JPEPA Premised on Outmoded Economics

JPEPA Premised on Outmoded Economics

by Dr. Ernie Gonzales


THE National Economic Protectionism Association (NEPA),  the 72-year-old consistent advocate of nationalist economics for a Philippine economy owned and run mainly by Filipinos, welcomes the good news that the Senate committee on trade headed by Sen. Mar Roxas has invited noted economist Dr. Ernesto R. Gonzales, Ph.D, to its hearing come Monday, November 27.  Dr. Gonzales is being invited to speak on the implications of the economic provisions of the recently-signed Japan-Philippine Economic Partnership Agreement (JPEPA).

Before that Senate committee, before the Academe, and before the country’s leading economic thinkers, Dr. Gonzales, who has been one of the leading members of the NEPA economists’ circle since 2003, carries impeccable credentials. These include having elucidated his novel framework of synergizing the people’s own cultural, natural and economic resources (C-N-E Resources) for the sustainable development of the national economy and of the local community economies upon which such national economy has to be founded. This was the subject of his doctoral dissertation that was subsequently republished by the London School of Economics in the United Kingdom last year. He currently chairs the economic section of the National Research Council of the Philippines, and heads the Social Research Center of the University of Sto. Tomas. He is also the current chairperson of the mainly-Academe-based Lambat-Liwanag Network for Empowering Paradigms.

In an analytical paper he has been preparing on JPEPA, Gonzales has the following points to present, backed by hard facts and solid rational logic:

The economic reality in the Philippines for the past 50 years has been stagnating in cyclical downward trends. As a country with an economic rating second only to Japan’s in the whole of Asia before the start of the past three decades and a half, we have plummeted to current critical point as the second poorest country in Asia.  As Prof. Muhammad Yunus, recent Nobel Peace Laureate, who was behind the Grameen Banking System in Bangladesh has been acclaimed for finding the crux to push his country up and out of the dungeons of  poverty, we cannot doubt the current trajectory of  Philippine political-economics towards becoming the poorest nation in Asia, replacing Bangladesh, within the next decade.

One of the newest frontiers being considered by the Philippine government, aside from Charter Change, is JPEPA: Japan-Philippines Economic Partnership Agreement, with plans, at the heels of JPEPA’s recent signing, for starting to negotiate a Philippine American equivalent in the future.  However, an objective assessment of the state-of-the-art and situations related to this JPEPA controversy has to focus on the claimed scientific basis of its economic justification conducted by the top-rated economic think tank in the country, the Philippine Institute for Development Studies (PIDS). The 18 macro-econometric models as well as the sectoral micro-economic analysis utilized in its scientific assessments can no longer be considered valid today by current development in economic analysis, as pointed out in Stiglitz in 2005; Neumeyer, 2003; Costanza, 1997 and Gonzales. 2006. Current scientific thinking in economics has to go well beyond the Neo-classical doctrines and towards the economics of ecology and sustainable develop­ment.

Therefore, the justification of JPEPA based on Neo-classical and Keynesian economics falls acutely short of its ecological-economic implications to the large-scale realities of ecology-created poverty in the Philippines today.  Moreover, the voluminous macro-economics data of Roxas (2005) and Lamberte (2002, 2003) reveal the shortcomings of this “outdated growth-centered approach” in justifications of the economic policies (i.e. value added tax, and so forth), plans (with macroeconomics as mother framework) and market-based mobility of economic resources of the economy of globalization.  The empirical data (1950-present) proves that this economic growth centered economics utilized in the same period created poverty rather prosperity for Filipinos in the Philippines.

If growth-centered economics had clearly pushed our society towards the current massive scale of poverty and environmental destruction, why use the same “schools of thought of growth economics”  (Neo-Classical and Keynesian) in the evaluation and justification of JPEPA? How can one accept the economics promises of JPEPA when the logic of the econometrics was shaped by the context of the logic of the Neo-classical doctrine?  What is tremendously  lamentable at this stage is that no ecological assessment was done even though JPEPA’s economics will be accompanied by the dumping of industrial, domestic and even highly-toxic waste into the already ecologically fragile conditions of the Philippines today.  If all projects whether public or private are required to undergo environmental impact assessment before implementation, why is it that no ecological assessments on JPEPA were required of the proponents?

NEPA is proud of the work being done by Dr. Gonzales, as well as of all the work being done by other NEPA economists on their respective chosen focuses of study. We are confident that given enough opportunity, he can effectively deliver the solid bases for the Senate committee and the Senate itself to subject to closer scrutiny the claims being made by JPEPA supporters that “economic advantages for the Philippines outweigh the environmental sacrifice” being forced on the safety, dignity, and the very lives of our people and our posterity.  We are confident that the Senators, despite the expected extraneous pressure on it to rubberstamp its approval, would eventually judge JPEPA as unfit for Senate ratification.

NEPA will be releasing the full text of the Dr. Gonzales Study on JPEPA within the next few days. We call upon all conscious stakeholders to study his paper diligently as soon as it gets circulated. That way, we can all explain it well to the other stakeholders on this issue in their teeming dozens of millions.  At present, NEPA is also conducting discussions with leaders of micro-/small and medium enterprises (SMEs), as well as with labor leaders, cooperatives, and other sectors of our people, to gather and consolidate their respective collective views especially on the economic provisions of JPEPA. We will be releasing studies and statements based on these as soon as they are ready. We owe this to the  present and future generations of our people; and we owe it to our shining tradition both as Filipinos and as NEPA.

We are proud to be an active part of building the synergy of the Filipino people to oppose such onerous impositions as JPEPA. Such synergy is fast emerging now as the very foundation of Philippine economic protection and progress from within.

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