Wednesday, March 28, 2007

MNL, T minus 8 Days

I'll be out of town most of April for work-related travel, leaving on 6 April (Good Friday). I'll be alone during my trip. Hopefully I'll have time to post regularly to keep my (few) readers updated. As my first post under the "travelogue" tag, here is my complete route (in three-letter IATA airport code):


I'm almost sure only my elder sister would be able to identify each airport without having to google them. For the rest, you can search them here. Using synecdoche for brevity, I'll be staying 6 days in FRU, 6 days in DYU, and 5 days in GYD. I'll also spend 10 hours in IST and possibly one night in LHR.

Sunday, March 25, 2007

Of Port Wine and David Ricardo

Last night I received a Balikabayan Box from my folks in the US. In it is a bottle of Dow's 10-Year-Old Tawny Port, courtesy of my sister (thanks!). True port wine comes from the Douro Valley region in Portugal and is actually a mixture of old and new vintages, so 10 years is the average of the vintage mix.

Although port comes from Portugal, most of the popular and established port brands have English names: Croft, Dow, Graham, Sandeman, Taylor, Warre. This is because England and Portugal have been traditional trading partners since the 1300's, a partnership reinforced during the Franco-English wars (starting from the 17th century) when England banned trade from France. (France and Spain, on the other hand, became close partners; even their monarchs eventully came from one family-- the Borbon/Bourbon dynasty.) So when French wine was banned from English stores, English traders turned to Portugal for substitutes. These traders eventually established port houses to make production of port wine more efficient and facilitate its trade-- multinational companies in today's terms. These English port brands are the names of those port houses.

David Ricardo, the father of modern trade theory, wrote On the Principles of Political Economy and Taxation in 1817 within this context of vibrant trade between England and Portugal. Though he never used the term comparative advantage in his text, he illustrated this truly nontrivial concept in his classic example:

"If Portugal had no commercial connexion with other countries, instead of employing a great part of her capital and industry in the production of wines, with which she purchases for her own use the cloth and hardware of other countries, she would be obliged to devote a part of that capital to the manufacture of those commodities, which she would thus obtain probably inferior in quality as well as quantity.

"The quantity of wine which she shall give in exchange for the cloth of England, is not determined by the respective quantities of labour devoted to the production of each, as it would be, if both commodities were manufactured in England, or both in Portugal.

"England may be so circumstanced, that to produce the cloth may require the labour of 100 men for one year; and if she attempted to make the wine, it might require the labour of 120 men for the same time. England would therefore find it her interest to import wine, and to purchase it by the exportation of cloth.

"To produce the wine in Portugal, might require only the labour of 80 men for one year, and to produce the cloth in the same country, might require the labour of 90 men for the same time. It would therefore be advantageous for her to export wine in exchange for cloth. This exchange might even take place, notwithstanding that the commodity imported by Portugal could be produced there with less labour than in England. Though she could make the cloth with the labour of 90 men, she would import it from a country where it required the labour of 100 men to produce it, because it would be advantageous to her rather to employ her capital in the production of wine, for which she would obtain more cloth from England, than she could produce by diverting a portion of her capital from the cultivation of vines to the manufacture of cloth.

"Thus England would give the produce of the labour of 100 men, for the produce of the labour of 80. Such an exchange could not take place between the individuals of the same country. The labour of 100 Englishmen cannot be given for that of 80 Englishmen, but the produce of the labour of 100 Englishmen may be given for the produce of the labour of 80 Portuguese, 60 Russians, or 120 East Indians. The difference in this respect, between a single country and many, is easily accounted for, by considering the difficulty with which capital moves from one country to another, to seek a more profitable employment, and the activity with which it invariably passes from one province to another in the same country."

Thus giving port wine a permanent place in economic theory.

Wednesday, March 14, 2007

GO's 10-point Economic Plan

The Genuine Opposition (GO) today unveiled their 10-point economic plan. Here's their plan (in italics), and my comments, in a nutshell:

1 - Generate more jobs through labor-intensive infrastructure projects in the rural areas.
I am not a civil engineer, but I think most infrastructure projects are already labour-intensive. Despite the use of cranes and cement mixers, current technology still needs people to actually do the building. What technology are they talking about here? The pounded-earth method to build walls and dikes? But in any case, infrastructure projects need money, so to do this they should either increase revenues or reallocate current revenues from other departments. See #5.

2 - Increase budgetary allocations for education at all levels.
No argument here; we do need more money for education. Again, this needs money, so to do this they should either increase revenues or reallocate current revenues from other departments. See #5.

3 - Substantially lower the cost of medicines.
How do they plan to do this? Parallel importing? Promoting alternative medicines? Imposing price caps? Nationalising pharmaceutical companies?

4 - Lower the costs of transportation and power through the development of domestic sources of renewable energy.
I hope they realise that "the development of domestic sources of renewable energy" will be quite costly in the short term. R&D of new technology is just the beginning; add to that the replacement and adaptation of current technology to the new technology. Again, this needs money, so to do this they should either increase revenues or reallocate current revenues from other departments. See #5. (Is it obvious I'm copying and pasting here?)

5 - Reject any new tax and improve tax administration.
Whoa! So they plan to do a lot of projects with a lot of spending without increasing taxes. So which department or budget item are they going to squeeze dry? And how do they plan to improve tax administration over and above what's being done now? How much additional income (net of additional administrative costs) do they expect to get after improving tax administration?

6 - Grant prosecutorial powers to the Commission on Human Rights and de-emphasize the heavily militarist approach in counter-insurgency.
Not really an economic plan, but fine. I don't see why the CHR can't file cases against human rights violators now, but if they think this will help then so be it.

7 - Contribute to the arrest of global warming.
How??? By doing #4? By pressing the US to ratify the Kyoto Protocol?

8 - Organize additional support programs for overseas Filipino workers.
Ok, fine. Again, this needs money, so to do this they should either increase revenues or reallocate current revenues from other departments. See #5.

9 - Reinforce the role of the press as watchdog against graft and corruption by decriminalizing libel and increasing penalties for harm done to news persons.
Wait, decriminalize libel??? This is a non sequitur. There is nothing that shows that the threat of libel causes journalists to abandon their watchdog role; rather, the threat of government persecution or censorship often leads to more courageous journalists. Cases in point: the Mosquito Press during Marcos and the PCIJ during Erap. What leads to the abandonment of the watchdog role is the presence of corruption in the media, a.k.a. "envelopmental journalism". The threat of libel does not muzzle the press; money does.

10 - Institute other meaningful economic reforms.
Like what?!? Talk about motherhood statements.

Woman on Top

Her Majesty Queen Rania Al-Abdullah
Hashemite Kingdom of Jordan

  • Born Rania Al-Yassin in 1970 in Kuwait where she also completed her primary and secondary education.
  • Is of Palestinian heritage like the late Queen Alia Al-Hussein of Jordan (1948-1977).
  • Received her Bachelor's degree in Business Administration from the American University of Cairo in 1991.
  • Married HM King Abdullah II on 10 June 1993, who was a prince at the time.
  • Has four children: HRH Prince Hussein, HRH Princess Iman, HRH Princess Salma, and HRH Prince Hashem.
  • Actively involved in various international organisations such as the World Economic Forum, UNICEF, The Vaccine Fund, the International Youth Foundation, the Foundation for International Community Assistance, and the International Osteoporosis Foundation.
  • Initiated a number of scholarships, fellowships, and educational prizes. Among them is the Queen Rania Scholarship for Women Business Leaders, which is awarded annually to two Jordanian women business leaders, and the Queen Rania Award for Excellence in Education, which rewards achievements in teaching.
  • Has an official website.