Group lists bold steps for RP to survive financial crisis


Posted at Oct 25 2008 06:59 PM | Updated as of Oct 26 2008 02:59 AM

Three urgent steps should be undertaken for the country’s survival in the face of the global financial meltdown, a political action committee announced on Saturday.

In a press conference, the Philippine LaRouche Society said that such must be implemented immediately in order to avoid the country’s “deterioration into chaos and anarchy, abandonment of government’s basic services, and proliferation of warlordism.”

They said that these three proposals include the freezing of foreign debt payments, the operation of the Bataan Nuclear Power Plant (BNPP), and the immediate implementation of a national food production program.

Butch Valdes, an economist and head of the Philippine LaRouche Society, said that before the idea becomes moot and academic, the Arroyo administration must consider declaring a moratorium on debt payments reaching $10B a year.

“The reason we’re paying $10 billion is because of the floating exchange rate system. We’ve been devalued over the years because of this. If you don’t pay for foreign debt for a year, you can actually use this for many things. For one, it’ll give us necessary means for a massive food production program,” he said.

Food and energy

This massive food production program should take precedence over other projects which are not directly related to people’s survival.

Valdes also stressed the need to rehabilitate and activate the BNPP which is a safe, cheap, yet excellent source of reliable energy. He said that after spending $4 billion of taxpayers' money for the mothballed nuclear facility, it should at least be put into good use.

“All countries are moving towards nuclear energy development programs. It is indigenous, something we’re not importing,” he said.

Albeit not long term, Valdes said that these three steps will address the survival of the nation with the assurance that its succeeding generations will prosper.

Regardless of political leadership, Valdes said these measures need to be undertaken. What is important is that the administration has both the capability and accountability to implement such methods.

Return to fixed exchange rates

The Philippine LaRouche society joins in the call for a New Bretton Woods or financial system that would change the current economic order.

The LaRouche society urged global leaders who will join an economic summit in Washington on November 15 to push for the New Bretton Woods system, following its review of the underlying causes of the financial crisis.

Valdes said that instead of promoting a hierarchy in favor of financial oligarchs, a new financial system binds countries to guarantee sovereignty and development of one another.

“They [financial oligarchs] were all involved in this greed-motivated system, which was geared towards the interest of financial institutions, faceless money-lenders,” he said.

The New Bretton Woods agreement specified the major principles of American political activist Lyndon LaRouche, which focused on bankruptcy reorganization, measures to stop speculation, the importance of a credit system, and the 4-power move of the US, Russia, China, and India.

“The New Bretton Woods system recognizes the community of sovereign nation-states with its sole purpose of uplifting the condition of life for all,” he said.

Speculative economy

Valdes mentioned that the current economic order is largely characterized by speculative investments and floating exchange rates, saying that it is what led to the financial meltdown that the world is facing today.

“We don’t realize the effects of floating exchange rate. We make bets on how the market is going to end up. As for credit, the amount lent to business went to speculation and not to the physical economy,” he said.

Valdes said that a speculative market doesn’t generate jobs and real income. With fixed exchange rates, he said that banks can lend on a long-term basis so companies can borrow bigger capital in building industries which are more able to absorb and generate employment.

"These losses we see right now have a huge effect on employment as all businesses worldwide would start to cut back on jobs, affecting migrant workers. Most OFWs land in service-related jobs because of speculation, such as domestic helpers, etc.,” he said.