesh the army is overseeing the distribution of discounted rice. In the Philippines the government has called on restaurants to cut rice portions to protect stocks.
The most common response is to ban exports. Governments including China, India, Vietnam, Egypt and Cambodia have in recent months imposed total bans or serious curbs on rice exports.
This allows governments to temporarily protect their domestic supplies, but it is worsening the overall problem by pushing up rice prices further as traders rush to buy up and stockpile any available rice.
Rice is mostly produced for a domestic market – only 6 or 7 percent is traded on the world market.
But this international trade plays a crucial role in determining world rice prices. It is also where countries turn to for imports if they face rice shortages.
Rice stocks are at their lowest levels since the 1970s, so every market shortage becomes a crisis – or an opportunity, if you a trader.
As prices started rising, many rice traders started stockpiling and hoarding rice to sell at inflated prices when the crisis becomes more acute.
Commodity markets are the main factor behind price rises. But rising fuel prices and a lack of infrastructure to deal with extreme weather in countries such as Bangladesh have also played their part.
Long term trends in land use have also seen rice cultivation become static or even decline. In many countries land has been shifted in past years into more profitable crops, or taken over for commercial development.
The rising costs of wheat, corn and soya, are making the crisis worse for millions as it becomes impossible to switch to a cheaper food staple.
The problem is not just in Asia. Many countries in Africa were forced after 1995 by the World Trade Organisation to drop import controls and open borders to rice imports. This created an increased reliance on rice in those countries.
As Robert Zeigler from the International Rice Research Institute points out, we already know the devastating human costs of rising food prices.
"We have seen this before in the 1970s, associated with the oil price shocks," he says. "There was a serious spike in food price rises, in particular rice. The consequences were very serious.
"Bangladesh shortly after its independence could not source rice on the world market – it had no stocks and couldn't access credit – and according to colleagues in Bangladesh, up to three million died as a result."
It is obscene that the drive for profits is threatening to deny basic foods to millions today. The fight for the right to food is set to become a defining feature of our era.
Esme Choonara
Hungry for change: the scandal of rising food prices
The lives of billions of people across the globe are under threat due to rising food prices.
A series of massive price increases has sparked panic in many parts of the world.
The latest food stuff to soar is rice, with prices doubling since January. There have also been steep rises in the prices of other basic foods, such as wheat, dairy and corn. This situation is set to produce a deadly crisis for the world's poor.
The mainstream media has put forward a number of explanations for the hike in food prices.
These rest upon the premise that there is a shortage of food. So a drought in Australia, a major wheat exporter, is said to cause shortages and higher prices.
The finger of blame is also being pointed at China and India, who are already being blamed for climate change. Their "larger and more affluent" populations are supposedly responsible for the alleged lack of food.
But the fact is that there is no food shortage. The world's food supply is characterised by abundance, not by scarcity.
There are enough grains, rice and wheat produced to provide every human being with more than their daily needs – and this is before other foods such as meat, dairy, vegetables, nuts, beans or fish are taken into account.
In the modern world, there has been enough food to feed people during every famine. People do not starve due to a lack of food – they starve because they cannot afford to buy it. Famine always hits the poorest.
Consumption
And the view that growth in population and consumption leads to poverty and scarcity is not true either.
According to the World Hunger Education Service, a US-based NGO, global agriculture produces 17 percent more calories per person today than it did 30 years ago – despite the population of the world increasing.
Revolutionising production and increasing productivity are the hallmarks of capitalism. Today there is the potential to end food shortages.
So why have food prices risen so sharply recently? The main reason is that food is a commodity like any other, and is subject to speculation and the fluctuations of the market.
It seems the recent credit crunch is making food price rises worse. As speculators find their investments in housing and the stock market threatened they have shifted to invest in commodities, such as food.
The recent rush to investment in biofuels has also helped to drive up food prices as agribusinesses and traders shift from food to fuel crops in an attempt to chase profits.
"The credit crunch has pushed a lot of investors into commodities as a safe haven," wrote Paul Braks, commodities analyst at Rabobank, in the bosses' Financial Times newspaper.
Now speculators are betting on the chances of food prices climbing even further and are rushing to buy, which pushes the prices even higher.
There is no thought, of course, for what this means for the billions people this will affect around the world.
This is just one aspect of the madness of a world run on the basis of profit. Capitalists compete within the food industry to grab the biggest share of the market, leading to overproduction and a glut of food.
So business and governments use a variety of methods to keep food prices – and profits – high. This can mean the stockpiling of food or even its destruction as a way of dealing with overproduction and hiking up prices.
The US destroyed huge amounts of food during the 1930s Great Depression, despite rampant malnutrition – causing people to organise hunger marches.
The Agricultural Adjustment Act of 1933 restricted food production to keep prices high. Six million pigs were slaughtered, ten million acres of crops were ploughed under and fruit was left to rot.
Even in "normal" times, malnutrition and food insecurity is a permanent feature of capitalism. Some 1.2 billion people in the Global South live on less than $1 dollar a day and of these, 780 million suffer from chronic hunger.
Children are particularly vulnerable – the stunting that results from malnutrition affects 33 percent of children in developing countries. Malnutrition is estimated to contribute to the deaths of five million children in poor countries every year.
Potential
The socialist revolutionary Karl Marx noted 150 years ago that capitalism provides the potential, for the first time in human history, to expand production to meet the basic needs of the world's population.
But he noted that although capitalism could expand production up to a point, eventually the way the system puts profits above other considerations would become a barrier to further development.
This is the situation we face today. Millions will starve and billions more will be malnourished because the system is geared towards making profits rather than meeting human needs.
The crisis in food prices has sparked riots and protests around the world – in Egypt, Indonesia, Mexico, the Ivory Coast, Cameroon, Argentina and Burkino Faso.
The resistance of ordinary people will be the key to putting an end to the capitalist system that produces too much food while letting people starve.
Wednesday, April 9, 2008
TRUTH FOR RICE AND FOOD SUFFICIENCY (BEFORE IT'S TOO LATE)
National government agencies are all up for show on the problem of rice shortage and escalating food prices. The rice crisis, unfortunately now spread to corn and meat, and many others. And Filipinos can only watch in vain on government's feeble attempts to arrest the onset of a food crisis, and waste public resources in the process.The Php 43+ billion promised for the current rice crisis is deceptive. This is not new or additional money on top of existing budgets, but are regular agency and project funds that already exist and had been programmed. Just look at the 2008 proposed budget for agriculture and agrarian reform, now at Php42 billion. The President's announcement of the FIELD's program is basically putting label to the items in the budget that have to do (even if slightly) with agriculture. This is a Houdini move designed to trick the senses, but all it entails is creative accounting and the stomach for lying. For the nth-time, the administration must be transparent and straightforward about the problem. In order to solve the food shortage and impending food crisis, real policies and resources are needed, not parades and speeches, and budget tricks.Millions of small farmers and fishers urgently need government's full support. The rice sector surely can benefit in the reform of the National Food Authority, not its privatization. Resources need to be rechanneled down to the local level, enabling LGU's to provide research and extension services; government financial institutions (GFIs) to provide credit; and dismantle the cartel of traders and financier's (usurers) that persistently exploit small farmers and fishers. Finally, instead of relying on imports, the country needs to reduce its vulnerability to global food supply shocks; it must return to rice and food self- sufficiency as a food policy.
Monday, April 7, 2008
Grains Gone Wild
by Paul Krugman
These days you hear a lot about the world financial crisis. But there’s another world crisis under way - and it’s hurting a lot more people.
I’m talking about the food crisis. Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans - but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.
There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers - and making things even worse in countries that need to import food.
How did this happen? The answer is a combination of long-term trends, bad luck - and bad policy.
Let’s start with the things that aren’t anyone’s fault.
First, there’s the march of the meat-eating Chinese - that is, the growing number of people in emerging economies who are, for the first time, rich enough to start eating like Westerners. Since it takes about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains.
Second, there’s the price of oil. Modern farming is highly energy-intensive: a lot of B.T.U.’s go into producing fertilizer, running tractors and, not least, transporting farm products to consumers. With oil persistently above $100 per barrel, energy costs have become a major factor driving up agricultural costs.
High oil prices, by the way, also have a lot to do with the growth of China and other emerging economies. Directly and indirectly, these rising economic powers are competing with the rest of us for scarce resources, including oil and farmland, driving up prices for raw materials of all sorts.
Third, there has been a run of bad weather in key growing areas. In particular, Australia, normally the world’s second-largest wheat exporter, has been suffering from an epic drought.
O.K., I said that these factors behind the food crisis aren’t anyone’s fault, but that’s not quite true. The rise of China and other emerging economies is the main force driving oil prices, but the invasion of Iraq - which proponents promised would lead to cheap oil - has also reduced oil supplies below what they would have been otherwise.
And bad weather, especially the Australian drought, is probably related to climate change. So politicians and governments that have stood in the way of action on greenhouse gases bear some responsibility for food shortages.
Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.
The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.
Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.
One more thing: one reason the food crisis has gotten so severe, so fast, is that major players in the grain market grew complacent.
Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed.
This left the world food balance highly vulnerable to a crisis affecting many countries at once - in much the same way that the marketing of complex financial securities, which was supposed to diversify away risk, left world financial markets highly vulnerable to a systemwide shock.
What should be done? The most immediate need is more aid to people in distress: the U.N.’s World Food Program put out a desperate appeal for more funds.
We also need a pushback against biofuels, which turn out to have been a terrible mistake.
But it’s not clear how much can be done. Cheap food, like cheap oil, may be a thing of the past.
Paul Krugman is Professor of Economics at Princeton University and a regular New York Times columnist. His most recent book is The Conscience of a Liberal.
These days you hear a lot about the world financial crisis. But there’s another world crisis under way - and it’s hurting a lot more people.
I’m talking about the food crisis. Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans - but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.
There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers - and making things even worse in countries that need to import food.
How did this happen? The answer is a combination of long-term trends, bad luck - and bad policy.
Let’s start with the things that aren’t anyone’s fault.
First, there’s the march of the meat-eating Chinese - that is, the growing number of people in emerging economies who are, for the first time, rich enough to start eating like Westerners. Since it takes about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains.
Second, there’s the price of oil. Modern farming is highly energy-intensive: a lot of B.T.U.’s go into producing fertilizer, running tractors and, not least, transporting farm products to consumers. With oil persistently above $100 per barrel, energy costs have become a major factor driving up agricultural costs.
High oil prices, by the way, also have a lot to do with the growth of China and other emerging economies. Directly and indirectly, these rising economic powers are competing with the rest of us for scarce resources, including oil and farmland, driving up prices for raw materials of all sorts.
Third, there has been a run of bad weather in key growing areas. In particular, Australia, normally the world’s second-largest wheat exporter, has been suffering from an epic drought.
O.K., I said that these factors behind the food crisis aren’t anyone’s fault, but that’s not quite true. The rise of China and other emerging economies is the main force driving oil prices, but the invasion of Iraq - which proponents promised would lead to cheap oil - has also reduced oil supplies below what they would have been otherwise.
And bad weather, especially the Australian drought, is probably related to climate change. So politicians and governments that have stood in the way of action on greenhouse gases bear some responsibility for food shortages.
Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.
The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.
Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.
One more thing: one reason the food crisis has gotten so severe, so fast, is that major players in the grain market grew complacent.
Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed.
This left the world food balance highly vulnerable to a crisis affecting many countries at once - in much the same way that the marketing of complex financial securities, which was supposed to diversify away risk, left world financial markets highly vulnerable to a systemwide shock.
What should be done? The most immediate need is more aid to people in distress: the U.N.’s World Food Program put out a desperate appeal for more funds.
We also need a pushback against biofuels, which turn out to have been a terrible mistake.
But it’s not clear how much can be done. Cheap food, like cheap oil, may be a thing of the past.
Paul Krugman is Professor of Economics at Princeton University and a regular New York Times columnist. His most recent book is The Conscience of a Liberal.
Philippine Poverty and Inequality Situation (as of March 2008)
Poverty Incidence
According to the Social Weather Stations (January 2008):
· Almost 1 out of 2 Filipinos see themselves as poor.
· 46% of Filipinos families (estimated 8.1 million families or about 40.5 million Filipinos out of the 2007 projected population of 86 million) see themselves as poor.
Available data from the government:
· 1 out of 3 Filipinos is poor. (2006 NSCB)
· 32.9 million Filipinos out of 88.6 million (2006 NSCB and 2007 NSO population projection data).
Other sources of data:
· There are more than 30 million urban poor or 34% of the population (Ibon, Sept 2006)
· 65 million Filipinos or 80% of the population are struggling to survive on the equivalent of US$ 2 a day (Ibon, Mar 2007)
Poverty Threshold
· PhP 41 per person per day for food and non-food needs(NSCB, March 2007)
o PhP 27 for food alone which amounts to PhP 9 per meal
o PhP 14 for transportation, shelter, education, health, water, electricity, and
§ other non-food needs except recreation and communication
· PhP 14,866 annual per capita poverty threshold per Filipino
· PhP 74,340 annual per capita poverty threshold for a family of five (5)
Cost of Living Wage
· PhP 158 per person per day for food and non-food needs (NWPC, July 2007)
· PhP 792 family living wage for a family of 5 living in the National Capital Region
Poverty Wages
16.1 million Filipino workers or more than 50 percent of the labor force (in 2005) earn wages around Php5,000-8,000 (wages that hover around the poverty threshold), which translates to PhP33-53 per person per day (6.1 M farmers and fisherfolk and 10 M laborers and unskilled workers) (pegged at PhP41 per person per day).
(Malaluan, Nepomoceno A., Dire State of the Nation, The Crisis of Income and Employment in the Philippines , August 26, 2006)
Income Inequality
· Income of top 10% of the income decile is equivalent to 19 times that of the poorest 10 percent. (2006 FIES)
· 3.5 million families or the top 20% of the income decile account for 52.8% or more than half of the total family income, while the remaining 47.3% was shared by the poorest 80% or 13.9 million families. (2006 FIES)
· 7 out of 10 peasants still do not own land while less than 1/3 of landowners own more than 80% of agricultural land (Ibon, 2006)
· Oil companies earn PhP 110 million a day in 2006 (Ibon, 2007)
· Income inequality is intensified by regressive taxation (exacerbated by the recently imposed 12% E-VAT) (Ibon, 2007)
Status of Hunger
· 16.2% of Filipino Families or 2.9 families (approx. 14.5 Filipinos) experienced involuntary hunger (SWS, January 2007)
· Around 9.3 million Filipinos do not even meet the 100% dietary energy requirement (FNRI, 2005)
Coping Strategies on Hunger
· Cutting down the number of meals
· Sleeping through meal times
· Mothers eating smaller portions
· Skipping meals so the rest of the family will get to eat.
· Giving children to the care of relatives / other sympathetic souls
(Datinguinoo, Vinia M, The Face of Hunger is Female, November 24, 2004, PCIJ)
Based on a 2001 study Surrogate Ulam is what one-third of class E & one- tenth of class D eat in lieu of vegetables, fish or meat because they cannot afford them
· Salt, soy sauce, bagoong
· Pork / chicken lard
· softdrinks, coffee
· Instant noodles drowned in plenty of water now constitute a full meal for many poor families.
Eating pagpag or batchoy or kaning baboy (thrown left-overs)
Health
· 12 Filipinos die of dirty water daily (Cebu Daily News citing USAID, November 7, 2006)
· More than 90% of all sewage in the Philippines is untreated
(Cebu Daily News citing the World Bank, November 7, 2006)
· 10 Filipino women die daily from childbirth-related complications because they do not have access to emergency obstetric care. We have among the highest maternal mortality rate (estimated at 162 per 100,000 live births) in Asia and the world. (FIES, 2006)
· Among 0-5 years old, 27% are underweight and 30% are short (FNRI, 2005)
Education
· 1 in 10 Filipinos has never gone to school (6.8 million) (Education Network Quick Stats, 2003)
· 1 in 6 Filipinos is not functionally literate (9.6 million),
· 4.1 million Filipinos are complete illiterate.
· 1 in 3 children/ youth is not attending school(11.6 million)
· About half(51%) of Filipinos had Elementary Education at most
· Among poor Filipinos, only about 70% can read, write and compute.
· Only a little over half(54.3%) are fully literate
· Among non-poor Filipinos, 45.3% have completed at least basic education.
· In contrast, only 14.3% have achieved this level of education among the rural poor Filipinos.
Employment
· 3,300 workers leave the country daily (Ibon, Mar 2007)
· 4.1 million Filipinos * (or 7.3% of the total labor force) are unemployed (NSO, 2005-2006)
* According to Cielito Habito, this is based on the new definition of unemployment which was introduced in 2005. Under the old definition, the current number of Filipinos unemployed is about 4 million.
· 7.47 million Filipinos are considered underemployed (or 13.4% of total labor force). Despite the slight improvement from 2006 to 2007, the average annual unemployment rate is still posted at 10.8%, just a little lower than the previous year at 11 percent. (NSO, 2005-2006)
· 861,000 (NSO 2005-2006) jobs were created by the government at the end 2007 but revealed the following:
142,000 household help or kasambahays
116,000 in transport, storage and communication 111,000 in wholesale and retail trade o what we called the ambulant vendors
103,000 construction workers
34,000 in unpaid family labor
These types of work are characterized by low productivity, below-poverty- level wages, and insecure working conditions. (Marivic Raquiza, Social Watch Philippines 2008)
Debt
· Every Filipino owes about PhP 44,000.00. (Debt Quick Stats, Freedom from Debt Coalition)
· The total debt of the Philippines as of December 2006 is $118.19 billion
· Debt service is allocated PhP612.8 Billion in the 2008 National Budget.
Corruption
25 % of the Annual National Budget ends up in corruption. (PS Link)
Philippines is the most corrupt in Asia (PERC, 2007)
Sources:
Government Agencies
2006 Family Income and Expenditure Survey (FIES) Final Results, National Statistics Office (NSO)
National Statistical Coordination Board (NSCB)
National Wages and Productivity Commission (NSCB)
Food and Nutrition Research Institute (FNRI)
Institutions
Freedom from Debt Coalition (FDC)
Political and Economic Risk Consultancy (PERC)
Ibon Development Foundation (Ibon)
Social Watch Philippines (SWP)
Education Network (E-Net)
Public Services Labor Independent Confederation (PSLink)
rice crisis?
expect the goverment trumpeting the practicality of eating burgers,spaghetti,fried chicken, french fries, hotdogs and the whole gamut of what fast food offers. i can't help but recall a local politician in rizal province who ran for congress two or three elections ago, he's program is to convert pinoys into potato eaters, just like in the U.S. of A. and the rest of the western world. i'm glad he lost. what's next? food riots? bring it on!
A GLOBAL rice-supply crisis is unfolding, and the Philippines today the world’s top rice importer, will be no comfort zone.
In 2006, every Filipino consumed 118.7 kilos or 2.4 sacks of rice a year. That amounts to a daily per capita rice consumption of 325.21 grams per citizen. The Philippines produces about 90 percent of the rice it needs but also today needs to import up to 2.1 million metric tons, to be able to maintain its two-month inventory. Over the last three months, that inventory has thinned by 20 percent. Vast hectares planted to rice and corn have failed to lift this semi-feudal nation’s status from rice importer to exporter. In 2006, then Agriculture Secretary Domingo Panganiban told Reuters: “Except for a brief period in the seventies, the last time this nation produced enough rice to feed itself was in 1903, the year the Wright brothers (Wilbur and Orville) invented the airplane.”
The alarm bells have been sounded: The world’s rice stocks have dipped to their lowest level in 25 years. The most rosy estimates say the global rice supply could slide to 70 million tons, less than half the 150 million-ton inventory in the year 2000.
Conversely, rice prices have surged to their highest levels in 20 years, trading at $500 to over $700 per ton in recent months. In 2001, the price was slightly above $300 per metric ton only.
Only last January, the Philippines bought rice at only $474.40 per ton, and in two months, the price has surged by 43 percent.
Various reasons have been blamed for the sharp slide in supply: erratic weather; natural disasters; soaring fuel and transport costs; supply hoarding and smuggling; conversion of agricultural lands to cash crops, biofuel production, and other commercial purposes, etcetera.
But from country to country feeding on the staple grain, the context remains the same: galloping population growth rate has unduly stepped up the demand for rice, even as production has remained low or stagnant.
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