Cancun was destined to fail

No one seriously expected the WTO conference in Cancun to succeed. The negotiating parameters of the developed and the undeveloped worlds were just too far apart. You would have to be an extreme optimist to think that the worsening hunger and poverty in the Third World would have bothered the collective conscience of the West enough to reach a breakthrough in the talks.

It makes no difference to America or Europe if Western cows get a $2 subsidy a day while poor folks in the Third World live by with less than half of that. It makes no difference that American cotton growers are getting more than the value of the crop in subsidy. The advocates of laissez faire capitalism in America and Europe are the worse violators of its basic tenets.

There is no denying that subsidies given by American and European governments to their farmers distort the market. But the powerful always screw the poor, in the society of nations as in our own. Those with vested interests hold the levers of power and they are not about to let go of the benefits they enjoy unless they really have to.

One would have thought that with the tragedy of 9/11, people from the developed world would have done some real soul searching on why there is so much hatred towards them from the have nots of the earth. I was watching man-on-the-street interviews conducted by CNN and BBC on the occasion of the 9/11 anniversary and it is obvious ordinary Americans don’t get it.

Middle Americans saw 9/11 as an expression of envy for the American way of life. Middle Americans see themselves as generous givers of aid to the world’s poor. But to them, those damn foreigners are nothing more than a bunch of ungrateful wretches biting the hands that feed them.

In Europe, farmers are unable to see why the rest of the world has anything to say with what the French government does with French tax money. If Paris wants to dole out all those euros to French farmers, why should a farmer in Botswana protest?

That’s the kind of domestic politics driving the American and European trade negotiators in Cancun. Many of those diplomats negotiating trade agreements may even have a social conscience or are intelligent enough to know they have to right centuries of wrongs. But their domestic politics won‘t allow them. This is why the WTO thus far, has been nothing more than a debating society. Sure, small concessions may be won now and then but major agreements that would really ensure free trade is another thing altogether.

In a sense, despite the so-called global village, the world is still basically tribal. The United States may be the only superpower hereabouts with global interests, but only a relatively small percentage of people living there have a world view. I don‘t have the statistics, but I suppose less than half of Americans in Middle America have traveled abroad, or even more than 1,000 miles from the towns where they were born. That‘s probably true as well for the farmers in Europe. No wonder they can‘t see beyond today’s subsidy.

This is why it made sense that the rest of the world went to Cancun with a more or less united front. Working together with India, China, Brazil and other fairly large economies outside of the Group of 8, we have a better chance of standing our ground. In fact, the failure of Cancun can be considered a victory of sorts. It is far better that no agreement was reached rather than to have a bad one.

We should individually and collectively resist attempts to impose unfair trade rules. With their declining populations and markets and ever-growing dependence on international trade, the West needs us more than we need them. Eventually, they have to see it our way. Like it or not, in the end, the poor will inherit the earth simply because we will overwhelm them.

Stock Exchange

The Philippine stock market is still suffering the country‘s dismal attractiveness to investors, but the alert and patient investor could still make some decent money. If you bought PLDT in January this year, Alicia Morales Arroyo observed, you would have doubled your money by now.

Mrs. Arroyo, the Chair of the Philippine Stock Exchange (PSE), was unfazed by the political whirlwind that has made a mess of the local business environment. When she met with the Business staff of the Philippine Star late last week, she said she is just pursuing her mandate under the new Securities Regulation Code to accomplish as much as she could in her abbreviated term of office.

The new Securities Regulatory Code, an offshoot of the BW scandal, mandates drastic changes in how the local stock market should be managed. For instance, a board of directors that has a majority of non-brokers as members, now governs the PSE. There is definitely greater transparency in transactions, Mrs. Arroyo assured.

The PSE now has a Manual for Corporate Governance, a Manual for Anti-Money Laundering, a Code of Ethics and an enhanced surveillance system that alerts on unusual trading movements. An electronic disclosure system now brings the latest news from listed issues to all interested parties as quickly as they are filed.

The remaining big item in the reform agenda Mrs. Arroyo must see through is the listing of PSE shares to complete the demutualization process. She explained that it is not easy to force the current shareholders/brokers to dispose of 80 percent of their ownership under current market conditions.

With the deadline for listing hanging over their heads, they are exploring various options, and may invite a strategic investor such as one of the larger stock exchanges in the region or the world. She is desperately trying to meet the deadline set by the SEC for listing PSC shares, even if all that is possible is a partial compliance.

We were itching to ask her the question of the day but waited until towards the end of the meeting to do that. It was Margie Grey, our assistant editor and columnist in the Business section, who finally asked her in so many words, how she felt being Mrs. Jose Pidal. Mrs. Arroyo is married to Ignacio Arroyo, the self-confessed owner of the Jose Pidal accounts.

She smiled and explained that she keeps the personal and business aspects of her life separate. It helps that her professional colleagues know her as Aleli Morales, the daughter of the late respected banker Manolo Morales, rather than the wife of Ignacio Arroyo. She minds her own business and her husband minds his. And yes, they file separate income tax returns.

She appears resigned that she married into a controversial political family and the main annoyance she confessed to us has to do with increased personal security. Having lived abroad, where she started her career, she is used to moving about anonymously. In a small town like Manila, she can’t do that anymore - not as Mrs. Jose Pidal, even if her husband isn’t really Jose Pidal.

As it is, it is widely suspected that Ate Glo intervened to have her elected as PSE Chair. But she strikes me as a nice enough person, completely professional and shouldn‘t be associated with the current national scandal plaguing the family she married into. And given her illustrious pedigree as her father‘s daughter, a legacy she must protect, we were tempted to do a Gunigundo. But no, we didn‘t recommend that she cut off all ties to Jose Pidal, assuming it was Jose Pidal she exchanged marriage vows with.

It’s Only Fair

This one‘s from Dr. Ernie E.

A doctor‘s secretary called an old farmer and said: "Your check came back."

The old man replied, "So did my arthritis."

Boo Chanco’s e-mail address is