A Postmortem on APEC
It's over. They've left and the traffic and street dwellers are back. One airline is facing a multi-million peso damage suit, another, millions more in dollar-denominated unrecoverable losses. Kris has her tan and her brother, his two-day Php 10 billion learning experience - a tax-paid tuition the equivalent of capitalizing several world-class universities.
According to one of the most incisive international publications*, what might be the true value of the Asia Pacific Economic Cooperation (APEC) meetings was not so much in the joint declarations reached during each of its gatherings but in the fact that the conferences drew together divergent if not competing leaders in both the global economic and geopolitical arenas.
Substance-wise, save for the debts incurred, the damage suits, lawyer's fees and unrecoverable business losses, lost man-hours and squandered taxes, none of anything set on paper from the shindig is binding, enforceable or obligatory. Everything is as fleeting and skin-deep as Kris's sunburn.
Given its long history against it’s short list of any substantial economic development that can be directly attributed to APEC, including the alleged focus on small and medium enterprises (SME) which was exactly the very same the last time APEC was in town, very little has moved forward save for a kitschy tradition of Kodak Moments in pre-tailored native attire. While it hasn’t yet happened, imagine Vladimir Putin in a bright fuschia, canary and chartreuse Balinese shirt worn over a shiny woven grass skirt wrapped around his waist and a pair of boar's tooth anklets around his bare feet and you might just understand what we mean.
The Singaporean-published magazine was a tad harsher. The apparent importance of the grand soiree was singularly in APEC’s attendance list. Within an economic gathering, how does showing up constitute substance?
For one, geopolitics has no place in APEC. Its focus is trade. The geopolitical tensions in the South China Sea have not yet impeded on large scale trade. Not yet.
For another, the rules of the marketplace from supply and demand to economies of scale operate more to catalyze trade among the APEC members than did the declarations since APEC’s inception. A recent survey showing that major businesses are largely unaware of these agreements validates their non-utility and non-enforceability as international pacts.
So, if at the end of the day, APEC was merely a grand photo opportunity costing us over Php 10 billion in direct expenses and perhaps billions more in business disruption and litigation, what should the prognosis be?
If the upsides are largely mirages, let us look at concrete downsides.
One, APEC's brand of cooperation and its effective definition of supply markets spawned competition where economies race to provide the lowest paid, shortest term, contractually-compensated sweatshops.
Two, APEC economies compete to provide the most fractured value chain inputs and semi-manufactured products so that margins earned outside APEC's less-developed economies are more prolific for the global corporations that own the proprietary rights to these. Note how our mining sector exports raw ore that we repurchase as finished metals. Note also how the agro-agricultural sector pays virtual slave wages to induce exporting lower-valued, generic and unbranded produce that we import back as processed food at higher margins.
Three, APEC cooperation ensures lower margins for supplier and service economies such as ours. APEC-neutered, Filipino officials stupidly reduced import tariffs prematurely, allowed smuggling to flourish, and now, virtually bends over, raises its posterior, opens wide its orifices and offers to pay for a foreign corporation's business losses.
The victimization is undeniable. Agricultural productivity fell below 10% of GDP. Manufacturing is about a fifth. We import more than we export, including single-use toothpicks. We earn the lowest wages but pay the highest utilities.
And then we spend over Php 10 billion for Aquino's learning experience and Kris's tan.
* The Economist, http://www.economist.com/news/asia/21678279-no-thriller-manila-apec-all-partners-except-china