Part 2 — Economic recovery and the second wave

CENTRAL to a global economic recovery are two predicates: the taming of the coronavirus disease 2019 (Covid-19) as a “sine qua non” and a seamless measured lifting of the quarantine to restart local economic activities. But the world cannot wait 18 months. Much is unknown about its virulence when quarantine is lifted. It could trigger another wave of contagion. Yet, the world must understand we may have to live with the contagion or its mutant form among us for the foreseeable future.

Government and private revenues are drying up dangerously. Unemployment has shot through the roof and food subsidies are finite. The advanced economies have built-in safety nets, while the impoverished countries, like the Philippines, have their masses coping. They eat when they find work. We need to comprehend, too, that Covid- 19 has ravaged a relatively small percentage of a country’s population, but hysteria, ignorance and panic have blown this out of proportion. It is not a zero-sum game between “saving lives to save the economy or saving the economy to save lives.” The trade-off between the need for jobs and avoidance of contagion to save the economy must be calibrated with precision toward the decision to reopen the economy. (Refer to Nick Perlas’ letter to President Duterte on the Philippine Daily Inquirer.)

Singapore — second wave
Take Singapore, with its reputation as the best governed prosperous city-state; it acted quickly and decisively. By instituting quarantines and employing massive testing, isolating the positives and tracing the infected, and of everyone flying into its Changi airport, the virus was contained. Covid-19 positives were enrolled into its excellent healthcare system, freeing them once they tested negative. Singapore learned its lessons well from the outbreak of the 2003 severe acute respiratory syndrome epidemic. What they did became the gold standard for the virus containment and mitigation. Then the second wave rolled in.

The spike in cases hit Singapore harder this time around. Several reasons could be attributed for this surge, but the overarching cause was that this First World country acted as a Third World country with respect to its foreign migrant workers. “Singapore’s vast migrant worker population, in particular those workers — most from South Asia — living in cramped dormitories, who appear to have been overlooked in the initial wave of testing. What is evident is that the conditions that workers live in made effective social distancing — or ‘home’ quarantine — next to impossible, making it easy for the virus to spread,” (James Griffiths, CNN, April 19, 2020.)

For the well-to-do Singaporeans, the initial reaction as explained by Dale Fisher, infection control chairman at the National University Hospital, was that, “In Singapore, we want life to go on as normal… We want businesses, churches, restaurants and schools to stay open. This is what success looks like. Everything goes forward with modifications as needed and you keep doing this until there’s a vaccine or a treatment.” Its relaxed attitude may have done Singapore in. Or maybe hubris did.

The US
America’s case is different. Unlike Singapore, it is a country gazillion times bigger, endowed with vast resources, but saddled with a complicated political system, presided over by a leader that pales in comparison to Lee Kwan Yew’s progeny, Lee Hsien Loong. United tates President Donald Trump mandated a phased-in reopening of the economy leaving final decision to state governors under a set of his own criteria. The next day he promptly subverted the same — calling his base to “liberate the states from lockdowns.” Minnesota, Michigan and Virginia are key targets needed to propel him to a second term in November. This is seducing fate for a possible second wave of contagion as the exigencies of politics he made supreme over people’s lives.

PH experience
In our country, meanwhile, President Rodrigo Duterte, or the Deegong, has been chillingly deliberate in explaining to the citizens that the P270-billion outlay is only enough for two months. When the subsidy and the money runs out, this simmering social volcano could erupt — resulting in chaos, disruption and death that is more widespread than that inflicted by any contagion.

Government needs to divert its scarce resources from food subsidy toward getting the work force productive safely and quickly. Finance Secretary Carlos Dominguez 3rd, ascendant over the economic team with the resignation of former Socioeconomic Planning secretary Ernesto Pernia, needs to identify which critical economic activities are immediately viable for restart and in what sequence of urgency, preferably those not dependent solely on foreign supply chains.

The service-producing industries, in which a large segment of our wage earners are engaged in, are obviously the priority

An imaginative public transport system to and from the sites could be introduced — or for that matter, workers could be housed in temporary dormitories near their workplaces. And a curfew could be imposed to monitor eateries, restaurants and entertainment places, and maintain order in the streets.

Corruption
Which brings us to an egregious systemic anomaly. Deeply embedded in our political culture, the traditional values perverting governance surfaces. Even in times of misfortune, rent seekers and market opportunists abound. Millions from the Super Typhoon “Yolanda” (“Haiyan”) calamity funds have never been accounted for and foreign goods donated were found rotting in warehouses because of logistical glitches; and then this despicable practice of substituting politicians’ labels on donors goods, widely known locally as “epal.”

The undisciplined hordes, the pasaway roaming the streets during lockdowns need to be tamed with creative alternative livelihood, keeping them productive. The Deegong who has just extended quarantine for major cities to May 15 has initiated a Balik Probinsya program to decongest the slums of the cities. But, again, as in any palliative, instant solutions to generations-long festering problem are bound to fail. The pasaway will just earn a much-needed vacation back to their provinces. When the crisis abates, they will be back in their hovels. Meantime, when the masses are hungry and angry, looting and crime are their desperate expressions; forcing the state to exercise its monopoly on the legitimate use of violence. In a farcical display of political will but no longer instilling fear into an already callused citizenry, martial law has been hinted at.

Global initiatives
Meanwhile, local economic recovery will not be sustainable unless the global economy restarts. The cooperation of the biggest economies, principally China and the US, with substantial participation of other First World countries is imperative. First is to pool resources and technology and share information toward the production of the Covid- 19 vaccine or other cures. Second is to guarantee distribution priority to the countries that need these the most.

Despite Trump defunding the World Health Organization, this is still the most extensively wired worldwide institution that can allocate the needs of member countries efficiently. Presidents Xi Jinping and Vladimir Putin will still be in charge of their respective countries. By November, an American lameduck president may be presiding over the US.

But before then, the world must work with urgency as one to save humanity no less. We all work together to save our specie, or we perish individually, just the same. And this is the new normal.

LOOK at the figures and what the Americans have been doing, and you decide if the United States has become that proverbial frog being boiled alive, not realizing its quagmire until it’s too late.

At the start of March, the US had 73 Covid-19 cases; by the end of this week, there will most likely be a million Americans infected (960,651 the other day). Only six Americans died from the disease on March 1; as of the other day, 54,256 did. (We have our 7,294 cases and 494 deaths so far.) Think about it: if just a third of 960,651 infected with the disease get to infect more people, how can the US ever get to control its spread?

The US now is the Sickest Man of the world, given the most infected citizens, which account for a third of the 2,920,954 human beings now afflicted with the coronavirus.


The leadership of the US government, embodied by President Donald Trump, is panicking at the same time that it is deluding itself that the disease will just go away. Or dreaming that some magic vaccine will be invented soon, or the Lysol kind of disinfectant will be found to be useful in fighting it by simply ingesting it, as its president remarked. Only a few cities — New York and Chicago — have been locked down in the way Wuhan was when it had only 20,000 cases.


Cases of and deaths due to Covid-19 as of April 26 SOURCE: JOHNS HOPKINS
Some states have even been loosening up their stay-at-home suggestions and would allow even massage parlors to open next week. Americans in the Midwest are protesting in the streets that their inalienable rights are being violated with some states’ orders to close down enterprises. State governors have been quarreling with the President of the United States over supplies and equipment to fight the epidemic. Some 26 million Americans — more than the population of Australia — are officially unemployed.

The US is certainly demonstrating that democracy isn’t just overrated; it is even dangerous to people’s health and lives.

A big part of the US problem is hubris, a psychological disease even a Filipino American has caught, when he commented on my Facebook post March 28 that expressed my worry over the steep rise of Covid-19 cases there at that time:

“This is America, the most powerful country on earth. We will survive. We have the CDC (Centers for Disease Control and Prevention) the best health regulating agency in the world. Our healthcare systems may not be perfect but we are 10x better than my home country, the Philippines. The people here are very proactive, disciplined and obedient to government policies.

“The preventative measures set in place before the actual crisis occurred are outstanding. My county in the San Francisco Bay area was the first to declare ‘shelter at home,’ even without a single confirmed case unlike your health department. FEMA (Federal Emergency Management Agency) is mobilized. The National Guards are 24/7 rotating on duty. Economic stimulus checks will be started to be distributed next week. Mortgage relief, student loan relief, unemployment benefits are on the dot… We have the best and the brightest scientists in the world with so much resources. I feel way safer here than in ‘Pinas.”

So much for colonial mentality — or wishful thinking.

But this column is certainly not one of schadenfreude, although I am not such a big fan of the US: it has been the hegemonic imperialist power in the era of hyper-capitalism, which in the postwar era waged 19 wars outside of its borders that by one estimate killed 12 million non-Caucasian peoples.

If America’s loss of control over the coronavirus pandemic leads to its steep economic fall, we will suffer, thanks to our elites’ yoking of the economy to that of the US since it colonized us. In 2019, the US was still the biggest importer of Philippine products and fourth largest exporter to our markets. Probably if somebody with President Duterte’s insight into world affairs had been president in 2010, we might have had a more balanced trade structure, with China on the same level with the US.

We would easily survive a sudden downturn of US exports to the Philippines. But a sudden cutting or even a reduction by half of our exports to that country — which would likely happen with the meltdown of the US economy because of the pandemic — would gouge out a huge chunk of our manufacturing and service industries.

The US still accounts for the bulk of our business-process outsourcing industry, which has been the engine for the boom in retail and restaurant markets in the past several years, as this placed a lot of purchasing power in the hands of the younger generation. In 2008, several of the US biggest financial institutions went belly up — triggering a world financial crisis. What if not just its banks but its manufacturing backbone goes under?

More than the impact of a fall of the US economy on ours though, what could be worrying is the sudden decline of the US as hegemonic superpower. While the US has for most of the last century ridden roughshod over the rest of the world and exploited the developing countries, history has shown that the fall of any empire has created so much chaos, as in the classic case of the fall of the Roman empire leading to the Dark Ages.

The epicenter of the chaos from the fall of the US would be the Middle East because it had dismantled the authoritarian but stable regimes, with the democratic systems that replaced these proving to be disasters as in the case of Iraq, Afghanistan and Libya. Without the armed might and money of the US, a tsunami of Islamic fundamentalist movements would overwhelm the region.

For all its military and technological prowess, Israel is still dependent on the US, which has been giving it an average of $3 billion annually since 1997 to this day. If that ends, its old Arab enemies would be tempted to invade the tiny country as they did in 1967 — and a desperate Israel would retaliate with its nuclear arsenal.

We probably should be praying that North Korea’s dictator Kim Jong Il doesn’t recover from his alleged heart surgery: only the US is standing between this nut who has at least 20 nuclear bombs at his disposal and South Korea.

That its three nuclear-powered attack carriers had to go to port because its sailors got infected with Covid-19 is certainly emblematic of the dangerous quagmire the US is in now.

In short, the US had appointed itself as the world’s policeman since the end of the last world war. While this facilitated its extraction of wealth in different ways from developing countries, it was after all the policeman that kept order.

What happens now if the policeman is gravely ill, with neither China nor Russia having the appetite to assume that role?

People should RE-INVENT THEMSELVES, INDIVIDUALLY and AS A NATION, NOW!

Chokepoints, bottlenecks are costing us lives, unnecessary economic losses and future gains.

The stress testing of systems is happening simultaneously today around the globe, and nations are being graded by their response to the coronavirus pandemic. Beyond pronouncements of politicians, critics and peoples, we can see which countries have clear plans and communication, effective infrastructure, good execution and disciplined citizens and to some extent, which have been favored by nature and which have not. The grading is relentlessly shown in infection and death rates — without chances for appeal.

Since we have the Inter-Agency Task Force for the Management of Emerging Infectious Diseases for recommendations for the policy level and medical institutions for the health level, we focus here on ground-operation recommendations.

Where we must improve to avoid disaster?

Essential goods are getting stuck up even at low volume. Customs, ports and logistics need increased hours; more personnel; upgraded computers, software and training; and better regulation and transparency. Goods, food even, are getting choked because of extreme delays, such that key needed commodities are endangering our manufacturing of crucial food supply. Even shipping lines are hesitating to transport to the country because of delays in processing — delays in coming out, increasing costs of demurrage and storage, with the latter in need of regulation, making our country’s already expensive handling cost even costlier not just for food but for all items. This is partly because of containers not being withdrawn by many importers, but this can be mitigated by organizing ahead for priorities, announcements of what importations to withhold and communications.

Breakdowns are happening regularly in information technology of different agencies, they need updating and training. There are complete stoppages because there are no back-ups or pre-planned alternative processes. In the last month, clearing of payments got stuck up; Customs billings, Customs payment systems stopped functioning. Various other agencies’ portals, enrollment, titling, registrations, verification, name checking, among other systems, stopped functioning at this crucial period. This has been happening regularly even in normal times, and yet they are charging much more. We expect breakdowns to happen, but the frequency and spread among agencies mean there is not even a functioning back-up system in some of our vital agencies. Without updating our systems soonest, this will happen again and again. This is a period when IT experts can analyze and redesign even during lockdown, let’s do it now. It seems our pride of a tech-savvy population refers to Facebook, Instagram and various social media?

Communications and quick-response culture that need to be planted are not part of most of us. Institutions are not responding to applications or inquiries even after weeks. People and companies need to know if they should anticipate not having income support or no deliveries, and plan accordingly. Some agencies like the Trade department are communicating and responding regularly. Each key agency needs different levels of responders, who are coached on responses and on how to disseminate every few hours, with access to decisions when needed.

We propose further:

1. Public-private partnership teams in operations, not just consultation. Recruit teams with proven operation experience. Skill sets and equipment available in the private sector can squeeze billions more in daily value through more efficient execution with the help of decisions of key government officials. Both the private and public sectors are helping each other out extensively now, but they can do much more, much better together if not just in an advisory capacity but being part of execution together. Without liquidity extensions and assistance, the private sector cannot last long.

2. Full-time, quick-response decisions are needed 24/7. Delays or non-decisions for situations on the ground are compromising life and death situations , reputation of the government and forgoing massive possible sources of income and savings, hurting morale and creating room for politics. Some decisions need live discussion, others need to be listed and responded to at a later time.

3. Food and rice need bigger buffer — a non-negotiable. We might meet possible tightening of supply if countries reduce trade, our purchases abroad need to be locked in, not just promised, to tide us over until our rice harvest season in October. Start orienting our people’s diets to be more diversified and adaptable, improve our agricultural yields and incentives.

4. Speed up national adoption of digital billing, payments and receipting systems, KYC (Know Your Customer), monitors and ledger systems, etc. We can take occasion today to advance the technology of operations in the country. Needed in executing the disbursements and inflows that need to be executed safely today with minimal physical presence or movement or pilferage losses will be very high or payments will get stuck up, all logistics won’t flow and the real economy as well won’t.

5. Plan now for increased health strains to the public and private sectors. How to use tests, operate safely, for after quarantine — as there will be another wave of patients when travel and the economy are liberalized to operate again.

6. Simulation studies, together with private actual operators and people, on effects of an extension of quarantine, to estimate more realistically financial, food, logistic needs and the costs and how to deliver. Without sit-downs with operators, unnecessary errors will cost a lot and even cause more deaths that are avoidable.

7. Productivity must be managed, modernized and not just kept up. This is a good time for government and organizations to do their updating, reformatting of their organizations and technologies, which were not possible before when everyone was busy with operations.

8. The same reformat is true for individuals for their careers, to catch up on self-development, grow with the family, empower those around us. Not just use this time to coast and relax all thru the holiday. What you do now will determine if after the unavoidable difficulties, you and your family will be one of the winners in the new world!

New Worlds by IDSI (Integrated Development Studies Institute) aims to present frameworks based on a balance of economic theory, historical realities, ground success in real business and communities and attempt for common good, culture and spirituality. We welcome logical feedback and possibly working together with compatible frameworks.

Editorial cartoon.

Editorial Cartoon.

Almost every morning during these COVID-19 lockdown weeks, I have been posting on Facebook the front page of the digital version of the Inquirer.

For the computer illiterate, the Inquirer digital version is exactly what the day’s newspaper looks like, and you can flip the pages with your finger on the touchscreen of your gadget. It is best to read on a tablet while you are having your breakfast coffee. You have to be a subscriber to access the entire issue.

Oh, but I must say that there is nothing like the smell of the news and the day’s Sudoku on real paper. Alas, there has been no delivery for more than a month now.

When the Inquirer came out with the editorial “Betraying Homonhon” last Tuesday, I wanted to immediately share the stand-alone online version, but it was not yet uploaded so I took a screenshot of the Opinion page and posted it. An hour later, the free online version was up.

Why was I riled enough to post the editorial for many to read right away? It was because while we were cloistered in our homes, a Chinese-operated vessel was creeping into Homonhon Island in Guiuan, Eastern Samar, to haul away chromite ore from a mining site operated by Techiron Resources Inc. That, despite the lockdown in the province and other parts of the country.

Well, elsewhere, the Chinese have extracted black sand and marine resources, seized Philippine territory—plus the hearts, minds, guts, and balls of some of our elected leaders.

Homonhon is the island in our archipelago where, some historians argue, one Fernão de Magalhães/Fernando de Magallanes/Ferdinand Magellan first set foot (not on Limasawa Island) and marked the beginning of Spanish colonization and the advent of Christianity in the Philippines, something that the locals commemorate. An event whose tragic outcome Yoyoy Villame had delightfully immortalized in song.

Fast forward to 2020, almost 500 years since, the little island is at odds with present-day extractors, modern-day explorers, and despoilers of the environment from nearby.

According to CBCP News of the Catholic Bishops’ Conference of the Philippines, the government had “allow[ed] a Chinese-manned vessel to load mineral ores despite the province-wide quarantine.” This sparked citizens’ appeals for the closure of mining operations on the island.

MV VW Peace, a Panamanian-registered vessel with a crew of 13 Chinese and four from Myanmar, arrived in Homonhon on April 4 to load about 7,000 tons of chromite ore. The loading was at first delayed but was later resumed when the Department of Environment and Natural Resources reversed its first decision to suspend operations. Why so enamored with China? We know the answer.

Another petition from the Philippine-Misereor Partnership Inc. and the Visayas State University decried the effect of mining on forest diversity and the ocean surrounding the island. Misereor is the development arm of the Catholic bishops of Germany.

“The mines would affect the forest, fauna diversity and also influence the productivity of the ocean around the island (considering the ridge-to-reef effect) which is the main source of livelihood of the residents of Homonhon… Not only would we lose valuable species, but (mining would) also affect the environment and the lives of the people. This petition now aims to hasten the bill or law that proposes to declare the island as a critical habitat and which could and possibly prohibit any mining activities.”

Here we are waiting to exhale, cocooned in our private abodes, riding out the COVID-19 long-drawn pandemic that visited our planet while out there, an island community must battle foreign, plague-carrying intruders.

What a timely sneak of thieves in the night. But this is not the first time on the island or elsewhere. The password for entry: China.

Moving indeed is the music video “Dakila Ka, Bayani Ka” from the Department of Education, dedicated to our heroic health workers and other frontliners serving here and abroad during these dark times. It is performed by about a dozen Filipino artists/musicians, most of them under quarantine. The music and images brought tears to my eyes especially because of nurses and doctors in the family, my late father among them.

Editorial cartoon.

Part 1 Covid-19 and lockdowns

THE movie “I Am Legend” comes to mind as one of the alternative “end of times” scenarios. I quote its synopsis: “Years after a plague kills most of humanity and transforms the rest into monsters, the sole survivor in New York City struggles valiantly to find a cure in this post-apocalyptic action thriller.” Movies have a way of predicting the possible outcomes of a given hypothesis. What limits or unlocks the universe of possibilities is simply the imagination — either infertile or vivid — of the author or the screenwriter from which the movie is adapted.

Films are also reflections of man’s hopes and fears writ large with the audience vicariously involved, safe within the confines of dark cinemas or home theaters. But audiences demand that at the end, there must be a redeeming value or at the very least a deux ex machina that restores order — a universal karma that must overarch the lives of men.

What is eerie is that the current Covid-19 mimics the plot of the movie, giving credence to the “reality follows fiction” dictum. Only the finale has not yet been scripted. Will the world find a cure — a vaccine — in time to save humanity? Reality’s final intent has still to unfold.

Panacea
A vaccine to cure or immunize the population may be available in 18 months. Meantime, China, the world’s newly minted benefactor will have to work its factories double time to produce the much-needed medical supplies and equipment for the hospitals. And there is fear of a second deadly wave, as China’s labor force breaks quarantine. Prognosis for each country is imprecise. Germany, Switzerland and the United Kingdom are expected to “flatten their curves,” but not Italy or Spain. They will be decimated. When China or the United States makes the scarce vaccine available, Western Judeo-Christian countries or China’s allies may have priority. The impoverished countries in the fringes and in the Middle East be damned. And how do you think the Islamic world will react? The permutations are endless, but Darwin’s law of natural selection will kick in — which simply means, the fittest will survive; a logical complement to the hypothesis that results in a Malthusian catastrophe.” (“Covid-19 conspiracy theories,” The Manila Times, April 1, 2020.)

The slums of Asia and India, the favelas of Latin America, and the shanty towns of Africa may be written off. They are unable to quarantine themselves seriously as this is not the priority for the poor and the “dregs of society.” And social or physical distancing is alien not only to their culture but the realities of their lives. Multi-families live in shacks and hovels.

And the jobs and food situation for survival need to be included in the calculus. There will be practically a few of the former and not enough of the latter. Hunger will descend and, perhaps, starvation and famine not unlike the intermittent years that hit the Sahel region and sub-Saharan Africa in 1968 to 2016 or North Korea from 1994 to 1998. Admittedly this extremely grim scenario belongs more to the movie disaster genre. Reality most probably will fall along the alternative route.

Point of departure
Where are we today, four-and-a-half months after the first contagion and subsequent first death was reported? As we go to press, we have 2.2 million to 2.5 million cases, with 150,000 deaths and rising. That’s 0.002 percent of the world population of 7.7 billion — minuscule compared to an estimated 0.01 percent to 5.56 percent deaths in the 1918 Spanish Flu pandemic. Hysteria and terror are the handmaidens of fear. And we have been flagellated by an amalgam of facts, fiction and fake news underpinned by ignorance, precluding us from facing lucidly monsters we ourselves created. Although Covid-19 grew exponentially in four months, the protocols on quarantine, physical distancing and health practices have begun to “flatten the curve” in some countries. But America, remiss in its role as the world’s hegemon, is now the epicenter of Covid-19. But experts have reduced morbidity projections from a high 240,000 to 60,000. Still a tragic figure compared to 9/11’s 3,000 dead that triggered two American wars and untold misery. In other countries, Covid-19 is still raging, but country-to-country assessment differs — depending on how survival protocols are enforced.

World economy
I borrow heavily from Fareed Zakaria’s reportage, a journalist of global renown on the state of the world’s economy that we are just at the “early stages of what is going to become a series of cascading crises.” And we are not going back to anything resembling normal — a position that Adam Tooze, a British historian and an eminent academic agreed with. “The old economic and political playbooks don’t apply,” he declared. The healthcare crisis is only the first phase that brought the world’s leading economies on their knees. Long profligate, the world’s governments and their desire to uplift the lives first of their elite and the overclass, then their masses, perhaps as an afterthought, produced a wealth gap between the “haves and the have nots” that caused the government and private sectors to be mired in debt. Credit Suisse estimates that the world’s richest 1 percent now owns half the world’s wealth. This is the “old normal.” Do we want to revert to that? And the global gross domestic product is $90 trillion, adding $260 trillion in public and private debt.

Many of the leading countries were caught naively unprepared, including America. It has lost 17 million jobs and on track for 30-percent unemployment. The next phase will be the debt crunch, with leading countries defaulting on their loans precipitating a fiscal breakdown. Italy, the third largest European economy is toast; it can no longer rely on Germany, its ‘go-to’ banker to tide it over. Germany, the strongest European economy, is expected to contract by more than 5 percent to start with.

Middle East and oil countries
The price of oil, the lifeblood of the industrialized nations and its main source of energy, is on a free fall, its demand having collapsed, settling perhaps at $10 per barrel. Saudi Arabia, Venezuela and members of the Organization of the Petroleum Exporting Countries Will have lakes of unsold oil. Below $60 per barrel, oil becomes unprofitable, and government revenue will dry up, sinking the economies of Libya, Nigeria, Iran and Iraq. And this will lead to instability and political turmoil, and massive shift of immigrants and refugees inundating borders.

Endgame
The knee-jerk palliative of a lockdown to contain, then mitigate the contagion saved lives. But there is a trade-off on the country’s economic life, which will also impact negatively on people’s lives, prompting reversal. Of note is South Korea and China itself, where incidences of contagion have eventually abated and lockdowns have been lifted. US President Donald Trump, who irresponsibly refused to enforce lockdowns resulting in countless American lives lost, is now disingenuously shifting blame to state governors for his criminal incompetence. He backtracked on his earlier assertion that as president, he is in total control over the states. His insistence still on a three-phased reopening of the US economy before November smacks of brazen politicking, an eye toward sanitizing his reelection bid.

Next week: Part 2 Economic recovery

Something big is happening in the global supply chain, and if the Philippines plays its cards right, significant manufacturing investments may come its way in the wake of COVID-19.

China has long been the world’s manufacturer, but the novel coronavirus pandemic afflicting the globe has exposed the problem of the world economy depending too much on a single country for many of its products. With China becoming the first epicenter of the COVID-19 crisis, many foreign companies had to take a hit when their factories were forced to stop production as the country moved to contain the spread of the disease.

The health crisis also added to the complications caused by China’s trade dispute with the United States. Foreign firms had earlier shouldered increased production cost for their output coming from the mainland after the Trump administration slapped higher tariffs on thousands of imports from China.

As a result, many American, European, and even Japanese and Korean companies are reportedly now planning—or have decided—to relocate their production bases out of China. These range from automotive and parts manufacturers to IT companies and pharmaceutical and health care services firms.

The Japanese and US governments have involved themselves directly in the effort by offering incentives to companies to bring their investments in China back home to their respective countries. Japan, for instance, already has a $2.2-billion stimulus package to cover the cost for Japanese firms leaving China and returning to Japan.

The opportunity for the Philippines, however, is in the thousands of other companies planning to move out of China but not back to their home countries where production costs remain high.

Of course, the Philippines is just one of the possible recipients of these investment dollars leaving China. In fact, some analysts are not even including the country in their list of potential beneficiaries of the shifting investment landscape, pointing to Vietnam as the most likely pick.

According to Forbes magazine, “This ongoing diversification of the global supply chain creates ample opportunities for corporate investors and gives rise to new markets in countries like Vietnam, now getting the equivalent of a steroid shot to beef up their own economy.”

But the Philippines, battered as well by the COVID-19 pandemic, should fight for its share in this development by quickly undertaking what needs to be done to make it more conducive for investors to set up shop here. Pending in Congress are bills to open up more economic sectors to non-Filipinos (although a contentious proposal facing prolonged debate), a reduction in corporate income tax, and a review of the incentives currently available to foreign investors.

Already in place is the Ease of Doing Business Act signed into law in mid-2018, which hopes to further address bureaucratic red tape by improving the efficiency and transparency of government procedures at all levels, down to the local government bureaucracy. Also in place is the Revised Corporation Code of the Philippines, which amended the 40-year-old Corporation Code to create a more business-friendly environment and improve the ease of doing business here. Such easing of the process for starting a business in the Philippines can be a major factor in attracting companies moving out of China.

The 11th Foreign Investment Negative List, signed in late 2018, also further liberalized foreign participation and opened more sectors to foreign investment, allowing 100-percent foreign ownership in internet businesses, training centers that are engaged in short-term high-level skills development, wellness centers, adjustment/lending/financing companies, and investment houses.

The proposed second tax reform package intends to gradually lower the corporate income tax rate, which remains one of the highest in the Association of Southeast Asian Nations. However, being tackled with this measure is the so-called “rationalization” of the various tax incentives given to foreign investors, a planned overhaul that is causing anxiety among some businesses. The sooner Congress hammers out the details of this reform measure, the better for the country’s business environment.

While the focus has understandably been on reopening the domestic economy given the tremendous repercussions of the lockdown, there is an urgent opportunity to be seized now that international businesses are looking for other places to relocate. The Duterte administration has a small window to act and make the country attractive enough for manufacturers getting out of China, especially since the Philippines’ foreign direct investments record has been a laggard compared to its neighbors. Here is a watershed chance for the government to make it right.

GOING by all the publications, dialectics and analyses by doomsayers in social media, the pronouncements of the World Health Organization (WHO) and the Centers for Disease Control and Prevention, this column, predictive in one sense, should logically be written only in the year 2021, when the world has seen its way clear through, before the near annihilation of the human race has come to pass.

I will add my voice to the cacophony, not as an alarmist, but as a member of the most vulnerable segment of society that is bearing the pandemic’s brunt — the seniors with “preexisting health conditions.” By definition, the elderly are a repository of numerous illnesses over time. Death is inevitable, the cliché goes. But not this way! I have witnessed the passing of friends, their wives and kin, but I couldn’t pay my last respects as their remains were sent posthaste to the crematoria. Grief transmitted through Facebook, Messenger and Viber is the new kind of normal; as physical distancing precludes wakes and the traditional “lamay,” renewal of old friendships and catching up during such engagements. And no more nine-day novenas of final goodbyes to write finis to the departed’s life as dictated by centuries of tradition. Lockdown and social distancing have prevailed.

Warnings and lessons
Thus, this article portrays a chilling scenario, part of which is even now occurring, given current global dynamics. The period from the fading months of 2019 to the present will cursorily be put in frame, extracting valuable lessons in anticipation of another resurgence of this pandemic.

Early November 2019, the virus out of the exotic palates of Wuhan, China jumped from animal to humans and spread imperceptibly at first. China controling the narrative now stands accused of keeping this under wraps, wasting precious time. Thousands of lives could have been saved had China been more upfront. Only by January 9 was the first Chinese death reported. Lockdown was enforced in Wuhan by January 23 and the other Chinese cities thereafter. South Korea followed suit on February 23. By then, 46 countries were already reporting cases of contagion, and Italy and Spain were about to be ravaged.

The United States, whom many countries look up to for leadership, has irresponsibly abandoned this role and relinquished its ascendancy. It may be recalled that in 2015, the Republican former president George Bush predicted this exact type of pandemic cautioning preparedness. Then outgoing president Barack Obama 2nd briefed incoming president Donald Trump on a bureaucracy of quick response experts, which the latter subsequently dismantled. But, now a month after the Wuhan lockdown, Trump trivialized the contagion asserting it “…is very well under control in the US…and when you have 15 people [infected], within a couple of days [it] goes down to zero…” Ian Johnson a writer based in Beijing succinctly stated “China bought the West time. The West squandered it.” America most definitely did.

Only by March 19 and 20 did the states of California and New York declare their own version of a quarantine: “Stay at home” and “Shelter in place,” respectively. But still, Trump refused to call for a nationwide lockdown, leaving the decision to each of the states, all of which were seeing the early stages of contagion. The prognosis when this is over is 60,000 to 240,000 Americans dead.

To date, there is no known cure. The best scientists and even the credible person with the money to fund the research, Bill Gates, thinks that the vaccine against this virus will be developed is within a year to 18 months. Those hyping in social media that magical concoctions are available now are all fake news peddling false hopes. Meantime, we hope that the virus will not mutate to infect the young and the rest of the adult population. If it does, millions will die. The world’s health-care system will be overburdened and will collapse. Most probably, the proverbial “last country standing” will be China. One who giveth us the virus — and who may not taketh it away!

End of American century
At the outset, Trump declared pompously that the spread of coronavirus disease 2019 (Covid-19) was tantamount to war. And he fancied himself a wartime president. Indeed, this was a worldwide conflict in which one protagonist dictated the frontlines, killing hundreds of thousands, maybe millions, without firing a single shot. Shades of Sun Tzu. No armada of ships; no bombers or stealth fighter planes; not even armies in the field of battle; and nuclear arsenals and missiles could not be deployed. All are useless before an unseen enemy. And the criminally incompetent wartime president is utterly clueless, presaging perhaps the end of American hegemony.

Historians have always maintained that empires fall, brought down by a culmination of centuries of the rot within. Thus, Rome’s downfall in 467 AD by the sacking of the city was inevitable. Future historians could draw some parallels not in the lingering decay of American society per se but due in part to one megalomaniac wartime president unable to use the full might of a great country, allowing the decimation of its people by his sheer ignorance, supported by an equally oblivious base and an intimidated but loyal political cabal. A Nero fiddling while Rome burned.

Enter the dragon
China, the totalitarian state, is ascendant which begs the question. Was she responsible for the virus from Wuhan? Was there collusion with the WHO to declare this pandemic very late? No matter. The wherewithal the world depends on to fight the virus now is stamped “Made in China.” As America and the world are ravaged, they must look toward China for their immediate needs; personal protective equipment, ventilators and all other medical supplies, which their own industries cannot produce on time. China obliges and ships to 100 other countries – establishing its new role as the world’s benefactor.

America’s global preeminence has always depended not only on its resources and might of arms, but on the legitimacy of its democratic domestic governance and institutions, however flawed, and its collective will to assume world leadership based on “right is might.” This whole sordid affair has exposed the weaknesses of America’s democratic system, highly dependent on an illiterate, charismatic but domineering leader’s skewed world view and the acquiescence of an intimidated political leadership ceding to him in essence, these cherished ideals.

The America of the post-World War 2 era is fading. The US instituted the Marshall Plan reconstructing Europe, establishing its imprimatur on the post-world war geopolitics. China could now be implementing its own version. Its Belt and Road Initiative strategy, encircling the globe with its economic tentacles has found its exclamation mark with Covid- 19.

Thucydides trap
Harvard’s Graham Allison’s book Destined for War expounded on the “Thucydides trap” — that “it was the rise of Athens and the fear that this installed in Sparta that made war inevitable.” Taking off from this postulate, China, the rising power, threatens to displace the ruling power, the US, in a war that is likely but not inevitable.

In the current context, China is not at war with America. The whole world is at war against one enemy, Covid-19, with nary a single missile launched. When the smoke clears, China emerges triumphant.