‘Fiscal crisis’

The trouble with ‘fiscal crisis’ is it is hard to define especially as it was used by President Arroyo. It really depends on who is saying it, why and in what context it is being said. It may be hilarious but there is some truth in the joke going around about a senator-actor when told of the ‘fiscal crisis’ said, "sinabi ko na ba yan ang hirap sa mga fiscal." After all a screwed up justice system can be said to be one of the reasons why we are in a mess.

Among foreign diplomats I talked to at a recent function at Speaker JDV’s house in honor of the Iranian Foreign Minister, they were amazed with the announcement of the President.

A diplomat (from a poor country) said but the Philippines is "rich", how can it be in a fiscal crisis? NEDA chief Romy Neri said it is partly true and partly false. The diplomat is right to be surprised why the President made the statement at all if the audience is the world because there are more countries in deep financial trouble than we are. A good example is the surprised diplomat, coming as he does, from a country not only economically troubled but with serious security problems after 9/11. Indeed, what country is not economically troubled given the world recession? It is a matter of degree.

I hope that the fourth annual international roadshow next month can address the ambivalence of the President’s statement when they talk to the bankers. Or will it be another junket? Its task is to spread the message that the country may have fiscal problems but it is striving to address them. HSBC PLC will be the global coordinator for Asia and Europe, and Citigroup and JP Morgan as coordinators for the US. The roadshow will cover Singapore, Hong Kong, London, Frankfurt, Zurich and Geneva and finally to Boston and New York.

On the other hand, the statement is true insofar as the mechanisms in the Philippines are not in place if we were to continue our lifestyle despite the threat of a more serious turn of events. We are already in fiscal crisis because of the huge deficit between what we earn and what we spend, there are still those who would not hear of spending less or earning more. Unfortunately words from the economists that the country might suffer an Argentina-type of debt crisis within the next three years was lifted out of context.

In a way ‘a fiscal crisis’ is what we need to jolt us out of our complacency so the President should not regret having made the warning. The Arroyo statement was meant for a Philippine audience. The trouble is it is no longer possible given instant communications to speak one language to Filipinos and another to the world. That is the reason for the confusion. As my daughter, CNN anchor Veronica told me from Hong Kong, "it got front page coverage in London’s Financial Times which is the bible for the investment community. That was the reaction from the outside world. We still have to know what its effect will be for the Filipino public that has become so cynical it will be interpreted as ‘politics as usual."

To her critics, she is just crying wolf, that she does not really mean what she says but is saying it to justify her actions in the coming days for new taxes, austerity measures for the politicians in the House and the Senate, whittling down the bureaucracy and so forth. It remains to be seen whether her statement will have any effect on the audience she wants to address seriously. All eyes are on politicians and government bureaucrats whether they will make the sacrifices they want ordinary people to make. Newspaper financial pages are not helping any with their own dire predictions without any thought that it can be self-fulfilling.

It remember what former Singapore Prime Minister Lee Kuan Yew said about his long conversations with Marcos in his biography. Lee said that he (Marcos) believed that having said something is the same as doing it. I know President Arroyo said it also in her state of the nation speech in the 13th Congress – "let’s just do it". Fine. But are we, as a nation, capable of moving from thought to action. That, I am afraid, is a fundamental problem that cannot be addressed by any roadshow.

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MISCELLANY. Speaker JDV’s house on Magnolia Street in Dasmariñas has become a kind of mecca for Arab leaders. Whenever an important dignitary from the Arab world is in Manila you can be sure that a Magnolia reception is de rigeur. At Thursday’s reception for visiting Iranian Foreign Minister Kamal Kharazi, he was late for more than an hour. We were told that the meeting with incoming Secretary of Foreign Affairs Alberto Romulo took longer than expected drafting a joint statement. Interestingly, their joint statement included a pledge to help rebuild Iraq as well as concerns on the more than million Filipinos who live and work in the Middle East . . . It was a particularly busy Thursday with the ambassadors having to balance their time to be in Magnolia as well as to attend a lunch in the Hyatt with Secretary Alberto Romulo I myself had to rush from Magnolia to Shangri-la Makati as one of the special guests of outgoing Secretary of Foreign Affairs Delia Albert at the luncheon meeting of the Rotary Club of Manila. There is speculation she may be assigned to the UN but she demurred against saying anything until the President appoints her. Ms. Albert has many new ideas about the foreign service but what intrigues me was how well she understood that more and more Philippine embassies should serve as trading posts. Australia has began restructuring its foreign service to that end . . . I regret very much that bad weather made it impossible to make it to the Polo Club reception by Consul General Fernando Lising to introduce the new, non-resident ambassador for Poland, HE Bogdan Goralczyk, after presenting his credentials. He will be based in Indonesia which seems more aware than the Philippines that Poland is an important country to have a diplomatic post. I was with a group of journalists from Asia sometime last year and found out we did not have an embassy there but we had in smaller East European countries.Why?It is strange why we have not nurtured this diplomatic relationship – a very big country that is now part of EU and the source of many products that we buy from other countries at a higher prices. Polish manufacturers told us some helicopters from France or Australia are made in Poland . . . Other dates in the diplomatic row are Europe Day to be observed with European Commission HE Jan de Kok and his wife, Agnes on September 9 with the theme United in Diversity . . . I got a chance to talk with Libyan HE Salem M. Adam who reminded me of the 35th anniversary of the Al-Fateh (Revolution of the Great Socialist People’s Libyan Arab Jamahiriya on 1st September. Saudi Ambassador Mohamed Wali was close by so I asked if they were friends because of the stories on the alleged Libyan plot to eliminate Saudi royalty. Both denied the story although it is hard to understand what diplomats mean when they say they are friends. Is the story true or false?

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