Asean’s challenges

SINGAPORE – The oil companies give, the oil companies take away. Last Saturday before I left Manila, petroleum dealers restored the P1 per liter that they had cut from gasoline prices the other weekend.

On top of that they raised diesel prices by P3 per liter, making up for previous weekends when they gave diesel consumers a respite from the regular price hikes.

That increase of P3, though not entirely unexpected, must have been too heavy for some drivers and operators of public utility vehicles. Again it might have been my imagination, but there seemed to be significantly fewer PUVs on the road last Saturday, normally a day for shopping and leisure for most families.

Under pressure from Malacañang, the oil companies agreed yesterday to cut the increase by P1.50 per liter. But this is just postponing the pain; as sure as death and taxes, that P1.50 will surely be recovered eventually by the oil firms.

Gloomy economic forecasts and new energy consumption habits that are pulling down demand brought world oil prices plummeting last week. Though the prices were still nauseatingly high compared to a year ago, that closing price of $128.88 per barrel from the previous week’s $147 for light sweet crude on the New York Mercantile Exchange was refreshing news for consumers.

No one dared describe it as a bubble implosion or predict a sustained price drop. But the prolonged price surge has given fresh urgency to global efforts to develop alternative fuel sources and achieve energy efficiency. Coupled with a global economic slowdown that has dampened fuel demand, some quarters are starting to make cautious projections about the end of the fuel price surge.

But this market is too volatile, so ministers of the 10-member Association of Southeast Asian Nations started meeting in this city-state late last week to discuss, among other things, a regional response to food and fuel woes.

It is but apt that discussions on food and energy problems would precede the 15th ASEAN Regional Forum here this Thursday, which focuses on security matters.

For several years now, security analysts have been pushing for a broader approach to matters of national security – one that takes into account not just military and defense capabilities but also food and energy security, fresh water supply and environmental management.

ASEAN members have a spotty record in united action. Since its creation, the grouping has strictly abided by a policy of non-intervention in each other’s internal affairs.

But like the African states that have turned against Zimbabwe’s folk hero-turned-heel Robert Mugabe, ASEAN members now realize that one dysfunctional neighbor can contaminate an entire region with its problems.

Malaysia, for example, has a stake in seeing a peaceful Mindanao, partly because Filipinos from conflict areas in the south are fleeing the Philippines and crowding into Sabah as refugees and undocumented workers. Thousands of those Filipinos are set to be repatriated in the coming months.

And so ASEAN is gingerly lifting its policy of non-intervention. It has taken the unprecedented step of censuring Myanmar for its human rights record, including its response to the recent devastating typhoon, and compelling the junta to implement democratic reforms. The first-ever ASEAN Charter on human rights is on the agenda of the ongoing 41st ASEAN Ministerial Meeting here. Myanmar is expected to officially accede to the charter this week. Whether it will abide by the ideals embodied in the charter is another story.

ASEAN might have better prospects in working for a regional approach to the food and fuel crunch. Even Myanmar’s rulers realize that hunger, reduced mobility and personal discomfort from fuel and power shortages can trigger unrest among the masses and worsen political instability.

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What can ASEAN do?

The world’s two largest rice exporters, Thailand and Vietnam, can stop holding on to their rice stocks – whether out of fear over future supply insecurity or sheer supply manipulation to boost prices. The two will be asked to sell their rice stocks within ASEAN first in times of global shortages.

Rice importers like the Philippines, on the other hand, can tone down the panic. Our country has been blamed for the spike in world rice prices. We have been urged to stop buying up everything we can get our hands on in the world market – the price is no object – even as our agriculture officials keep announcing that the country has enough rice stocks and a bumper harvest is expected this year.

Seeing the large global demand, Southeast Asia can position itself as the rice basket of the world, with ASEAN members sharing agricultural knowhow to boost production.

ASEAN’s oil exporters led by Malaysia and Brunei may be asked to help stabilize crude supply in the region. But in this market, ASEAN’s oil producers are expected to go along with collective decisions of the Organization of Petroleum Exporting Countries.

The region can instead push joint oil exploration projects in the South China Sea and the development of alternative energy sources.

There could also be better regulation of agro-forestry activities amid efforts to develop biofuels within the region. Indonesia has come under fire for clearing its rainforests to make room for coconut plantations.

The Philippines, which is also tapping coconuts for biofuel, can boost efforts to develop jathropa as a fuel alternative. So far the research efforts have not yet led to findings about unintended consequences, such as the tightening of the global food supply as a result of using arable land and food crops for biofuel.

Filipino children in the countryside have long played with jathropa, also known as tuba-tuba. The global fuel crunch has boosted research efforts on the plant.

Food and fuel woes have made the world stop taking many of life’s comforts for granted. The global economic slowdown will eventually be felt even by the major oil producers.

Even with world crude oil prices seemingly softening, no one can afford to continue with business as usual. ASEAN should rise to the new challenges.