VIRTUAL REALITY: APEC and the new Trans-Pacific Partnership

By Tony Lopez

AT the summit of leaders of states and territories that straddle the Pacific Ocean, the most important topics that should have been discussed are countries that do not belong to the 21-member Asia-Pacific Economic Cooperation (APEC) bloc—Iran and eurozone nations, particularly Italy and Greece.
China was a hot topic, but only because the host of this year’s summit, United States President Barack Obama, seemed to blame the Chinese currency, the yuan—it is devalued (undervalued is more appropriate term) by 20 to 25 percent, according to him—for the current joblessness in America and the diminished competitiveness of US exports vis-à-vis China.
China, by the way, has the biggest representation in APEC, thanks to a technicality—mainland China, Chinese Taipei (Taiwan), and Hong Kong. In this particular group, members are economies, not states or countries.
That is not counting Singapore, which is veritably a Chinese city, and Malaysia, which has an economically dominant Chinese community.
So when Obama brings up a topic as sensitive as revaluing the yuan, he naturally goes nowhere.
China is also being cajoled into contributing to a European rescue fund for debt-ridden eurozone countries—Portugal, Ireland, Italy, Greece, and Spain, or PIIGS.
China has $3.2 trillion reserves, arguably the world’s largest foreign currency cash hoard. Additionally, Taiwan has $400.77 billion; Hong Kong, $277.2 billion; and Singapore, $242.28 billion.
The US has $146.58 billion foreign reserves—paltry by the standards of rich APEC members like Japan ($1.137 trillion) and Russia ($516.8 billion).
Eurozone nations, meanwhile, have combined reserves of just $886.35 billion, which is not even enough to pay for Italy’s $2.6-trillion debt.
It seems that collectively, the 17 countries of the euro are technically bankrupt. Their bloc owes more in foreign debts than what they earn from their exports of goods and services and income from foreign dividends and royalties. That is why they need to create a financial firewall or total bailout fund of one trillion euros ($1.4 trillion). China is supposed to contribute substantially to this rescue fund.
As of June 30, 2010, the US has foreign debts of $14.8 trillion; the European Union (EU), $13.72 trillion; the United Kingdom, $8.98 trillion; Germany, $84.7 trillion; France, $4.69 trillion; Italy, $2.23 trillion ($2.6 trillion today); and Spain, $2.16 trillion.
After nearly a quarter century, APEC still has to assert its relevance and explain what it is all about. The original idea, it seems to me, is that APEC is supposed to promote harmony and increased trade in the world’s most dynamic region.
The Asia-Pacific bloc’s 21 members span four continents and collectively account for 40 percent of the world’s population, 54 percent of the world gross domestic product (GDP), and 44 percent of total world trade.
To me, those who benefit the most from APEC are businessmen who are able to secure an APEC card—a visa-free travel card that speeds up processing at immigration counters in the bloc’s member economies.
As for the peoples of APEC, they have been battered by two major financial crises—the 1997 Asian Financial Crisis that was triggered by the run in Thailand and the 2008 financial meltdown and recession that was triggered by the subprime mortgage collapse in America.
All is not lost with APEC, though. Actively being pursued is the Trans-Pacific Partnership (TPP), an ambitious, next-generation Asia-Pacific trade agreement.
“The TPP will boost our economies, lower barriers to trade and investment, increase exports, and create more jobs for our people, which is my number-one priority,” Obama said when he addressed the APEC summit on November 12 in his home state of Hawaii.

“Along with our trade agreements with South Korea, Panama and Colombia, the TPP will also help achieve my goal of doubling US exports, which support millions of American jobs,” he added.
Japanese Prime Minister Yoshihiko Noda has expressed his country’s interest in the TPP. Obama readily welcomed the Japanese participation, noting that “eliminating the barriers to trade between our two countries could provide a historic opportunity to deepen our economic relationship, as well as strengthen Japan’s ties with some of its closest partners in the region.”
The TPP, the prestigious Economist magazine wrote also on November 12, “has suddenly emerged as the most promising trade liberalization initiative since the Doha Round of world trade talks stalled in 2008. On November 11, Japan, the world’s third-largest economy, announced its intention to join America and eight other countries in negotiating what its advocates hope would emerge as the new gold standard for free trade in the world’s most dynamic economic zone.”
The ten-country deal, according to Reuters, will cover a market 40 percent bigger than the EU. The agreement calls for free movement of almost everything, except labor.
With the eurozone in shambles, The Economist pointed out, the TPP “would further shift the world’s center of economic gravity from the Atlantic Ocean to the Pacific.”
Noda’s “decision may spur other big economies, such as Canada, to make renewed efforts to join the negotiations, which currently include America, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. If America and Japan can pull off such a deal, the TPP could challenge China’s own free-trade push in the region, which revolves around the Association of Southeast Asian Nations (Asean), South Korea and Japan, rather than the Pacific Rim,” the magazine said.
“By joining with America, Japan also hopes to influence global technological standards in industries like electric cars and clean energy, rather than having those heavily swayed by China,” it added.

FROM THE CAPITOL: Building a Greener California

By Senator Leland Yee

 

Earlier this year, I authored and introduced legislation in Sacramento that close a loophole that allowed work to be done without prevailing wage on public infrastructure projects offered at so-called “no cost” by Energy Service Companies (ESCOs).
Typically, an ESCO conducts an audit in order to come up with a design to generate energy efficiency or develop energy on a public facility. Upon approval by the public agency, the ESCO typically pays for the design, construction management, and commission of the project with the understanding that whatever savings are realized from the project are then used to pay back the ESCO.
For example, if a school district can save $10,000 a year by installing energy efficient lighting and windows, the ESCO would front the cost of that upgrade, but the school district would transfer the savings to the ESCO for a fixed time period. Fortunately, Senate Bill 136, which was signed into law by Governor Jerry Brown. will ensure workers receive prevailing wages on energy service contracts of public agencies. 
  Despite the fact that the work is being completed on public infrastructure and will be paid back from energy savings that otherwise would have been utilized by the public agency, some have argued that such work is exempt from the prevailing wage requirements.  SB 136 removes any doubt that prevailing wage must and should be paid on these types of public infrastructure improvements. This bill will ensure all public projects are completed using prevailing wage for workers.  SB 136 will officially become state law on January 1, 2012.
While I am pleased the Governor signed the prevailing wage bill, it is very disappointing that he didn’t ensure corporations keep their promises.  SB 364 is critical to holding big businesses accountable for job creation promises in exchange for any tax breaks.
Specifically, SB 364 would have required all future tax breaks related to job creation to have clear goals and performance measures. If a corporation failed to meet those promises, the state could recoup the tax credit.
A working mother on CalWORKS or disabled senior receiving in-home supportive services has to jump through numerous bureaucratic hoops to receive minimal life-sustaining benefits, but if you are a big corporation looking for scarce tax credits, no one asks any questions.  California taxpayers deserve better.
Tax expenditures for corporations are often created with the argument that they will create jobs and fuel economic development. Yet under existing law, it is nearly impossible to track which companies are receiving tax credits and if those subsidies are meeting the goals of the expenditure. Corporations are even permitted to take taxpayer money and relocate to other states.
It is wrong for California to provide upwards of $14 billion in corporate tax credits without transparency and accountability.   If a business fails to keep its word, or in some cases even moves out of the state, taxpayers should not have to foot the bill. This legislation was a win-win for Californians – corporations either help get people back to work or the state recoups the tax break and we can save our state’s safety net.
Many California businesses receive major credits and exemptions from dozens of state taxes. In fact, the tax credits passed as part of the September 2008 and February 2009 budget “solutions” will cost the state $8.7 billion in lost revenue from 2008-09 to 2014-15 and ongoing $2-2.5 billion yearly. 

STREET TALK: A Gathering Of Game Changers

By Greg Macabenta

The 22ND Philippine Advertising Congress will be held next week, from November 16 to19, at the Watersports Complex in Pili, Camarines Sur. Like past congresses, this one has an impressive and dramatic theme, “Change the Game.”
It proceeds on the presumption that the advertising industry – in this case, composed of ad agencies, advertisers, media, and companies providing production, research and other marketing services - is a catalyst for change.
According to congress chair, Alexandra Prieto-Romualdez of the Philippine Daily Inquirer, the organizing committee envisioned a gathering of professionals and practitioners that “will hopefully inspire change.”
What that “change” is can only be surmised. One can deduce that it has to do with changing the way advertising is created, the way new media vehicles are utilized, and the way products and services are conceived, developed and promoted to consumers.
I was, frankly, hoping that “change” would also have something to do with our national life, particularly the values of our people. As I had hoped in past congresses, I continue to hope that this 22nd Congress would devote some of the creative, production, media and marketing talent overflowing in the conference to the kind of change that finally appeared possible with the assumption of the presidency by Noynoy Aquino.
I am attending the ad congress. I have a number of reasons for doing so. First of all, I simply can’t get the advertising bug out of my system. It isn’t easy getting over half a century of being on the frontlines. I will relish being with colleagues, young and old. I’m sure I can still learn a few tricks from them.
The second reason for attending the congress is the fact that my book, “How To Make A Benta – Anecdotes, Lectures & Articles from the Advertising Wars,” has just been released and, I understand, will be available in the National Book Store branches in Naga and Legaspi, as well in other branches nationwide.
While most books on advertising use case studies in the American setting, this book provides valuable insights on the making of several classic advertising campaigns, many of which I personally created. The book is also a virtual history of Philippine advertising over the past 50 years. It should prove interesting reading for both students and oldtimers alike.
The third reason, of course, is my hope that, somehow, in some future ad congress – if not in this one - the industry will finally do something to achieve the kind of change that our country and our people need.
Indeed, every ad congress is a Gathering of Game Changers, this 22nd Congress,  no less. Some of the brightest, sharpest, most creative, most innovative brains in the country populate the advertising and marketing industry. The efficiency with which these brains create products and conceive services and move them from conception to consumption is the key to economic development and growth.
Imagine what this brain power could do if focused on changing what has been described as our “damaged culture.” Imagine what the creative minds gathered in the congress could do if used to create a campaign that will awaken the Filipino to the vast natural and human resources of our country. A campaign that will imbue in every citizen a caring attitude and an entrepreneurial zeal that will enable them to effectively and profitably harness these resources.
Imagine what this Gathering of Game Changers could do if they decide to devote some of their time and talents to stirring the nobility of our people. Strengthening their love of country. Their spirit of patriotism. Implanting in their hearts the value of honest labor and inspiring them in the pursuit of excellence.
I was the chairman of the 8th Philippine Advertising Congress in November 1983, a few months after a bona fide Game Changer named Benigno Aquino, Jr. was brutally murdered. For that reason, I decided on a congress theme summed up by the acronym, ROAR - Risks, Opportunities and Responsibilities of the ad industry in the face of the crisis confronting the country.
Ninoy had returned in an effort to effect the kind of change for the Philippines that was being jeopardized by the terminal illness of President Marcos and the presence of ambitious individuals who had a different concept of change.
He did, in fact, help to achieve that change. By dying for it. His death set ablaze the smoldering embers that the Marcos dictatorship tried desperately to smother. Change happened with the revolt at EDSA.
But it was, sadly, a temporary one. Our culture had been so badly damaged that a benign revolution failed to repair it.
Two years ago, when preparations for the 21st Ad Congress were being made, I appealed to the organizers to consider the significance of the forthcoming presidential elections and the opportunity that the advertising industry had to prepare the Filipino people for it.
The country had just been ravaged by typhoon Ondoy and the advertising industry and private businesses responded heroically to the crisis. They raised money and relief goods and actively helped in alleviating the suffering of the victims.
Encouraged by this, I wrote a column item that expressed the hope that the organizers would use the ad congress as an opportunity to harness the industry’s talents to help educate the Filipino people on the need for militancy and for voting wisely in the 2010 presidential elections.
 Dodie Lucas, one of the prime movers of the Advertising Foundation, was the very first to respond to my appeal. He offered to bring it up with the congress organizing committee. But this was to no avail.
 As it turned out, it was the Ad Foundation that eventually took up the challenge, launching a competition that honored the advertisers and the print and broadcast media that mounted outstanding campaigns on voter education and clean elections.
 In October 2010, the Ad Foundation presented the Gintong Haligi Award to the DDB Group and its client, PLDT-Smart Foundation, for the Ako Mismo cam­paign; ABS-CBN for Boto Mo Ipatrol Mo; Philippine Star for The Vote 2010 and Smart Vote; Philippine Seven Corporation for 7-Elections; and Bombo Radyo for The Vote 2010.
Change did, in fact, happen as a result of the presidential elections. Since Noynoy Aquino’s assumption of the presidency, there has been renewed hope in finally cleaning up the Aegean stable that our government has become.
 But more change is required. And that change has to be initiated first of all – and most of all – among our children. Their minds are still malleable. The proper values can be implanted in them. But these values need to be nurtured up to adulthood. And this is where the creativity and the skills of the advertising industry can be put to such effective use.
It can be done. It has been done.
 Over a century ago, an individual, a Game Changer, used his creative gifts to effect change. Meaningful change. Dr. Jose Rizal wrote Noli Mi Tangere and El Filibusterismo.
 And Change happened.

(gregmacabenta@hotmail.com)