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BoI approves P9.6-M face mask production project in Caloocan

REUTERS

THE Board of Investments (BoI) said it approved for incentives a P9.6-million face mask production project run by Ipolymer Solutions Corp.

In a statement on Monday, the BoI said that the project is located in Caloocan City with annual capacity of 13.2 million KN95 face masks and 26.4 million surgical masks.

It added that the project will import 100% of the raw materials needed for production.

“The increasing production of medical-grade face masks entails additional imports of raw materials (non-woven fabric), which might help the National Government to promote investment in the production of these raw materials in the country,” the BoI said.

According to Trade Secretary Ramon M. Lopez, the project will help meet rising local demand for face masks due to the COVID-19 pandemic.

“During these difficult times — be it natural calamities or global health crises — the local capability to supply critical and strategic products such as medical-grade face masks is crucial and serves as a reminder of the importance of developing our domestic manufacturing industry,” he added.

The BoI said the project was approved under the “All Qualified Activities Relating to the Fight against the COVID-19 Pandemic – Essential Goods” category of the 2020 Investment Priorities Plan, which serves as the transitional Strategic Investment Priorities Plan. The plan covers personal protective equipment (PPE) as authorized by Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) law.

BoI Managing Head Ceferino S. Rodolfo urged mask-producing firms to invest in the Philippines.

This goes to show that we can make it happen in the Philippines, as the BoI has been the catalyst for a modern economy as we recover from the pandemic. Thus, we invite other mask-producing companies to invest here in the Philippines to further fill the gaps in providing more affordable critical PPE,” Mr. Rodolfo said.  

To date, the BoI said it has registered two projects in 2020 for face mask production: Sunwest Construction and Development Corp. in Marilao, Bulacan with an annual capacity of 15.6 million and Nagaland Development Corp. in Naga City, Camarines Sur, with a yearly capacity of 2.4 million. — Revin Mikhael D. Ochave

ARTA introduces electronic complaint management system 

THE Anti-Red Tape Authority (ARTA) said it has introduced a digital system that will field complaints to the public on needlessly complex government transactions.

At the soft launch of the system on Monday, ARTA Deputy Director General Eduardo V. Bringas said the eARTA Complaints Management System is intended to bring about a zero backlog in the handling of complaints about government services.

Mr. Bringas said that the system will fully automate the process of filing and handling complaints by the end of the first quarter.

“(This) will allow citizens to file a complaint in the comfort of their own homes and (achieve) zero backlog (at) ARTA,” Mr. Bringas said.

ARTA’s partner in developing the system is Multisys Technologies Corp.

“ARTA and its private partner have developed an electronic platform to be used by government agencies for a seamless and faster referral and handling of complaints,” Mr. Bringas said.

Mr. Bringas said the system supports electronic ticketing, paperless filing of complaints, a dashboard for real-time monitoring and updates, and short message service (SMS) notification.

Government agencies that are pre-registered for the system include the Bureau of Internal Revenue (BIR), the Department of Environment and Natural Resources (DENR), Bureau of Customs (BoC), the Department of Public Works and Highways (DPWH), and the Department of Agrarian Reform (DA).

Mr. Bringas said the public can still file complaints against government agencies that are not registered in the system, adding that ARTA will notify the agency of the complaint. — Revin Mikhael D. Ochave 

IPOPHL in tieup with LGUs to promote IP awareness

THE Intellectual Property Office of the Philippines (IPOPHL) said it has entered into a partnership with the Local Government Academy (LGA) to promote intellectual property (IP) rights at the local government unit (LGU) level.

In a statement on Monday, IPOPHL said it signed a memorandum of understanding with the LGA on Feb. 7 to pursue IP education, development, and training programs for LGUs.

The LGA is an agency of the Department of the Interior and Local Government (DILG).

The LGA “will craft its own IP policy and encourage LGUs to adopt IP-related innovations and best practices, ensuring their compliance with IP-related laws and policies,” IPOPHL said.

IPOPHL Deputy Director General Teodoro C. Pascua said the partnership will help increase awareness of IP system at grassroots level.

Nelson P. Laluces, IPOPHL director general, said the partnership will allow LGUs to increase their ranking in the Cities and Municipalities Competitive Index (CMCI) following the addition of IP protection in its metrics.

The CMCI measures LGUs’ economic dynamism, efficiency, infrastructure, resiliency, and innovation. — Revin Mikhael D. Ochave

Converge participating in Southeast Asia-HK cable link

CONVERGE ICT SOLUTIONS INC./YOUTUBE

LISTED fiber internet provider Converge ICT Solutions, Inc. said on Monday that it is taking part in a cable project that will carry traffic between Southeast Asia and Hong Kong.

“Converge is a party to a construction and maintenance agreement, effective March 4, for the Southeast Asia-Hainan-Hongkong Express Cable System (Project SEA-H2X),” Converge said in a disclosure to the stock exchange.

The parties to the project are Converge, CMCC Infrastructure 3 Ltd., PP Telecommunication Sdn. Bhd., and China United Network Communications Group Co. Ltd.

The project aims to “address the tremendous growth of the telecommunications traffic between Southeast Asia and Hong Kong by building and implementing a  state-of-the-art fiber-optic submarine cable system connecting Singapore, Thailand, Malaysia, Philippines, Hainan China and Hong Kong SAR,” it added.

On the official website of the Hong Kong Trade Development Council, the fiber-optic submarine cable system project will initially connect Singapore and Hong Kong, then Hainan, the Philippines, Thailand, and Malaysia.

There is also a proposal to link Cambodia and Indonesia.

Last year, Converge announced that it will invest more than $100 million in a new transpacific cable system aimed at increasing internet speeds and network diversity in the Philippines.

“Our investment in one full fiber pair, connecting us to Singapore and the west coast of North America, will allow us to independently activate at will up to 15Tbps (terabits per second) of capacity to either country using the latest technology,” Converge Chief Executive Officer and Co-Founder Dennis Anthony H. Uy said in a statement.

Converge ICT shares closed 2.11% lower at P25.50 Monday. — Arjay L. Balinbin

Amendments to the Foreign Investments and Retail Trade Liberalization laws

One of the most common inquiries we receive from foreign investors pertains to questions involving setting up subsidiaries in the Philippines and their concerns about minimum capital requirements relevant to the nature of their business or industry. The restrictions on foreign ownership to some industries surely affect the flow of foreign investment into the country, the Philippines being notably one of the strictest within the Asia-Pacific in terms of foreign investment policy. For some time now, the law easing these restrictions has been long anticipated to stimulate investment from foreign enterprises.

Last week, President Rodrigo Duterte signed into law Republic Act (RA) 11647, “An Act Promoting Foreign Investments, Thereby Amending Republic Act 7042 Otherwise Known as the Foreign Investments Act of 1991, as Amended and For Other Purposes.” This was signed by the President almost three months after signing RA 11595, a law which amended the Retail Trade Liberalization Act of 2000 (RTLA). Both laws aim to attract foreign investors to the Philippines to make its industries more competitive with those of the ASEAN neighbors.

SALIENT FEATURES OF THE AMENDED RTLA
The recently amended RTLA removed the categorization of enterprises and reduced the minimum paid-up capital of foreign retailers from $2.5 million to P25 million. For foreign retailers engaged in retail trade through more than one physical store, the minimum investment per store must be at least P10,000,000.

While the pre-qualification requirement with the Board of Investments (BoI) was removed as well, foreign retailers must maintain the required minimum paid-up capital. Compliance with this requirement will be subject to review by the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), and National Economic and Development Authority (NEDA) every three years.

Another notable requirement under this law is the submission of a certificate from the Bangko Sentral ng Pilipinas (BSP) of the inward remittance of the capital investment. While the law also allows other proofs certifying that the foreign retailer’s capital investment is deposited and maintained in a bank in the Philippines, it is better to secure a Bangko Sentral Registration Document (BSRD) to facilitate the ease in repatriation of foreign investment.

The relaxation of the RTLA is expected to generate foreign investment to help the economy recuperate from the devastating effects of the COVID-19 pandemic. I have personally experienced the influx of inquiries from foreign retailers showing clear interest in setting up companies here.

SALIENT FEATURES OF THE AMENDED FIA
Relevant to the lowered minimum paid up capital under RTLA, Section 8 of the amended Foreign Investment Act (FIA) provides that, among others, micro and small domestic market enterprises with paid-in capital less than the equivalent of $200,000.00 are reserved to Philippine nationals. However, under certain conditions, foreign nationals are allowed a minimum paid-up capital of $100,000.00 provided that the enterprises: (1) utilize advanced technology as determined by the Department of Science and Technology (DoST); (2) are endorsed as startup or startup enablers by the lead host agencies in accordance with RA No. 11337 (Innovative Startup Act); or (3) are composed of a majority of Filipino employees, the number of which shall in no case be less than 15, a reduction from the previous requirement of at least 50 direct Filipino employees. Further, registered foreign enterprises employing foreign nationals and enjoying fiscal incentives are required to implement an understudy or skills development program to ensure the transfer of technology or skills to Filipinos.

The latest amendments to the FIA are expected to generate more foreign investment to boost the economy for the long term. RA 11647 recognizes that increased capital and technology benefits the Philippines, and that global and regional economies affect the Philippine economy. Fittingly, the law allows foreign investors to invest up to 100% in a domestic enterprise unless participation of foreigners is limited or prohibited to a smaller percentage. Similarly, foreign investment in export enterprises is allowed up to 100%, provided the products and services do not fall within the Foreign Investment Negative List (FINL). Notably, the law mandates that amendments to the FINL be made at least once every two years. But then, foreign export enterprises are required to register with the BoI and submit reports to ensure compliance with the BoI’s export requirements. Failure to comply with these requirements may result in a reduction of the entity’s sales to the domestic market to not more than 40% as may be ordered by the BoI or DTI.

To integrate all the promotion and facilitation efforts to encourage foreign investment, the Inter-Agency Investment Promotion Coordination Committee (IIPCC) was also created which will be chaired by the Secretary of Trade and Industry. The IIPCC was created mainly to establish both medium- and long-term Foreign Investment Promotion and Marketing Plans (FIPMP), among other functions.

Considering the increase in the national debt due to the pandemic and the government’s effort to stimulate economic growth, legislation easing the requirements and relaxing the limitations on foreign investors will help the Philippines recover and sustain economic development. We are one with the government in working towards attracting and welcoming productive foreign investment for economic growth to provide more opportunity to our fellow Filipinos.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Gemmalu Molleno-Placido is a manager from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Bojan Bogdanović sinks team-record 11 treys as Jazz top Thunder

BOJAN Bogdanović scored 35 points, setting a franchise record with 11 3-pointers, to lead the Utah Jazz to a 116-103 road win over the Oklahoma City Thunder on Sunday.

The Jazz have won 10 of their last 12 while the Thunder have lost two consecutive games and 10 of their last 13.

Bogdanović was coming off his worst shooting game of the season — going 1 of 11 from the floor and missing five of six 3-point attempts in Friday’s blowout loss in New Orleans.

But Bogdanović got going from outside early, hitting four 3-pointers in the first quarter.

Bogdanović had made eight 3-pointers in a game three times in his career before breaking through with more on Sunday.

Utah led by as many as 23 late in the third quarter, before Oklahoma City started cutting the deficit.

The Thunder pulled within nine with 4:30 remaining in the fourth, the first time Oklahoma City had been closer than 10 since the opening moments of the second quarter.

But Bogdanović got hot from outside once again, hitting three 3-pointers down the stretch to keep the Thunder from getting closer than eight. Bogdanović was 11 of 19 from the field, with all but one of his attempts coming from beyond the arc.

Donovan Mitchell added 24 points and 10 assists for Utah, while Jordan Clarkson scored 20 off the bench. Utah hit 23 3-pointers in 52 tries (44%).  Reuters

Kevin De Bruyne and Riyad Mahrez fire Man City to 4-1 win over United

MANCHESTER, England — Kevin De Bruyne and Riyad Mahrez scored two goals each as Manchester City restored their lead at the top of the Premier League to six points with a convincing 4-1 derby victory over Manchester United at the Etihad Stadium on Sunday.

United had put up a decent fight in the first half, going in 2-1 down at the break, but City’s quality showed after the interval with Ralf Rangnick’s side looking increasingly demoralized.

City has 69 points from 28 games with Liverpool on 63 from one game less. United slip down to fifth place, a point behind Arsenal who beat Watford on Sunday and has three games in hand.

Belgian De Bruyne was outstanding, running the game from central midfield and then presenting himself as a threat in the box.

United was without Cristiano Ronaldo and Edinson Cavani through injuries and surprisingly Rangnick opted to play Paul Pogba and Bruno Fernandes in forward positions.

City made the perfect start with De Bruyne putting them ahead in the fifth minute, slotting home a low pulled-back pass from Bernardo Silva after they overloaded the left side.

But United drew level through a superb curling shot from Jadon Sancho, who took his time and cut inside after a swift break before beating Ederson with his confident strike.

But Belgian De Bruyne restored City’s advantage finding the target after Phil Foden had powered into the area and seen his shot parried out by David De Gea.

City dominated after the break and made it 3-1 when De Bruyne struck a corner deep to the edge of the box and Mahrez met it with a first-time drive which took a slight deflection off Harry Maguire.

Mahrez completed the victory with a goal that was initially flagged as offside but VAR found Alex Telles had played the Algerian onside before he latched on to an Ilkay Gundogan pass and blasted in off the shoulder of De Gea.

The scoreline was a fair reflection of City’s dominance and manager Pep Guardiola was full of praise for his team.

“It was excellent from the first minute. We played really well and had to be patient in the first step,” said the Spaniard. “Football is emotions. It’s tactics, definitely, but it’s also emotions. Without the ball, we are a team with desire and passion to regain the ball from the first minute to the 90th,” he added.

Rangnick felt his tactics had been the right way to take on City before the gulf in class became evident.

“It was working. For us, it was clear if we want a chance to win the game, we have to do a lot of running. You have to be in attacking and hunting mode and we did that in the first half. The third goal killed us off in the end,” he said. — Reuters

World no. 1 Jin Young Ko has record-setting win at HSBC in Singapore

WORLD No. 1 Jin Young Ko won her sixth tournament in her past 10 Ladies Professional Golf Association (LPGA) Tour starts at the 2022 Hongkong and Shanghai Banking Corp. Ltd. (HSBC) Women’s World Championship in Singapore on Sunday, setting two records in the process.

Ko, a 26-year-old South Korean, shot a 6-under-par 66 to finish with a 17-under 271 for the tournament. It was her 15th consecutive round in the 60s and her 30th straight under par — both LPGA records.

Minjee Lee of Australia fired the tournament’s low round of 63 to move into a tie for second with South Korean In Gee Chun (69) at 15-under par 273.

“I am just proud of myself to record 60s, 15 rounds like straight. So I’m so happy,” Ko said. “I feel amazing right now.”

The day was not without drama for Ko. She couldn’t make any headway in the first seven holes, recording her first birdies at Nos. 8 and 9. Her compatriot, Jeongeun Lee6, who started the day one stroke behind 54-hole leader, birdied four of the first eight holes, and teenager Atthaya Thitkul of Thailand tallied nine birdies on the front nine.

Turning onto the back nine, Lee6 was 15-under and had a one stroke lead over Thitkul and was two strokes up on Ko and Chun at the New Tanjong Course at Sentosa Golf Club.

But Ko attacked the back nine as she had all week she was 5-under on the front nine compared to -12-under on the back nine. After a bogey at No. 12, she rattled off four straight birdies and was tied with Lee6 at 16-under on No. 18.

Ko reached the green in two, but Lee6 mishit a chip shot that left her ball in the rough. Another mishit led to a double bogey by Lee6, and Ko finished the round off with her seventh bogey of the day. Thitikul (67) and Lee6 (69) finished in a tie for fourth, three shots off the pace.

Canada’s Brooke Henderson (67), Australia’s Hannah Green (66) and South Korean Amy Yang (68) tied for sixth at 13 under, with A Lim Kim (66) of South Korea and American Danielle Kang (70) at 11 under. — Reuters

Retief Goosen goes low to win Hoag Classic

RETIEF Goosen fired an 8-under-par 63, the lowest round of the week, to break away from the pack on Sunday and win the Hoag Classic at Newport Beach (CA) Country Club.

The two-time major champion from South Africa entered the final round trailing countryman Ernie Els by a stroke. But he soared ahead with an eagle-birdie-birdie start, made the turn in 5-under 30 and added four birdies and a lone bogey on the back nine.

At 15-under 198, Goosen bested South Korea’s K.J. Choi by four shots. Lee Janzen and Canadian Stephen Ames tied for third at 9 under.

“The swing felt great, I drove it nicely this week, a lot of good iron shots,” Goosen said. “I can’t complain. Obviously, you win by three or four, you played well.”

Goosen was grateful for the victory after returning from offseason shoulder surgery.

“At this age, there’s always going to be something niggling,” he said. “For me, it was the shoulder last year. I had it injected three times last year and it just didn’t want to go away and the doctor said best thing is to just get it operated on.”

Goosen’s eagle at the par-4 first hole came when he holed out from a greenside bunker.

“No. 1, it was a tricky bunker shot coming out of that bunker and you had to fly it over that ridge,” Goosen said. “So my main goal was to obviously land it up there as far as I can and I was thinking if I hit a good shot, it will probably finish 5 feet past the hole. It just came out a little hotter than I expected and hit the flag and went straight in.

“It was very, very lucky. Whenever you hit a flag it could go anywhere, it could have come back off the green.”

It marked Goosen’s second win on the 50-and-over circuit and his first since 2019, when he won the Bridgestone Senior Players Championship.

Choi posted a 5-under 66, finishing strong with four birdies, a bogey and a par over his last six holes. Ames shot a 67 and Janzen turned in a 69.

Doug Barron and Tim Petrovic both shot 67 and finished tied for fifth at 7 under. Els, who was the defending champion, dropped out of contention quickly when he made four of his six bogeys on the front nine. He carded a 2-over 73 and finished solo seventh at 6 under. — Reuters

Feeling pinch of Russia-Ukraine conflict, bakery looks to wheat alternatives

WIKIMEDIA COMMONS

By Patricia B. Mirasol, Reporter

A bakery in Quezon City is feeling the pinch of disrupted raw material flows as a result of the Russia-Ukraine crisis.

Since the price of wheat rose, Kamuning Bakery Café has been studying alternatives to imported wheat, flour, and sugar, the prices of which are “too high,” said owner Wilson Lee Flores in an SMS message to BusinessWorld. 

Among the alternative ingredients considered by its cooks and bakers arekamote (sweet potato), cassava, monggo (mung bean), rice, and corn. 

Based on Mr. Flores’s research, early Filipinos baked using rice before the Chinese brought wheat to the Philippines. He noted that Filipinos could, perhaps, go back to rice cakes like bikosumanpalitawkutsinta, and maja blanca. 

The price of Kamuning Bakery Café’s pan de sal has not gone up, and is still at P3 per piece.

“It’s still the same quality and taste,” Mr. Flores told BusinessWorld. “We do not want to adjust. We will just absorb the higher costs and try to find ways to cope.”

The price of wheat rose 48.03% between Feb. 7 and March 7. Russia, which supplied 77,000,000 metric tons of wheat in 2020, is the third top producer of wheat worldwide, per geography resource World Atlas. Ukraine, known as Europe’s bread basket, is sixth. 

The country can minimize the effects of any possible economic fallout from the Russia-Ukraine crisis by maintaining its Alert Level 1 status, continuing to vaccinate its population, and keeping businesses open, according to José Maria A. Concepcion III, presidential adviser for entrepreneurship. 

“Keeping businesses open will help contribute to revenue generation for the government and help pay back its debt,” he said in a press statement. 

The country’s debt, which stands at P11.73 trillion as of end-December, increased by almost P4 trillion since the start of the pandemic. 

“We were able to hit 7.7 GDP [Gross Domestic Product] growth in the fourth quarter, better than most had expected, when we reopened the economy,” Mr. Concepcion added. “We have addressed the public health situation, and now we have to keep on track with the economy.” 

MSMEs (micro, small, and medium enterprises) generated 63.2% of the country’s total employment in 2020. They make up 99.51% of all business enterprises operating in the Philippines.

Beyond their numbers: The youth vote, their concerns and aspirations

LOOKSTUDIO-FREEPIK

“No one is born a good citizen, no nation is born a democracy. Rather, both are processes that continue to evolve over a lifetime. Young people must be included from birth. A society that cuts itself off from its youth severs, its lifeline, it is condemned to bleed to death.”

— Kofi Annan, former Secretary-General of the UN

At a political camp held last summer by Ped Xing, a student organization based at the University of the Philippines in Diliman, Quezon City, this writer was invited to talk about youth political participation in Asia. This talk with students from different schools in Metro Manila came on the heels of recent political activism across the region that included the Hong Kong protests from 2019 to 2020, a political crisis built on the people’s opposition to a controversial move that would amend their extradition bill and would infringe on their civil rights, and the Myanmar crisis of 2021, born out of the people’s opposition to Tatmadaw’s deposing democratically elected members of the ruling party.

In the Philippines, what stood out at that time as a strong form of involvement or civic engagement by young people, was the establishment of community pantries across the country. What began as one community pantry aimed at extending help to others left economically vulnerable due to the COVID-19 pandemic, eventually ballooned to about 80 more scattered from Luzon to Mindanao. And while established essentially as a spontaneous and organic act of compassion that offered free food and other necessities to those who needed them, these community pantries were eventually seen by some quarters as a form of political statement in response to the difficulties and unmet needs that many Filipinos faced at the height of the pandemic.

At the heart of all these political and civic activities from Hong Kong to Myanmar to the Philippines, is the involvement of young people — from student volunteers to advocate groups and the working class alike. This is not an isolated example of the active involvement of the youth in socio-political issues around them throughout history. According to the UNDP (2013), “youth are often the driving forces behind reform movements and the youth also tend to get involved in civic, service-oriented activities, such as volunteering for a social cause.” It is not surprising then, that questions on the power of youth vote come to the fore. Is there a youth vote and can it turn the tide during elections?

This question weighs heavily on the Philippines, now just roughly two months away from the national elections in May. According to the Commission on Elections (Comelec), 52% of the total number of registered voters for the May 2022 elections are aged 18-40, falling under the youth vote category (CNN, 2021). The majority of the voters will be the youth, which means the outcome of the elections would or could be determined by this group’s voter turnout. This assumption does not deviate from the voter turnout during the 2010 presidential elections. Pulse Asia exit poll data back then showed that 36% of the votes came from the youth.

It does not categorically mean, though, that there is a youth vote. They are a force to reckon with in terms of numbers, but the experiences and diverse concerns of the youth contribute to differing attitudes during elections, making it difficult, if not impossible to assume that they share a homogenous set of standards in determining their political choices. In an interview with Rappler (Paris, 2019), sociologist Jayeel Cornelio said that “young people remain fragmented and their local experiences matter… these experiences affect their voting preferences based on whom they think can meet their needs.” Following Cornelio’s argument, there is more to understanding the strength of the youth beyond their turnout in the elections.

Given the sheer number of young voters expected to participate in the 2022 elections, it is imperative to understand how their aspirations and concerns find space in the platforms of candidates.

Significant findings from a 2021 project led by the UNDP, Youth Co:Lab Philippines, and Citi Foundation showed what young Filipinos hope or aspire for. Topping the list are “good governance, post-COVID recovery, and education.”

“Good governance” as a top answer on what the youth hope for resonates with what is most discussed on various platforms in the last few months of 2021 leading to the start of the campaign this February. With the election campaign now in full swing, good governance becomes an important yardstick for youth and adult voters alike as they decide on who to vote for. The campaign period offers an avenue for the public to hear candidates’ specific plans for reforms to address issues of corruption, transparency, and accountability, among others. The youth will resonate with candidates whose platforms include institutionalizing reforms that would prioritize good governance.

Education, on the other hand, has been challenging for many students who have had to endure learning disruptions since March 2020. Less privileged students had overwhelming difficulty with the online mode of learning because of poor connectivity, lack of gadgets, and poor learning environments (mainly due to lack of enough space for studying). With more of the population now having received their vaccines against COVID-19, face-to-face learning opportunities are slowly and sparsely being offered in low-risk areas across the country. This is a welcome development not only for the affected students but also for parents and educators. Candidates who champion more inclusive education for students regardless of their economic backgrounds, and whose concrete plans of action include mechanisms that would capacitate the education sector so as to be insulated from any more disruptions in a post-COVID world, will draw positive attention from the youth.

From the same UNDP study, the top of the list of what worries young Filipinos are “climate emergency, conflicts and disasters, and access to primary healthcare and social services.” Disasters that hit the Philippines, such as typhoons Rolly and Ulysses in 2020 and typhoon Odette in 2021, validate these concerns on climate change-enhanced disasters. While the country is not immune to disasters and we have systems in place to address most, having to deal with the pandemic made it more difficult to extend help to communities affected by typhoons during the first two years of COVID, especially in terms of emergency relief as well as in providing healthcare. Disasters disproportionately affect different sectors and among those that are highly vulnerable are the younger population. In the new normal where COVID is endemic, the youth will be looking for innovative solutions that will put us in a better position to deal with complex disasters that may happen successively, or worse, at the same time.

While the aspirations and concerns presented here are not exhaustive, they offer a good indicator of what matters to many of our youth: good governance, sustainability and inclusion, education, healthcare, and social services. Those who are “applying” for government positions must commit to these diverse needs in order to foster deeper political and civic involvement from them.

 

Pilar Preciousa Pajayon-Berse, Ph.D. is an assistant professor of the Ateneo de Manila University Department of Political Science.

Sanctions test faith in the power of economics

THE European-American response to Russia’s invasion of Ukraine represents a watershed in the contemporary understanding of how nation-states behave and what motivates their leaders to act. It pits two leading theories of international affairs against each other. The difference between the two theories may even explain why there is a war going on at all.

The post-Cold War belief prevalent especially in Western Europe is that states and leaders are motivated by rational economic self-interest. By this reasoning, squeezing Russia economically will bring Russian President Vladimir Putin to a breaking point. Either he will back down and leave Ukraine, or Russia will collapse. In other words, economic warfare is a form of warfare as effective as bombs and guns.

Putin’s apparent faith in military force represents the other theory, associated with old-school international affairs ideas like realpolitik and machtpolitik (realist politics and power politics). According to that perspective, if a country’s troops can occupy another nation and no one can push them out by force, the occupier wins, sanctions or no sanctions.

These worldviews overlap. Advocates of economic warfare admit that missiles and tanks also send a message. Proponents of military power must acknowledge that wars can be won and lost because of one country’s greater capacity to pay for and manufacture arms. Both agree that before going to war, rational state actors try to weigh the costs and benefits of fighting, including its economic consequences. And both agree that costs and benefits include the well-being of citizens and the domestic prestige of leaders.

The divergence between the worldviews comes down to their answers to whether states and leaders can be sufficiently motivated by economic pressure alone to give up on a war of invasion that they otherwise would choose to pursue.

Europe says yes. It bases its logic on the interconnectedness of the contemporary economic world. Eventually, it thinks, economic pressure will win. Its evidence is the remarkable period of peace and prosperity in Western Europe since World War II (if you leave out the Balkan debacle of the 1990s).

Putin says no. His historical evidence is that it’s difficult to name even a single example of a country that occupied another and withdrew because of sanctions alone. The basic intuition, going back to antiquity, is that force wins. Deploying economic sanctions without the threat of force is, for him, a signal of weakness.

Put another way, Europe thinks of economic sanctions as a tool of warfare like a siege or a blockade. Putin thinks a siege is only a siege if you back it up with an army, and a blockade is only a blockade if a navy makes it real.

And both sides know that, for the time being at least, Germany is dependent on Russian gas, oil, and coal for its energy needs. That means even economic pressure cannot be total.

This disparity of worldviews goes a long way to explaining the run-up to the war. Even as the US government made public its intelligence assessments that Russia had decided to invade Ukraine, many skeptics in Europe and the US continued to believe that war could be averted. They reasoned that Putin couldn’t possibly think the economic costs would be small enough to justify the gains he might make by invading.

Putin had already determined that no power outside Ukraine would be willing to use force to oppose the invasion. From this premise he surely reasoned that the costs of economic sanctions would not displace Russian troops. From there he seems to have concluded that the gain to Russia and himself in prestige and power would outweigh the costs of sanctions.

The same thinking gap may help explain why the fighting is happening. According to one influential theory, wars happen when the two sides either have different information about each other’s power or have radically different understandings of the likely consequences of their conduct.

This idea is a form of rational-actor theory. It assumes that, if both sides knew who would win a war, neither would have to fight it. The certain winner would just take what it wanted, and the certain loser would give in without a fight. Wars happen, according to this account, when no one can be sure what will happen next.

The Ukraine war fits this description. Most militarily informed observers are fairly sure that Russia can occupy Ukraine, albeit not as quickly as it probably expected and not without quite a few casualties. But can economic sanctions suffice to make Putin leave or otherwise defeat Russia? That question awaits an answer.

The only way to know is by fighting the war, imposing the sanctions and seeing what happens. Europe sees it one way, Putin another. Their interpretation of their relative strengths may not differ much. Their predictions about what will happen when the dice are rolled differ markedly — because of their different theories of war and economic power.

Rational-actor theories, whether economic or militaristic, oversimplify reality. Leaders make mistakes. Political ideology shapes self-interest. And sometimes, there are no facts, just competing predictions based on competing theories.

BLOOMBERG OPINION