Wrong to Send More Troops to Afghanistan

The Dutch government just approved the sending of 545 police and soldiers to Afghanistan. They will be stationed in the province of Kunduz, and will concentrate on training local police. This seems to be rather innocent, and is safer than the previous Dutch mission in Uruzgan province, where they were constantly fighting the Taliban.

WHY? After all, the Dutch have already done their part, having sent that previous mission to a volatile province. So, nobody could say that the Dutch are simply standing idly by while other countries are sending soldiers into harm’s way.  The Dutch could easily say to others: “we’re done, it’s your turn”.

There are those that argue that Afghanistan is everybody’s responsibility. The world had left Afghanistan to itself before, and as a result, Al Qaida used it as its base from which to launch the “9/11” attack. Even if we grant the logic of this line of reasoning, I think the Dutch should still not send more troops there now. Because if it is indeed everybody’s responsibility, then why isn’t it the United Nations  that  is in charge of Afghanistan? I think it should, actually. But it happens that America would rather do the Afghanistan operation on its own; and when they found this too difficult, it asked NATO to help it out, but the US is still calling the shots there.

The US does not want to involve the UN in its Afghanistan operation, because it wants to have a direct hand on all decisions about Afghanistan.  If it passed the responsibility on to the UN, the US will still contribute a big part of the financing for the operation,  but it won’t have to send that many troops themselves.  A UN operation would mean that other countries get to participate in the effort – we would then perhaps see Swedish, Ecuadorian, Nigerian, Nepalese, even Filipino troops in Afghanistan.

With the present arrangement though, the US retains control of everything in Afghanistan, including NATO, and it prefers it that way. I don’t think it is wise for the Dutch, or any other NATO country, to agree to this. They should insist that the operation be turned over to the UN.

Details
Not only is the general framework all wrong,  the details are also problematic.  The proposed Dutch mission is to train police in Kunduz province. This isn’t the most dangerous province in Afghanistan; it is a far cry from Uruzgan (where the previous Dutch mission was), which was a lot more violent.  The Dutch government is assuring the opposition that these trainees will not be used against the Taliban.  And the opposition bought it! I think this “assurance” is as leaky as a basket.  The Afghan government is sure to agree to it, but not really implement it.
Remember Srebrenica, in 1995? Then, the Dutch UN troops there received assurances from the Serbian military that no harm will come to the Muslim men that the Dutch were protecting, if they were turned over to the Serbs. The Dutch believed the Serb military! And about 8000 Muslims were killed by the Serbs as a result. Assurances are not written in stone, especially not in a war situation. The Dutch have not learned their lesson.

Another problem with the “assurances” that the Dutch want is that the training of Afghan police is done by forces from many countries together. It would be difficult to point out which trainees are being trained specifically by the Dutch.

Saying that the police will not engage the Taliban is quite impractical. If they are assigned to a specific village, they will have to respond to the whole spectrum of crimes and threats. It would be ridiculous to tell them to go after drug smugglers and other criminals, but not the Taliban.  What if the one doing the drug smuggling is a member of the Taliban? How will the police know if they are Taliban anyway? They don’t have uniforms identifying themselves as such.

The Afghan police trainees will be controlled by the local militia leader (read: warlord) and will effectively be part of his forces. The Dutch will then just be strengthening that local militia leader. And these people are unreliable at the least. So, the better the Dutch are in training these police, the worse things may turn out to be (of course, depending on whether the local militia leader remains loyal to the government, or not).

So, as things now are, it is indeed a very bad idea for the Dutch to send its newest mission to Afghanistan. Not only will it not help, but it may even make things worse.

Was the Big Bad Blogger story “creative”?

The story of the Big Bad Blogger (BBB) who tries to extort restaurant owners to pay him (her?) or else he/she will write a bad blog about their restaurants (Please Don’t Give Blogging a Bad Name ) has been gathering all kinds of comments from bloggers.   Here is my take on the issue.

If true, the activities of the BBB and the PR firm are a crime. It is a crime to extort someone. Threatening to write negative blogs in order to hurt a restaurant (whether or not it is effective) constitutes a crime. In essence, it is the same as the Mafia’s threat to burn your shop if you don’t pay them “protection money”. Thus, both BBB and PR firm should either be fined, imprisoned, or closed down by the police or a court of law.

At the same time, it is a crime which is relatively hard to prove. BBB could claim that he was acting independently and that the PR firm was just taking advantage of his blogs, or the PR firm could claim that it made no such offer, and that it was misunderstood.  So, it is a crime which is plausibly deniable, and thus difficult to prosecute.

An adage in chess goes: “The threat is more dangerous than the act itself”.  A wise criminal would rather use threats than to actually do what he threatens to do. The US mafia collects “protection money” from shops on the basis of the threat of arson or something else bad happening to the shop. They would rather collect money on the basis of the threat rather than actually burn down the shop.

In the same way, BBB and the PR firm could merely have threatened Georgia (the restaurateur) with coming out with a bad blog review. Ms Salcedo’s story could be literally true, or it could be a creative way of relating a real threat. I suspect it is “creative”, and that BBB didn’t actually write a negative blog about the restaurant. Yet.  So, Ms Salcedo comes out with a “blind article” , or what I would call a creative piece, to warn everybody about BBB/PR firms’ activities. In this way, Salcedo comes out with her own counter-threat, which is: “if BBB does write that bad blog review, he will be exposed, and his reputation will be ruined forever.”  And I think that it worked – the fuzz over the BBB article has been so great, that I think it has prevented BBB from actually doing what he threatened, and thus the article has served its purpose well. It worked better than an article which had actually named BBB or the PR firm. I congratulate Ms Salcedo for a job well done.

The Economics is Wrong
The economics of the BBB story is wrong. Restaurant owners are expected to be so scared of bad blogs that they will pay big money to avoid this. This just does not compute.  After all, how much could a bad blog review cost a restaurant anyway?  I think people will more likely immediately heed a GOOD review (by going to the restaurant) than a bad one. And if a bad review is written, most people will want to get a second opinion on the matter, before deciding not to go.  Because something else must have prompted someone to think about going to a certain restaurant in the first place – and this prompt is not immediately negated by a bad review. So, unless the restaurant is really bad – and this will show by it having a lot of bad blog reviews – a single bad blog review shouldn’t hurt.

I think what will more likely damage a restaurant is if there are NO GOOD BLOGS about it. This should raise all kinds of red flags – why is nobody blogging about this particular restaurant? But, then this would impossible for a single extorting agent to do.

And then there is the matter of the value of a blogger’s reputation. How much does this BBB scheme potentially earn? and how does the potential loss of the blogger’s reputation cost? I don’t think it adds up – the blogger (which we assume should have a substantial following) would stand to lose a lot of money if he gets “busted”.  And the extortion racket could even get him put in jail. It doesn’t pay to do this.

We should also realize that, for a price, restaurant owners may pay for good reviews. They will not make it too obvious: perhaps offering free meals or other giveaways.  If they are desperate enough, they may actually pay cash for a good review. But if this would be the only good review of that restaurant, it would not be a good idea for the blogger to write it. So, the “paid” blogger will only dare to write a good review if the restaurant itself really deserves a good review.

What Now?
Assuming that Ms Salcedo was a bit creative in writing her BBB article, what does this mean to bloggers? to the general public?  For bloggers, the warning is real – there are probably bloggers out there whose efforts to “monetize” their blogs are bordering on (or actually crossed the line) on the criminal. The blogging community should be constantly on the watch for these people.  Today it is food blogs, but it could also be of other kinds of blogs (e.g. travel blogs, on hotels or resorts), so watching out for crooked bloggers should be done constantly.

The public could learn something from this whole incident. They should realize that bloggers’ opinions are only as good as their reputations. A negative blog (or even a positive blog) about a restaurant should always be taken with a grain of salt. The public should not immediately take the blogger’s word for it. They should always consult other sources (including other bloggers) as to what THEY think of the restaurant in question.
If a person bases his food decisions on the opinions of a single blogger, it is his/her own fault if they get wrong advice.

In the end, I think that it does not really matter if Salcedo’s article was creative or literal. I suggest that we treat it as creative, and not get too worried about it. For whatever it’s worth, this article has probably succeeded in deterring the prospective BBBs out there; and that is a good thing.

Catholicism Impedes Philippine Development

People ask why is it that the Philippines is underdeveloped, when it is the only Catholic country in the region. Well, I think the simple answer would be: precisely! Catholicism has some features that tend to make a country underdeveloped, and it is important for the Philippines (and other Catholic countries) to be able to overcome these in order to move forward.

Saints and Palakasan
The Catholic tradition has a lot of saints, who we are supposed to pray to in order to get favors from God. This is a form of patronism: talk to someone who has contacts “higher up”. This idea of going through contacts is at its height with praying to Mary; she is supposed to really have the “hot line” to Jesus. So, praying to Mary and the saints is indeed a form of indirect “democracy” – or democracy through your contacts.

Intercession by saints, or Mary for that matter, is just another form of “palakasan“. And this is reflected in the real world. No wonder we have such a strong patronage system in Philippine politics. It merely reflects the patronage that exists in our religious life.

Of course, going through contacts in heaven is a lot fairer than going through contacts here on earth. We can easily pray to whichever saint we want to, without having to have voted for them or gone to the same school with them, or whatever. But the whole idea that we can get things through contacts; and reciprocally, that we have to cultivate (or be loyal to) these contacts, is a direct influence on how we behave on earth.

Penance
The whole idea of penance for one’s sins, which is prescribed during confession with a priest is another problem with Catholicism. It may be a caricature; but the idea of committing a murder, and then having to say “three Hail Mary’s” as penance shows the disproportionality of penance to the sin.

Politicians could be corrupt, violate human rights, etc, but if they build churches and pray every Sunday, they will still go to heaven. The Catholic Church doesn’t demand that you return the loot (in contrast, Protestants would require it) before you get forgiven. So, Catholics could get away with murder, for a prayer, sometimes literally.

Celibate Priests
Priests are another thing wrong with Catholicism. Why is it that there is a class of MEN, who are required not to have any sexual experience (if this is possible??), to have the biggest say in how people live their lives?  These men only know sexual experiences and women (assuming of course, that these are heterosexual men) from a “theoretical” level. And they don’t know anything first hand about family life, and about the raising of children. I think it is therefore quite anomalous for these priests to have a say (and they do have a VERY big say) in people’s relations, in child upbringing, in family life.

The concept of celibacy for priests is a remnant of the way the church behaved in the Middle Ages. They didn’t want priests to be part of any family, in order to avoid conflicts of loyalties. Besides, since the church was a feudal power it itself, they didn’t want church officials handing down benefits to their children.

While it is true that some priests are so immersed in the social life of their communities that they are able to give good advice to people; the church as a whole does get in the way of formulating laws that would have been good for social development. The church is against sex education, birth control and divorce for so long; and its lobby against these has been quite successful so far.

It is rather ironic that many parents purposely enroll their children in religious schools in order to ensure that they are taught correct values. In these schools, their children absorb the values of palakasan, disproportional penance and the dominance of priests in society. They are destined to perpetuate these things which impede Philippine development.

All this is not to say that a country that is mainly Catholic is “hopeless”. Other countries with significant Catholic populations could overcome its limitations.  In the Netherlands (which is about 50% Catholic), Catholics no longer have confessions (so the “penance trap” does not happen), and saints are just looked upon as good examples and not as “people with contacts in higher places”.  And priests have not blocked divorce nor birth control.

Having a Deposit System for PET bottles

Plastic bottled water and some soft drinks bottles are made of PET (Polyethylene Terephthalate). With the widespread use of bottled water, especially that in 0.5 liter PET bottles, the amount of PET that end up in our garbage gets more by the year. It is thus quite important to have a system to recycle this PET plastic, if only so that we do not get overwhelmed by it in our garbage dumps.

PET is the plastic which is probably the easiest to recycle, and perhaps for this reason, we should start with recycling it. The reason for its ease in recycling is that plastic water bottles and soft drink bottles are almost exclusively PET (i.e. only the cap is not PET). And there are indeed a number of companies in the Philippines that do recycle PET.

There have been numerous attempts to recycle PET bottles, and they have usually been successful – to a point.  The problem lies in the collection of the bottles; the value of the PET in a half liter bottle is something like 25 centavos. If this is the only way to recover PET bottles, there will be lots of bottles that won’t get collected.  There should be a system to get almost all PET bottles back – that way, their recycling would go into high steam.

I propose that there be a deposit on every PET bottle.  In the first place, products in PET bottles are non-essential; so the additional cost of the deposit will not adversely affect the consumption and distribution of an essential product.  If every PET bottle had a deposit of Php 1 (for 0,5 liter bottles), and Php 2 for larger PET bottles; I think we could be almost sure that all PET bottles will be returned.

There could be a government agency to administer this deposit system. This agency will pay out 1 or 2 pesos per bottle; of course, this also means that it will first collect 1 or 2 pesos whenever a PET bottle is produced. This will involve an initial expenditure for the government, but this should not be a problem, since it will be able to sell the PET bottles to recyclers for 25 to 50 centavos apiece (it should ensure that recyclers also make money on the transaction).

And while there will a problem of extra PET bottles – of PET bottles to which no deposit was collected, but submitted for deposit collection. This will only be in the beginning. And, it won’t be a bad thing if people start recovering PET bottles from the garbage to do it. The government can handle this initial problem; besides, the idea is profitable in the long run because of the 25 centavos that the government can collect from the PET recycling companies.

Philippine Electronics Industry set to Take Off

The Philippine Electronics Industry is about to take off. In 2010, investments in the industry surged to more than $1 billion, and exports reached $20 Billion. According to the Semiconductors and Electronics Industry of the Philippines (SEIPI), an industry association for the electronics industry, exports could exceed $30 billion this year, and reach $50 billion in 2015.

But it is all relative. The Philippines’ share in the world electronics market is a mere 1%, while that of China is more than 20%.  So, even if the Philippine electronics industry grows by 150% in 5 years, it won’t be too much in the overall scheme of things.

Although it is a small part of the overall “pie”, the electronics industry is quite important to the Philippines. By the end of 2010, the industry employed nearly 500,000 people. And electronics exports make up almost 50% of total Philippine exports.

Growing Market, Lower Tariffs
One of the main reasons to be enthusiastic about the electronics industry is that there is a growing number of electronics products. A couple of years ago, things like the iPod, GPS navigation and e-Readers were unheard of. Now, they are capturing the market, and a big part of the production of such items is done in East Asia. More than half of all electronics are made in Asia, so as the number of things that are electronic grows, the more all East Asian countries stand to benefit.

As people get wealthier, their need for electronic products will grow. If everyone who now owns a mobile telephone will also get to use an e-Reader, just think how many e-Readers would be needed.  And even if wealth does not grow in some countries, the use of electronic products will grow anyway: modern appliances need ever more sophisticated electronics, so simply replacing old appliances will increase the demand for electronics.

At the same time as the demand for electronics increases, production costs are decreasing. Tariffs within ASEAN, for example, in electronics products (and a lot of other items too) have gone to 0% as of 1 January 2011 (under the Asian Free Trade Area – AFTA – agreement). And ASEAN has free trade agreements with China, India and Australia/New Zealand too.  Technical specifications for electronics are also getting more standardized. The low tariffs and technical standardization mean that it would be easier for companies to source their electronic inputs from anywhere in the ASEAN area, with very little extra expenses for doing so. Thus, final assemblers in the Philippines could source some parts from plants in other ASEAN countries, while Philippine-based suppliers could also easily supply the needs of assemblers in other countries. The effective scale for electronic products has been increased because of this, making for cheaper production costs.

What About China?
The Philippines’ niche in the growing electronics market is in final assembly and testing – this is also the most labor-intensive part of the electronics value chain.  In a sense, we are competing directly with China, which has generally the same niche. However, we should consider the role of the Philippines (and ASEAN) relative to China.

Japanese and other multinationals prefer to have a “China Plus One” policy when they do offshore production. This means that they would set up shop in China, but also in one other country, preferably one of the “ASEAN-5” (Indonesia, Malaysia, Philippines, Thailand and Vietnam). This is some kind of an insurance against problems in China.  China sometimes makes policies against Japanese or Taiwanese companies, and they need to have a back-up operation or else they would have problems if their China operations get into trouble.   And things could also go wrong with joint ventures with Chinese.  In addition, ASEAN-5 countries are more friendly to 100%-owned subsidiaries than China is.

While China is perceived as the cheapest production platform, its price advantage over ASEAN-5 is rather small when it comes to electronics.  Both China and ASEAN-5 import chips and high-end electronics from Japan and the NIE-3 (Hong Kong, South Korea and Singapore), process these into finished products, and export these mostly to developed countries.  The cost of the electronics inputs are the same, and the difference between countries is only in the cost of operations – things like transport, labor costs, electricity, infrastructure. Since the electronics products (both intermediate and final products) are relatively lightweight, it is relatively easy and cheap to transport them from one location to another.  Chinese labor costs are lower than that in ASEAN-5, and transport and electricity are subsidized more in China than elsewhere, but the difference is rather small, and these are average costs.  So, there are enough cases where the particular mix of operating costs for producing certain items would actually be lower in an ASEAN-5 country than in China.

Sometimes, the decisive difference is the proximity of other electronics companies which make intermediate products needed for the assembly of a specific item. This reduces the cost of transport, and thus the overall cost of making a product. This proximity of suppliers is something new in the Philippines. Today, there is a wide range of companies producing all kinds of electronic parts that the chance of sourcing most of a company’s needs from within the Philippines ( from within the Calabarzon region), or even from within the same Export Processing Zone, is getting bigger.  The range of companies includes everything from the assemblies around chips to making of hard disk drives to electric power supply. There is even a company that specializes in helping  electronic companies get ISO certifications.

Locally Owned
A recent trend (in the last decade) in the Philippine electronics industry is that there are now a lot of Philippine-owned companies. This means that there is a stable anchor of companies which are definitely Philippine-based.  Some of these are getting quite integrated in the industry, even to the point of buying US electronics companies. They are busy “filling-in” gaps in the supply base of electronic materials, making it cheaper to produce all kinds of products. Where before, we could fear that companies would pull out of the country; now, chances are that if a foreign company pulls out, their equipment will be taken over by a local company.

Experts have commented that the Philippine electronics industry needs to go “upstream” in the electronic value-chain in order to survive. Well, I think this needs to be nuanced a bit. As is, the Philippines handles a disproportionate proportion of high-tech electronic products; and this is probably because it has a relative advantage in short-run (smaller batch) assembly and testing. China and Vietnam will have a relative advantage in long-run assembly. Philippine companies are busy innovating in terms of manufacturing process, and even to some extent re product development.

The real upstream activity would be the fabrication of the chips itself.  But this is a very expensive thing to do. It will take a bit more to induce companies to take this step, and to base it in the Philippines. The growing role of Philippine-owned companies in the field makes it more likely for the country to soon have chip production. Why? Because, as the production base for electronics widens, it will soon become quite profitable to also establish chip production in country. Even with low transport costs, which mean that chips could still be sourced from Hong Kong, Taiwan or Singapore, it would be even cheaper for companies if the chips are made in the Philippines itself.  And since Philippine-owned companies have a different take on the issue of basing; they will more likely want to start chip production earlier than foreign-owned firms. So, I think that chip making will soon be done in the Philippines also.

Another issue is the adequate supply of skilled personnel for all the electronics companies.  There are now schools that are specifically producing skilled workers for companies; and I think that more will do so with time.  However, I think that the government should also do something to encourage the continuous training of personnel who are already working with companies – to ensure that their skills keep getting upgraded.

All in all, things are indeed looking bright for the Philippines electronic industry. I think that the projected growth rate for 2011 of 10% is indeed too conservative. It will grow much faster than that – perhaps something in the 20-30% level. And,  in the process, it will also positively influence the rest of the economy.