Tuesday, April 17, 2007

Trailblazing: The Quest for Energy Self-Reliance (A Kasarinlan Review)

Geronimo Z. Velasco. 2006. Trailblazing: The Quest for Energy Self-Reliance. Pasig City: Anvil Publishing. 236 pp.

First published in Kasarinlan: Philippine Journal of Third World Studies 21, 2 (2006): 176-180.

It is a dilemma to critique a book authored by someone I worked for and admire as a person but with whom I disagreed with in major policy decisions during my term as Secretary of Energy under the Ramos administration. I can either end up defending myself—which will be construed as a biased critique—or avoid a debate on policy decisions by simply citing the differences in governance during his time and my time. However, such simplistic review would ignore the significance of the management approach and policies that helped the accomplishments cited in the book, which I completely agree with. Not because I worked for the author for some time, but because I was very much involved in the energy industry during my academic career at the University of the Philippines during the Marcos administration.

The book is a good treatise on how to manage government corporations, most especially in the energy industry, which is critical to the life of a country’s economy and the well being of its citizens. The story on Philippine National Oil Company (PNOC), Petron, and National Power Corporation (Napocor) showed that the state has to insulate from political intervention the energy industry’s government corporations if it wants them to accomplish their mission in the interest of national security and price affordability, and if it wants corporations to act as catalyst to support policies on energy development and management. The admission of the author that he would not have done the things he had done without Martial Law attests to this statement (48, 78). He can even get away with so-called anomalous Memorandum of Agreements (141) at the time. Moreover, the success of Petron from which the author inherited personnel with a private culture of efficiency and merit-based recognition compared to the lesser success of Napocor, which was a government corporation from the start, is another testament (140-41).

While I agree that the best way to influence the behavior of players in the market is for government to play a significant role through a full ownership of Petron and Napocor, such role can only be played if it is allowed to be run professionally and freed from political intervention and removed from the rules and regulations of government hiring, salary structures, procurement procedures, and the like (17-19, 205). Note: A lot of good people at Napocor left when it was placed under the Salary Standardization Law of the government.
The mere fact that when the Department of Energy was reinstituted in 1992, Congress inserted a provision whereby the budget of PNOC and Napocor had to be approved by Congress proves that insulating energy corporations from political intervention is easier said than done. Imagine Petron’s budget passing through Congress, its crude oil procurement done through government bidding procedures (19), or Petron being asked by government to subsidize oil prices during periods of crude oil increase just like what was mandated for Napocor. Under our version of a democracy and its resultant political environment, Petron will be bankrupt by now and will thus fail in its obligation that the author stated: “It [Petron] was the most profitable government corporation and thus a valuable source of revenues for government. More important, Petron performed a unique role in stabilizing local oil prices” (177). The author recognized that he could not have insulated Petron from political intervention and government rules and regulations if it were not for Martial Law (29).

I submit that the privatization of Petron and the oil deregulation law are the right policies under the current political environment, but I agree with the author that the government must strengthen its regulatory powers and exercise it to the fullest. Deregulation does not mean no regulation but re-regulation. For starters, one advantage of deregulation would be that all service stations, not only of Petron, would have clean toilets (168).

Congress needs to pass an anti-trust law so that it can strengthen its regulatory mandate in liberalized and deregulated markets. Even if the government has only a 40 percent share in Petron, this can still be used as a policy instrument and exert influence in pricing. However, government would need political savvy in addition to management acumen.

The author admits that during his term, everybody followed Petron when it set the price (194). The same happens in a deregulated environment: Everybody follows the lowest price setter, hence the “same price” situation still prevails, but that same price is the lowest price set by the most efficient. While one is always free to accuse the foreign companies of collusion, I do not think that Petron is a party even with Saudi Aramco as a foreign partner. Otherwise, government itself, which has equal vote in the board, will be a party to a cartel, which it wants to prevent—an irony in its highest degree. The privatization model of Petron achieves the twin objectives of insulating it from political intervention and performing its role as “a potent policy instrument” vis-à-vis major oil industry players.

To be able to perform its role well, Petron had to be financially stable, efficient, and able to compete; but this is possible only if it is insulated from political intervention. Given the current political climate, its privatization, with government retaining 40 percent and the public 20 percent, is the best decision that was made by the Ramos administration.

Likewise, the Philippine Electric Power Industry Reform Act (EPIRA), for all its shortcomings, is a step in the right direction. The government has no money to put into the required expansion program of the power sector, and with political intervention Napocor cannot generate its cash counterpart requirements for the projects (136). Lower interest loans are offset by inefficiency and political interference. EPIRA is a developmental process and the issue of cross-ownership prohibition must come at the right time. For this, government must be constantly at attention to monitor developments on monopolistic behavior. National Transmission Corporation, for instance, must be privatized like the Petron model. It must not be entrusted completely in the hands of the private sector, even in a concessionaire model of privatization.

The author failed to mention that our independent power producer contracts are, in reality, not IPP contracts in the strictest sense, but are Build-Operate-Transfer contracts (a policy embodied in Republic Act [RA] 6957 and RA 7718) wherein the assets will be transferred to the Napocor after the cooperation period. As such, the payments made due to the “take-or-pay” contract, whether used or not, are payments for the capital assets and not for unused fuel or coal because Napocor supplies the fuel. Note that the author’s word is “whether or not the organization needed” (155) instead of used, to which I disagree with because at the time the take-or-pay volume were contracted out, they were based on forecast and therefore were “needed” in the future as forecasted at that time. Unlike a straightforward IPP, the facilities are not transferred to the buying party. So in the BOT projects, payments made if the plants are not used is not wasted because the assets will eventually be owned by Napocor.

Lastly, to say that the post-Marcos administration did not have a comprehensive energy development plan is a sweeping statement. I would like to take exception for the Ramos administration for which I was the Secretary of Energy from September 1994. In fact, the plans and programs of the Ramos administration were built on the achievements mentioned in the book; and the policies, objectives, and basic thrusts were basically maintained (208). Policies on the development of indigenous energy resources and renewable energy and energy conservation were continued. We pursued the implementation of the Malampaya natural gas project, which has enhanced our energy security and independence. We left behind an ocean, solar, and wind pole-vaulting program, which is geared toward developing renewable energy. We had the very successful Power Patrol Project, which involved the participation of the private sector to support the energy conservation policy.

The policy on deregulation and liberalization of the oil and power industry are policies called for in this current form of political governance. Liberalization is not an invention of post-Marcos administrations because as the author wrote, “In 1984, as the country implemented the International Monetary Fund’s structural adjustment program, we [the Marcos administration] had to allow market forces to operate in the coal industry” (65-66). Moreover, the Ramos administration left behind a thirty-five-year Energy Development Plan (1998-2035), which takes off from the accomplishments cited in the book and those done during the Ramos administration.

The Filipino people are now enjoying the fruits of the labor of the author in our quest for energy self-reliance, most especially the geothermal and hydropower development. But while he does not agree with the privatization of Petron, we must realize that Petron’s privatization was successful because it was nurtured and managed well to become a very profitable company during the Marcos administration. While we have yet to see the benefits of the EPIRA, it is too early to pass judgment on policy decisions of post-Marcos administrations on the power sector. Suffice it to say that I agree with the author that the success of deregulating a very critical industry, like oil and power, is a strengthened, responsive, and well-administered regulatory environment. The challenge that lies ahead of us is to be able to duplicate the achievements told in the book in our own version of democracy in which political intervention, not only by the politicians but also by those with self-interests from the private sector and nongovernment organizations, is a commonplace.—Francisco L. Viray, President, Trans-Asia Power Generation Corporation

Click this link to download the review in PDF.

Monday, April 16, 2007

Virtual Thailand: The Media and Cultural Politics in Thailand, Malaysia and Singapore (A Kasarinlan Review)

Glen Lewis. 2006. Virtual Thailand: The Media and Cultural Politics in Thailand, Malaysia and Singapore. London and New York: Routledge Curzon. 227 pp.

First published in Kasarinlan: Philippine Journal of Third World Studies 21, 2 (2006): 180-183.

The virtuality of Thailand as a state of mind exists as a creation of an imagination, partly based on reality, but largely comprised of constructed representations, all of which serve to achieve the agenda of the state and the elites in their state-building projects in the context of a globalized world. It is in this complex terrain of images that the media takes a central role, and tourism becomes the dominant field where media images are inscribed and take root. Glen Lewis has clearly illustrated this in his well-researched although sometimes disparately argued book.

Tourism subsists on a mediated construction of opposing categories of modern and ethnic. “Amazing Thailand” and “Malaysia Truly Asia” both capitalize on the organic allure of an oriental culture that offers raw forms of meanings that are different from modern and built environments. Yet, Thailand and Malaysia also have to present an imagery of convenience of modern-day living in which tourists thrive. Thus, you have posh hotels with the amenities of modern life just a few yards away from the exotic and the ethnic. Nothing could be more vivid than seeing elephants walking the streets of modern Bangkok. This is precisely why Singapore is trying hard to find an image that goes beyond its economic power—shopping malls and corporate culture. To be able to compete in the international tourism market, Singapore attempts to match the cultural Thai and Malay to which Western and/or affluent Asian travelers are more attracted to. In all these, organic meanings have to be represented as cultural attractions. Images have to be reconfigured beyond their traditional roots and forced to exist as an object of gaze for the paying outsider. In the case of Thailand, this could even take the form of offering the weary traveler the various incarnations of its traditional hospitality, including the touch of massage parlors and go-go bars. These complex plays of representation—produced by the power that comes with the ability to reconstruct the native landscape and its inhabitants, and represent them for tourists to gawk at, take photographs of, and be mesmerized about—exist in a political economy not only of symbols but of pragmatic politics. In the process, elements of the native landscape that may compromise the image of safety and allure which the state would like to project have to be reconfigured, hidden, and, in some instances, silenced.

It is in this context that the projection of beauty becomes just the other face of the oppressive structures of beauty-fixated politics. The Philippines has had this experience during the reign of Imelda Marcos. Yet, Thailand has become even more corporately innovative. While Imelda used influence, both subtle and blatant, on the press to project an image of the true, the good, and the beautiful, Thaksin simply did the more practical and effective way—which is, own the media.

As Lewis illustrates, the virtuality of Thailand, Malaysia, and Singapore, while manifested in the poster images and slogans of its tourism industry, uses the media as its lifeblood. Here, Lewis points out another dualism that exists parallel to the oppositional categories of tradition and modernity that can be seen in how tourism is discursively constructed. The media becomes a terrain in which the opposing categories of freedom and limits are defined. The mass media in mainland Southeast Asia—particularly in Thailand, Malaysia, and Singapore—exist as an object for the state to provide spaces for freedom and mobility, even as it is used to limit those spaces as well. What Thaksin gives through his mobile-phone company, he takes away through the structural limits he imposed in his virtual control of—if not great influence on—the telecommunications industry.

As a child of democratization processes, and as an institution traditionally tasked to provide a venue for critic and engagement, the mass media ideally should act as a conscience to ensure that the virtual representations of Thailand, Malaysia, and Singapore peddled both by their government bureaucrats and by tourism operators are truly authentic. Yet, the mass media is also effectively positioned for the controlling gaze of the state. Lewis pointed out correctly that mass media has edged out educational institutions, indicating that it is an important shaper of consciousness. In some countries, these could be done in more draconian ways. Singapore and Malaysia have very stringent controls on the press. In others, attempts to control are carried out not by intimidating laws, but by sheer brutality manifested in actual killings of journalists. The Philippines, in fact, has prided itself on a free media, but at the same time has had the highest number of journalists murdered in recent years. Thailand, on the other hand, has seen a more subtle, if not insidious, process of control. Instead of deploying draconian laws or vicious killings, Thaksin’s Chief-Executive-Officer approach appropriated corporate control and ownership of the media as a way of making it toe the line. But as Lewis correctly pointed out, the globalization process has rendered the field for media representation virtually beyond totalizing control. The logic behind the capacity of a state to control its media institutions and manage the production of images—as a lynchpin for a virtual Thailand, or Malaysia, or Singapore to project an image that is safe, alluring, and exciting to a global market of tourists, assuring them of a land free of terrorists, severe acute respiratory syndrome (SARS), and bird flu—is ironically linked to a global market where images and information are considered free commodities. A globalized media is one that is not bounded by state borders or delimited by state policy. Even as states are busy covering up or sanitizing information from within, global communication networks such as Cable News Network and British Broadcasting Corporation, and even media organizations from other (perhaps competing?) countries are as effective in projecting terror and disease as real threats to the paying tourists.

However, Lewis should have emphasized more in his book the countervailing forces that continue to challenge the hegemonic image factories controlled by state structures from within their boundaries. Thaksin may have had control of the media through corporate channels, but considering recent events in Thai politics, this did not protect him from losing his legitimacy and perhaps, worse, at least for Thais, his “face.” These forces are not products of globalized forces that are naturally beyond the reach of a single Thaksin, or of Malaysia’s United Malay National Organization, or of Singapore’s People’s Action Party. There are enough stories to tell in Southeast Asia, and in particular, in Thailand, Malaysia, and even Singapore, of local struggles to challenge the virtual representations that are being projected by state image managers and media handlers. Most of these happen at local levels, as people-based or popular movements that push for sustainable development and for human rights, both of which address a convergence of discourses that relocate the representation away from postcard images that are politically convenient to the powerful elites, and closer to images that are more relevant and authentic to the lives of local people. These kinds of images are missing in the picture that Lewis has painted for us. Local stories of resistance and counter-imagination are potent forces that could interrupt the grand narratives and the broad strokes of a constructed landscape that is virtual Thailand.—Antonio P. Contreras, Professor and Dean, College of Liberal Arts, De La Salle University, Manila.

Tuesday, April 03, 2007

The Acehnese Conflict and Peace Process and Its Implications for Peacebuilding in Mindanao


Mr. Shaber Arsad

Opening Remarks
Mr. Tsutomu "Ben" Suzuki
Director, Japan Foundation Manila

Welcome Remarks
Dr. Mashur Bin-Ghalib Jundam
Dean, Institute of Islamic Studies

Prof. Taha Basman
Center for Moderate Muslims-Philippines

Introduction of Speakers
Ms. Elsa Clave
Ms. Nefertari Arsad

Talk on the Acehnese Conflict and Peace Process
Shadia Marhaban
President, Acehnese Women’s League

Film Showing
“The Black Road”

Sharing and Insights on the GRP-MILF Peace Process
Atty. Musib Buat
MILF Peace Panel

Prof. Rudy Rodil
GRP-Peace Panel

Open Forum
Asst. Prof. Macrina A. Morados

Closing Remarks
Dr. Eduardo Tadem
Associate Professor, Asian Center

Emcee: Asst. Prof. Macrina Morados


Aceh is a province situated on the north-western tip of Sumatra Island in Indonesia. The separatist movement led by the Gerakan Aceh Merdeka (GAM, or Free Aceh Movement) is the contemporary extension of older struggles which began after independence in 1949. The lack of social and economic progress in Aceh due to discriminatory policies of the Jakarta government's led to the formation of GAM in 1976 and the relaunching of an armed struggle for social justice and Acehnese independence. The conflict intensified in 1989 as GAM led numerous offensives against the police and military. From 1989 to 1998, then President Suharto launched a large-scale military operation which turned Aceh into a Military Operation Zone. Human rights violations were frequent, including murders, kidnappings, beatings, arbitrary detention, torture, and rape committed mainly by the Indonesian army, but also, less often, by GAM combatants.

The fall of the Suharto regime in 1998 marked the beginning of a period of political reform known as Reformasi which temporarily cooled the Aceh conflict. Following a new round of peace negotiations initiated by then President Abdurrahman Wahid in 1999, around 500,000 people gathered in front of the largest mosque in the provincial capital, Banda Aceh, on 8 November 1999, to demand a referendum. This widely-supported initiative quickly spread and an alarmed Indonesian military moved to suppress the movement.

On December 9, 2000, a humanitarian ceasefire was finally signed which led to an Agreement of Cessation of Hostilities (CoHA). Consequently, the national government passed in August 2001 the Nanggroe Aceh Darussalam (NAD) Law which granted Aceh unprecedented authority over its internal affairs. Unfortunately, these two initiatives failed to bring sustainable peace and political autonomy. Violations of the CoHA as well as Jakarta's failure to implement the NAD law led to further oppression. Then President Megawati Soekarnoputri declared a state of military emergency in Aceh in May 2003, and a year later, a state of civil emergency. The province was closed to foreigners, most Non-Governmental Organizations and the media.

From 2001 to 2004, violence and fear ruled Aceh. Farmers abandoned their farm lands. The streets became unsafe due to frequent shoot-outs and villagers beaten, raped or tortured in revenge. Vehicles had to pay road taxes to both GAM and the Indonesian army checkpoints. Hijacking of trade goods often took place. Schools and private houses were burned as punishment for GAM supporters.

On 24 December 2004, a powerful tsunami struck the North-western coast of Sumatra and caused tremendous damage in Aceh. About 2,500 villages were levelled, around 167,000 people were killed and 500,000 individuals were rendered homeless. The international response to the disaster forced a reluctant Indonesian government to reopen Aceh to the world.

The tragedy, ironically, became a new opportunity to rekindle the peace process. The Indonesian government announced on 23 January 2005 the resumption of peace talks with GAM in Helsinki. On August 15, 2005, a Memorandum of Understanding (MOU) for attaining peace in Aceh was signed by the two parties. The province was demilitarized in December 2005 with political integration within the Republic of Indonesia beginning in 2006. Provincial elections finally took place on December 11, 2006 which resulted in the election of Irwandi Yusuf, a GAM member running as an independent, as the new Aceh governor.

The Acehnese peace process provides important lessons for other countries with similar long-standing separatist movements. The Philippines is one such country where independence movements by the Moro people have long simmered in Mindanao and Sulu. It is therefore crucial to understand the Aceh experience and search for insights and opportunities that could be useful for the resolution of the conflict between the Mindanao independence groups and the Manila government.