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Monday, May 16, 2016 Vol. 11 No. 219
IP owners to get access to shipping documents T B C N. P
@c_pillas29
HE country’s fight against violators of intellectual-property rights (IPR) will begin right at the ports of entry soon.
This is through the joint administrative order (JAO) that the Intellectual Property Office of the Philippines (IPOPHL) and the Bureau of Customs (BOC) are now finalizing.
INSIDE
Lawyer Josephine Santiago, director general of the IPOPHL, told the BusinessMirror the JAO will allow greater transparency, particularly through the release
This will facilitate coordination with brand owners, as they can be given easy access to the shipping documents identified to be dubious.” —S
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Land-reclamation tack fraught with challenges, opportunities
P. | | 7 DAYS A WEEK
Framing the role of Tidcorp in desocializing losses in PPPs PPP Lead Alberto C. Agra
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OW can risks attending a public-private partnership (PPP) arrangement be mitigated? How can the general public be shielded from the harmful effects of a failed PPP project? How can the Trade and Investment Development Corp. of the Philippines (Tidcorp) help desocialize losses and risks? C A
ROLE IN PPPs: GOVERNMENT AS...
LIFE
POLICY-MAKER D1
WHEN I WAS 25: FIDEL V. RAMOS
REGULATOR FUNDER A HOTEL building is being built near the SM Mall of Asia in Pasay City. NONIE REYES B J M @jonlmayuga
First of three parts
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PERSPECTIVE
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ITH the country’s rapidly increasing population vis-à-vis limited land resources, the prospect of land reclamation, basically a strategy for urban expansion, continues to stir debate among stakeholders. Despite strong opposition, massive land reclamation is a strategy being pursued by the government
PESO EXCHANGE RATES n US 46.5840
to further boost the country’s economy, as space has become a scarce resource. The issue of land reclamation becomes even more pressing with the advent of climate change, with fears that human folly, in pursuit of development at the expense of nature, may eventually lead to problems of catastrophic proportions in the end. Up in arms against massive landreclamation projects, environmentalists and fishermen argue that
more ecologically unsound projects would further damage the country’s already-vulnerable marine ecosystem, affect the country’s food-production capacity and endanger the lives of tens of thousands of people living in coastal areas. Under t he ad m i n ist rat ion of President Aquino, two small land-reclamation projects were successfully implemented, according to the Philippine Reclamation Authority (PRA).
SUBSIDY-PROVIDER GUARANTOR PARTNER AUTHOR: ALBERTO C. AGRA
BM GRAPHICS: JOB RUZGAL
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n JAPAN 0.4273 n UK 67.3372 n HK 6.0037 n CHINA 7.1514 n SINGAPORE 33.9459 n AUSTRALIA 34.1228 n EU 53.0079 n SAUDI ARABIA 12.4221
Source: BSP (13 May 2016 )
A2 Monday, May 16, 2016
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Land-reclamation tack fraught with challenges, opportunities C A
These are the P360-million reclamation component of the Manila North Harbour Port Inc. involving 3 hectares and the P190-million reclamation component of the Batangas AgroIndustrial Development Corp. covering 4 hectares. Both were implemented through the public-private partnership (PPP) strategy of the Aquino administration. Other than these two, land-fill projects that took place since June 2010 were made without the approval of the PRA, the agency that regulates land-reclamation projects. Currently, the government is evaluating eight big land-reclamation projects in Metro Manila, Metro Cebu and Davao City, PRA Assistant General Manager Joselito D. Gonzales told the BUSINESSMIRROR in an interview. These projects are expected to boost local and national development by way of capital inflow, wealth creation, job generation and increased government revenues, he said.
“Historically, mankind has always been attracted to beachfronts, not only because of its aesthetic beauty [but] because it has always been attractive to trade and commerce,” Gonzales said, explaining the global trend of urban expansion. “If an [area of an] LGU [local government unit] is congested and there’re development opportunities, an LGU cannot encroach [on] its [neighboring LGU],” Gonzales said. That leaves the LGU “no other choice but to expand in coastal areas.”
Environmental impact
CLEMENTE BAUTISTA of the environmental group Kalikasan-People’s Network for the Environment (Kalikasan-PNE) is averse to land reclamation, especially on coastal areas. Bautista said the destruction of coastal habitats will lead to reduction of fish catch and productivity at the local level. Bautista, Kalikasan-PNE national coordinator, added such move will also increase the country’s
vulnerability to climate change, such as supertyphoons, flooding and storm surges. “ These [projects] will lead to higher economic value of damages, particularly in urban areas.” Moreover, Bautista said the opportunity to rehabilitate a coastal area, like the Manila Bay, will be lost. As such, he said, environmental services, like carbon capture and ecotourism, will also be lost. However, Theresa Mundita S. Lim of the Biodiversity Management Bureau (BMB) of the Department of Environment and Natural Resources (DENR) said there are environmental laws that provide a safeguard against excesses in land-reclamation projects. These protect the country’s rich biodiversity against unbridled development, Lim, BMB director, said. “We appreciate that safeguards are observed in every development projects, because we really need to protect our rich biodiversity against destructive activities,” Lim added.
In case of massive land reclamation, Lim said, such activities should be conducted outside marine protected areas or away from areas with high concentration of biodiversity. “That is why before undertaking [any] development project, we encourage proponents to do baseline studies as proof that the proposed project will not in any way harm our biodiversity.”
Risk perceptions
WHILE environmentalists warn against potential adverse impact of land reclamation to the environment, small fishermen generally oppose such activities, complaining of declining fish catch with the loss of important ecosystem, including breeding grounds of fish and other marine life. Underscoring the economic opportunities in land reclamation, however, Gonzales said the only expressed dangers of land reclamation are the perception of certain sectors of society. “A properly engineered reclamation is expected to withstand acts of nature. It could last up to a thousand or even 10,000 years,” he said. In fact, Gonzales said land reclamation can provide coastal defense. According to him, land reclamation can prevent storm surges and flooding, as the structures on the reclaimed land will act as barrier against sea-level rise, tsunamis or storm surge. Gonzales said this can be achieved without financial burden to the government by allowing reclamation for mixed-use development. “In the case of Manila Bay, at an elevation sufficient enough for the new land mass, [reclaimed land can] serve as barrier for the low lying areas around the bay,” Gonzales, a lawyer, told the BUSINESSM IRROR. “Hydraulic structures can be designed and installed between the islands to regulate the flow of water, particularly during inclement weather conditions.” According to Gonzales, the benefits of land reclamation may outweigh the risks if the project is implemented accordingly.
Engineering interventions
ACCORDING to Gonzales, coastal defense can be done either through hard- or softengineering interventions. Hard engineering involves the construction of concrete structures, while soft engineering involves the massive rehabilitation or reforestation of coastal areas. Gonzales added that contrar y to speculation, land reclamations are done in coordination with concerned government agencies, such as the Department of Agriculture (DA), particularly the Bureau of Fisheries and Aquatic Resources (BFAR). He said the DENR, which issues Environmental Compliance Certificate (ECC), is also involved in such projects to ensure these are environmentally sound and that provisions of environmental laws are followed. “Before we approve a project, we see to
it that the BFAR and the DENR are involved,” he said. “If it’s [involving] a key biodiversity area, we would not have approved it.”
Opportunities teem
PRA’s Gonzales said land reclamation offers an opportunity for a well-planned and modern urban expanse. It could also enhance coastal environment in urban setting and provide coastal defense through hard engineering interventions in the face of intensifying typhoons being experienced in many parts of the country. A government-owned and -controlled corporation (GOCC), PRA regulates land-reclamation projects and serves as property development and management of public estates or lands belonging to, managed and/or operated by the government. Reclamation, defined as the deliberate action of filling up foreshore, offshores or submerged areas of public domain for specific use using acceptable filing materials and appropriate technology, is being done in many parts of the world. The World Bank, for one, has loaned Japan in 2010 for land reclamation in Northern Japan. The Hong Kong Disneyland Resort, Hong Kong International Airport and its predecessor Kai Tak Airport were all built on reclaimed land. Singapore’s Ministry of National Development has also released a land reclamation plan for housing and recreation use by 2030. Land reclamation in the Philippines, according to the PRA, has always been for expansion of highly urbanized areas, such as Metro Manila and Cebu. In some cases, land reclamation was undertaken for port expansion. It is also being done to provide for back-up areas for port facilities and for expansion of businesses thriving along seafronts.
Proponents, advocates
GONZALES clarified that the PRA is not a promoter of land-reclamation projects. Being the primary regulatory body tasked to evaluate proposed projects that involve reclamation, the PRA only evaluates the proposals that fall on its lap, he explained. “I just want to make it clear, again, because we are being heavily criticized from all sectors as the promoter of land reclamation,” Gonzales said. “I would like to emphasize, we are not the promoters. Applications and proposals just come in, mostly local government unit who submit proposals.” Citing PRA records, of the archipelago’s 36,000 kilometers shoreline, only 10 km have, so far, been subjected to land-reclamation activities, covering approximately 2,000 hectares. The main concentration of these projects is the urban areas, like Metro Manila and Metro Cebu. “The small projects are spread over different areas of the country and are mostly for portrelated reclamations.” Manila Bay is where most of these land reclamation areas took place, Gonzales said. Cebu is in far second, also because of the extensive reclamation done there.
IP owners to get access to shipping documents C A
of advance information on incoming shipments. The JAO, she said, will allow brand owners and other law-enforcement agencies access to shipping documents as a facilitating measure. “The JAO, with the BOC may cover establishing an IP desk at BOC and giving rights holders and other law-enforcement agencies access to shipping documents for possible profiling or inspection to determine IP violations,” Santiago said. “This will facilitate coordination with brand owners, as they can be given easy access to the shipping documents identified to be dubious. In which case, upon verification, proper inspection can be made, and if the goods are counterfeit, forfeiture and condemnation proceedings can forthwith be initiated,” she added. However, whether the procedure to be implemented from the seizure of counterfeit products to their destruction will be shortened will still depend on the BOC. “Simplifying administrative procedure to further facilitate the condemnation and destruction of counterfeit goods is always an option; but the same is within the jurisdiction of the BOC,” Santiago said.
According to IPR enforcement procedure at the BOC, after the IPR owner/ brand owner has been alerted of a shipment of counterfeit goods and has declared the shipment as such, the Intellectual Property Unit-Customs Intelligence and Investigation Services of the BOC will issue a warrant of seizure and detention. After the issuance of the warrant, the consignee of the shipment is given a period to contest the counterfeit claim and notify the brand owner. If, after 10 days, the owner or importer of the shipment does not appear or contest the claim, the goods will be declared forfeited in favor of the government. After the declaration, there may still be an administrative hearing to get more information on the case. Strengthening border-control measures is a key factor in ensuring the Philippines will stay out of the United States Trade Representative’s (USTR) Special 301 Watch List. The USTR Special 301 Report is the annual review of nations’ IPR enforcement. The Philippines was again absent in the said review in this year’s edition, ref lecting the countr y’s continued compliance to IPR protection.
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Monday, May 16, 2016
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Gokongwei, Singson, Chua likely to head economic team being formed by Duterte B M. S F. A | Special to the BM
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LD NAMES, familiar faces, and even a few surprises.
The transition team of presumptive President Rodrigo R. Duterte has drawn up a wish list of nominees to several major Cabinet posts. They include JG Summit Holdings Inc. President Lance Y. Gokongwei, current Public Works Secretary Rogelio L. Singson and Shell Philippines Country Chairman Edgar O. Chua. In an interview with the BusinessMirror, a source close to the Duterte transition team stressed, though, that all these names are “just under consideration,” and the transition team will be reaching out to them and a few others in the next few weeks. Gokongwei, for one, is being eyed as finance secretary. Only 49, Gokongwei is a double summa cum laude graduate from the University of Pennsylvania’s School of Engineering, with a bachelor’s degree in Economics, Applied Science, and is a graduate of the Wharton School of Business in Finance. He is the only son of business tycoon John L. Gokongwei, founder of pioneering snack food and beverage company Universal Robina Corp. Asked if it was a reward for Gokongwei for being a donor to the Duterte campaign, the source said: “No. He’s a very smart guy with an excellent academic and professional track record. Also, he’s too rich to steal.” Gokongwei, who is also president of JG Summit subsidiary Cebu Pacific Airways, has been credited for expanding the budget carrier’s operations to become the Philippines’s largest commercial airline. Last year Cebu Pacific flew 18.4 million passengers, both domestically and internationally. Its profit jumped by 81 percent to P4 billion in the first quarter of 2016, due to higher passenger traffic. Earlier, Duterte had announced that his schoolmate and chum, former Agriculture Secretary Carlos G. Dominguez, may take over the Department of Finance portfolio. However, the source confirmed that Dominguez has yet to accept the position of finance secretary. Chua, meanwhile, “is a leading contender” for the post of energy secretary, the source said. A graduate of Chemical Engineering from the De La Salle University, Chua joined Shell Philippines in 1979 and has worked in various capacities within the company, as well as in Shell units in the United Kingdom and Cambodia. At 58, he has been described as low key and unassuming, and not used to being in the limelight. It was under Chua’s stewardship that Shell Philippines unit Shell Philippines Exploration B.V. expanded the output of the Malampaya Deepwater gas-to-power project in joint-venture state-owned Philippine National Oil Co. and Chevron. The Malampaya project is recognized as one of the country’s most successful public-private partnership (PPP) projects, which Shell operates on behalf of the Department of Energy. Singson, 67, is being eyed as transportation secretary; he is expected to use his knowledge and expertise in infrastructure expansion to fast-track vital projects in the transportation sector. He is credited for purging the Department of Public Works and Highways (DPWH) of an overstaffed bureaucracy, cutting the red tape in bidding and securing projects, and eliminating graft and corrupt practices that led to costly projects. From July 2010 to 2015, the DPWH had paved about 5,208 kilometers of national roads, rehabilitated 4,397 km and widened 1,577 km. Singson is respected by his peers for his extensive background in the private sector—having been president and CEO of Maynilad Water Services, a unit of Metro Pacific Invesments Corp.—and in the government. As chairman and president of the Bases Conversion and Development Authority from July 1998 to February 2002, Singson had pursued PPP projects to transform former military bases, like Clark and Subic, to thriving industrial and commercial areas. The Duterte transition team is also keenly looking at William Dar to sit as agriculture secretary. Dar, 63, was acting agriculture secretary and presidential adviser on rural development from July 1998 to May 1999, under then-President Joseph E. Estrada. Wikipedia describes Dar as a horticultural expert who received a doctorate degree from the University of the Philippines in Los Baños. He was the first director of the Bureau of Agricultural Research, an attached agency of the Department of Agriculture (DA), in 1988, when Dominguez was agriculture secretary. Marketing guru Tomas B. Lopez Jr., currently the president of the University of Makati, is also being considered to take over the Department of Tourism (DOT). A longtime academician and former marketing professor at the Asian Institute of Management, Lopez, 63, was executive director of the National Agricultural and Fishery Council, when Dominguez was DA secretary. “That’s actually not a bad idea,” said the source, quoting Dominguez, on suggestions that Lopez head the DOT. Lopez has also extensive experience in the tourism sector having been president of the Club Noah Group of Cos., which operates a resort in Palawan. He is currently a shareholder in an airline charter service, Southeast Asian Airlines International. The transition team had actually wanted current Tourism Secretary Ramon R. Jimenez Jr. to remain at his post, but the latter had declined the offer due to personal reasons. The transition team is considering V. Bruce J. Tolentino as economic planning secretary and director general of the National Economic and Development Authority. Tolentino, once a colleague of Dominguez at the DA, was agriculture undersecretary from 1986 to 1993. He is currently deputy director general for Communication and Partnerships for the International Rice Research Institute in Los Baños. At the DA, Tolentino was an advocate of removing government subsidies, especially for the National Food Authority.
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A4 Monday, May 16, 2016
BIR asked to revise proposal for easing bank-secrecy rules
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@butchfBM
HE incoming Congress expects the Executive to pitch anew an initiative, led by the Bureau of Internal Revenue (BIR), to lift bank secrecy on serious tax-evasion cases, but some senators said the agency’s proposal is “overbroad” and should be revisited.
The bone of contention, in the view of outgoing members of the Senate Ways and Means Committee, is that the BIR wants to grant access to bank accounts of suspected tax evaders to far too many officials than necessary. “The BIR and the Department of Finance [DOF] are the ones pushing [it] but their proposed bill was overbroad, allowing many hundred officials access,” Sen. Juan Edgardo Angara told the BusinessMirror over the weekend. Angara added they sent the proposal back to the proponents for further refinements. “We asked them to tailor it well to make it acceptable,” he said.
It will be recalled that the BIR and the DOF had long clamored for the easing of bank-secrecy rules, saying the Philippines was supposedly one of the few countries where tax agencies have difficulty chasing suspected big-time tax evaders because of strict bank-secrecy laws. In the campaign for the May 9 national elections, bank secrecy became an issue once more amid allegations by Sen. Antonio Trillanes IV that then survey front-runner Rodrigo R. Duterte kept hundreds of millions in bank accounts that were not properly disclosed. Trillanes was put on the spot when Duterte lawyers demanded that the senator substantiate how he
We are one of only three countries in the entire world where our tax administration cannot access bank transactions for taxevasion purposes.”—P
obtained supposed bank documents bolstering his “tale.” Duterte’s lawyer, Salvador Panelo, said Trillanes’s claim constituted “double hearsay” because it came from a certain Joseph de Mesa, whom Trillanes did not know, and who, in turn, claimed he got it from another person. Banking and finance officials have proposed to leaders of both houses of Congress to amend the country’s Anti-Money Laundering Act and revise the bank deposit-secrecy law for tax-evasion purposes. Among the more salient proposed amendments to Republic Act (RA) 9160, also known as the Amla of 2001, is to include casinos, among others, as mentioned in the Financial Action Task Force recommendations, as covered entities under the law; as well as the inclusion of tax evasion, among other crimes, as a
predicate crime to money laundering. The government also said the proposal aims to improve the ability of the Anti-Money Laundering Council to safeguard the financial system from money-laundering activities. The DOF also wanted to amend RA 1405, or the bank-secrecy law, and RA 6426, otherwise known as the Foreign Currency Deposit Act of the Philippines, to lift restrictions on bank secrecy of peso deposits and foreign-currency deposits for tax purposes. “We are one of only three countries in the entire world where our tax administration cannot access bank transactions for tax-evasion purposes. We are one of only two countries in the entire world where tax evasion is not a predicate crime to money laundering,” Finance Secretary Cesar V. Purisima said in a statement.
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Next Congress to prioritize RFI bill, tax reform–Quimbo B J M N. C @joveemarie
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LEADER of the House of Representatives on Sunday said Congress should pass Rationalization of Fiscal Incentives (RFI) bill to offset any revenue shortfall from lowering individual income and corporate tax rates. House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina said he will push for the passage of RFI and the tax-reform measure in the next Congress. “We need to pass the RFI. The savings generated from RFI is needed to offset any revenue shortfall that will result from tax-reform,” Quimbo told the BusinessMirror. “We need to create a healthy mix of taxes, bearing in mind the implementation of a just and progressive tax rate,” he added. The RFI bill is now considered dead in the lower chamber after the Departments of Finance (DOF) and Trade and Industry (DTI) failed to reconcile their conflicting positions on the measure. “This will involve close to 78 industries, so it’s very important that we will be able to know their [DTI and DOF] specific inputs,” said Quimbo, who ran unopposed in the Second District of Marikina City. The lawmaker said the government is losing billions of pesos due to the grant of incentives. “We lost P148 billion in 2013 on
fiscal incentives but [with the passage of the RFI bill] we want to make sure that we will only remove incentives to those industries that don’t deserve it,” he added. The rationalization of fiscal incentives bill is included in the Palace’s priority measures. The RFI has been repeatedly filed since the 9th Congress, but this failed to secure the approval of lawmakers. The rationalization of fiscal incentives was strongly opposed by business groups, as it would remove the tax- and duty-free incentives of several industries. Earlier, the BusinessMirror reported that the Makati Business Club (MBC) had advised lawmakers not to rush the passage of the RFI bill, as railroading the measure may result in a “slipshod” version of the key fiscal-reform measure. While the business sector supports the initiative to streamline fiscal incentives to help plug revenue leakages, MBC Executive Director Peter Angelo Perfecto said fasttracking the bill’s passage without regard for its content could erode the country’s competitiveness. President Aquino had said he will not back income-tax reforms sans a measure that would compensate lost revenues, such as the RFI bill. He also urged tax-reform proponents to first seek “solid sources” of funds to fill the projected fiscal gap that may ensue from the proposed adjustments in income and corporate tax rates.
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AseanMonday BusinessMirror
Vietnam wants Japan to take more active role in settling sea dispute
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IETNAMESE Prime Minister Nguyen Xuan Phuc said Japan, as a major regional power, should play a more active role in promoting the peaceful resolution of disputes involving the South China Sea. In an interview in Hanoi with Japanese media organizations, Phuc also said he expects Japan to make “effective” efforts to advance regional cooperation in a bid to ensure the safety of navigation in and aviation over the contested waters. China, which claims almost all of the South China Sea, has been aggressively pursuing its assertion, including conducting massive land reclamation, despite objections by smaller rivals such as Vietnam and the Philippines. Japan, which is not a claimant, is among countries that advocate freedom of navigation and overflight in the sea. Phuc, who had his first in-
terview with the foreign press since taking office in April, is scheduled to visit Japan to participate in an outreach session of the Group of Seven summit on May 26 and 27 in Mie Prefecture, central Japan. The 61-year-old leader described bilateral relations with Japan as being in “the best-ever development stage” and expressed hope for the Japanese government to continue providing aid to improve Vietnam’s infrastructure and for enhanced cooperation in areas such as climate change. The two countries have been promoting defense cooperation, in an apparent attempt to keep China in check. In April two Japanese destroyers made a port call at Vietnam’s strategic point of Cam Ranh Bay facing the South China Sea, becoming the first vessels belonging to Japan’s Maritime Self-Defense Force to visit the site. PNA
SoKor, Indonesia in talks to boost bilateral trade ties
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RESIDENT Joko “Jokowi” Widodo left for Seoul, South Korea, on Sunday for a state visit until Wednesday to boost bilateral economic ties between the two countries.
Jokowi, accompanied by Coordinating Minister for Economic Affairs Darmin Nasution and Trade Minister Thomas Lembong, departed aboard presidential aircraft Indonesia One at 9:05 a.m. local time. Foreign Minister Retno Marsudi and Head of the Investment Coordinating Board Franky Sibarani are already in Seoul ahead of the president’s departure. The head of state is scheduled to meet the Indonesian community in South Korea at the Indonesian embassy in Seoul on Sunday evening.
On Monday Jokowi and South Korean President Park Geun-hye are scheduled to hold bilateral talks on political, economic and socio-cultural issues. During the president’s visit, a number of memorandum of understanding (MOU) are expected to be signed, according to South Korean Ambassador to Indonesia Taiyoung Cho. He explained that the MOUs will cover several fields, including the environment, creative industry, forestry, peat land, trade and others. South Korea is the fifth-biggest investor in Indonesia, with total invest-
ment reaching $1.2 billion, while trade between the two countries peaked at $30 billion in 2011. Jokowi is also scheduled to hold business meetings, including a oneon-one meeting and a luncheon roundtable, with the 20 biggest businessmen in South Korea. He will also give a speech at the Asian Leadership Meeting, the biggest discussion forum in South Korea on leadership and innovation. Marsudi earlier informed that South Korea is one of the main partners of Indonesia when it comes to trade, investment and tourism. Indonesia also plans to partner with South Korea to expedite the pace of industrialization in the country, she said. From South Korea, Jokowi will proceed to Sochi, Russia, for the AseanRussia Summit. He will stay in Russia until Friday, and is expected to return to Jakarta on Saturday. PNA
Monday, May 16, 2016 A5
Bhumibol’s health has improved
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HAILAND’S King Bhumibol Adulyadej is recovering after a lung infection, though he will continue to be hospitalized and treated with antibiotics for an infection in his knee, the royal palace said. Bhumibol, 88, had an infection in his right lung, a quickened pulse and a fever earlier in the week, the palace said in statement late Saturday. His temperature, pulse and blood pressure have since returned to normal, it said. The world’s longest-reigning monarch, Bhumibol was hospitalized at Bangkok’s Siriraj Hospital in May 2015, when he was treated for a lung infection. He also suffered lung infections in 2009 and 2013. The health of Bhumibol is watched closely in Thailand, where he is revered by many for what they say has been his unifying presence during a sevendecade reign marked by 16 attempted or successful coups, the most recent in May 2014. Bloomberg News
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The World BusinessMirror
Editor: Lyn Resurreccion • Monday, May 16, 2016
Maoists still a force 50 years after Cultural Revolution
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UOYANG, China—Fifty years after Mao Zedong unleashed the decade-long Cultural Revolution to reassert his authority and revive his radical communist agenda, the spirit of modern China’s founder still exerts a powerful pull. Millions of people were persecuted, publicly humiliated, beaten or killed during the upheaval, as zealous factionalism metastasized countrywide, tearing apart Chinese society at a most basic level. Student groups tortured their own teachers, and children were made to watch mobs beat their own parents condemned as counterrevolutionaries. Gangs engaging in “armed struggle” killed at least a half million people while countless more committed suicide, unable to cope with relentless persecution. It was only in 1981—five years after Mao's death—that China's government officially pronounced the Cultural Revolution “a catastrophe.” But in the ancient city of Luoyang, the old, the poor and the marginalized gather daily in the main public square to profess nostalgia for the decade-long political movement, downplaying that period's violent excesses. In the marble halls of power in Beijing, Cultural Revolution-era song-and-dance performances are being revived. China's liberals see ominous signs of a society tugged backward by ideological currents. "Either it's because people have forgotten the Cultural Revolution or are increasingly dissatisfied with social conditions, but since the mid1990s, these kinds of ideas have been gaining currency," said Xu Youyu, a former Chinese Academy
of Social Sciences researcher. Maoists have largely embraced President Xi Jinping as one of their own, though he has never endorsed their views outright, and the nuances of his personal ideology—especially on economic matters—remain a cipher. Many see encouraging echoes of Mao’s political style in Xi’s crusade against corrupt party bureaucrats, and in his staunchly populist rhetoric, nationalistic bent and repeated demands for ideological conformity. The surge in Maoist sentiment and distrust of the status quo points to the complex risks facing China. The legitimacy of the Communist Party is staked upon both Mao’s legacy and a tacit promise of bettering people’s lives. Those two pillars may prove difficult to maintain as China navigates a painful economic transition that threatens to shed countless miners and factory workers and widen social inequality. While China went through similar reforms a decade ago, the economy was growing much faster at the time and citizens lacked organizational tools such as the Internet and social media platforms. Grassroots Maoism has been “blossoming in every corner” in the past few years as social media has taken off, said Han Deqiang, a prominent Maoist lecturer and professor at Beihang University
in Beijing. The Cultural Revolution is considered to have begun May 16, 1966, when the Communist Party's Politburo purged a number of leading officials. Over the following decade, Mao deposed two heirs apparent, his “Little Red Book” of sayings was elevated to the level of holy scripture, and millions were imprisoned, sent to labor camps or exiled from the cities. Xi himself spent years living in a cave dwelling and laboring in the fields of his father's native province of Sha’anxi. Still, in Luoyang, a 3,000-yearold city in the central province of Henan, nearly every day retired or unemployed workers sing odes to Mao under a billowing Communist Party flag at Zhouwangcheng Plaza. People swarm around a clothesline and squint at dozens of pinned essays condemning the past 30 years of liberalization or positively reappraising the Cultural Revolution. It was here in the plaza that Xu Xiaobin met a group of Maoist retirees who changed his thinking five years ago. That was before he was laid off from his 3,000 yuan ($460) -a-month machining job. “Even the word ‘layoff’ didn't exist" in Mao’s time, Xu said, standing outside a shuttered state-owned gear factory that used to support his family of four. “You look on the Internet and there are people showing off their wealth. Then there are people like me, working under the sun in 40-degree (Celsius, 104-degree Fahrenheit) heat.” Many have taken their grievances to Luoyang’s streets. Thousands of decommissioned army veterans have been petitioning for years for retirement benefits, which have led to confrontations with police, who break up even private meetings in restaurants, said veteran Qin Shuiyan. Perhaps no one has drawn Luoyang authorities’ ire more than Wang Xianfeng, a 57-year-old retiree who in recent years has pulled together
Maoist rallies with thousands of people, prompting multiple crackdowns. She discusses Maoist thought semi-weekly in a rented home and organizes followers who distribute thousands of pamphlets. Police once tore down the house door and seized her group’s public address system, Wang said. Luoyang police declined a request for a telephone interview and did not respond to questions submitted by fax. Wang was sentenced to two years in a labor camp in 2010, but her ardor for the ruling party and its leader has hardly dimmed. In her eyes, Xi is leading a new Cultural Revolution. “He wants to inspect these people who’ve enjoyed their lifestyle for so long,” she said. “It’s a class struggle, so of course they’re going to resist him, just like during the Cultural Revolution, when landlords didn’t want to give up their position. If he needs us, we’re ready to fight for him.” Maoism nationwide remains loosely organized, however. The community is bound mostly online by blogs and forums. Public demonstrations of even modest size are quickly shut down and unauthorized monuments to Mao, like giant statues, are razed in the heartland regions where Maoism burns hottest. Analysts are closely watching how the party endorses or suppresses commemorations of the movement's anniversary this month, seeing that as a measure of Xi's personal authority. Divisions are beginning to show. In March, a commentary in the state-run Global Times tabloid warned against taking “extreme” positions about the Cultural Revolution. A recent Beijing concert featuring lavish productions praising Mao and his class struggle reportedly drew criticism from some in the party elite. AP
Dutch Holocaust museum exhibits Jeroen Krabbe paintings
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MSTERDAM—More than 70 years after tens of thousands of Dutch Jews were deported and killed by the Nazis, the Netherlands is finally getting a national Holocaust museum. It will be three years before the new museum is completed, but on Monday, it opens its doors to host a harrowing exhibition of paintings by actor and artist Jeroen Krabbe. The location of the museum, a former teacher training school in the heart of Amsterdam’s old Jewish quarter, is a small, but hugely significant ray of light in the dark history of Jews in the Dutch capital during World War II. Some 600 Jewish children were spirited to safety via the school from a neighboring kindergarten where they were being held while awaiting deportation, said curator Annemiek Gringold. On the other side of the street stands the Hollandsche Schouwburg, a theater used by the Nazi occupiers as a gathering point for Jews who were rounded up — often with the help of Dutch collaborators paid a bounty for each person they betrayed — and transported to their deaths. In all, 104,000 Dutch Jews were among the 6 million Jews murdered in the Holocaust. The theater is now home to a memorial to those victims. Nearby are also the Jewish Historical Museum and a 17th-century Portuguese Synagogue. The nine paintings on show Monday are collectively titled “The Demise of Abraham Reiss.” They trace the life of Krabbe’s grandfather, who was murdered by the Nazis in 1943 in the Sobibor death camp in occupied Poland. From a man sitting in a forest of birch trees on the edge of Amsterdam, the paintings trace Reiss’ life in prewar Amsterdam to his detention in the Westerbork camp in the northeastern
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Ruled ‘broken,’ Texas foster care system faces long overhaul
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ALLAS—At 5, the girl identified as SA entered the Texas foster care system. Within months, she reported being raped by an older child. She was moved more than 45 times, including to psychiatric hospitals, and missed several chances for adoption because of paperwork delays. At 18, after aging out of the system, she walked into traffic and was hit by a car. At last report, she was living in a homeless shelter. Her story, detailed in court records, was among scores of chronic foster-care failures that led a federal judge to declare the Texas system unconstitutionally flawed and order an independent overhaul. Unlike most other states under similar orders, Texas is fighting the ruling — even as two court-appointed administrators face a September deadline to present a reform plan. The system, which has about 30,000 children in homes and institutional settings, is “broken, and it has been that way for decades,” US District Judge Janis Graham Jack said in her December ruling. That’s especially true for those labeled permanent wards of the state, she said, who “almost uniformly leave state custody more damaged than when they entered.” That label, covering about 12,000 children on whose behalf the suit was brought, can be affixed after a child spends just a year in custody and means they receive less care and oversight, Jack said. Another troubling aspect of Texas’ system, the judge wrote, was allowing “foster group homes.” Texas’ stated allowance of up to 12 children in such homes, including the caregivers’ own, was exceeded, Jack said, calling them “a hybrid” between traditional foster homes and institutional facilities that provided “fewer benefits ... and fewer safeguards.” Jack said the sexual assault of and by foster children was a special problem in the foster group homes. She noted a boy identified as D.I. who was sexually abused from age 8, saying the system tried to cover it up and there was no indication he was ever placed in a single-child home. An expert testified D.I. had become “a high risk for sexually harming children.” Kristopher Sharp, who spent eight years in the Texas system and advocates for reform, is heartened by the judge’s ruling. “We’re constantly being told no, we’re making stuff up or it’s not that bad or whatever. And here it is, this federal judge is saying it’s just as bad as people are saying it is — and in fact, it’s even worse.” The judge directed the two special
masters to decide whether the foster group homes should exist. She also suggested setting up a 24-hour hotline to report abuse and neglect, figuring out manageable caseloads for workers and tracking child-on-child abuse. The two began working with state officials in April. Texas contends it was already reforming foster care and has challenged the appointment of the special masters. It’s asked the 5th US Circuit Court of Appeals to make the judge craft the reforms herself so that the state will have a final judgment to appeal rather than waiting — and paying — for the special masters to complete their work. “It’s unfortunate and disappointing that millions of dollars that could have gone to serving youth in the Texas foster care system and hiring more caseworkers will now be spent on the legally baseless special master process,” said John Wittman, spokesman for Gov. Greg Abbott, who declined an interview. Far more states settle such lawsuits. Leecia Welch of the National Center for Youth Law, which was not involved in the case, said there’s currently comprehensive litigation or ongoing settlement agreements in more than 15 child welfare systems across the US. Experts said having up to 12 children in one home wasn’t something they’d seen elsewhere and the trend among states was a move away from group settings. “It’s this bizarre hybrid that seems to exist only in Texas and should exist nowhere,” said Richard Wexler, executive director of the National Coalition for Child Protection Reform. A 2013 report from Generations United and the American Bar Association Center on Children and the Law found that state allowances for foster homes vary from four to eight children, including host family kids. Texas’ traditional foster homes allow up to six children, including the host family’s children. In addition, being designated a permanent ward of the state is “like being moved to the backburner,” said attorney Sara Bartosz of Children’s Rights, which filed the lawsuit. A healthy system will get a child reunited with family members or in a longterm placement with relatives “fairly quickly,” or get them adopted within two years, said Sandra Gasca-Gonzalez, director of the Jim Casey Youth Opportunities Initiative. Texas “ignored 20 years of reports, outlining problems and recommending solutions,” Jack wrote. “Although some foster children are able to overcome these obstacles, they should not have to.” AP
PRINCE’S YELLOW GUITAR FOR AUCTION IN CALIFORNIA IN this February 4, 2007, file photo, Prince performs during the halftime show at the Super Bowl XLI football game at Dolphin Stadium in Miami. Heritage Auctions is selling one of the late artist’s “yellow cloud” electric guitars beginning June 24 with an opening bid of $30,000. The guitar was one of several custom guitars Prince used in the 1980s and 1990s.
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DUTCH actor and artist Jeroen Krabbe poses in front of his painting that tells the story of his grandfather Abraham Reiss (left), who was murdered in the Sobibor Nazi German extermination camp, during a press preview at the National Holocaust Museum in Amsterdam, the Netherlands, on May 12. AP/PETER DEJONG Netherlands and his arrival at Sobibor, where he was greeted by a snarling dog and shadowy, faceless guards. The final painting shows thick smoke billowing out of the chimney of Sobibor’s gas chamber and a flock of geese, whose honking was intended to drown out the screams of Jews being murdered, according to a text accompanying one of the paintings. The artist said he couldn’t bring himself to visit Sobibor. So instead he drew on the memories of camp survivor Jules Schelvis, who wrote a book about his experiences and built models of the camp and its gas chambers. The models are exhibited in the same room as Krabbe’s paintings.
Schelvis, who died last month, survived his time in the camp, but lost 18 relatives there, including his wife, Rachel. In 2009, he recalled his Sobibor experiences in the Munich trial of John Demjanjuk, a retired Ohio autoworker who was convicted of 27,900 counts of accessory to murder, but always denied serving as a Sobibor guard. Krabbe said he also used his acting skills to imagine how his grandfather would respond to the horrors unfolding in his life. “I wanted to get under his skin,” Krabbe told The Associated Press. “To imagine how it would be to experience what happened to him and how he would have reacted. It was like I
had to play a role.” The holocaust museum will stand among other institutions in the Netherlands charting the history of Jews and their killings during World War II, including Amsterdam’s Anne Frank House. That museum, built around the hidden apartment where the teenage Jewish diarist hid with her family from the Nazis until being betrayed and dying in the Nazis’ BergenBelsen camp, attracted more than 1.2 million visitors last year. Gringold said the holocaust museum will shine a light on other victims. “There is one Anne Frank, but 104,000 Dutch Jews died and we have to tell their story, too,” she said. AP
OS ANGELES—A bright yellow, uniquely shaped guitar used by Prince to perform such tunes as “Cream” and “Gett Off” is going up for auction. Heritage Auctions is selling one of the late artist’s “yellow cloud” electric guitars beginning June 24 with an opening bid of $30,000. The guitar was one of several custom guitars Prince used in the 1980s and 1990s. “I’ve been a Prince fan since I was a little kid, and that guitar always stuck out to me because it was super cool and stylish,” said current owner Richard Lecce, who bought it for about $30,000 over a year ago from Heritage Auctions. The instrument features a serial number and comes with a letter of authenticity from Prince guitar technician Zeke Clark, who noted that the guitar’s neck was broken in France in 1994 and later repaired. “Unfortunately, as morbid as it is, when people pass, their items become
AP/CHRIS O’MEARA
more valuable,” Lecce said. “I think something as valuable as this could be too risky to continue to have in my possession.” Lecce, who doesn’t play any musical instruments, said other than posing for a few photos with the guitar when he first received it, he has kept it in pristine condition. Prince employed other similarly shaped guitars in various colors. The instrument’s flowing form went on to become part of the musician’s iconic symbol. Other items up for auction in Beverly Hills, California, include Prince’s record-sales awards and an original demo tape featuring the songs “Just as Long as We’re Together,” ‘’My Love Is Forever” and “Jelly Jam.” Another “yellow cloud” guitar is currently on display at the National Museum of American History in Washington, DC. Prince was found dead April 21 at age 57 in his Paisley Park recording complex in Chanhassen, Minnesota. AP
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Moody’s downgrades Saudi Arabia on lower oil prices
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EW YORK—Saudi Arabia’s credit rating has been downgraded by Moody’s because of the long and deep slump in oil prices. Moody’s Investors Service said on Saturday that it also downgraded Gulf oil producers Bahrain and Oman. It left ratings unchanged for other Gulf
states including Kuwait and Qatar. Saudi Arabia is the world’s largest oil exporter. Moody’s cut the country’s long-term issuer rating
one notch to A1 from Aa3 after a review that began in March. Crude prices fell from more than $100 in mid-2014 to under $30 a barrel in February, although they have recovered into the mid-$40s. Benchmark international crude settled on Friday at $47.83 a barrel. “A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the Kingdom less well positioned to weather future shocks,” Moody’s said in a note. Moody’s lowered Oman to Baa1 from A3 and Bahrain to Ba2 from
Ba1. The ratings agency did not downgrade Kuwait, Qatar, the United Arab Emirates or Abu Dhabi, but it assigned a negative outlook to each. Oil prices slumped because of production that grew faster than demand. Surging production from shale operators in the United States contributed to the glut. So did the Organization of Petroleum Exporting Countries, which decided in November 2014, several months after prices began falling, to continue pumping rather than give up market share. AP
Syria urges UN to condemn China: US report hypes up al-Qaeda massacre in Hama its so-called military threat
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AMASCUS—Syria urged the UN Security Council on Saturday to condemn a massacre committed by the al-Qaeda-linked Nusra Front in the central province of Hama, according to the state news agency SANA. The Syrian Foreign Ministry said in a statement the Nusra Front and likeminded groups stormed the town of Zara in the southern countryside of Hama on Thursday, slaughtering women, children and the elderly without discrimination. The terrorists have viciously killed the civilians in Zara while they were asleep. The ministry said the massacre will not dissuade the Syrian government from con-
tinuing to battle the terrorist groups, urging the UN Security Council to condemn the killing of civilians in Zara. In earlier reports, the official Syrian media outlet said 16 were killed in Zara, but the pro-government Sama TV said hundreds were killed, injured or kidnapped. Rebels published haunting images, one of which showed the radical rebels stepping on the bodies of bloodied women, with blood splashed on a wall in the background. Sama TV said the Syrian army is bracing to unleash a counter offensive to retake the town, which is inhabited by people of the Alawite minority, to whom the ruling elite in Syria belongs. PNA/XINHUA
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EIJING—China’s defense ministry criticized a US report assessing its island-building efforts in the South China Sea, saying it “hyped up” China’s socalled military threat. The US Defense Department’s annual report on China’s military activities had “wilfully distorted China’s national defense policy,” said ministry spokesman Yang Yujun, adding that the US was too suspicious. China expressed its “strong dissatisfaction and firm opposition” to the Pentagon report, Yang said. “China follows a national defense policy that is defensive in nature,” he said. “China’s deepening military reforms and its strengthening of weapons and equip-
ment building are aimed at maintaining sovereignty, security and territorial integrity and guaranteeing China’s peaceful development.” The report to the US Congress on Friday said that China was focused on developing and weaponizing the islands it has built in the disputed waters of the South China Sea so it will have greater control over the maritime region without resorting to armed conflict. It accused China of “increasingly assertive efforts to advance its national sovereignty and territorial claims” and a lack of transparency about its growing military capabilities that are causing tensions with other countries in the region. AP
Monday, May 16, 2016
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MADURO THREATENS TO SEIZE IDLE VENEZUELA FACTORIES, JAIL OWNERS
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ARACAS, Venezuela— President Nicolas Maduro threatened on Saturday to take over idle factories and jail their owners following a decree granting him expanded powers to act in the face of a deep economic crisis. Maduro’s remarks came as Venezuela’s opposition warned the embattled leader that if he tries to block an attempt to hold a recall referendum, society could “explode.” Speaking to supporters in the capital, Caracas, the president ordered “all actions to recover the production apparatus, which is being paralyzed by the bourgeoisie.” He also said businesspeople who “sabotage the country” by halting production at their plants risk being “put in handcuffs.” Last month, the country’s largest food and beverage distributor, Empresas Polar, shut down its last operating beer plant. It said it has been unable to access hard currency to buy raw materials. Maduro accuses Polar and others of trying to destabilize the financially stricken country by exacerbating shortages of goods from foodstuffs to medicines to toilet paper. Meanwhile dueling anti- and pro-government crowds demonstrated in Caracas on Sat-
urday for and against a bid to recall the president. Maduro opponents demanded that the National Electoral Council rule on the validity of some 1.8 million signatures collected in favor of the referendum and allow it to move forward. “If you obstruct the democratic way, we do not know what could happen in this country,” opposition leader Henrique Capriles said at one rally. “Venezuela is a bomb that could explode at any moment.” Across town, Maduro ally Jorge Rodriguez vowed there would be no recall referendum. “They got signatures from dead people, minors and undocumented foreigners,” Rodriguez said. Opposition leaders deny any fraud in the signature drive. Friday’s decree extended for 60 days Maduro’s exceptional powers to address the crisis. Venezuela is suffering from multiple financial woes including rampant inflation and low prices for oil, the cornerstone of its economy. Opposition leaders accuse Maduro and his predecessor, the late President Hugo Chavez, of mismanaging the economy. Maduro alleges that conservative political interests are waging what he calls an “economic war” seeking his ouster. AP
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Monday, May 16, 2016 • Editor: Lyn Resurreccion
Iraq: Militant attack north of Baghdad kills at least 12
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AGHDAD—The Islamic State group launched a coordinated assault on Sunday on a natural-gas plant north of the capital that killed at least 12 people, according to Iraqi officials. The attack started at dawn with a suicide car bomber hitting the main gate of the plant in the town of Taji, about 20 kilometers (12 miles) north of Baghdad. Then several suicide bombers and militants broke into the plant and clashed with the security forces, an official said, adding that 25 troops were wounded. A medical official confirmed the casualty figures. Both officials spoke on condition of anonymity as they were not authorized to release information. The IS-affiliated Aamaq news agency credited a group of “Caliphate soldiers” for the attack. In a statement, Deputy Oil Minister Hamid Younis said firefighters managed to control and extinguish a fire caused by the explosions. Younis said technicians were examining the damage. IS extremists still control significant areas in northern and western Iraq, including the second-largest city of Mosul. It has declared an Islamic caliphate on the territory it holds in Iraq and Syria. AP
Mexico court absolves soldiers in 2014 army killing of suspects D
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Bangladesh police arrest suspect in killing of gay activist
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EXICO CITY—A Mexican civilian court has freed the last three soldiers accused of homicide in a 2014 incident in which at least a dozen suspects were allegedly executed after they surrendered.
The federal Attorney General’s Office emailed a news release shortly after 11 p.m. on Friday saying the court absolved all three of charges of homicide, cover-up and alteration of evidence for lack of proof. Santiago Aguirre, deputy director of the nonprofit Miguel Agustin Pro Juarez Center for Human Rights, which is representing a woman who survived the incident but whose daughter was killed, said authorities cannot appeal the ruling but families of the victims may still do so. If there is no appeal, the decision could signal an end to a case that rights groups see as emblematic of abuses by some agents in the Mexican security forces.
“This confirms what we had been warning, in the sense that one of the most serious recent cases of human-rights violations was on the way to going unpunished,” Aguirre said. The Mexican army reported in June 2014 that 22 presumed criminals had died in a clash with troops at a warehouse in the town of Tlatlaya west of Mexico City. It said only one soldier was wounded. But questions emerged when The Associated Press found that evidence at the site didn’t match the army’s account of a clash with drug suspects. There was little sign of a protracted gun battle. Instead, the walls of the warehouse showed a repeated pattern of one or two closely placed bullet holes sur-
rounded by spattered blood, giving the appearance that some of those killed had been standing against a wall and shot at about chest level. T he gover n ment ’s Hu m a n R ights Commission investigated and determined that at least 12 and as many as 15 people had been executed at the warehouse. It also said there were attempts by civilian and military authorities to cover up what happened. Prosecutors, however, concluded that only eight were killed after surrendering. Three women who survived came forward to say that agents of the Mexico State prosecutor’s office had tortured them to support the army’s version, and state officials later charged several police officers with torture. Juan Velazquez, an attorney who advised the families of the soldiers who were charged, insisted there was no massacre and said it was all an effort to discredit the military. “That whole story of the execution of Tlatlaya was an invention,” he said. Aguirre said the woman his center is working with, Clara Gomez, was “very upset” in the wake of the ruling.
“She fears she may suffer reprisals from the army or from the very soldiers who were on trial,” he said. Gomez is under round-the-clock protection by bodyguards as part of cautionary recommendations by the Inter-American Commission on Human Rights. Aguirre added Gomez’s daughter was not among the eight victims who prosecutors determined were killed after surrendering, and Gomez therefore does not have the right to appeal. His organization has not been able to contact relatives of those executed to see if they intend to seek an appeal. Seven soldiers were initially charged in both military and civilian courts. A civilian judge soon threw out charges against four of the soldiers, and the new ruling clears the other three. In October, a military court acquitted six of the seven soldiers charged with breach of discipline in the case, though the ruling was not made public until March, when it was obtained by a human rights organization. One soldier was convicted of disobeying orders and received a one-year sentence. He has been released. AP
HAK A, Bangladesh—Police in Bangladesh said on Sunday they have arrested a suspected Muslim militant for his alleged involvement in the killing last month of a gayrights activist and his friend in the capital. Police identified the suspect as Shariful Islam Shihab, a former member of the banned Islamic group Harkatul Jihad. They said he joined another militant group, Ansarullah Bangla Team, in mid-2015. Shihab, 37, was arrested in the southwestern district of Kushtia, Munirul Islam, head of a newly formed police counterterrorism unit, told a news conference. He did not give any further details. There have been a series of recent attacks targeting atheists, moderates and foreigners in Bangladesh. Only one of 15 such killings has been prosecuted since 2013. Islam said Shihab allegedly killed Xulhaz Mannan, who worked for the US Agency for International Development, because he was a gay-rights activist and promoted the gay community’s cause through a magazine as an editor. He said Shihab told police during questioning that he took part in stabbing to death Mannan and his friend as ordered by his group’s high command. There was no independent confirmation of the police officer’s claim. AP
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www.businessmirror.com.ph | Monday, May 16, 2016
Dominican election a referendum on ruling party’s domination
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ANTO DOMINGO, Dominican Republic—Dominicans face a dizzy ing array of choices on Sunday in one of the most complex ballots in recent history, with eight candidates for president, all 222 members of Congress up for reelection and thousands of people vying for local offices around the country. For many voters it amounts to a referendum on whether to let President Danilo Medina’s Democratic Liberation Party, or PLD, extend its political dominance after winning four of the last five presidential elections and controlling both the Senate and Chamber of Deputies for a decade. Polls forecast Medina, 64, will not only likely win the day, but could take more than 50 percent of the vote to avoid a runoff against his nearest competitor, businessman Luis Abinader. That’s due in part to the fact that the opposition is divided and weaker than during the last election, in 2012, which was much closer. Medina also benefits from an economy that grew 7 percent last year, better than any other country in Latin America or the Caribbean, and increased funding for social programs that have strong popular support. Medina’s government has built about 2,500 new schools, lengthened the school day to provide more classes and promoted literacy and vocational training for adults.
Abinader, 48, ran for vice president in 2012, but has never held elective office. On the campaign trail he has vowed to spend more on a system of social programs that provide payments to nearly one million poor families. He also says he would reduce crime, a principal concern in the country, and hike pay for police and the armed forces as well raise the national minimum wage. Clad in the purple and gold colors of the PLD at a final campaign rally on Friday, college student Raysa Montero said the president deserves credit for developing the country and expanding education. “Danilo is the hope for the country,” she said. But others feel the ruling party, which passed a constitutional amendment letting Medina run for a second consecutive term, has been allowed to amass too much power. “We’re fed up. The PLD controls everything,” said Rafael de Jesus, a mechanic and father of two who was planning to vote for Abinader. De Jesus also worried that the party has been able to pack the bench with friendly judges, saying: “They want everything.” If no candidate surpasses 50 percent, there will be a runoff on June 26. Electoral authorities say nearly 7 million people are expected to vote, including thousands in the United States, mostly in large Dominican enclaves in New York and Florida. AP
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Okinawans demand closure of US bases T OKYO—Around 1,000 protesters marched in Naha, the capital of Okinawa Prefecture, on Sunday in protest against the relocation of a controversial US military base and demanded the closure of all bases on the island.
The demonstration coincided with the 44th anniversary of the return of Okinawa from the US rule to Japan. The marchers held placards saying they opposed the Japanese and US plans to relocate the US Marine Corps Futenma Air Station from Ginowan to the less-populated coastal region of Henoko, also on Okinawa island. In 1996 the Japanese and US governments inked an accord to close down the Futenma base and return the land occupied by the facility to Okinawa, with the transfer of the base’s functions aimed partly at reducing the burden on Okinawa and its people.
The demonstrators marched close to the controversial base located in the densely populated region of Ginowan, as well as close to sites that were associated with the bloody Battle of Okinawa in 1945, which was the US only land assault on Japan during WWII and saw more than 100,000 Japanese soldiers and as many civilians killed during the hostilities. The demonstrators, while calling for the closure of the Futenma base, were also demanding the closure of all US bases on their island. They also called for an end to war and for the scrapping of Prime Minister Shinzo Abe’s
“security plans.” The recent enacting of related bills could see Japanese troops deployed to active war theaters overseas for the first time since WWII and in blatant violation of the nation’s pacifist constitution. Urging Abe to step down, one demonstrator told local media that “He [Abe] has his own war agenda and does not reflect the feeling of Japanese people who love peace.” The elderly lady, whose banner read: “Peace Not War,” said, “We Okinawans, more than anyone, know the devastation and brutality of war. Now is the time to stand up and say no to this dangerous war agenda.” Similarly, a man in his 30s said the central government was putting the lives of ordinary Japanese people at risk and called for the closure of all US bases as well as the upholding of the constitution. “We’ve lived peacefully for 70 years because we have prioritized and cherished peace. If the government chooses a different path it will almost certainly force Japan into dangerous situations and none of us want to see history
repeated,” he said. “The constitution as it stands has guaranteed us peace for the past seven decades so why change it?” he continued. “As for the US bases, we’ve been hosting them for long enough, it’s just time for them to be shut down or transferred overseas. The time is now, “ he exclaimed, his placard reflecting similar sentiments. Okinawans have consistently called on both the prefectural and the central government to see their base-hosting burdens lifted and rallies at the site of the replacement facility in the coastal Henoko region, as well as in Naha have become more frequent and more vociferous of late. Okinawa hosts some 75 percent of US bases in Japan, yet the tiny sub-tropical island accounts for less than 1 percent of the county’s total land mass. The rally on Sunday followed similar demonstrations held a day earlier in Japan’s southernmost prefecture, also calling for the US bases be permanently shut down, the land be returned and Abe’s war agenda be entirely abandoned. PNA/Xinhua
Tourism&Entertainment BusinessMirror
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Editor: Carla Mortel-Baricaua
10 KILOMETERS TO FREEDOM: THE 2016 CAPAS FREEDOM MARCH
JUMP shot by keynote speakers and guests
FORMER President Fidel V. Ramos, Dra. Mina Gabor and Col. Ralph F. Liebhaber, USAF (RET), with Filipino soldiers
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HE air was arid as the gunshot was fired close to 5 a.m., signaling the start of our 10-kilometer walk. Exhausted, sleepless, and nursing a bad foot, I felt the brunt of each step as we treaded the dark streets from People’s Park to Capas National Shrine.
CAPAS Memorial Shrine 70-meter obelisk
Midway, the shooting pain crept up to my thigh, becoming my singular obsession. Hunger, sleep deprivation and the searing rays of the summer sun bore down as we moved from one Death March marker to another. When we reached our final destination in Capas two-and-a-half hours later, there was nothing but sheer relief at the sight of the shrine’s obelisk and the bed of grass to lay my aching legs on, knowing that our exhausting walk was over. Yet, despite all that, me and the rest of the participants of this year’s Capas Freedom March were lucky. We knew for certain that there will be an end to all of it, hot breakfast and all. We could stop as desired. For the 100,000 Filipino and American soldiers who were captured by the Japanese in the Bataan Peninsula on April 9, 1942, it was a grim, endless punishment marked by torture and starvation. During the Bataan Death March, they were forced to trek 188 kilometers from Mariveles to San Fernando, then another 8 km to the Camp O’Donnell concentration camp in Capas without food, water and sleep. Along the way, they were beaten for entertainment and those who fell to the ground were bayoneted. Some escaped to the jungle, but some weren’t so lucky. At the tail end of the Death March, only 54,000 soldiers made it out alive. They were imprisoned and suffered three more years under the Japanese regime before the Philippines was liberated in 1945.
EACH participant during the Freedom March was designated a WWII veteran, to whom their march was dedicated.
The Capas Freedom March, now on its second year, is a commemoration of all those sufferings that our forefathers endured during the World War II. Spearheaded by the Philippine Veterans Affairs Office, Municipality of Capas, Automobile Association Philippines and supported by the Province of Tarlac, the Department of National Defense, Department of Tourism (DOT) Region 3, Philippine Retirement Authority, Commission on Higher Education Region 3, Metropolitan Manila Development Authority (MMDA), Department of Transportation and Communications (DOTC) and the Metro Rail Transit Yellow Line, the event gathered around 2,000 participants on April 11, consisting of civilians and military groups—including American soldiers from the ongoing Balikatan exercise—each carrying the name of a veteran as they strode.
Lessons of war for the youth
GUIDED by the theme “March for a Veteran,” this year’s Freedom March intended to honor the noble service of World War II veterans by encouraging active participation of youth and civilians. Through the funds gathered from these annual events, the organizers hope to one day be able to build a replica of the actual concentration O’Donnell camp, as well as an on-site war museum. AAP Travel Chairman Dra. Mina Gabor intimated, “The theme this year gives [the event] more sense of belongingness. Before, we enjoyed it, we felt it. But it’s so
ONE of many Death March markers across Tarlac
FORMER President Fidel V. Ramos shares his insights on war, unity and the youth.
COL. Ralph F. Liebhaber, USAF (RET), speaks about World War II.
AMERICAN soldiers from the Balikatan Exercise joined the Freedom March.
FEMALE ROTC cadets perform gun exhibitions during the postmarch program.
YOUNG students, including members of the Girl Scouts of the Philippines, participated in this year’s Capas Freedom March.
nice to say, ‘We’ve marched for you. Thank you for what you’ve done for us.’ It makes it more meaningful.” During the program, World War II veterans, including Col. Ralph F. Liebhaber, United States Air Force (RET); and keynote event speaker, former President Fidel V. Ramos (FVR) shared insights and personal experiences during the war. According to Ramos, Capas and Bataan played a crucial part in preventing the invasion of Australia, New Zealand and other Pacific islands, inspiring a friendship among nations that must not be forgotten. He also added that the event serves as a reminder of the sacrifices of Filipinos and Americans veterans so that its lessons may not be forgotten by younger generations. Among these valuable lessons, he
says, is a citizen’s primary obligation to his country is to ensure a brighter and more progressive future for the people. “You must weave for us, millennials, a better future where there is no more poverty, no more suffering because of conflict, no more hardship because of the lack of a job, food and water,” he related. Gabor, who headed the DOT during Ramos’s presidential term, concurred and claimed that the bigger responsibility of guarding our freedom lies on the youth—reason organizers enlisted the participation of high school and college students, girl scouts and educators across Region 3. “The young people should not forget. The fight is still ongoing. We have to make sure that the freedom
SOLDIERS were among the 2,000 participants in this year’s Freedom March.
we have today is enjoyed by future generations,” she commented.
Collective will for peace and unity
RAMOS, who marched for his uncle, Major Simeon Valdez—a battalion commander for a guerilla resistance movement in Ilocos Norte against Japanese invaders—called for a collective effort toward solidarity and peace, citing that families and children are often the first and worst affected victims of war. As the program ended, I remembered entering the shrine grounds and finding a tender moment when all civilians, American soldiers and Filipino military men—all strangers before this—communed on the
grass and shared meals. I recalled Gabor quoting FVR that “This country cannot really go where it wants to go if we do not care about one another.” From the looks of it, the road going there is not too far from sight. The Capas Freedom March is an annual project sponsored by the Tourism Promotions Board Philippines, Globe Telecom, San Miguel Corp., Jollibee Foods Corp., North Luzon Expressway Subic-Clark-Tarlac Expressway and Tagum Agricultural Development Co. Inc. Official private and media partners include Philippine Airlines, Philippine Veterans Bank, ABS-CBN Sports+Action, ANC, Philippine Daily Inquirer and the BusinessMirror.
Tourism&Entertainment BusinessMirror
Editor: Carla Mortel-Baricaua
Monday, May 16, 2016
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Let’s do the ‘Zamba’
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OOTLOOSE travelers need not look far for a consummate and budget-friendly getaway in this long hot summer. Just a few hours north of the metropolis lies Zambales, a province that offers a zestful mixture of culture, adventure and nature.
Fondly called “Zamba,” the province is a constant top local destination due to its proximity, and diverse attractions and experiences it offers.
Choose your water adventure
WITH a 177-kilometer West Philippine Sea coastline, it is a sought-after getaway for its fine-sand beaches of varying shades, with nearly all points offering a beach view and mesmerizing sunset. If you want a sleepy shore minus the madding crowd, there are the hidden coves of Sampaloc, Silangin and Nagsasa that can only be reached by boat or by long and winding foot trails from the towns of Subic or Castillejos. In San Antonio the islands of Camara and Capones are known for its hilltop picturesque century-old lighthouse that has guided Spanish galleons and merchant ships passing through its sea lanes. A few minutes away, you can find the pine tree-lined Anawangin Cove, a campers’ haven because of its secluded location and back-to-basics ambiance.
Zambales takes pride in its lush underwater world ideal for snorkeling, such as the Taklobo Farm and the Marine Conservation Park on San Salvador Island in Masinloc. This is where one can easily get enraptured by its coral gardens and giant clamshells. Magalawa Island in Palauig, and the adjacent San Salvador and Bakala sandbar in Masinloc offer an exciting triangle of mangrove forests and giant clams. In the northernmost town of Santa Cruz, the sister islands of Hermana Mayor and Hermana Menor beckon with their powdery sand and crystalline waters. The latter island takes pride in its long stretch of sandbar and underwater world, which serves as sanctuary to lush coral tables teeming with aquatic life. Ride the waves at the famed San Narciso and San Antonio surfing sites or skimboard in Iba’s 7-km beachfront, dubbed as Luzon’s “beach capital”. These waters are friendly to surfing and skimboarding newbies, and soon
enough you’ll find yourself hooked to the sport. Indulge in kayaking and paddle at the Uacon Lake, Uacon Cove or Potipot Island just a few minutes across. The more agile paddlers can kayak on both bodies of water through a tranquil river channel.
SURFING in San Narciso
Revisit historical sites
AS one of the first provinces organized by the Spanish religious missionaries, Zambales is dotted with heritage churches and ancestral homes, attesting to its storied past. Topping the list are the postcardpretty Spanish-era churches in Botolan, Santa Cruz, Masinloc and Iba, serving as bastions of the Roman Catholic faith. The latter is the seat of the Diocese, which has a modest Ecclesiastical Museum chronicling the young history of Catholicism in this side of the archipelago. The coral stone at Saint Andrew Church in Masinloc has been declared a National Cultural Treasure by the National Museum and recently underwent a face-lift to restore its colonial glory. Historical enthusiasts must swing by the President Ramon Magsaysay House in Castillejos, where the memorabilia of the late great president are preserved, including his famed Cadillac vintage car. Soon to open is the Museo de Iba or the newly restored Roque del Fierro Trinidad Heritage House, which will serve as the town’s repository of history.
Know the local culture
FOR a glimpse of the genteel lifestyle of the local gentry, visitors can go around and take snapshots of the old stone houses built in the classic bahay na bato Castillan architecture which have withstood the ravages of time.
AETA tribal coutship dance
KAYAKING at Potipot Island
DINAMULAG Festival Street Dancing For a dose of classical music, chill out at Casa San Miguel, the art community of renowned violinist Alfonso “Coke” Bolipata, located in the heart of San Antonio’s mango orchards. Treat yourself to the summertime concerts and exhibits at the annual Pundaquit Festival or take a glimpse of Zambales’s checkered past at the Museum of Community Heritage, which chronicles local ethnography and archaeological finds. For a dash of indigenous culture, im-
merse yourself with the nomadic Aeta communities and learn from their ethnic way of life.
Feed your soul and tummy
OUTDOOR lovers can conquer the 2,037-meter-high Mount Tapulao in Palauig, which takes mountaineers through various ecosystems on the way to the top. Often called “The High Peak,” referring to the seemingly endless hike, the trail to the summit on rolling and gradual terrain takes hikers through
a number of distinct ecosystems: from lowland grass and scrubland dominated by talahib (cogon grass), to primary dipterocarp forest, mossy montane forest, and pine forest that extend to the adjacent mountains. After a grueling hike through the rocky reddish soil, hikers are treated to refreshing cool breeze and breathtaking views upon reaching the pine-tree forest. And for the clincher, relish the sweet life and sink your teeth into the ripe and fragrant kinalabaw or dinamulag mango variety, reputedly among the sweetest in the world. Every year the province produces an annual yield of 15,046,770 kilograms, harvested from the 428,637 mango trees that cover 7,500 hectares. And there is no better time for this feast of the senses when the best mangoes are ready for the picking in the riverine orchards of Botolan. It’s time to do Zamba, and bask in the sun, sea and sand...and mangoes.
Green Monday BusinessMirror
BusinessMirror
A12 Monday, May 16, 2016
3 PHL cities vie in ‘We Love Cities’ campaign
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VER half the world’s population live in cities, and World Wide Fund for Nature (WWF) projects a dramatic rise in urban development in the coming decades. Cities have become centers of traffic, pollution, consumption and carbon emissions. Launched by the WWF in 2011, the Earth Hour City Challenge (EHCC) is a yearlong initiative to promote sustainable practices to allow cities to make a transition to a low-carbon future. Seven Philippine cities joined in August 2015—Cagayan de Oro, Makati, Naga, Parañaque, San Carlos, Santa Rosa and Quezon City. A total of 124 cities from around the world joined the 2015-2016 Earth Hour City challenge. Three cities made the final cut—San Carlos City in Negros Occidental, Santa Rosa City in Laguna and Makati City in the National Capital Region. One of these can become a national Earth Hour capital, which will have a chance to be hailed as the global Earth Hour capital. To let the voices of the people in these cities be heard, the ‘We Love Cities (WLC)’ campaign was created. WLC is a global celebration of the world’s most sustainable cities. After juries all over the world select EHCC finalists, each city’s citizens will be able to take the challenge into cyberspace, highlighting their best initiatives to make the biggest online impressions. The Philippine WLC campaign shall run from May 13 to June 19. The main battlegrounds shall be on the WWF-Philippines web site, campaign pages, finalist web sites—and across social-media platforms, such as Facebook, Twitter and Instagram. Votes are counted by online polls, as well as the number of hashtags used on social media. The following hashtags are to be used— #WeLoveMakatiPH, #WeLoveSantaRosaPH and #WeLoveSanCarlosPH—to vote for Makati City, Santa Rosa City and San Carlos City, respectively. The country finalist will be taken into the international arena, where the overall finalist will receive the We Love Cities Award in Quito, Ecuador, in mid-October. “The campaign is a great way to inspire and raise awareness for sustainable development; to celebrate and further upgrade the city through suggestions; and to reward and strengthen communities through a friendly competition and healthy dialogue,” WWFPhilippines Climate Change and Energy Programme Head lawyer Gia Ibay said. “Everyone is a winner when we all try and do our part in building a sustainable future by sharing solutions and empowering one another.”
Editor: Lyn Resurreccion • www.businessmirror.com.ph
Indian women worst hit by water crisis
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EW DELHI—A staggering 330 million Indians, making up a quarter of the country’s population (or roughly the entire population of the United States), are currently reeling under the effects of a severe drought, resulting in an acute drinking-water shortage and agricultural distress. State governments are resorting to emergency measures, like rushing water trains carrying billions of liters to thirsty hinterlands and doling out food rations to the starving poor. As primary stakeholders in water-resource management, Indian women have always borne the br unt of such shortages. Traveling long distances to fetch the precious commodity, balancing heavy pitchers on their head while juggling households, children and cattle, working on farms, as well as giving care to the elderly, they have had to do this drudgery for decades. In many rural areas, women wa l k over 2. 5 k i lometers to reach water sources. According to a report by noted environmentalist Dr. Vandana Shiva, on average, a rural Indian woman traverses 14,000 km a year just to fetch water. “In every household, in the rural areas in the desert state of Rajasthan, women and girl children bear the responsibility of collecting, transporting, storing and managing water.... Natural sources are drying up, which adds the kilometers for women every day to quench the thirst of their family, as well as animals,” Shiva wrote. Ironically, women continue to slog for clean water even today, when India has emerged as Asia’s third-largest economy helmed by a prime minister who aspires to put the country at the global high table. In the central state of Madhya Pradesh this summer, women are leaving their homes at the crack of dawn to procure water. Government schools are being shut early just so that children, especially the girls, too, can pitch in. In some regions, the impact of the water crisis has been so devastating that people are dying. An 11-year-old girl died of heatstroke and dehydration while collecting water from a village pump in the western state of Maharashtra earlier this month. Yogita Desai had spent close to four hours in 42-degree Celsius temperatures. In the Beed district of Maharashtra, Chabubai Khamkar lost her balance and fell into a 40-foot-
330M The number of Indian women who are worst hit by severe drought
deep well and died while drawing water from the well whose level had plummeted perilously low. According to Dr. Shashank Shekhar, an associate professor at the Department of Geology, Delhi Universit y, New Delhi, “ The water scarcity is largely the result of stress on multiple water resources across India. On the one hand, the rapidly rising population and changing lifestyles of Indians have increased the need for freshwater. On the ot he r, i nte n se comp et it ion s among users in agriculture, industry and domestic sector are pushing the groundwater table to abysmal levels.” Dr. Ranjana Kumari, director of the Centre for Social Research, a New Delhi-based think tank, said women suffer disproportionately from the impacts of disasters because of cultural norms and the inequitable distribution of roles, resources and power, which apply to them in developing countries. “ These factors are altering economies, economic development and patterns of human migration, all of which are contributing further to women’s vulnerability,” Kumari told Inter Press Service. “W hile touring Latur district in Maharashtra, I’ve come across children with their skin scaling off due to lack of personal hygiene. Water is so scarce here that people barely get enough to drink, forget bathing. Often, entire families have to make do with just one bucket of water a day.” According to the study “Effects of Drought on Livelihoods and Gender Roles: A Case Study of Meghalaya,” which analyzed the effects of climate change on India’s northeastern state of Meghalaya, changing weather has serious repercussions on food security, availability, accessibility and utilization, and
INDIAN women walk home after collecting drinking water from a well at Mengal Pada in Thane district in Maharashtra state, India. Much of India is reeling under a weeks-long heat wave and severe drought conditions that have decimated crops, killed livestock and left at least 330 million Indians without enough water for their daily needs. AP/RAJANISH KAKADE
food-system stability. When climate change-related disasters strike, women are more vulnerable than men, and the workload of women and girls increases, the survey concludes. Like many rural Indian women worldwide, Manorama spends hours each day hauling water for her family to drink and wash, as well as for her livestock and crops. The 40-year-old resident of L at u r d i st r ic t i n Ma h a ra shtra, one of the worst hit with drought, is helpless. “The drought has destroyed my family,” she told IPS by phone. “My husband has been admitted to hospital because of a heart problem, while my daughters’ weddings have been put off. I’m the only bread earner, managing home and children between endless rounds of the hospital.” Pallavi K irkire’s fate is no better. The 38-year-old widow’s once swaying green fields in Bundelkhand in the northern state of Uttar Pradesh now resemble parched and cracked earth plots. They were once the source of income for her and her two children. A frustrated Kirkire is now planning to sell the land and her cattle,
and move to the city to “look for a better life.” Apart from economic and social ramifications, doctors are discovering an alarming impact of the water crisis on women’s health, both mental and physical. Whether it’s the physical stress of collecting water from tankers in dozens of pots daily, or the emotional stress of managing with very little water or maintaining menstrual hygiene in times of acute water scarcity, it’s a tough haul for the ladies. Activists say women struggle most from inadequate sanitation, the often unspoken part of the water crisis. The double whammy of lack of water and of inadequate sanitation leads to an inevitable downward spiral, especially for young girls. They cannot attend school, leading to lack of employability and subsequent loss of income even as they battle ill-health. As part of policy framework to achieve universal access of water, the Indian government has accorded the highest priority to rural drinking water. Yet, despite the installation of more than 3.5 million hand pumps and
over 116,000 piped water-supply schemes, most Indians continue to face water scarcity almost every year. Not that the situation is any better in cities. Here, women have to queue up in front of public water taps for hours. Being at the end of the pipeline system, they get water only after the users ahead in the pipeline have collected their quota. Water fights are common among harried women waiting in queues for hours, especially in slums. Experts caution that unless India’s potable-water shortage problem is addressed in a long-term, sustainable manner, its impact on women will get more and more acute. “In India women are actively engaged in agricultural activities, including paddy cultivation and fishing, which are both affected by changing weather patterns and deficit water. Loss of livelihood increases women’s vulnerability and marginalization. However, the impacts of a water crisis can be minimized by empowering women with requisite knowledge of their rights, relevant information and vocational skills,” Kumari said. IPS
United Nations: Rising air pollution in cities killing millions
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THE Eiffel Tower is photographed through the smog in Paris in March 2014. The World Health Organization on Thursday released new information from its Global Urban Ambient Air Pollution Database that says 98 percent of residents in large cities of low- and middle-income countries are facing excessively high air pollution. AP/JACQUES BRINON
E N E VA — A l m o s t e v eryone in large cities in poor- and middle-income countries faces excessively high air pollution, a growing problem that is killing more than 3 million people prematurely each year and “wreaking havoc on human health,” the World Health Organization (WHO) said on Thursday. The United Nations health agency says more than four out of five city dwellers worldwide live in cities that don’t meet the WHO air-quality guidelines—98 percent in poorer countries and 56 percent even in high-income countries. “Ambient air pollution, made of high concentrations of small and fine particulate matter, is the greatest environmental risk to health, causing more than 3
million premature deaths worldwide every year,” the WHO said. T he findings are part of the WHO’s third Global Urban Ambient A ir Pollution Database, which examines outdoor air in 3,000 cities, towns and villages—but mostly cities—across 103 countries. It’s based on country reports and other sources for the period from 2008 to 2013, although some nations, including many in Africa, don’t contribute data. An accompanying UN news release said global urban airpollution levels rose 8 percent over that time span, “despite improvements in some regions,” and noted that people face a higher risk of strokes, heart disease, lung cancer and respiratory
diseases as air quality worsens. “Urban air pollution continues to rise at an alarming rate, wreaking havoc on human health,” said Dr. Maria Neira, a WHO director for environment and public health. “At the same time, awareness is rising and more cities are monitoring their air quality. When air quality improves, global respiratory and cardiovascular-related illnesses decrease.” The agency’s database named Zabol, Iran, as the city with the highest annual mean concentration of particulate matter of less than 2.5 microns in diameter—a key measure of air pollution that could damage health. By that measure, India stood out as home to more than half of the 21 most polluted cities on
the WHO list. New Delhi, which had previously topped the list, dropped to No. 11. The Indian capital has managed to decrease its annual average concentration of particulate matter by about 20 percent from 2013 to 2015. The change coincides with a series of air-clearing measures, including banning older cars and cargo trucks from the city, introducing steep fines for construction pollution or garbage burning, and shutting down an old coal-fired power plant. “New Del hi has succeeded in arresting the trend, which shows that if you take action, you will see results,” said Anu m it a R oyc howd hu r y of t he Delhi-based Center for Science and Environment. AP
Science Monday
Monday, May 16, 2016 A13
www.businessmirror.com.ph • Editor: Lyn Resurreccion
E. Visayas science scholars excel in academics
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CIENCE and technology (S&T) scholars from the Eastern Visayas received awards from the Department of Science and Technology (DOST)-Eastern Visayas for outstanding accomplishments in academics.
The awarding night, titled “In Touch With Excellence,” was held at a hotel on May 10. Awarded for academic excellence were five magna cum laude and 17 cum laude graduates, including five board placers, from various state tertiary schools in the region. The five S&T scholars who graduated magna cum laude were Ben Fermin Q. Abuda (Eastern Samar State University [ESSU]Borongan), Niel Darryl G. Branzuela (Northwestern Samar State University-Calbayog), Carl Aljon M. Lacaba (Eastern Visayas State University [EVSU]-Tacloban), Geralyn U. Ando (Visayas State University [VSU]-Isabel Campus), all Bachelor of Secondary EducationMathematics majors; and Ryan Dave Sugano (BS Chemistry, VSC). Abuda later shared how his DOST scholarship helped him pursue and achieve excellence in his academics, and develop social responsibility for his community. Meanwhile, three of the board placers who aced the Geodetic Engineering Licensure Exams were all from VSU: Engr. Rex R. Doñoz (topnotcher, 2015), Engr. Romer S. Bongbonga (Rank 4, 2015) and Engr. Rey Mark L. Alfante (Rank 6, 2014). Darwin C. Gomez of the EVSU, meanwhile, placed eighth in the 2012 Chemistry Board Exam and Sung Shin Woong-ill of Leyte Normal University (LNU) ranked 10th in the 2015 Licensure Ex-
27 The number of the Department of Science and Technology-Eastern Visayas scholars who received academic excellence awards
amination for Teachers. The 17 others who graduated cum laude were BSED-Mathematics majors Alison V. Senobio (University of Eastern Philippines-Catarman), Jessamay B. Jabien (Samar State University-Catbalogan), Jefrey D. Asadon (ESSU-Borongan), Rosary N. Librilla and Ruby Rose Anne B. Panganod (LNU), and Jenilyn E. Samaco (VSU). Cum laude awardees included scholars from the VSU, namely, Bernadeth P. Balonga and Mary Jaica Maghanay (Food Technology), Jovie Mariel L. Degorio (BSED Physical Science), and Rabigh F. Kangleon, Mary Grace Z. Saldino and , Ryan Dave Sugano (BS Chemistry). Other cum laude awardees were from LNU, namely, Neuville Florinth Lucrese D. Abenis (BS
DEPARTMENT of Science and Technology-Eastern Visayas Director Edgardo M. Esperancilla and DOST-Science Education Institute Director Josette T. Biyo (fourth from left) confer the excellence award to Ben Fermin Q. Abuda, who graduated in BSED Mathematics from the Eastern Samar State University (ESSU)-Borongan campus, magna cum laude. Also in photo are ESSU President Edmundo A. Campoto and SEI Scholarships Chief Alicia L. Asuncion. FRAMELIA V. ANONAS/S&T MEDIA SERVICE
Biology), Ma. Lucille W. Abarracoso (BSED-Physical Science), and Nikko R. Fernandez and Eduardo P. Sivellita (BS Biology). Other awardees were Carlo D. Jarito (BS Electrical Engineering, EVSU-Ormoc) and Wency M. Dagayloan (BS Chemistry, EVSUTacloban). Meanwhile, DOSTEaster Visayas gave a toast to its staff achievers who completed their graduate studies. Recognized were Lucia P. Dauz and John Glenn D. Ocaña (Doctor of Management Technology), Amado T. Amasco Jr. and Veronica A. Laguitan (Master in Public Manage-
ment), Debbie G. Delmo (Master of Public Management), Romeo L. Dignos (Master in Food Science and Technology), and Master of Technology Management (MTM) graduates Emiel Prisco N. Discar, Maria Catherine B. Gonda and Isabelita M. Pamposa. Other MTM graduates, namely, Emmanuel E. Lagdamen, Florentino L. Quiñones, Marilyn O. Radam, Evelyn B. Tablante and Ramil T. Uy were awarded the “Gawad Parangal para sa Mag-aaral.” Dr. Joset te Biyo, d i rec tor of DOST ’s Science Education Institute, which handles S&T
scholarships, encouraged all the awardees to pursue their dreams. Sharing her own personal experience of “never giving up” despite poverty; she narrated how she pursued all opportunities to be able to get scholarships to move on to higher studies. She related how her never-giveup attitude helped her get the title as the first Asian winner of the Intel Excellence in Teaching Award. “I had no laptop to use for presentation. What I had were transparencies, manila papers, even thumbtacks,” she told of her story during the US-held com-
petition, eliciting laughter from the audience. She said she went around, asking other contenders to lend her a laptop until she found one kind soul. Eventually, this teacher, which came prepared for “ low-tech ” demonstration, proved she was also prepared for a “high-tech” one, and brought home laurels for the country, including a planet found between Mars and Jupiter named after her. Engr. Edgardo Esperancilla, DOST-Eastern Visayas regional director, likewise, related the levelling up of DOST-Eastern Visayas scholars in terms of academic
US to harness microbes for health, environment Tau protein better predictor of dementia symptoms
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A SHI NGTON —We share our bodies and our surroundings with teeming communities of microbes that are crucial to the health of people and the planet, and now the Obama administration is beginning a major project to better understand those invisible ecosystems—even control them. The National Microbiome Initiative that was announced by White House science officials on Friday aims to bring together scientists who study the microbes that live in the human gut and in the oceans, in farm soil and in hospitals—to speed discoveries that could bring big payoffs. Consider: Taking antibiotics alters the diversity of your gut bacteria, which eventually settle into a new normal. The 2010 oil spill altered microbes in the Gulf of Mexico, which, likewise, settled into a new normal, said Dr. Jo Handelsman, associate director of the White House Office of Science and Technology Policy. Despite the parallels, “we have no idea if that’s a healthier norm or a less-healthy norm than before, and no idea how to fix it,” said Handelsman, who led development of the initiative. Leading researchers have long urged a national collaboration as the best way to learn how microbes interact with each other and their environments. “I’m excited. It’s a long time coming and much-needed endeavor,” said Dr. Jack Gilbert, a microbiologist at the Argonne National Laboratory and University of Chicago, who pushed for the project. “We need to understand the microbial engine of the earth.”
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A CLUSTER of Escherichia coli bacteria magnified 10,000 times. WIKIMEDIA COMMONS
The US government spends about $300 million a year on microbiome research, until now mostly an effort to catalog different communities of bacteria, viruses and other microbes, Handelsman said. T he Nat ion a l M ic robiome Initiative will add $121 million this year and next for ecosystem-crossing federal research. A nd in partnership w ith the government, dozens of universities, foundations and other organizations are announcing more than $400 million in additional microbiome research investments, she said. It’s a hot field. One project focusing on
people revealed that trillions of microbes live on our skin, in our noses, in our intestinal tracts, and that many of them play critical roles in keeping us healthy. Scientists now are studying how differences in gut bacteria play roles in a range of health outcomes, from asthma to obesity. It’s captured the public’s imagination, with people joining citizenscience efforts to learn what bugs they harbor. But the planet harbors large numbers of microbiomes that get less attention despite performing vital jobs. Microbes in the ocean suck carbon out of the air to moderate global warming, for example.
Understanding which soil bacteria help different plants grow could let scientists boost food production or repair eroded cropland. Since much of the world’s population spends more time indoors than out, learning how we transfer microbes at home, at work, in hospital rooms could lead to healthier built environments. “This is a microbial planet,” said Dr. Lita Proctor, who oversees microbiome research at the National Institutes of Health. “Everything that’s driving all the ecosystems, including human beings, is driven by microbial processes, yet, we’ve been fairly ignorant of their activities.” AP
CIENTISTS have shown that measures of the tau protein inside nerve cells better predict symptoms of dementia than the protein amyloid beta, where research has largely focused. The study by Washington University School of Medicine was published on Wednesday in the journal Science Translational Medicine, a journal addressing international health issues. While Alzheimer’s research has focused on the accumulation of amyloid beta, scientists recently began to pay closer attention to tau. The tau protein has long been associated with disease, but it has not been studied as thoroughly because researchers had no way to effectively view and measure tau. Using a new imaging agent that binds to the tau protein and makes it visible in positron emission tomography (PET), scans, Washington University scientists found that measures of tau are better markers of cognitive decline associated with Alzheimer’s than measures of amyloid beta. A buildup of plaque and dysfunctional proteins in the brain are hallmarks of Alzheimer’s disease, the sixth leading cause of death in the US. The accumulation of amyloid beta, a sticky protein fragment in the brain, leads to the destruction of nerve cells. “Our work and that of others has shown that elevated levels of amyloid beta are the earliest markers of developing Alzheimer’s disease,” neurologist and senior study author Dr. Beau Ances said. “But in the earliest stages of Alzheimer’s disease, even with amyloid buildup, many patients are cognitively
normal, meaning their memory and thought processes are intact. What we suspect is that amyloid changes first and then tau, and it’s the combination of both that tips the patient from being asymptomatic to showing mild cognitive impairment.” T he st udy w a s s m a l l — 3 6 cog n it ive ly nor m a l pat ie nt s were compared to 10 with mild A lzheimer’s—but showed the new imaging agent is an important tool for understanding the progression of the disease and pinpointing which parts of the brain are gathering abnormal proteins. “Our new study suggests you can tolerate a certain amount of tau clumped in the hippocampus,” Ances said, “ but once it starts spreading to other areas, especially the lateral and parietal lobes, that seems to be the tipping point.” Researchers now have the tools necessary to test the effectiveness of therapies against the buildup of amyloid beta and tau, he said. “We want to develop ways to make earlier diagnosis and then design trials to test drugs against amyloid buildup and against tau buildup,” Ances said. “While we currently can’t prevent or cure Alzheimer’s disease, delaying the onset of symptoms by 10 years to 15 years would make a huge difference to our patients, to their families and caregivers, and to the global economy.” About 5.2 million Americans have Alzheimer’s, and that number is expected to nearly triple by 2050. This year Alzheimer’s and other dementias will cost the nation $236 billion. TNS
A14 Monday, May 16, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
PHL must upgrade its security now
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LTHOUGH pushed out of the main topics of discussion in the last two weeks due to the elections, the Philippines is definitely in the midst of a war.
The $81-million cyber heist at Bangladesh Bank put the Philippines and its banking system square in the middle of the global cyber war. New information, revealed this past week from an ongoing investigation, is incredibly disturbing. Cybersecurity firm BAE Systems—a British multinational defense, security and aerospace company—is reportedly going to release a study that shows the Bangladesh computer break-in “is linked to other cyberattacks, including the high-profile 2014 attack on Sony’s Hollywood studio” (Reuters. com). Further, “similar malware recently was used to target a Vietnamese commercial bank with fraudulent messages from the SWIFT money-transfer system, which also was used in the Bangladesh hack,” BAE said. We have seen countless incidents of government and private web sites having been hacked and defaced in the past year here in the Philippines. On the government side, the reaction has been consistent—“No problem. Nothing to worry about. All is well.” The Commission on Elections (Comelec) web site was hacked, and personal information on 50 million Filipino voters was stolen. The Bangko Sentral ng Pilipinas reported that hackers targeted its system but it successfully defended itself because of robust security features. None of this is acceptable in the least, and we think more must be done now. When the world was facing a potentially critical computer problem due to operating systems and programs not being able to adjust to the year 2000, the government and the local private sector responded to the call. Republic Act 8747—the Philippine Year 2000 Disclosure and Readiness Act—was passed on June 1, 1999, requiring all public and private entities to be prepared for the “Y2K bug” and report that preparedness to the government. The law created a congressional oversight committee on the Y2K bug and—the most important provision—the Presidential Commission on Year 2000 Compliance. The National Security Council was the coordinating agency for the commission, the Department of Science and Technology, National Computer Center, National Disaster Coordinating Council, and the Technology and Livelihood Resource Center. The moment the Senate and the House reconvene, the creation of a similar commission should be a top priority. Imagine the disaster if communications were suddenly to shut down in the face of a natural disaster like a typhoon. Imagine the economic catastrophe if the power grid was suddenly inoperable for an extended period. The Philippines has some of the best and brightest information-technology and computer people available, and now is the time to call on their expertise. A Cybersecurity Commission should not be a “feel good” program with well-written press releases but a very secure and even secret body to ensure the safety and defense of the Philippines. The Senate President and Speaker of the House should be on this problem immediately.
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Tourism a booming business Atty. Jose Ferdinand M. Rojas II
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RISING SUN
OW that it’s summertime and most schools are out, there is an increasing interest in domestic tourism for vacations, company outings and other leisure activities.
The good news is that not only is Philippine tourism booming from the business from local tourists, but international tourists, as well, are contributing to sector growth. Government and private business efforts over the past six years have combined to make tourism one of the most profit able a nd h ig h- g row t h sectors, accord ing to t he latest industry statistics. From 2010 to 2015, international tourist arrivals grew by 8.77 percent, from the 7.76 percent for nine years, from 2001 to 2010. Likewise, revenues from international tourism reached P227.62 billion ($5 billion) in 2015, from P112.55 billion in 2010. As for tourist arrivals, for the first time in history, the number of total inbound tourists exceeded 5 million in 2015, with 5,360,682
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young boys swing and jump into the water, as you enjoy a delicious feast of native dishes while being entertained by musicians and singers. Romblon is an undiscovered paradise. Its beaches are unspoiled and not yet crowded; in fact, some entrepreneurs with businesses on nearby Boracay island come home regularly to Bohol for the same lovely beaches, but with peace and quiet. Its handcrafted marble items are a must-have. The Philippines has other attractions, apart from beaches and resorts. For cultural and historical heritage sites, visit the provinces of Ilocos Sur and Ilocos Norte. They have excellent museums; in fact, part of the town proper itself is like a bit
of Spanish colonial Philippines preserved, with architecture conforming to certain standards set by the local government along those lines. The cuisine of the Ilocos is another draw; food trippers are sure to enjoy a visit there. Do try the famous longganisa and empanada, which has variants from Laoag to Vigan. Somewhere in Laoag is a restaurant that serves excellent sampaloc juice and an interesting dragon-fruit ice cream; another dining place serves the unusual but tasty pinakbet pizza. These are, by no means, the only noteworthy spots in the country. There is something for everyone at nearly all price points everywhere in the Philippines, providing a range of choices to suit all budgets. If we are to help the local tourism industr y further expand, and in so doing help our kababayan working in this sector, let us remember that we are still our own best customers, and making the choice to spend our vacations somewhere in our beautiful countr y will contribute to local and national economic growth. nnn
Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.
Framing the role of Tidcorp in desocializing losses in PPPs
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
visitors experiencing the famous Philippine hospitality. This figure represents growth of 10.91 percent, from the 2014 figure of 4,833,368. However, we Filipinos can contribute much to boost the growth of this sector by putting Philippine destinations on our travel list. Among the many noteworthy places one can visit in the Philippines is Bohol. It has magnificent resorts that boast of beautif u l beaches and pools. The famous tarsiers are another draw, as is the food—try the malunggay and sili ice cream at the Bohol Bee Farm, as well as its organic honey. And don’t miss the experience of dining onboard the “floating restaurants” plying the Loboc River—the two-hour cruise takes you down green waters amid overhanging mangroves from which
As for tourist arrivals, for the first time in history, the number of total inbound tourists exceeded 5 million in 2015, with 5,360,682 visitors experiencing the famous Philippine hospitality. This figure represents growth of 10.91 percent from the 2014 figure of 4,833,368.
Continued from A1 In an article, titled “PPP and Gender Justice in the Context of the Third UN Conference of Financing for Development,” published by the Development Alternatives with Women for a New Era, failures in PPPs can be attributed to the “privatization of benefits and socialization of losses.” In this “double whammy,” we, as end-users and taxpayers, are not gainers and, worse, are at the losing end. PPPs may tend to lose sight of the “true north” of PPPs, which is the public good and better quality of life of the people. When ordinary people and the society bear the losses, and do not share in the benefits, and where the privatesector proponent does not absorb any loss and passes all risks
to government, and ultimately to us, PPP becomes purely proprofit and antipeople. Benefits are privatized, and only a handful gains. When government extends a subsidy that is undisclosed, unconscionable and unaccounted for, the people will directly or eventually bear the burden. This happens in “lemon socialism,” where government abdicates its role as regulator, relinquishes its duty to protect human rights and subsidizes unfeasible projects. Regardless of the PPP project and modality, government should continue to “steer”, while allowing the private sector to “row.” Government agencies can or should help prevent the occurrence of the double whammy. Tidcorp, also known as the Philippine Export-Import Credit
PPPs may tend to lose sight of the “true north” of PPPs, which is the public good and better quality of life of the people. When ordinary people and the society bear the losses, and do not share in the benefits, and where the private sector proponent does not absorb any loss and passes all risks to government, and ultimately to us, PPP becomes purely pro-profit and antipeople. Agency (Philexim), can be one such government agency that can facilitate or enhance the “desocialization” of risks and losses. A liberal reading of the charter of Tidcorp reveals that it can go beyond exports. Tidcorp can act as guarantor, funder and/or risk mitigator of PPP projects, thereby protecting the public from the harm we want to avoid. To obviate a “moral hazard risk” situation where government
and Tidcorp will assume more or less risks and functions than it should or where the private-sector proponent will be incentivized to engage in excessive risk-taking due to guarantees that may be extended by Tidcorp safeguards must be insta l led. First, the true north must be at the front and at the back of the minds of government officials, and this orientation should be shared by the private sector. Second, guarantee caps and ceilings must be imposed. Third, external controls and audit mechanisms must be in place. Fourth, the people, through civil-society organizations, must be part of the PPP cycle from prioritization, selection and implementation. Fifth, any guarantee must be disclosed and accounted for. Last, the private sector can participate in the guarantee by paying a premium or posting a collateral. The task now is to reframe PPPs, recalibrate government’s mandate, redefine Tidcorp’s participation, and reassess the role of ordinary people. Then, we all move forward with a purpose.
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Scripts, hashes and unbelievably bad calls
Straightening financial reporting Filbert Tsai
DEBIT CREDIT
James Jimenez
I
SPOX
FEEL bad that I missed last week’s deadline. In my defense, I was sort of busy doing that thing we’re doing at the Philippine International Convention Center—you know? Canvassing votes for the May 9 elections? So, today (Sunday) is really the first opportunity I’ve had since Monday last week to do anything not related to the work of determining who won the polls. Begging your indulgence, therefore, allow me to talk to you of scripts, hashcodes and the unbelievably bad calls people can make. Here’s what I know: On May 9, at the transparency server room in the Parish Pastoral Council for Responsible Voting’s (PPCRV) headquarters (HQ ), a tech guy from a well-known news outfit approached the Commission on Elections’s (Comelec) own tech guy and pointed out that the reports they were receiving showed question marks (?) at various places in the text. He wanted to know what those question marks represented. The Comelec tech referred the question to the Smartmatic tech who was also at the HQ at the time. I can only imagine how the three-way conversation actually went, but after all was said and done, the Smartmatic tech was sitting at a console, tapping away at a keyboard. Less than half an hour later, the Comelec tech was announcing to everyone in the room—“everyone” being understood to include tech representatives from various political parties and watchdogs—that a script change had been made, which corrected the encoding of the output files so that it would display the Ñ character correctly. Interestingly, all those output files have corresponding hashcodes—well, technically they should be called checksums—which are basically a guarantee that they can’t be altered later on without the alteration being detected. Prior to the script change, the output files—which were being generated every 20 minutes or so—had already been hashed. So, after the script change, when the output files were generated, they started showing a different hashcode. And that was what called the attention of a political party tech rep. The following day, May 10, that tech rep approached the Comelec and Smartmatic support guys at the transparency server and
asked for an explanation. The explanation was given, and—as far as I know—the entire script change was reversed and replicated to explain the changes in the hashcodes. And again, as far as I know, the tech rep accepted the explanation. To date, both the PPCRV and National Citizens’ Movement for Free Elections have gone on record as saying the script changes did not affect the election results being reported. A well-known news outlet has put up its proofs to support its belief that there has been no manipulation of results. And yet, this particular fire rages on. The continuation of the conflagration isn’t so much about the manipulation of results anymore, as it is about the distrust of the Comelec, which was aggravated by the seemingly cavalier way the script change was accomplished. I have to say, the fears aren’t difficult to understand. Coming into the elections, everyone involved in putting the whole thing together should have been aware of how critically important it was not to give anyone reason to doubt the integrity of the process. With the Comelec already fighting what amounted to a rear-guard action against a sustained wave of disinformation propagated online, any effort taken to ensure strict adherence to the precepts of transparency would have been well worth taking. Yes, this includes judgment calls; and in this case, an incredibly bad call was clearly made. Despite the fact that script change has been proven—definitively, to my mind—to be harmless, for the sake of the credibility of the elections, the investigation called by the Comelec into the matter should determine whether that was all it was—a bad call. And after that, let the cards fall where they may.
Brazil needs an ambitious president
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RAZIL’s new acting president is almost as unpopular as Dilma Rousseff, his now-suspended predecessor, and he may have to hand back power to her in a few months, depending on the outcome of her impeachment trial. Nevertheless, Michel Temer can be much more than a caretaker president—and Brazil needs him to be. Brazil’s economy faces another year of contraction. Unemployment, inflation, and corporate and consumer debt are rising. Meanwhile, Brazil’s fiscal deficits have left it little room to respond, with the cost of servicing the debt amounting to 7.5 percent of GDP this year. Temer’s basic dilemma is the same as Rousseff’s: how to stimulate Brazil’s economy while also bringing its books closer to balance. Unlike Rousseff, Temer has the support of a working legislative majority, and is widely respected for his political savvy. He’ll need both to bring about some politically painful changes. Brazil’s constitutionally mandated spending on pensions and other social expenses accounts for about 90 percent of its budget, and thanks to expansive promises, these costs have been growing faster than the economy. To balance the budget by 2018 with cuts just to discretionary spending, he would have to cut that category by
an unlikely 25 percent a year. Raising taxes is an ugly option in a country where the take amounts to about 35 percent of GDP—more than in many developed nations. But Temer could ease taxes on the middle class and make up the revenue by boosting Brazil’s puny inheritance tax and ending the tax break for private medical expenses—both gimmicks that benefit Brazil’s better-off. There are also plenty of things he could do to simplify one of the world’s most onerous tax regimes. He could also rationalize entitlements, such as Brazil’s relatively generous pensions, which can kick in for Brazilians in their 50s and are keyed to the minimum wage. Breaking that linkage and setting a higher retirement age are essential, especially given Brazil’s changing demographics. Temer could lessen the political sting of such a move and help Brazil’s poorest by diverting some of the ensuing savings to the proven Bolsa Familia cash assistance program. None of this will be easy. But creating a more flexible budget will free up money for needed investments in railways, ports and roads. It might also make future presidents less likely to resort to the kind of budgetary gimmicks that cost Rousseff—for now, at least—her job. Bloomberg View
Monday, May 16, 2016 A15
Part One
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OMPETING in the new competitive business landscape requires innovative solutions that enable a business to obtain a better snapshot of its business performance and standing. The increased necessity for a good financial reporting is driven not primarily by regulatory requirement. Rather, it is driven principally by increased demand for quality management reports. However, poor financial reporting oftentimes comes about due to corrupt practices, tax evasion and the traditional agency principal problems in the corporate world. There are two general forms of poor financial reporting: (1) earnings manipulations and (2) incomplete financial records. Poor financial reporting in the form of earnings manipulation pertains to various tweaks in the financial records of companies with a goal of either reporting overstated profit figures for better management reporting or understated profit figures to minimize, albeit, evade taxes. This form of poor financial reporting takes place primarily in corporate setting rather than for small businesses.
Poor financial reporting, in the form of incomplete financial records, pertains to incomplete recording of transactions by a company’s bookkeeper or poor data (electronic and hard copy) retention practice that is rampant. This form of poor financial reporting usually applies to small businesses with bookkeeping outsourced to small practice firms or sole practitioners. Businesses and owners often look outside of their business to understand market trends and data to analyze the economic insinuations. While analyzing, external in-
formation can provide significant insights on customer demands and market demographics, it is difficult to translate these information into a business-specific information. What most businesses and owners fail to acknowledge is that the biggest source of their data is within their financial reports. Financial reports are expected to capture all financial transactions that occur throughout the life of the business and are composed of various transactions that can be used for analysis. Recent years have driven many companies to appreciate the concept of big data and how they can leverage these massive data sets into useful corporate information. Removing poor financial reporting in the picture, data collected at rock-bottom granularity can provide significant insight into financial and nonfinancial information, which could be significantly leveraged for business decisions. Notably, the practice of manipulating big data into insight have resulted to data science being a whole new business practice rather than being a purely academic topic. The need for better information have proven to be a massively costly project for companies with longstanding businesses living without any financial records other than a blabber produced by their bookkeepers. These projects typically involve the reconstruction of the
whole accounting records limited by the availability of backup information and the consideration of various assumptions to compensate the lack of business records. Poor financial reporting resulting from earnings manipulation can be a real pain to discriminate fact from fiction. This would often entail the need for financial experts to help assess the extent of manipulation and cleanse the underlying data. Straightening your financial reporting process from the very onset can provide substantial leverage on a company’s long-term strategy. In the short run, the costs involved in setting up a good financial record can be burdensome. However, the long-term benefit of having a good financial transaction history definitely outweighs the costs involve. To be concluded Filbert Tsai is a Filipino financial accounting advisory services executive in the UK with specialization in transaction accounting in the power and utilities sector. He had provided accounting advice to a significant number of government and financial institutions investing or providing financing structures in the renewables sector in Europe and in developing countries. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.
There’s no rule book for eradicating corruption
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B L B | Bloomberg View
NITED Kingdom Prime Minister David Cameron’s anticorruption summit coincided with the release of an International Monetary Fund (IMF) staff paper that explains why corruption is bad for economies and suggests ways to eradicate it. But neither these recommendations nor those expressed at the forum will do much to fix the developing world’s problems. That would require much more than better antigraft laws and dogged enforcement. At the forum, much was made of international efforts to recover stolen wealth and of transparency in general. Cameron hopes to erase London’s reputation as a haven for corrupt fortunes. He wants all foreign companies that own real estate in the UK to declare their assets in a public register. I doubt that’ll be very useful: In most cases, such declarations won’t contain anything but a list of London properties, and the names of beneficiary owners either won’t mean anything to anyone or will belong to people with legitimate businesses. Asset recovery is tricky: For starters, the owners must be sentenced by a court of law. In corrupt countries, however, courts are among the most rotten institutions. The European Union has been forced to remove associates of former Ukrainian President Viktor Yanukovych from its sanctions lists after the Ukrainian justice system failed to nab them. The IMF’s “mitigating strategies” for corruption also center on transparency, enhancing the rule of law, building institutions and trying patiently to change social norms in corrupt societies. These are all well-known recommendations that some of the most corrupt regimes in the world have mockingly applied. Russia has a transparent, electronic government procurement system that would be the envy of many a country if the “right” companies weren’t winning all the tenders, anyway. Ukraine has not one but three bodies charged with fighting graft—the National AntiCorruption Bureau, the National Agency for Corruption Prevention and the Specialized Anti-Corruption Prosecutor’s Office—but it’s still so corrupt that the IMF is withholding the latest tranche of its bailout package. Kakha Bendukidze, whose reforms took the nation of Georgia from the 124th place in Transpar-
ency International’s Corruption Perceptions Index in 2003 to 50th place today, recalled in an interview with Ukrainian journalist Vladimir Fedorin that he once attended a RAND Corp.-organized US-Russian business forum, attended by Donald Rumsfeld and Paul O’Neil, both of whom had leading roles in George W. Bush’s administration. “Once a Russian participant was complaining about corruption. So Rumsfeld said to that: ‘I think there’s a simple way to combat corruption—you need to pass a law to ban corruption.’ All the Russian participants were rolling around laughing, and the Americans were nodding their heads earnestly: ‘Yes, yes.’” It may not have happened quite like that, but Bendukidze, known for his sharp wit, seized on an important issue: Western experts stress the institutional, legal and enforcement side, as if unaware that laws can be ignored, institutions subverted and enforcers can become the problem rather than the solution. Bendukidze’s own solution was not of the kind recommended at international conferences or in IMF papers. “Liberalization and deregulation helped destroy corruption, and the destruction of corruption, in turn, helped liberalization and deregulation,” was how he described the process. Bendukidze, who paid out millions of dollars in bribes while building a huge fortune in Russia, knew all the common schemes and many of the players when President Mikheil Saakashvili of Georgia appointed him minister for economic reform in 2004. Saakashvili had the biggest grafters jailed without much due process and forced others to hand most of their fortunes to the state. The process wasn’t grounded in legality by Western standards but, coupled with Bendukidze’s reductionist approach to government, it worked
The IMF’s “mitigating strategies” for corruption also center on transparency, enhancing the rule of law, building institutions and trying patiently to change social norms in corrupt societies. These are all wellknown recommendations that some of the most corrupt regimes in the world have mockingly applied. Russia has a transparent, electronic government procurement system that would be the envy of many a country if the “right” companies weren’t winning all the tenders, anyway. Ukraine has not one but three bodies charged with fighting graft—the National Anti-Corruption Bureau, the National Agency for Corruption Prevention and the Specialized AntiCorruption Prosecutor’s Office—but it’s still so corrupt that the IMF is withholding the latest tranche of its bailout package.
remarkably well. Bendukidze’s theory was that to remove corruption, a government had to get rid of departments that it knew it could do without and reduce contact between citizens and government to a minimum. Thus, he closed down Georgia’s antitrust committee, which, he said, was doing little except taking bribes, and disbanded the notoriously venal traffic police. No one missed either, and monopolization or traffic chaos did not ensue. Georgian culture changed quickly, and the country didn’t slip in the transparency rankings even after Bendukidze and Saakashvili were driven out of office. Georgia is now the cleanest country in the former Soviet bloc, but no other nation—including postrevolutionary Ukraine— has had the courage to adopt this draconian approach. The economist Hernando de Soto regarded excessive bureaucracy as the root cause of corrup-
tion in the developing world. In post-Soviet states, some of the world’s most corrupt, the bureaucracy is mostly inherited from a time when cheating the state was a national pastime. It has been strengthened and streamlined to keep out the unconnected. So in these countries, corruption is both a traditional part of the social fabric and a mainstay of the regime. The only way to beat it is to take the reins out of the bureaucrats’ hands, depriving them of any opportunity to collect a rent. The IMF paper contains exactly three paragraphs about eliminating excessive regulation, but one of these stresses the importance of technology (electronic procurement again), and another warns that deregulation can “pose its own risks, particularly where the institutional framework is underdeveloped.” These risks, according to the paper, are associated with the monopolies created by the fast post-Soviet privatization. The oligarchs who put together these conglomerates are pretty good at government capture. Bendukidze’s approach to them was “play by the new rules or rot in jail,” but that can’t be part of any “institutional framework.” Eradicating corruption in countries where it is the way of life can’t be achieved by following a rule book. Bendukidze’s method probably isn’t the only possible one, but no useful recipe can be based solely on recommendations from law-abiding, orderly Western societies: Post-Communist states, and probably many in Africa and Asia, have deep traditions of subverting and mocking the systems and institutions of power. According to the IMF, corruption costs the world $1.5 trillion to $2 trillion a year, or 2 percent of global economic output, mainly by undermining incentives for taxpayers to share their incomes with governments; increasing costs and undermining the quality of public spending; and stifling private investment and productivity. The losses mostly occur in the countries that can least afford them. The West cannot do much to help, either in terms of enforcement or by offering advice. It’s up to each corrupt nation to rip up its bureaucracy and chase away its architects.
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