Issuu

“Thanks to you, we’ve reached a milestone.”—Hillary Clinton, who claimed victory in the race for the Democratic presidential nomination and will be the first woman to lead a major US political party. AP

media partner of the year

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2015 environmental Media Award leadership award 2008

“Our fight is to transform this country and to understand that we are in this together, to understand that all of what we believe is what the majority of the American people believe and to understand that the struggle continues.”—Bernie Sanders, who vowed to stay in the race until next month’s Democratic convention in Philadelphia. AP

“I regret those comments he made. Claiming a person can’t do their job because of their race is sort of like the textbook definition of a racist comment.”—House Speaker Paul Ryan, who disavowed Donald Trump’s attacks on a federal judge hearing the lawsuit against his now-defunct real-estate seminar company. AP

BusinessMirror

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A broader look at today’s business n

Friday, June 10, 2016 Vol. 11 No. 244

Government alarmed over high youth unemployment rate

More than 1M young Filipinos are jobless

INSIDE

@cuo_bm

EARLY 1.3 million young Filipinos, the future of the country’s labor force, are unemployed, according to data released by the Philippine Statistics Authority (PSA) on Thursday.

Isuzu brings Truck Fest to Pampanga

motoring

By Cai U. Ordinario

4.7M

The total number of young Filipinos “underutilized”

Data showed 50.1 percent, or 1.299 million, of the 2.594 million unemployed nationwide are Filipinos 15 to 24 years old. The National Economic and Development Continued on A2

Database

Part Six

Impacts of power privatization

Continued on A11

By Lorenz S. Marasigan

@lorenzmarasigan

ith the seat of power being virtually moved down south, traffic at the airport in Davao City—the third-busiest international gateway in the Philippines—is expected to rise, an aviation expert said. Avelino L. Zapanta, an expert in the civil-aviation industry, said economic activities in Davao, including commercial-flight services, will rise in the coming months, with President-elect Rodrigo R. Duterte leading the pack of travelers going in and out Davao.

12.69%

“Davao just might become a beehive of aviation activity because of Duterte,” he told the BusinessMirror in a mobile-phone reply. The President-elect has repeatedly said he will fly in and out of Davao every so often, saying he is not really that comfortable sleeping in Malacañang. Data obtained by the BusinessMirror from the Civil Aeronautics Board showed that the airport handled a total of 2.84 million passengers in 2015, up by 12.69 percent from 2.52 million the year prior.

Cecilio T. Arillo

Duterte ‘magic’ seen to fuel passenger rise at Davao airport

The increase in passenger volume at the Francisco Bangoy International Airport— from 2.52 million in 2014 to 2.84 million last year—making the Davao City airport the third-busiest airport in the Philippines, after the Ninoy Aquino International Airport and the Mactan-Cebu International Airport.

Why oil prices and power rates keep on rising

HE main impact of power privatization in the Philippines, particularly during President Fidel V. Ramos’s administration, was the continuing increase in the cost of electricity. There were two sources of the increase in electricity rates: (1) The purchased Power Adjustment (PPA), and (2) the application for rate by local distribution utilities.

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See “Duterte,” A2

HOPI POINT One of several viewing decks at the Grand Canyon National Park in Arizona that at sunset offers some of the more spectacular sceneries there are on

On the other hand, of the P2.071 trillion in appropriations approved by Congress in the General Appropriations Act, 80.3 percent has already been released. The P2.071-trillion approved appropriations is that part of the budget approved by Congress for particular items, as opposed to those items automatically appropriated each year, such as interest payments and internal Continued on A4

See “East China Sea,” A2

Bulk of this year’s ₧3-trillion budget already disbursed F

PESO exchange rates n US 46.0620

matically set aside each year sans even the approval of Congress, 93.5 percent of these, or P930.69 billion, had already been released. The items in the automatic appropriations include the internal revenue allotments of local government units amounting to P428.62 billion, which has to be release as a matter of course, and interest payments of another P392.79 billion, both of which had already been released in full.

string of incidents in and over the East China Sea points to renewed tensions between Japan and China over territory, just as a new survey underlines the animosity between Asia’s two largest economies. Japanese Vice Foreign Minister Akitaka Saiki summoned Chinese Ambassador Cheng Yonghua in the early hours of Thursday, after a Chinese frigate entered the “contiguous zone” just outside Japan-administered waters surrounding contested islands. No Chinese naval vessel has previously been observed there. “This is a one-sided act that increases tensions,” Japanese Defense Minister Gen Nakatani told reporters. “I am seriously concerned,” he said, according to Kyodo News. Chen said he could not accept the protest, but would convey it to his government, Kyodo said. The previous day, three Chinese coast guard vessels entered what Japan regards as its territorial waters around the islands. Meanwhile, the US said Chinese fighter planes unsafely intercepted a reconnaissance flight in international airspace over the East China Sea, CNN reported. China’s foreign ministry said the US was deliberately hyping the jet encounter. A contiguous zone is an area of water that extends as far as 24 nautical miles out from territorial seas. While considered

the planet. While this was photographed well past noon on 21 May this year, one is still awed at nature’s grandeur and the sheer beauty the whole place offers for the thousands who visit each day.

inance officials bared on Friday the disbursement of the bulk, or 85.2 percent, of the P3.001trillion budget for 2016, latest figures from the Department of Budget and Management (DBM) show. In its monthly status report on the budget, a total of P2.556 trillion had already been released as of end-May this year. Of the total automatic appropriations in the budget, or those items auto-

EAST CHINA SEA TENSIONS RISE OVER CHINESE SHIPS

n japan 0.4306 n UK 66.8037 n HK 5.9361 n CHINA 7.0099 n singapore 34.2036 n australia 34.3991 n EU 52.4923 n SAUDI arabia 12.2829

Source: BSP (9 June 2016 )

A2 Friday, June 10, 2016

Duterte. . .

Continued from A1

But while the international airport in Davao is ready to handle large jets, it may have to prepare well before the influx of passengers starts. “Davao can handle wide-body aircraft operation. It is already an international airport. It may have to anticipate influx of traffic and, thus, terminal expansion,” Zapanta said. Francisco Bangoy International Airport in Davao is the third busiest airport in the Philippines, after the Naia and the MactanCebu International Airport. Located in Catitipan, Davao City, the airport has been operational for more than 15 years, currently serving both domestic and international operations. Currently, the government is tendering the operations and maintenance contract of the Davao airport to the tune of P40.57 billion. This contract also includes the modernization of several facilities inside the complex. Along with the influx of passengers in Davao is the growth in volume in Manila. “It won’t really free up Naia. Much of the traffic that will go in and out of Davao would be originating or terminating Manila,” Zapanta said. Last year saw Naia’s four terminals reaching past their maximum rated capacity for the first time, as more and more international and domestic flights were launched throughout the year, despite the lack of capacitybuilding projects for the air hub. Data collected by the Manila International Airport Authority showed that the airport handled 36.68 million passengers last year, seven percent higher than the 34.09 million passengers the year prior. Broken down, the airport handled 19.51 million domestic passengers last year— around 2 million higher than the 17.17 million it served in 2014. International passenger count was almost flat.

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More than 1M young Filipinos are jobless Continued from A1

Authority (Neda) has expressed alarm over the data saying the number means a youth unemployment rate of 14.6 percent—more than twice the 6.1- percent national unemployment rate—in April. “Moreover, some 23.8 percent of the total young working population were neither in school nor in the labor force, implying that 4.7 million young Filipinos are underutilized, as their skills are not being honed by education, training or employment,” Neda Director General and Economic Planning Secretary Emmanuel F. Esguerra said. To improve the employment situation in the country, Esguerra said the incoming administration needs to create the conditions that will produce more high quality jobs, including easing the country’s foreign investment restrictions. He added that the Duterte administration must also improve the business climate, which is key, given the need for resiliency and adaptability to changes in the labor market. Esguerra added that the country needs to produce better trained and a more agile work force. This highlights the need for better cooperation between industry and educational institutions on curriculum upgrade. “The country also needs to focus more on income security rather than

job security,” the Neda chief said. Meanwhile, Eagle Watch Senior Fellow Alvin P. Ang said training programs must also be implemented. These can address the job-skills mismatch that is preventing some members of the labor force from landing in decent jobs. While Ang said the K to 12 education system can help boost the chances of young Filipinos from obtaining employment, the benefits will not be immediate. Ang said two years into the implementation of the K to 12, unemployment could still increase, as firms adjust to the changing characteristics of future employees. “Firms may be hesitant at first to hire K to 12 graduates because they may think the graduates do not have sufficient skills. This is why the K to 12 Program must be executed well,” Ang said. “The first batch is crucial because they will be the testament to whether the program is a good one or not.”

Fewer jobs in metropolis?

GOVERNMENT data showed the employment rate in the National Capital Region (NCR) was at 92.3 percent, the lowest in any region nationwide. Data also showed unemployment was also the highest in Metro Manila at 7.7 percent. Underemployment, however, was the lowest in the NCR at 8.8 percent.

Esguerra said this may be due to the sheer number of workers in Metro Manila. As the nation’s nerve center, the NCR attracts migrants from other regions and this causes the number of workers to rise. Neda’s Rosemarie Edillon added this also highlights the high skills demand in the NCR, which is not easy to fill. “[The] NCR attracts a lot of migrants looking for work. And usually, these migrants are pretty competitive,” Edillon, Neda deputy director general for national development planning, said. “In other words, a resident of [the] NCR looking for work has to compete against residents and migrants [in the NCR] who think they are able to compete [and probably can compete] in the NCR labor market.”

April jobs data

GOVERNMENT data showed there were 66.805 million Filipinos aged 15 years old and over nationwide. The labor-force participation rate is 63.6 percent in April 2016. The employment rate during the period was 93.9 percent, or 39.916 million, Filipinos with jobs. The unemployment rate was at 6.1 percent, representing 2.594 million jobless Filipinos and the underemployment rate, 18.4 percent represented 7.351 million employed Filipinos looking for better jobs.

East China Sea. . . international waters, countries claiming such a zone exercise control over the area for various purposes including customs and sanitation.

Court ruling

Japan and China are embroiled in a dispute over uninhabited islets located near Taiwan, known as Senkaku in Japanese and Diaoyu in Chinese, with the Japanese government buying three of them in 2012 from a private landowner, leading to a rise in tensions. While Japanese Prime Minister Shinzo Abe has succeeded in calming the mood enough to hold two summits with President Xi Jinping, the recent incidents risk reigniting frictions. Tensions over territory are rising in Asia before an international court ruling on a case brought by the Philippines over a separate territorial dispute between China and other nations in the South China Sea, which could affect China’s behavior in waters through which more than $5 trillion of trade passes each year. China has said it doesn’t recognize the jurisdiction of The Hague tribunal and won’t abide by an unfavorable ruling.

Russian ships

Rather than deliberately provoking Japan, the Chinese ship may have been tailing three Russian naval vessels that were reported to have sailed through the zone at the same time, according to retired Maj. Gen.Ikuo Kayahara, an emeritus professor at Takushoku University in Tokyo. “There’s no need for China to

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Continued from A1

exacerbate the problem over the East China Sea now,” Kayahara said. “They’ve already said they won’t respect the verdict, so why would they send out warships and risk criticism for disturbing the order?” Japan has used its platform as host of the Group of Seven (G-7) meetings this year to criticize China, its biggest trading partner. G-7 foreign ministers issued a statement expressing opposition to any “intimidating, coercive or provocative” actions in the East China Sea and South China Sea, and calling on all parties to act in accordance with international law. China reacted with anger. The developments come as a survey of five Asian nations shows continuing ill feeling between China and Japan, despite growing opportunities to interact through business and tourism. A majority of Chinese see Japan as the most likely nation to start a conflict in Asia, according to a survey conducted by the United States Studies Center at the University of Sydney published this month. Fifty-six percent of Chinese respondents picked Japan as the most likely to initiate hostilities, compared with only 9 percent who picked North Korea. Thirty-seven percent of Japanese respondents picked China as the most likely instigator, compared with 50 percent who chose North Korea. The survey, which also covered South Korea, Australia, Indonesia and the US, found that the Japanese were by far the most likely to characterize China as “doing much more harm than good” in the region. Bloomberg News

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Friday, June 10, 2016 A3

Neda holds off decision on DA request for additional PRDP funds By Cai U. Ordinario

@cuo_bm

he National Economic and Development Authority (Neda) said it has put on hold its decision on the Department of Agriculture’s (DA) request to obtain additional funding for the Philippine Rural Development Project (PRDP).

Neda Deputy Director General for National Development Programming Rolando G. Tungpalan told the BusinessMirror the agency is not inclined to immediately decide on the matter given the transition to a new administration. Tungpalan said the DA is requesting for additional funds amounting to $400 million. If the request is approved by the Investment Coordination Committee, the DA will propose this to the World Bank, which provided a loan for the project. “We indicated to the DA that we need to get a solid basis [for approving the request,” Tungpalan said. “We said, the PRDP barely started, so we’d rather see progress [first]. Besides, there’s a new government coming in. It’s easy to scale up when you have success, rather than commit this early.” Tungpalan said the DA has already responded to the Neda’s letter. The content of the

DA’s res pon se i s now bei ng evaluated by the Neda’s Agriculture, Natural Resources and Environment Staff. He said it would be “more prudent” to wait for the next set of government officials to formally assume office, as it has its own socioeconomic priorities. “I’d rather that we be ready with the ongoing and the recently approved projects, and present to them what is in the pipeline [that is] consistent with the next ad m i n i st rat ion’s eight - poi nt agenda,” he said. Based on t he Ned a’s 2014 Of f ic i a l De ve lopment A ssis tance (ODA) portfolio review, the PRDP was identified as one of 13 ODA projects that encou nte re d pro c u re me nt a nd budget problems. The report stated the PRDP experienced slow procurement due to excessive time for award of contracts and high incidences of bid failures—23 out of 103.

Residents walk along a newly paved portion of the 3.6-kilometer Pamintayan-Bawang farm-to-market road (FMR) in Buug, Zamboanga Sibugay. The P46.9-million worth FMR, which used to be a mere trail, is being upgraded under the Department of Agriculture’s Philippine Rural Development Project. Gian Enrique, PSO Mindanao InfoACE Unit

$671.59M

The total cost of the PRDP being implemented by the DA The bid failure occurred in the procurement of the Intensified Building up of Infrastructure and Logistics for Development (I-Build) Project. Further, the Neda report stated the PRDP was also one of five ODA projects that experienced difficulties in obtaining certificates and clearances. The PRDP experienced difficulties in obtaining Certificates of Non-Coverage and Environmental

Compliance Certificates from the Department of Environment and National Resources. The Neda said it also experienced problems obtaining the Certificate of Non-Overlaps from the National Commission on Indigenous Peoples. The report indicated that the PRDP is one of three ODA projects that experienced issues in local government unit (LGU) capacity. Specifically, the project encountered unliquidated funds used by LGUs. “[This] shall delay project implementation, as COA [Commission on Audit] guidelines prohibit downloading of subsequent funds without proper liquidation of

funds previously provided,” the report read. The $671.59-million PRDP was approved by the Neda Board in June 2013. It included a $7-million grant from the Global Environment Facility and a loan from the World Bank. The $501.25-million loan from the International Bank for Reconstruction and Development (IBRD) was approved by the World Bank Group in September 2014. The project has four components—local and national level planning, which was allocated $19.27 million; infrastructure development, $452.13 million; enterprise development, $168.94 million; and project implementa-

tion support, $29.99 million. World Bank documents showed the project has an outstanding pipeline of infrastructure a nd enter pr i se de ve lopme nt subprojects. As of 2014, about $420 million worth of subprojects have been identified and are currently being prepared and procured. The PRDP aims to increase farm and fishery productivity and incomes in the targeted program areas through the adoption and integration of climate-smart and resilient agriculture support, technologies, tools and systems. It also aims to have a more market-oriented, climate-resilient agri-fishery sector.

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A4 Friday, June 10, 2016

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Limiting fishing expeditions should help protect Benham Rise–BFAR

By Jonathan L. Mayuga

@jonlmayuga

EBU CITY, Cebu—The Bureau of Fisheries and Aquatic Resources (BFAR) said it is mulling over the implementation of more stringent measures to prevent overfishing in the Benham Rise, the country’s newest territory in eastern Luzon. Benjamin F. S. Tabios Jr., BFAR assistant director for administrative services, told the BusinessMirror on the sidelines of the Ocean Heroes Award here that the agency wants to limit the number of fishing expeditions in the Benham Rise. The Ocean Heroes Award recognized fishermen who excelled in the field of marine protection and conservation, particularly in the Tañon Strait. Tabios, who was one of the judges in the competition, was sought for reaction on the stiff opposition to the use of fish-aggregating device (FAD). “We can put as many FAD there, as long as we put a measure that will prevent overfishing,” he said. He said they plan to limit the number of fishing vessel or fishing expedition, depending on the capacity based on the result of their ongoing study in the area. Theresa Mundita Lim, director of the Biodiversity Management Bureau (BMB), earlier warned against its use in the Beham Rise, noting that it promotes overfishing as the device gathers fishing in one area, which doesn’t reflect the true density or population of fish that can be found in a particular marine ecosystem such, as the Benham Rise. But Tabios said they plan to institute measures that will prevent overfishing in the tuna-rich fishing ground soon enough. Situated 250 kilometers off the province of Aurora, the Benham Rise is now being eyed for integrated coastal-resource management. The area is rich in oil, gas and mineral deposits, but is also rich in marine biodiversity.

Ocean-conservation advocacy group Oceana Philippines is pushing for sustainable management of the Benham Rise, and wants a particular area, the Benham Bank, the shallowest portion of the 13-millionhectare underground plateau, to be a “no-take zone,” effectively banning fishing in the area. Tabios admitted that the use of FAD is not sustainable but said just the same, the practice is being used to increase fish production. He defended the use of FAD in the Benham Rise. “It is a new fishing ground. But before the fishing companies go there, actually, they asked us to conduct test fishing. We conduct test fishing every year. There are times of the year that there are tunas there; highly migratory tunas, and there are times that the area is bare,” Tabios said. “But there are also deep-sea fish species, which we do not catch. We don’t normally, or haven’t actually, fished in deeper waters,” he said. According to Tabios, the BFAR has not explored deep sea portions in the Benham Rise. “Normally, 100 meters deep lang. Deeper than that, we don’t catch fish. Before you can start anything, like any regulatory, we want to gather more data through scientific exploration,” he said. “The National Stock Assessment Program is ongoing, and we are targeting the Benham Rise. We only have 100 sites. During the time of Director Asis Perez, he extended it to almost 500 areas, in order to get the data to determine the fish stock,” he said.

The Department of Agriculture-Bureau of Fisheries and Aquatic Resources is eyeing the Benham Rise as a potential fisheries hot spot in the country’s eastern seaboard facing the Pacific Ocean off the provinces of Aurora and Isabela. Malacañang Photo

According to Tabios, like any scientific endeavor, a series of year of scientific study is needed to get sufficient data. “You need at least five years. This is important to come up with a definitive or accurate assessment. What we know for a fact is that we need to reduce some fisheries activities in the area,” he said. According to Tabios, there are already plenty of FAD installed in the Benham Rise. “What we need to do is identify areas where they should be placed,” he said. He admitted that the use of FAD

must be applied, but precautionary measure can be institutionalized. “There is a need to put in place a measure to prevent by-catch, particularly for marine mammals. The theory there is you have to be able to remove marine mammals that are caught accidentally during fishing expendition. You can scoop the fish, and later release the marine mammals. There is a way,” he said. The fishermen and fishing companies should be able to push for measures that will prevent nontarget species, particularly marine mammals, he added. “Right now, we still have no

rules. The implementing rules of RA 10654 were just adopted 10 years of last year. We still need to come up with rules for that. It says before we come up with a regulatory measure or framework, we need to come up with a series of stakeholders meeting. Of course, we have to draft the rules first, then start consultation in July,” he said. According to Tabios, during the consultation process, a multilateral technical working group, which includes other agencies, non-governmental organizations and other stakeholders, is normally created. “All the nontarget species need

to be protected. Sea turtles, whales and other species of fish that we are not eating should be spared,” he said. He said there is already an existing rule for sea turtles, which promotes the use of a turtle exclusion device, particularly among big commercial fishing vessels. “The rule will not necessarily be for noncommercially viable fish only, but also for fish that are important to the ecosystem,” Tabios said. According to Tabios, the big fishing companies will be consulted after the BFAR conducted its assessment on how to promote the sustainable management of Benham Rise.

Group slams grant of provisional ICC for China rebars T

he provisional import commodity clearance (ICC) issued for the release of 5,000 metric tons of steel rebars from China was signed by a Bureau of Products Standards (BPS) official who was not an authorized signatory, according to the Philippine Iron and Steel Institute (Pisi). In a position paper submitted to the head office of the Bureau of Customs (BOC), Pisi insisted that

the alert order be maintained and that the shipment be seized since it has no proper ICC. The group also claimed that BPS provincial head Leonila Baluyut was not authorized to sign the ICC and that under the law and existing orders, “provisional” ICCs are not allowed, and that only regular ones are legitimate. It added that the shipment must first be subjected to test-

5,000 MT The volume of steel rebars imported from China by Mannage Trading Resources

ing to ensure the rebars are not substandard to protect public safety. But BPS officials claimed

t hey conducted t he requ ired testing, although no industry and customs officials were present as required. Pisi said the BPS officials got only three samples when the rules, imposed on and followed by local producers for similar volumes, require about 250 samples to be cut and tested. Pisi filed a complaint for graft last week against Baluyut and

BPS chief Ann Claire Cabochan with the Ombudsman. Pisi President Roberto Cola had earlier raised the alarm about the shipment given the hurried and “secret” testing done by the BPS, adding that substandard steel rebars were found in collapsed buildings and houses in Bohol and Cebu during the 2013 earthquake. Those rebars also had no authorized logo that would identify

the producer who will be liable in cases of product failure and substandard quality. Cola said the current shipment’s logo is questionable, since it is not among those in the official registry. The shipment, worth around P95 million, was consigned to Mannage Trad ing Resources, which was put up last year with a capital of P400,000.

Bulk of this year’s P3-trillion budget already disbursed Permits for killing Indian wildlife spark government row continued from a1

revenue allotments. The P3.001-trillion national budget is composed of the P2.071-trillion appropriations approved by Congress plus the P930.69 billion in automatic appropriations. The P2.071 trillion in approved appropriations is broken down as follows: P1.501 trillion as budget of the different government departments and P408.29 billion for items that will be funded by so-called special purpose funds (SPFs). A total 92.7 percent or P1.501 trillion of the P1.662-trillion appropriations for the various departments of the three main branches of government has already been released as of May 2016, while

only 36.1 percent of the P408.29-billion appropriations to be sourced from SPFs have been released. The DBM earlier clarified that the release of the budget to the various departments does not mean the money has already been spent, since actual disbursement of the money to the various payees have to meet stringent government procurement rules. The actual disbursement of government funds may be found in another report regularly published by the DBM related to the use of so-called notice of cash allocations, or NCAs. Budget officials have reported that actual cash expense by the entire bureaucracy as of April 2016 amounted to P595.28 billion. David Cagahastian

EW DELHI—An Indian Cabinet minister accused her colleagues in the Environment Ministry on Thursday of failing to protect the country’s wildlife by allowing states to cull populations of monkeys, elephants, wild boars and antelopes. The permissions are inspiring a public “lust for killing,” said the minister for women and child development, Maneka Gandhi. She joined animal-rights activists in accusing the Environment Ministry of playing politics by siding with farmers who complain that the animals are damaging their crops, despite the overall decline of most animal populations. The sharp criticism of an Indian minister by another is unusual in Prime Minister Na-

rendra Modi’s government, where Cabinet members generally keep silent except to espouse approved national policies or reiterate pledges to boost the economy. Environment Minister Prakash Javadekar, apparently surprised by the criticism from within his own administration, declined to respond directly to Gandhi’s remarkas, except to say that the permissions given for killing wildlife are targeted, scientifically safe and legal if requested by local authorities. “If there is a proposal by a state government, we allow killing of animals in a certain area for a certain period for scientific management. That’s the existing law,” he said. Gandhi said, however, that the approvals

are encouraging a frenzy of killing, including in areas where no permission was given. “There is a lust for killing. It’s shameful,” Gandhi said. She said a family of gunmen from the southern city of Hyderabad “is going around killing animals across the country” with impunity. Javadekar and other officials in the Environment Ministry did not comment on the allegations. Protecting wildlife is a point of pride for many Indians, who laud their nation’s pioneering tiger-conservation program launched in the 1970s and note the religious reverence paid to monkeys, elephants and cows considered to be the earthly embodiments of Hindu gods. AP

AseanFriday

BusinessMirrorEditor: Max V. de Leon • Friday, June 10, 2016 A5

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Thai King Bhumibol marks 70 yrs on the throne–from hospital bed accompany a candlelight gathering near the ceremonial Grand Palace. Long lines formed outside banks to buy for 100 baht a special commemorative 70-baht banknote, worth about $2—encased in a yellow paper frame, the color of the royalty. Commuter trains were packed with people wearing yellow shirts.

Social fabric

Buddhist monks enter the Grand Palace to pray for Thailand’s King Bhumibol Adulyadej during the 70th anniversary of his accession to the throne in Bangkok, Thailand, on June 9. King Bhumibol is the world’s longest-reigning monarch. AP

ANGKOK—Thailand’s King Bhumibol Adulyadej, the world’s longest-reigning monarch, on Thursday marked his 70th year on the throne—from his hospital bed, immobile and wracked by a variety of age-related ailments that have made Thais wonder what their world would be like without him. There was a time when Bhumibol (pronounced “Poo-me-pon”) would lead his aides on treks through swamps and over mountains to learn what was on the minds of his subjects in the most far-flung areas of his realm. But the 88-year-old guest of honor is unlikely to make a public appearance this week. For most of the past decade, the king has lived in a hospital—in a new wing built for him— for treatment of various problems, according to regular palace statements on his health. The ailments have sapped his

strength and taken him gradually out of the public eye. On Tuesday he underwent an operation to clear an artery; doctors said the results were satisfactory. “I really can’t think about the country without the king ...it’s just impossible to do so,” said Nonthawit Kanlapanayut, a 23-yearold trader at Thailand’s biggest foodprocessing conglomerate. “The monarchy is at the core for Thai people.”

Yellow shirts

TEN years ago, the ceremonies for his 60th diamond jubilee were splendid.

$30B

Thailand’s King Bhumibol Adulyadej’s net wealth assessed by Forbes

Golden royal barges glinted in a twilight procession, gliding down the Chao Phraya River, for an audience that included representatives of 25 of the world’s royal families, who also attended an opulent banquet the next day. Hundreds of thousands of ordinary Thais jammed Bangkok’s Royal Plaza to hear their king—wearing a gold brocade robe and flanked on a palace balcony by his family—deliver a short speech calling for national unity. This year’s 70th anniversary will not go unmarked. On Thursday morning 770 monks were ordained during religious ceremonies at a newly built throne hall in the palace temple complex, and fireworks will

BHUMIBOL took the throne in 1946 as a teenage boy under difficult circumstances: His 20-year-old brother, King Ananda, had been shot dead in his palace bedroom. The absolute monarchy had been ended by an army coup in 1932, leading to a series of military dictatorships. Old royalists slowly, but successfully, helped the young Bhumibol regain power and influence for the monarchy. Their efforts were aided in no small part by the king’s charisma, rectitude and genuine devotion to seeing his nation develop. Admirers and critics alike credit the king with steering the nation through the turbulent decades of the 1960s and 1970s, when neighboring countries fell prey to war and totalitarian rule. “Being king for so long is an accomplishment,” Thai studies scholar Kevin Hewison wrote in recently published comments. He noted that the monarchy was in poor political and economic shape when Bhumibol took over, but he and advisers were “able to make it ‘great’ again, not to say wealthy, politically powerful and part of the what the elite likes to think is the fabric of Thai society.”

Wealthiest monarch

THE royal palace doesn’t talk about the king much, and it didn’t respond to calls for comment on this article. The king is widely loved by his people, but open discussion of the monarchy is an extremely sensitive because, strict lese majeste laws make criticism of the royal family punishable by up to 15 years in prison. The king is known to be the wealthiest monarch in the world, with net wealth assessed by Forbes to be more than $30 billion, although most of it is owned by the crown as an institution, including land, a bank and an industrial conglomerate.

However, the past decade has taken a toll not only on the king’s health, but also on Thailand’s body politic. When Bhumibol spoke at his 60th anniversary in 2006 and called for unity, Thailand was sliding into crisis. A billionaire populist politician, Thaksin Shinawatra, had become prime minister, and his popularity and political power—rooted in electoral democracy—rubbed traditional royalist power-holders the wrong way.

Widely admired

JUST three months after the king’s balcony speech, the army deposed Thaksin in a coup, setting off a sustained and sometimes violent political conflict that has left the country socially and politically polarized between Thaksin’s supporters—many of them poor rural residents—and opponents. The barely concealed involvement of palace circles in the army takeover also dragged the monarchy down to the level of a political player, tarnishing its image as an honest broker above the fray. Thaksin’s opponents ostentatiously touted their royalist credentials. Bhumibol was still widely admired, but the consensus that used to value a royally supervised democracy over popular democracy was severely eroded. Weakened by age and ill health, Bhumibol, meanwhile, was unable or unwilling to exercise his personal prestige to promote reconciliation, which he had often done in the past during coups and political conflicts.

Smooth succession

NOW there was a void. In 2014 the army stepped in again, and declared that it would be calling the shots, even if a promised 2017 election established a façade of democratic rule. It also started enforcing vigorously a law that makes criticism of the monarchy a crime. Critics say the law’s loose interpretation has allowed the military government to detain even those criticizing the junta. Calls to the junta spokesman were not returned.

“Much of the old reverence is gone; even among royalists, it has been replaced by a politics of intolerance and persecution,” says Michael Montesano, a Thailand expert who works with Singapore’s Institute of Southeast Asian Studies. “At the same time, younger members of the royal family have, not least because the times have changed, been unable to play anything like the role that the king played decades ago.” The accelerating decline in the king’s health underlines another concern: How smooth a succession can be arranged in a country where the vast majority of people have known no other king?

Royal democracy

THE king’s only son and heir apparent, 63-year-old Crown Prince Vajiralongkorn, is a controversial figure, even among royalists. He does not command the same respect and affection as his father. “Under the best of circumstances, the monarchy will in the future play a purely ceremonial, rather passive role. The tensions and rhetoric of the past decade, along with the emergence of a more politically aware electorate, mean that the widely accepted unifying role that the monarchy played in the past is probably over,” Montesano says. In the absence of a unifying figure, there is fear that Thailand will descend into political turmoil as the rural supporters of Thaksin—already given a taste of their electoral power—will be emboldened to take on the so-called royalists who want to maintain the status quo and their power in what one expert defines as “royal democracy.” “Royal democracy is only possible because of him. It is not an exaggeration to say that without him, royal democracy might not survive,” said Thongchai Winichakul, a Thai scholar and professor of history at University of Wisconsin-Madison. “Thailand’s political future is highly uncertain.” AP

High prices hard to swallow Indonesia central bank data show positive for Myanmar’s betel chewers consumer perception of economy in 2nd half

HANPHYUYONE, Myanmar—It’s as vital to life in Myanmar as cheese is to France or tea to Britain. For millions of people in the Southeast Asian country, the day is incomplete without chewing the juicy, teeth-staining parcels of betel leaf wrapped around areca nut and a slake of lime. But Myanmar’s dedicated legions of redtoothed betel-nut chewers are now having to swallow hard—at the thought of paying double for what’s known as kun-ya, thanks to extreme weather that has caused a sharp spike in prices of the ingredients for the addictive stimulant. A severe drought this summer wreaked havoc on betel leaf and areca nut farms, which rely heavily on irrigation. This was followed by violent rainstorms that debilitated the remaining crop. Nowhere is the poor harvest more greatly felt than in Thanphyuyone, a village where every morning farmers pick mature leaves that are lined inside bamboo baskets and sent to wholesale markets in nearby Yangon, the country’s commercial capital. “Betel farmers usually rely on the water from the village reservoir to grow betel leaves, but as this year brought us drought, we lost a huge amount of betel leaves and there was nothing we could do,” said Kyi Lwin, a 42-year-old betel farmer. The extreme weather variations have been blamed on El Nino, a warming of parts of the Pacific Ocean that changes weather worldwide. The bright green betel leaves, as large as an adult palm, normally cost $1.80 to $2.50 per kilogram (2.2 pounds). But because of the shortage, the price has gone up nearly four times to 11,000 kyat, or $9 per kilogram. That’s as much as the

daily wage of a construction worker. “It has only happened this year,” said Myo Lin Tun, a seller in the Thirimingalar wholesale market in Yangon.

Centuries

CHEWING of kun-ya goes back centuries in Myanmar. Every village, town and city in the country has small kiosks that usually sell packs of four kun-ya portions for about 10 cents. In Yangon 25-year-old construction worker Phyo They Paing grumbles that he now gets only half the usual bang for his buck. “I used to get four packets for 100 kyats and I was happy with that,” he says. “But now, I just get two. I’m pretty disappointed with that.” The betel leaf is wrapped around a mixture of areca nuts, lime, spices and sometimes tobacco. Aficionados chew them throughout the day, filling their mouths with a red sludge of betel juice and saliva that they dispose of with abandon in the open. Great red streams of the juice line sidewalks, bus stops, walls, public restrooms and everywhere else. What’s left are teeth and gums stained red. A recent Health Ministry and World Health Organization survey showed that 62 percent of men and 24 percent of women in Myanmar use smokeless tobacco products such as kun-ya, carrying a serious risk of oral cancer. Many who sport the giveaway red teeth are bus, truck and taxi drivers who say its stimulant quality helps them stay alert. Last month the government issued an order instructing all employees not to chew betel during office hours and not to allow betel vendors inside government facilities. AP

AKARTA—Bank Indonesia said the consumers perception of the country’s economy is improving, pointing to a 3.1-point increase in the Consumer Confidence Index (IKK) in May to 112.1 points from 109 points in April. A survey by the central bank issued on Wednesday showed that IKK has increased on improvement of consumers’ perception and expectation of the country’s economy in the next six months. The consumers’ perception of the economy at present is measured on the present Economic Condition Index (IKE) that rose 1.8 points to 96.5 points.

“Consumers expectation is measured on Consumers Expectation Index that rose 4.5 points to 127.7 points,” the central bank said in a report. There are 12 cities reporting an increase in consumer confidence, with the highest recorded by Manado of North Sulawesi at 20 points, followed by Banjarmasin of South Kalimantan at 9 points. Based on levels of expenditures, the high IKK was recorded by group of consumers with spending more than Rp5 million a month. The survey report said pressure of price hike is expected to fade in August after expected price increases

in June and July. Price expectation index in the next three months is predicted to decline 2.7 points to 171.3 points in September. Price-hike pressure is predicted to die away in the sectors of food and beverages, cigarettes and tobacco and manufactured foods. The decline in price-hike pressure followed normalization after high consumption in the Islamic holy-day celebration of Eid al-Fitr. The monthly consumer survey by the central bank covered 4,600 households in 18 cities. PNA/Antara

Citing need for more security, Singapore cuts Internet access of government employees

INGAPORE—Government employees in Singapore will soon lose their Internet access at work to make official information systems more secure, authorities said on Wednesday. The government’s Infocomm Development Authority said it has begun disconnecting Internet access from the work stations of some government employees, and will expand the removal to all public workers by next June. It said the employees’ work will remain the same, while the government informa-

tion network will become more secure. Singapore’s government is believed to have about 120,000 employees. While authorities did not give further details, the Straits Times newspaper said the move will affect 100,000 computers. The newspaper said government employees who need the Internet for work will be issued separate laptops with web access. If they don’t, they can use the internet on personal tablets or cell phones without access to government networks, it said.

The move was greeted with furor on social media. Many saw it as an obstacle to efficiency in the wealthy city-state, where citizens have pushed for a better balance of work and life. Government leaders have often spoken of the need to master and harness technology. In 2013 a hacker said members of the Internet group Anonymous temporarily shut down 19 government web sites. Authorities denied the claim and attributed the outages to internal system failures. AP

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Economic averages miss big picture in US

EMPHIS, Tennessee— Dozens of FedEx jets queue up for takeoff at the airport here. Beale Street, the heart of the music district, hums with tourists. Yet, the empty storefronts in Memphis’s moribund downtown and the cash-advance shops strewn near its highways tell another story. It’s a tale of two cities, all in one place. And it’s a tale of two Americas: the one that national averages indicate has all but recovered from the Great Recession and the one lost in the statistics. The pattern is evident in cities and towns across America, from Memphis to Colorado Springs, Colorado, from Wichita to Jacksonville: The national numbers aren’t capturing the experience of many typical people in typical communities. A key reason is that pay and wealth are flowing disproportionately to the rich, skewing the data used to measure economic health— and producing an economy on paper that most Americans don’t recognize in their own lives. That disconnect has fueled much of the frustration and anxiety that have propelled the insurgent presidential campaigns of Donald Trump and Bernie Sanders. Again and again, primary voters who were most worried about the economy told pollsters that they had cast their ballots for Trump or Sanders, according to Edison Research, which conducted the surveys on behalf of The Associated Press and television networks.

The decrease in rate of income for the bottom 20 percent when the economy was mostly recovering Trump’s candidacy, in particular, has been driven by support in some of the most economically distressed regions in the country, where jobs have been automated, eliminated, or moved to other states and countries. It’s in these places that the outsider message of an unconventional candidate promising a return to the way things used to be resonates most. Mike Williams earns $22 an hour as a maintenance worker at an Owens-Corning factory, along with health care and retirement benefits. But after a recent raise, his hourly pay has only recently returned to where it was a decade ago, when he

Australian parties remain neck and neck before polls

ANBERRA, Australia—Midway through a national election campaign in Australia, Prime Minister Malcolm Turnbull’s honeymoon with voters continues to wane, raising the prospect of the country having its fifth leader in just over three years. Opinion polls suggest the conservative coalition government remains neck-and-neck with the center-left Labor Party opposition since the July 2 election was officially called early last month, despite efforts by both sides to break out with a range of policy announcements. “People aren’t particularly engaged, neither leader particularly excites the people,” Deakin University political scientist Geoff Robinson said. The ruling Liberal Party enjoyed a bounce in opinion polls last September, when it replaced Tony Abbott, a gaffe-prone and socially conservative leader, with the more progressive Turnbull, but voters now appear increasingly disenchanted with the former merchant banker who came to power by agreeing with party powerbrokers not to shift his government to the left on policies, including on climate change and gay marriage. Turnbull, 61, declined to comment on the polls that show him slipping as Australians’ preferred choice as prime minister, while his rival, Labor leader Bill Shorten, inches up. “I am not going to be drawn into that kind of introspection,” Turnbull told Australian Broadcasting Corp. television late on Wednesday. “My job is to focus on the needs of Australians.” Bill Shorten, a 49-year-old former labor-union boss, boasted during a television debate with Turnbull last month of the unity Labor lawmakers have shown under his leadership while government lawmakers who backed Abbott openly criticize the prime minister. “There’s a big difference between me and Mr. Turnbull, I genuinely lead my party whereas your party genuinely leads you,” Shorten said. But while Turnbull has alienated many voters, he remains more popular than Shorten, who is dogged by his role as a party powerbroker who helped bring down two prime ministers during Labor’s last chaotic rule from 2007 until 2013. A poll by Sydney market research Galaxy Research published on Monday found that voters were evenly split between the government and Labor, while the proportion of respondents who preferred Turnbull to Shorten as prime minister had fallen 10 percentage points since early March to 45 percent. Shorten improved his standing as preferred prime minister by 6 percentage points to 30 percent. The poll was a nationwide survey of 1,867 voters and had a 2.4 percentage-point margin of error. But Liberal and Labor strategists agree that the ruling party is ahead in the crucial swing seats that decide elections. Australians don’t directly elect their prime minister. They vote for members of the House of Representatives, and the leader of the party that wins a majority becomes prime minister. Having a popular leader is key to achieving that majority. Election campaigns are short in Australia, although at eight weeks the current one is slightly longer than normal. AP

Pedestrians walk past a “for sale” sign on Elvis Presley Boulevard in Memphis, Tennessee. The US economy has added a healthy average of roughly 200,000 jobs a month since 2011. Yet, most have been either high-paying or low-paying positions. AP/Karen Pulfer Focht

worked as a welder. “I feel like I’m going backward rather than forward,” Williams, 51, said on a recent afternoon after finishing his shift. In March Williams voted for Trump in the state’s primary, which the real-estate billionaire won easily. One reason he backed Trump, he said, is he feels less secure than in the past, when more manufacturing work was available. “I remember when you could quit a job today and go to work somewhere else tomorrow,” Williams said. After seven years of national economic expansion—to the point where the Federal Reserve is raising interest rates again—the depth of such insecurity across America has caught many observers off guard. Said Carl Tannenbaum, chief economist at Northern Trust and

former economist at the Federal Reserve: “The averages certainly don’t tell the whole story.” Consider incomes for the average US household. They ticked up 0.7 percent from 2008 to 2014, after taking inflation into account. But even that scant increase reflected mainly the rise in income for the richest tenth of households, which pulled up the average. For most others, incomes actually decreased—as much as 6 percent for the bottom 20 percent, at a time when the economy was mostly recovering. In Memphis hiring resumed after the recession and the unemployment rate has declined to match the national figure of 5 percent. Yet, those figures, too, obscure as much as they reveal: Many of the new jobs, in Memphis and elsewhere, are in lower-paying industries and

are more likely to be part time or temporary. In Millington, a Memphis suburb, where Trump held a rally in February at a military airfield, residents complain that most of the available jobs are in the fast-food chains that dot Highway 51, the main thoroughfare. The US economy has added a healthy average of roughly 200,000 jobs a month since 2011. Yet, most have been either high-paying or lowpaying positions. By the end of 2015, the nation still had fewer middleincome jobs than it did before the recession, according to the Georgetown University Center on Education and the Workforce. That reflects what economists call the “hollowing out” of the work force, as traditional mid-level positions, such as office administrators, bookkeepers and factory assembly-

line workers, are cut in recessions and never fully recover their previous levels of employment. In Memphis jobs in the one-third lowest-paying industries, such as retail, restaurants and hotels, are the only category to have fully recovered from the recession, according to Moody’s Analytics. Higher- and middle-paying jobs still trail their prerecession levels. In the first half of the recovery, jobs grew 5.6 percent nationwide. Yet in the wealthiest one-fifth of zip codes, hiring jumped 11.2 percent, according to the Economic Innovation Group think tank. For the rest of the country, total jobs increased just 3.3 percent. “It’s hard to find an average city,” Tannenbaum says. The same is true for households. These data suggest that the postWorld War II trend of a steadily growing middle class, lifted by broader national prosperity, is reversing. Slightly fewer than half of adults now fall in the middle-class camp, according to the Pew Research Center, a shift that followed four decades of decline. In 1971 61 percent of households were middle class, according to Pew, which defines middle class as income between two-thirds and double the median household income. Chris Rice, 29, has worked steadily in the Memphis region for the past 10 years, all at temporary jobs. Rice most recently worked as a forklift driver for Electrolux and for Ceva Logistics, a warehouse firm. The Ceva job ended after the company lost a contract to distribute Microsoft’s X-Box. Rice said he was hopeful of getting a new temp job at a plant owned by printer manufacturer Brother International. Still, “I’d love to have a permanent job,” he said. “I’m tired of going from temp agency to temp agency when there’s no work.” AP

How Clinton, Trump match up TRUMP AP

ASHINGTON—It’s on, Clinton versus Trump. The general election season begins now, a war about to be fought in multiple arenas, five months of unpredictable, raucous and probably ugly skirmishes. Presumptive Democratic nominee Hillary Clinton starts with a slight poll advantage, but Donald Trump, her likely Republican opponent, has some advantages of his own.

Likability

Both candidates score historically, consistently unfavorable numbers in poll after poll. And last month’s Quinnipiac University survey found most people don’t think they can fulfill campaign promises. Moderate Republicans are wary of Trump. Young voters who flocked to Bernie Sanders, a Vermont independent senator running for the Democratic nomination, aren’t crazy about Clinton. “No matter which candidate you pick, you can cut the cynicism with a knife,” said Tim Malloy, assistant director of the Quinnipiac poll. n Advantage: None.

Campaigning

Clinton has the savvy and experience. Trump has prospered as the outsider who shatters time-honored campaign rules. Clinton, ever the wise tactician, scored last week with her speech denouncing Trump for his “bizarre rants, personal feuds and outright lies.” Trump stumbled badly when he criticized the ethnicity of a federal judge who’s overseeing a lawsuit against his now-defunct Trump University.

clinton AP Clinton has a skilled organization already at work. Trump is still building his. n Advantage: Clinton.

Temperament

Clinton is publicly steady and measured. That strikes many voters as cold and calculating. Others see her style as well-suited to being commander in chief. Trump’s break-the-China ways were a major draw for Republican primary voters. Citing the controversy over her private e-mail server while secretary of state, Trump tweeted last week, “Such bad judgment and temperament cannot be allowed in the WH [White House].” Clinton counters that Trump is “temperamentally unfit” for the presidency and “not someone who should ever have the nuclear codes.” Last month’s CBS NewsNew York Times poll found 48 percent saw Clinton as having the right temperament to be president, compared with 27 percent who viewed Trump that way. n Advantage: Clinton.

Domestic issues

Trump vows to repeal the Affordable Care Act and replace it with a series of steps Republicans have been pushing for years. Clinton counters that the act is working and only needs some adjustments, such as slowing the growth of out-of-pocket expenses. Trump would shrink the current seven income-tax brackets to four, with a top rate of 25 percent. Clinton would add a tax surcharge on incomes over $5 million. Both candidates’ views mirror long-held

positions by top officials of their parties. n Advantage: None.

Image

Clinton is the first woman to head a major party ticket, and she gets strong support from women over 50. Trump has a huge following among men and people without college educations. Clinton goes home to a fancy neighborhood in Westchester County, a New York suburb. Trump usually heads to the posh Trump Tower, towering over Fifth Avenue in midtown Manhattan. Clinton gets strong support from African-Americans and Hispanics. Trump doesn’t. Both candidates suffer because nearly two-thirds of voters in the CBS poll don’t find either honest or trustworthy. n Advantage: None.

Immigration

Trump wants a wall between the US and Mexico and a temporary ban on Muslims entering the United States. “I have a very hardline position,” he’s said. He’s also repeatedly attacked a judge hearing a lawsuit against him, because of the judge’s Mexican heritage, prompting many in his own party to call the remarks racist. Clinton wants a path to citizenship for most immigrants who are now in the US illegally. She’s supported by several major immigration-rights groups and can expect a big turnout from Hispanic voters. n Advantage: Clinton.

Foreign policy

Clinton has to defend her record as secretary of state from 2009 to 2013. Republi-

cans have blasted her for supporting the US withdrawal from Iraq, US policies toward Syria and the toppling of Libyan leader Moammar Gadhafi. Trump’s foreign policy is a work in progress. He pledges to spend less on “toppling various people,” calls American involvement in Iraq a disaster and vows to get tougher on trade. This one’s a battle between experience and hope. n Advantage: None.

Family

Clinton has Bill. Trump has his marital history. Trump won’t let Clinton forget her husband’s affair with intern Monica Lewinsky in the 1990s and subsequent impeachment. Bill Clinton drew as many favorable as unfavorable marks from voters in last month’s Quinnipiac poll. Trump is on his third marriage. But Trump’s children are active campaigners and popular with his supporters, and he routinely gathers the family at big events. n Advantage: Trump.

Risks

Trump’s mouth is his biggest risk. His insistence that federal District Judge Gonzalo Curiel has a “conflict of interest” because of his Mexican heritage triggered a firestorm among not only his opponents, but also many Republicans. Clinton’s biggest worry is the outcome of the FBI’s investigation into her use of the e-mail server. Should that be wrapped up this summer, and she is cleared, that controversy will fade. Trump’s proclivity to get into rhetorical trouble is less likely to go away. n Advantage: Clinton. TNS

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India, US can anchor stability in Asia–Modi

$107B

ASHINGTON—Indian Prime Minister Narendra Modi told the US Congress on Wednesday that the world’s two largest democracies can anchor stability and prosperity from the Indian Ocean to the Pacific in an aspirational speech, which glossed over continuing divisions in the relationship. Modi, who has ushered in closer bilateral ties since taking power two years ago, said India and the United States have overcome “the hesitations of history” and called for everstronger economic and defense links between the two countries. Speaking in English, Modi used dashes of humor, drawing a parallel between the rough-andtumble politics of his own nation and the US, which he described tongue-in-cheek as “harmonious” and well-known for bipartisanship. Modi, a keen advocate of yoga, also referenced cultural ties, citing estimates that “more Americans bend for yoga than to throw a curve ball.” Modi paid tribute to the role of Congress, including through a civilian nuclear deal in 2008 that lifted US export restrictions on nuclear technology to India and which is hoped to lead to a contract by mid2017 for the construction of six power reactors by US-based Westinghouse Electric Co. He also praised Congress for “refusing to reward” those who preach and practice terrorism. Although Modi avoided direct mention of Pakistan, he was alluding to lawmakers

who recently blocked a proposed, US-subsided, sale of F-16 fighter jets to India’s archrival. “A strong India-US partnership can anchor peace, prosperity and stability from Asia to Africa, and from the Indian Ocean to the Pacific,” Modi said. Modi’s 46-minute speech followed years of being shunned in the US because of religious violence in his home state. It came a day after a White House meeting with President Barack Obama and was followed by a lunch with congressional leaders and a reception hosted by the House and Senate Foreign Affairs committees. US-India relations have been transformed since Rajiv Gandhi in 1985 became the first of five Indian prime ministers to have addressed a joint meeting of Congress. During the Cold War, US was more focused on ties with Pakistan, and many in Washington believed India, with its “nonaligned” foreign policy, was far too friendly with the Soviet Union. Today the US and Indian militaries conduct more drills with each other than with any other nation. While India resists the notion

The volume of trade between India and the US in 2015

Vice President Joe Biden (left) and House Speaker Paul Ryan of Wisconsin (right) applaud Indian Prime Minister Narendra Modi during his address to a joint meeting of Congress on Capitol Hill in Washington on Wednesday. AP/Evan Vucci

of becoming a US ally, both nation share concern over China’s rise and over freedom of navigation in the Asia-Pacific region. Although Modi lauded both nations’ common democratic principles and hailed two heroes of nonviolence, India’s Mahatma Gandhi

and civil rights leader Martin Luther King Jr., he did not address congressional concerns, his government’s record on religious tolerance and other rights issues. “I wish there had been an emphasis on cooperating with the US and every other democracy on combat-

ing all human-rights abuses, especially human trafficking and slavery,” Republican Rep. Chris Smith of New Jersey said. But the overall response from lawmakers of both parties was positive. “We’re now standing shoulder-

to-shoulder in ways that no one would have imagined a generation ago,” Rep. Eliot Engel of New York, the top-ranking Democrat on the House Foreign Affairs Committee, said of the bilateral relationship. Modi described the US as an “indispensable partner” for India. He said his nation’s 1.25 billion people made India an “ideal partner” for US businesses. Trade has expanded dramatically in recent years, from $60 billion in 2009 to $107 billion in 2015, although the US remains concerned over restrictions on foreign investment and bureaucratic red tape. Modi did not read a passage from his prepared remarks that said he and Obama “have agreed” that making India a permanent member of the UN Security Council “has to be an intrinsic part of this century’s new reality.” It was not immediately clear why Modi dropped the reference. Obama first voiced support for Indian membership in 2010 and reaffirmed it on Tuesday, but it appears no closer to happening because of resistance from other council permanent members. At his meeting with Obama, the two leaders consolidated strong bilateral ties but fell short of major outcomes. India, the world’s third-largest carbon emitter among nations, said it would strive to formally join a global climate deal this year—as the US and China have said they will do—but it gave no ironclad commitment. The last Indian prime minister to address Congress was Modi’s predecessor, Manmohan Singh, in 2005. AP

Nasa takes 23,000-foot view of world’s coral reefs Africans in India face

battles with racism N

OCONUT ISLAND, Hawaii— Coral reefs have almost always been studied up close, by scientists in the water looking at small portions of larger reefs to gather data and knowledge about the larger ecosystems. But National Aeronautic Space Administration’s (Nasa) Jet Propulsion Laboratory is taking a step back and getting a wider view, from about 23,000 feet above. Nasa and top scientists from around the world are launching a three-year campaign on Thursday to gather new data on coral reefs like never before. Using especially designed instruments mounted on high-flying aircraft, the scientists plan to map large swaths of corals around the world, in hopes of better understanding how environmental changes are impacting these delicate and important ecosystems. The researchers hope to discover how environmental forces, including global warming, acidification and pollution, impact coral reefs in different locations by creating detailed images of entire reef ecosystems. “Coral [Coral Reef Airborne Laboratory] is an airborne mission to survey reefs at select locations across the Pacific,” Bermuda Institute of Ocean Sciences’ Eric Hochberg, who is principal investigator for the project, told The Associated Press (AP) on Tuesday. “The idea is to get a new perspective on coral reefs from above, to study them at a larger scale than we have been able to before, and then relate reef condition to the environment.” Hochberg and the project’s lead Nasa scientist Michelle Gierach were in Oahu’s Kaneohe Bay with the AP on Tuesday to gather baseline data in the water. While the primary science will be conducted using instruments that map the sea floor from above, the team must also take baseline measurements in the ocean to validate the data they get from the air, Gierach said. Her main role in the project

A patch of coral reef is shown in Hawaii’s Kaneohe Bay off the island of Oahu near Kaneohe, Hawaii. AP/Caleb Jones

is to decipher the data gathered from the aircraft. “PRISM, the instrument that we’re using...is the state-of-the-art instrument for addressing coastal and inwater science questions,” Gierarch said. “Coral wouldn’t be possible without an instrument like PRISM, it’s really the heart and soul of the project.” Coral reefs drive many tourist economies around the world, but they provide much more than pretty places to dive and snorkel, Gierach said. Reefs are critical habitat for the majority of the fish humans consume and also protect shorelines from dangerous storm surges and rising ocean levels. Recently, scientists have developed pharmaceutical applications from coral reefs, including pain killers that aren’t habit forming, Hochberg said. “Just realizing that though you may not see a coral, that you may not have your backyard be within this beautiful environment that we’re in right now, corals are impacting

you, they are globally important,” Gierach said. “We have to understand how they’re changing so we can make some managed decisions about their future.” Reefs are among the first ecosystems to be dramatically and directly impacted by global warming, according to the researchers. The International Society for Reef Studies Consensus Statement on Climate Change and Coral Bleaching, published in 2015, said that over the past few decades, up to 50 percent of coral reefs have been “largely or completely degraded by a combination of local factors and global climate change.” Julia Baum, assistant professor of biology at the University of Victoria in British Columbia, has done extensive research on coral reefs and told the AP on Wednesday that the data gathered from this kind of project could prove highly valuable for international reef scientists and the conservation community. “I’m a huge proponent of open

source data,” Baum said. “To me, the application of this technology to coral reefs holds great promise, but to fulfill that promise the data has to be made openly available to the scientific community.” The Coral researchers said all data will be publicly available and will take about six months to process once captured. Baum acknowledged that a lot of coral-reef science has been limited by the lack of broad data sets like this project plans to provide. “As scientific divers we’re limited by the depth we can work at and the amount of bottom time that we have while we’re diving, so much of underwater marine science, especially on coral reefs, is a painstakingly slow process,” Baum said. “This CORAL can’t replace scientists in the water, but it can provide a very high-level, complementary type of data.” The Coral team will study the reefs of Hawaii, Palau, the Mariana Islands and Australia’s Great Barrier Reef over the next three years. AP

EW DELHI—Fear and anger. Those are the emotions that shadow Odole Emmanuel Opeyemi every time the Nigerian man steps out of his New Delhi apartment. Every encounter with Indians is fraught with those feelings, whether he’s taking an auto rickshaw or the Metro, buying vegetables or trying to find a spot to park his car. “When I sit down in the Metro, people sit away from me. Even old men and women will stand up as if any contact with me will give them a disease,” he said, describing the mixture of fear and revulsion with which most Indians treat Africans. Opeyemi is among hundreds of thousands of Africans in India, drawn by better education and work opportunities. For them, rampant racism is a daily battle in a country where their dark skin places them at the lower end of a series of strictly observed social hierarchies. Indians routinely perceive Africans as either prostitutes or drug dealers. The daily indignities Africans suffer usually go undocumented both by the police and local media. That changed on May 20, when Congolese student Masunda Kitada Oliver was fatally attacked in a dispute over hiring an auto rickshaw in New Delhi. Three men who insisted they had hired the vehicle beat him up and hit him on the head with a rock, killing him, according to police. The death made the city’s African students, diplomats and business owners rally together demanding quick justice. The African Heads of Mission in New Delhi issued a statement asking the government to address “racism and Afro-phobia” in the country. “Given the pervading climate of fear and insecurity in Delhi, the African Heads of Mission are left with little option than to consider recommending to their governments not to send new students to India, unless and until their safety can be guaranteed,” the statement said. The killing and the outrage it sparked drew an unusually prompt reaction from local police and India’s foreign ministry. Two men suspected in the attack were ar-

rested within a day, while a third remains at large. Minister Sushma Swaraj tweeted that her ministry asked for “stringent action against the culprits.” But the ministry also said all criminal acts involving Africans should not be seen as racial in nature. The bad press the country got as a result of the killing prompted India’s glacial government machinery to move quickly to try to address the issue. An India-Africa art exhibition was cobbled together at government expense and on short notice. A protest planned by African students in the Indian capital was put off after government officials reached out to African student groups. The police and government began holding workshops in neighborhoods across the city to try to sensitize local residents about their African neighbors. There were other well-publicized examples of anti-African prejudice in India before Oliver’s death. In February a Tanzanian woman was beaten and stripped naked by a mob in the southern city of Bangalore after a Sudanese student’s car hit an Indian woman. In September 2014 a video of three African men being beaten inside a security booth at a New Delhi Metro station went viral. For several minutes a large mob beat the men with bare hands and sticks and shoes as they climbed up the walls of the glass booth in terror. The police were absent. These incidents made it to the local newspapers. Hundreds more do not. Prejudice is open in India. The matrimonial columns of the newspaper are strictly segregated along caste lines. Landlords in cities like Delhi and Mumbai deny homes to people based on race and religion. Indians from northeastern India, who look different because of their Asian features, are routinely harassed and have to endure being called names on the streets. But the worst kind of discrimination is reserved for the Africans. In a country obsessed with fair skin and skin-lightening beauty treatments, their dark skin draws a mixture of fear and ridicule. AP

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Friday, June 10, 2016

Palestinians First time in TWO years kill 4 Israelis in Tel Aviv, 5 wounded

ERUSALEM—Two Palestinians opened fire near a popular open-air market in central Tel Aviv on Wednesday night, killing four Israelis and wounding at least five others in one of the deadliest attacks in an eightmonth wave of violence. The shooting occurred at the Sarona market, a series of restored buildings that have been transformed into a popular tourist spot filled with crowded shops and restaurants. The complex is across the street from Israel’s military headquarters and is often filled with tourists and young soldiers in uniform. “Two terrorists opened fire at civilians,” Tel Aviv district police commander Moshe Edri said, adding that one of the detained attackers was being treated for a gunfire wound. Police had initially said there might be a third attacker, but later ruled that out after extensive searches and examining security camera footage. Tel Aviv’s Ichilov Hospital said the four slain Israelis had been brought to the facility in critical condition and later died of their wounds. Prime Minister Benjamin Netanyahu met with his defense minister and security leaders shortly after the attack and then traveled to the scene. He called the attack a “cold-blooded murder by despicable terrorists,” according to a statement from his office. Hamas, the Islamic militant group that rules Gaza, welcomed the attack but did not claim responsibility for it. Hamas official Mushir al-Masri called the shootings a “heroic operation” and the group later issued an official statement promising the “Zionists” more “surprises” during the Muslim holy month of Ramadan. Meital Sassi told Channel 10 TV she was out with her family celebrating her son’s birthday at the Sarona market when she heard shots and “immediately understood it was a terror attack.” “We ran like lightning with the baby and the stroller,” she said. “I yelled at people who didn’t understand what was happening to run.” Channel 10 aired CCTV footage from inside a restaurant showing two men in suits shooting at diners as they run away from their tables. One of the attackers shoots a man on the ground and waves a knife before running out. Shlomi Hajaj, director of the market, told the station that security guards at the entrance prevented the attackers from entering, “averting a bigger disaster,” as the market was packed with people. Police said the two gunmen were members of the same family from the Palestinian village of Yatta, near the West Bank town of Hebron, which has been a flashpoint for violence in recent months. Over the last eight months Palestinians have carried out dozens of attacks on civilians and security forces, mostly stabbings, shootings and car ramming assaults that have killed 32 Israelis and two Americans. About 200 Palestinians have been killed during that time, most identified as attackers by Israel. The assaults were once near-daily incidents but they have become less frequent in recent weeks. Most of the attacks have been in east Jerusalem or the West Bank, territories Israel seized from Jordan in the 1967 war, which the Palestinians want for their future state. But Tel Aviv, Israel’s most cosmopolitan city, has not been spared. A member of Israel’s Arab minority went on a shooting rampage on New Year’s Day, killing three people. And in March a Palestinian went on stabbing spree, killing an American and wounding seven other people before he was shot and killed. US State Department Spokesman Mark Toner condemned the “horrific terrorist attack” in a statement, saying “cowardly attacks against innocent civilians can never be justified.” UN Secretary-General Ban Kimoon said in a statement he was shocked that Hamas leaders “chose to welcome this attack.” AP

Iraqi troops enter Fallujah

A soldier from Iraq’s elite counterterrorism forces looks from the gun turret of a Humvee as troops gather on the edge of the Shuhada neighborhood in Islamic State-held Fallujah, Iraq, just before special forces pushed into the district on Wednesday. AP/Maya Alleruzzo

AYMIYAH, Iraq—A column of black Humvees carrying Iraqi special forces rolled into southern Fallujah on Wednesday, the first time in more than two years that government troops have entered the western city held by the Islamic State (IS) group. The counterterrorism troops fought house-to-house battles with the militants in the Shuhada neighborhood, and the operation to retake the city is expected to be one of the most difficult yet. “Daesh are concentrating all their forces in this direction,” said Gen. Haider Fadel, one of the commanders of the counterterrorism forces, using the Arabic acronym for the IS militants. Prime Minister Haider al-Abadi promised a swift victory when he announced the start of the operation on May 22 to liberate Fallujah, about 65 kilometers west of Baghdad. But the complexity of the task quickly became apparent. Although other security forces from the federal and provincial police, government-sanctioned Shiite militias and the Iraqi military have surrounded the city, only the elite counterterrorism troops are fighting inside Fallujah at this stage of the operation. And they are doing so under the close cover of US-led coalition airpower. “We expect to face more resistance, especially because we are the only forces entering the city,” Fadel said.

The IS group has suffered setbacks on several fronts in the region where it captured large swaths of territory two years ago. In northern Syria US-backed rebels made a final push on Wednesday in the town of Manbij—a key waypoint on the IS supply line to the Turkish border and its self-styled capital of Raqqa. And in Libya, forces loyal to a United Nations-brokered government have advanced deep inside the coastal city of Sirte, the main stronghold of the IS group’s local affiliate. Fallujah is one of the last IS strongholds in Iraq. Government forces have slowly won back territory, although IS still controls parts of the north and west, as well as the second-largest city of Mosul. The sky above Fallujah’s Shuhada neighborhood on Wednesday filled with fine dust and thick gray smoke obscuring minarets and communication towers as artillery rounds and volleys of air strikes cleared the way for Iraqi ground forces. At a makeshift command center, Iraqi forces coordinated the operation via handheld radios, with Australian coalition troops stationed at

a nearby base. One of the Australians listed the casualties among the militants. “Two KIA [killed in action], one wounded with a missing arm—his right arm,” the unidentified Australian radioed after calling in an air strike on IS fighters. A frontier city on the easternmost edge of Anbar province, Fallujah has long been a bastion of support among its mostly Sunni population for antigovernment militants following the 2003 US-led invasion that toppled Saddam Hussein. It is symbolically important to both sides: Many of the Iraqi forces fought al-Qaeda in Iraq—the predecessor to IS—in this same territory, and the city was the scene of some of the bloodiest urban combat with US forces in 2004. Its high value is one of the reasons IS has deployed well-trained snipers and built extensive networks of tunnels to defend it. “We are having to fight two battles—one above the ground and one below,” Iraqi Maj. Ali Hamel of the military’s intelligence wing said. While Fallujah’s sparsely populated northern outskirts were recaptured quickly by Iraqi forces, IS used the initial days of the operation to pull the majority of its fighters into the city center, taking about 50,000 civilians with them for use as human shields. Once Iraq’s special forces began trying to punch inside the city limits, the pace of operations slowed. In past battles with IS in places like Ramadi, Fadel said, one of the signs that the militants were losing their grip on territory was when civilians begin fleeing the city center. “So far, we haven’t seen that” in Fallujah, he said. “Once we do, it will only be a matter of time.” The IS militants “had chosen their battle space,” a counterterrorism officer said, explaining how the

50,000

The number of Iraqi civilians who were taken by Islamic State forces as human shields group set up many defensive positions in the southern outskirts to try to bog down the Iraqi forces before they even had a chance to enter. That southern neighborhood of Naymiyah, which was secured by Iraqi forces on Sunday, bears the scars of a protracted fight, a nowcommon sight in Iraqi territory that has been won back from IS. Walls stood shredded by artillery fire, with almost every home either partially collapsed or pancaked. Craters from air strikes left many main roads unusable. Convoys of armored Humvees were forced to use the neighborhood’s unpaved side streets instead, churning up the soft sand beneath their treads. “We’re expecting another big fight like this one before Fallujah falls,” the officer said, explaining that he anticipated Iraqi forces would encounter another heavily fortified neighborhood. The officer spoke on condition of anonymity because he was not authorized to brief reporters. On Wednesday evening the prime minister visited the recently retaken territory. Al-Abadi was joined by Lt. Gen. Abdel Wahab al-Saadi, the counterterrorism commander of the Fallujah operation. It was al-Abadi’s fourth trip to the area since the operation began. Despite territorial victories against IS, the Iraqi leader continues to grapple with a deepening political crisis and growing social unrest in Baghdad. AP

UN: Setbacks fail to weaken IS strategically

NITED NATIONS—The Islamic State (IS) extremist group hasn’t been weakened strategically or irreversibly despite military setbacks in Iraq and Syria, the UN political chief said on Wednesday. Undersecretary-General Jeffrey Feltman told the UN Security Council that the threat posed by IS and its associates “remains high and continues to diversify,” and the flow of arms and ammunition into territory held by the group remains a serious concern. He said the military setbacks in Syria and Iraq, where IS controls sig-

nificant swathes of territory, “could be one of the factors behind the marked increase in the rate of returnee foreign terrorist fighters.” As a result of the setbacks, Feltman said, IS may also be moving to a new phase, elevating the role of its affiliates, moving funds out of conflict areas, “and increasing the risk of complex, multiwave and international attacks.” He was presenting Secretary-General Ban Ki-moon’s report on IS activities over the last four months. For the first time since the declaration of its so-called Caliphate in June

2014, the report said the group is under financial pressure, with international air strikes reducing oil production by between 30 percent and 50 percent. IS is trying to compensate for lost oil revenue by intensifying efforts at “taxation” and extortion, Feltman said. The extremist group is also getting an unknown amount of revenue from smuggling antiquities, not only from Syria and Iraq but possibly from Libya and Yemen, as well, he said. The report emphasizes that IS may attempt to generate revenue from kid-

napping international hostages, moving funds internationally through formal and informal channels, and converting local currency into gold or other commodities which can be moved around the world easily, Feltman said. He said significant numbers of “foreign terrorist fighters” continue to travel to join IS in Syria and Iraq, often using indirect journeys and false or stolen travel documents. The report stressed the risks that returning IS fighters pose to regions such as southeast Asia and countries such as Libya, Feltman added. AP

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Saudi beset by increase in terror attacks

ASHINGTON—Saudi Arabia is fending off a growing number of terror attacks inside its borders, even as it tries to lead a multinational counterterrorism coalition in a financial and physical battle with Islamic State (IS) and al-Qaeda, a senior Saudi official said on Wednesday. The ultraconservative country is the head of a 34-nation effort to combat terrorism in the Middle East and a key participant in the US-led campaign to defeat the Islamic State in Iraq and Syria. But those efforts have not kept Saudi Arabia itself safe from terror attacks, according to Maj. Gen. Mansour al Turki, a senior Interior Ministry official who spoke by phone from Riyadh with reporters gathered at the Saudi Embassy in Washington. Turki said 26 of the 63 terror attacks his country has suffered since 1932 took place in the past two years, and that nine of those had taken place in the past six months. “Most of these attacks targeted police persons or policemen or police facilities,” he said. He added that the attackers were “trying to scare off our people.” Turki’s comments offer a rare glimpse into the insular kingdom’s internal struggle against terrorism and come as American officials once again are discussing possible Saudi links to the September 11, 2001, terror attacks in the United States. Members of Congress are urging President Barack Obama to make public a 28-page portion of an 838-page report on those attacks that details allegations of Saudi contacts with the 9/11 hijackers, 15 of whom were Saudi subjects. The section was classified at the time the report was done and has never been shared with the public. North Carolina Republican Rep. Walter Jones, one of the lawmakers trying to secure public access to part of the report, met with Director of National Intelligence Gen. James Clapper in May and urged him to declassify the report. Jones had initially petitioned Obama to declassify parts of the report in a 2014 letter. Also advocating for release of the pages is former Sen. Bob Graham, a Florida Democrat, who chaired the congressional panel that produced the report. Turki declined to respond to questions about the report, including one about allegations reportedly in the classified section that a member of the Saudi royal family gave money to a person who had been in contact with two of the hijackers. “I’m not really involved in the socalled white paper and I would not like actually to comment on something that I’m not really following or involved in in any way,” he said. Saudi officials insist that they are victims of terrorism themselves. “Unfortunately, yes, we had 26 attacks, terrorist attacks, in Saudi Arabia within the last two years and… more than a hundred citizens or policemen were killed or injured,” Turki said. The relationship between the United States and Saudi Arabia is a complex one. The kingdom is one of only five countries that provide support for anti-Islamic State operations inside Syria. Kingdom officials also are leading a controversial military intervention in Yemen for which the United States has provided logistical and intelligence support. But legislation has been proposed in Congress to limit arms sales to Saudi Arabia and to allow Saudi Arabia to be sued in court over alleged support for the hijackers, a notion that has angered Saudi officials. Obama has said he would veto the bill, which has passed the Senate but has yet to come before the House. “Saudi Arabia represents a paradox for US counterterrorism. On the one hand, the Saudi government is a close partner of the United States on counterterrorism,” Center For Middle East Policy Research Director Daniel Byman said during a May congressional hearing on the US-Saudi Arabia counterterrorism relationship. “On the other hand, Saudi support for an array of preachers and non-governmental organizations contributes to an overall climate of radicalization, making it far harder to counter violent extremism. TNS

Ex-U.S. Marine prime suspect in murder of Okinawa woman

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OKYO—Japanese police said on Thursday that a US military contractor arrested on suspicion of abandoning the body of a young woman on Okinawa is now officially the prime suspect in her murder and rape, in a high-profile case that has sparked outrage on the southern island. Anti-US military sentiment runs deep on Okinawa, where residents have long complained about the heavy presence of US military bases and crime linked to them. The arrest took up a significant part of a Japan-US summit that was held a week later, causing President Barack Obama to apologize. The US Marines on Okinawa issued an order two days later restricting celebrations and offbase drinking. The arrest last weekend of a US sailor for alleged drunken driving has added to the anger. Following that arrest, the US Navy also banned all drinking of alcohol by its personnel in Japan, on and off base, and restricted off-base activities. Police said on Thursday that Kenneth Shinzato, who is also a former Marine, is now the prime suspect in the murder and rape of the 20-year-old woman whose body was found last month, three weeks after she disappeared after messaging her boyfriend that she was going for a walk. AP

A9 | Friday, June 10, 2016 • Editor: Lyn Resurreccion

The North Atlantic Treaty Organization (Nato) German warship FGS Bonn (left) is escorted by a rescue boat, as it departs from the harbor of the city of Izmir, Turkey. The FGS Bonn is part of the Nato flotilla patrolling the Aegean Sea in an effort to curb migrant activity between Turkey and Greece. AP/Markus Schreiber

Big Brussels neighbors stepping up cooperation

RUSSELS—They both have their headquarters in Belgium’s capital, and they profess many of the same values and goals, but, until recently, the North Atlantic Treaty Organization (Nato) defense alliance and the European Union (EU) economic bloc have acted like wary neighbors with little to say to one another.

That’s despite the fact that 22 prosperous Western democracies with more than 450 million citizens are members of both organizations, and both have been key to building and keeping the postwar order in Western Europe. This summer, the old standoffish ways are to change dramatically and the keyword will be cooperation, primarily because of Russia’s new military might and assertiveness, the threat of armed Islamic extremism and Europe’s continuing migration crisis. Some in the EU in the past have seen Nato as a Trojan horse for the trigger-happy United States to keep exercising domination over Europe. Meanwhile, some at Nato saw the EU—which also has security and military responsibilities—as a potential competitor. “Neither of these two institutions that are separated by, what, 2 miles or something here in Brussels, should be separated by the kind of institutional distance that we’ve seen in the past,” Douglas Lute, US ambassador to Nato, said recently. When US President Barack Obama and other Nato leaders sit down together in Warsaw next month, the two multinational groupings should

formally agree to cooperate in several fields, including fighting new threats to their own citizens’ security and helping bolster the defense and law-enforcement institutions of fragile states, like Libya and Iraq. “We need to take our cooperation to a higher level, and that’s exactly what we are working on now,” Nato Secretary-General Jens Stoltenberg said, as he hosted a visit by the EU’s foreign policy chief Federica Mogherini, to alliance headquarters last month. On Wednesday Stoltenberg planned a closed-door meeting with top EU officials Donald Tusk and Jean-Claude Juncker. Mogherini, a former Italian foreign minister, has said the official calendar this summer will provide “excellent synergy” for forging the better working relationship between the two international organizations that she and Stoltenberg have advocated. The week before Nato’s July 8 and 9 summit, Mogherini is scheduled to present the EU’s first redrafted global security strategy in 13 years to a meeting of the bloc’s 28 leaders in Brussels. The new EU document is ex-

pected to take note of a dramatically altered strategic landscape: one where Russia is an increasingly worrisome neighbor, and where the IS extremist group can exploit the territorial enclave it has carved out in the Middle East to stage bloody attacks in European capitals, including Brussels itself. “No country alone, and not even a united Europe, can carry the whole world on its shoulders,” Mogherini said in a major policy address she delivered in Paris in April. She predicted that “our cooperation with the US and Nato can only grow stronger.” Already this year, Nato and the EU have reached formal agreements on the swift exchange of information in the event of cyber attacks, as well as deployment of alliance warships to the Aegean Sea to help stop human traffickers from bringing people from Turkey to Greece. Institutional relations between Nato and the EU were launched in 2001, and in 2010 Nato allies expressed their determination to improve the Nato-EU strategic partnership. But only recently has there been much payoff. “We have concluded more arrangements in the past three months than in the previous 13 years,” Stoltenberg said last month. “We can and must do more.” Already, Nato military and civilian experts are pondering how they can use lessons learned in the Aegean to support Operation Sophia, an EU action mounted to shut down people-smuggling operations in the central Mediterranean. Work is also under way to draft “playbooks” to help Nato and the EU closely coordinate their response to so-called hybrid threats—the use of nonconventional tactics, as well as military means to achieve a strategic objective—and react quickly in tandem when they occur. “This focuses on informationsharing, civil preparedness, cyber and strategic communications,” Nato Spokesman Oana Lungescu

450M

The number of citizens who are members of both the North Atlantic Treaty Organization and the European Union

said. “The idea of the playbooks is to identify who does what if our nations and organizations come under hybrid attack.” Russia’s prowess in mobilizing nonmilitary and unconventional assets—including social and mass media, energy and other economic resources and civil organizations, showcased in the Kremlin’s 2014 takeover of Crimea—has been of particular concern to both Nato and the EU. “What these organizations are discovering is that Nato has some capabilities, the EU has others, more in the civilian component, and that the organizations are highly complementary if they work together,” said Heather Conley, a former US deputy assistant secretary of state. A joint statement is being prepared for signature in Warsaw, said an alliance official who was not authorized to make public remarks and spoke on condition of anonymity. That document is expected to focus on specific areas for future pooled efforts, including countering hybrid and cyber threats, increasing maritime security and helping partner nations build their military. At both Nato and the EU, “pragmatism finally has sort of taken hold,” said Conley, director of the Europe Program at the Washingtonbased Center for Strategic and International Studies. She cautioned, however, that “it’s going to take quite a while for these two organizations to really figure out their modus operandi in the future.” AP

Egypt rights group says extrajudicial killings surged to 754 in 2016

AIRO—An Egyptian rights group that treats victims of torture said on Wednesday that extrajudicial killings by security forces have surged, with 754 people killed, so far, this year. The Nadeem Center said it had documented the cases based on print, online and social-media reports. It said there were 326 such killings in all of 2015. In a statement attached to its report, it called for “justice” for what it

described as “crimes” of the state. Aida Seif el-Dawla, a psychiatrist and one of the center’s cofounders, said by telephone that “most of the killings were from shootings or air strikes” that took place in the troubled Sinai Peninsula, where security forces have been battling a powerful local affiliate of the Islamic State group. Egyptian officials could not immediately be reached for comment. Authorities have ordered the

Nadeem Center closed over its human-rights advocacy but it is still operating as it contests the order in court, with a hearing scheduled for July 10. Egypt denies accusations by local and human-rights groups that torture is widespread in its detention facilities, saying there are only isolated incidents and that perpetrators are disciplined. President Abdel-Fattah el-Sissi has overseen a broad crackdown on dissent

since 2013, when he led the military overthrow of his Islamist predecessor. Security forces have arrested thousands of Islamists and killed hundreds while dispersing protests. The campaign has also increasingly targeted secular activists who criticize the former general’s rule. Authorities argue that they are acting to bring stability after five years of turmoil following the 2011 pro-democracy uprising that toppled longtime autocrat Hosni Mubarak. AP

US germ sleuths go high-tech as labs get DNA sequencers

fter salmonella poisoned people in Minnesota in 2014, state germ sleuths already had a suspicion of what the culprit might be: raw, stuffed chicken that had caused close to half a dozen earlier outbreaks. The question was, where had it come from, and who still had it in their freezers? Detailed DNA analysis showed six people were infected with an identical salmonella germ found on meat labeled chicken Kiev. Using a technology called whole genome sequencing, Minnesota health officials were able to determine precisely which cases were linked to the outbreak and track the infections back to a manufacturer. A health alert was issued, product was pulled from shelves, tested and recalled. The outbreak was halted with only one hospitalization for salmonellosis. Now state health labs want to use the same technology to identify even more dangerous and insidious bacterial strains: those with drug resistance. Computer analysis of complete genomes of bacteria is enabling diseasetrackers, like Medus, to match strains collected from patients, food, animals and the environment, and identify outbreaks, as well as their likely source and mode of transmission. It’s giving scientists an earlier jump on emerging pathogens, especially those not stopped by life-saving antibiotics. Failure to act on drug-resistant infections will lead to 10 million extra deaths a year and cost the global economy $100 trillion by 2050, a report released by the United Kingdom government in February found.

Medicine threat

“I don’t think you can overstate the severity of the risk of antibiotic resistance,” Tom Frieden, director of the Centers for Disease Control and Prevention (CDC), said in a telephone interview. “It is not just about the infections that people may get that are hard to treat—pneumonias, urinary tract infections, skin infections— it’s actually about the fabric of modern medicine, because we assume we can treat infections that come along with transplants, cancer chemotherapy and arthritis treatments, but that assumption is increasingly incorrect.”

Illumina, Thermo Fisher

With antibiotic-resistant bacteria causing 2 million illnesses and about 23,000 deaths a year in the US, the government is beefing up surveillance in public health labs across the country. By 2018, it wants all states to have the sequencing capacity, with funds appropriated by Congress to support the purchase of next-generation devices, including platforms from Illumina Inc. and Thermo Fisher Scientific Inc.’s Life Technologies unit. It’s a vital public health need, said Carlota Medus, an epidemiologist with the Minnesota Department of Health, who worked on the 2014 chicken Kiev case. “Whole genome sequencing cuts out all the noise,” she said in a telephone interview. “It helps us know that what we’re seeing is real.” Infections from stuffed chicken recurred twice in 2015, and one of them showed signs of drug resistance. Medus wants to use the power of whole genome sequencing to quickly identify which cases

are connected—and the most virulent. Researchers at the Walter Reed Institute of Research last month reported using whole genome sequencing to find the first US case of a bacterial infection harboring the so-called mcr-1 gene that renders powerless the last-resort drug colistin. The same gene also turned up in gut bacteria from a pig. The finding was made on a RS II unit, a so-called long-read sequencer from Pacific Biosciences of California Inc., and a MiSeq benchtop sequencer from Illumina.

Outdated technology

The new bioinformatics tools are replacing a less-precise technique for comparing DNA called pulsed-field gel electrophoresis, said Alfred DeMaria, Massachusetts’s state epidemiologist. The method uses an electrical field to push DNA fragments of different sizes into groups, so that different organisms create “fingerprint” patterns in the gel. The technique is “becoming obsolete,” DeMaria said. “Everyone is using whole genome sequencing. We can recognize more subtle relationships between organisms. We cannot only tell that two salmonella came from the same source, we can tell which of them has been around longer.” CDC and its partner agencies demonstrated the utility of whole genome sequencing with a project that began in September 2013, in which gene-sequence data was coupled with epidemiological information from fresh cases of listeria, another bacterium that causes food-borne disease, to identify clusters and solve outbreaks.

‘Success story’

“If you look at listeria, it’s a real success story,” CDC’s Frieden said. “There are people alive today in America who would be dead if it was not for the advanced molecular-detection program that we’ve had that’s allowed us to quickly identify outbreaks and get contaminated products off the market.” “It’s a new world out there,” Frieden said. “We’re really doing things which were almost unimaginable just a few years ago.” The program was so successful that the government decided to expand it to cover other food-borne pathogens, such as salmonella. Data gathered from human, food and environmental sources could be shared among CDC’s research partners on a cloud-based platform, he said. “We are very excited about this and think it’s going to teach us a lot,” said Robert Tauxe, director of the CDC’s division of food-borne, water-borne and environmental diseases in Atlanta. Last year nine listeria outbreaks were detected, whereas only two to three were previously uncovered annually. “We are finding more outbreaks than we were before and we are finding them when they’re smaller,” he said.

$100K units

The cost of the technology has fallen, making it more affordable for routine public health applications, Tauxe said. The MiSeq unit from Illumina costs about $100,000, much less than the more meticulous long-read devices from PacBio, which the CDC and Food and Drug Administration use to generate “gold-standard” references for outbreak detection and surveillance analyses. These can go for as much as $750,000. Bloomberg News

A10 Friday, June 10, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

USA is dumping toxic e-waste

he Philippines was forced to deal with the issue of more than 1,000 tons of Canadian garbage being shipped here for disposal in 2013. It took two years for the situation to be resolved, as apparently the Philippine government worked with the Canadians to dump their waste on and in our soil. At the time, the Bureau of Customs labeled the shipment as “contraband,” but was overruled by the Philippine government. Further, it was claimed that the government had certified the garbage as “nontoxic” or nonhazardous. However, at the time, Angelica Carballo-Pago, communications manager for the Manilabased environmental watchdog group Ban Toxics, insisted that the rubbish contained “electronic waste” that the local landfill was not allowed to process. The issue quietly disappeared presumably along with the Canadian garbage. It appears, though, that more potentially toxic material is literally being dumped in Asia by the Americans. “Recycle” has been an environmental rallying cry for decades and has a useful purpose both for economic reasons and to preserve resources. But recycling is not all that it appears to be. A recently released report by the non-governmental organization Basel Action Network (BAN) concludes that “recycling” may only mean “dumping in someone else’s backyard.” BAN is particularly interested in what happens to electronic waste. In a two-year study, BAN discovered that a recycling program from Dell Computer —“Dell Reconnect”—did not recycle much. Last year BAN placed 200 GPS devices in discarded computers, printers and monitors to track where this “recyclable” equipment ended up. “What the investigation found was that about a third of the items were illegally exported from the United States, generally ending up in independent shops and junkyards in Southeast Asia.” One GPS specifically placed on an item donated to Dell Reconnect was tracked to a salvage location outside of Hong Kong. Workers were not involved in recycling; they were simply smashing used printers to pieces, while releasing clouds of toxic printer ink. “Ultimately, BAN’s tracking investigation revealed that 65 US recyclers illegally shipped e-waste to China, Thailand, Pakistan, Taiwan, Mexico and Kenya. Of the 28 electronic GPS-monitored devices dropped off by Puckett with Dell Reconnect, six went abroad—to Hong Kong, Taiwan, China and Thailand.” The Hong Kong government acknowledges that in the past three years, 21 cargo loads of illegal e-waste shipments have been intercepted and sent back to the US. Twenty-one loads were caught; no word on how many slipped through. We are both thankful and a little surprised that none of the GPS-tracked shipments made it to the Philippines. But we must be vigilant against making sure that we do not allow any sort of American hazardous garbage to enter our country. Obviously, there is big money for the corrupt both in and out of government with this illegal enterprise.

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Come clean James Jimenez

spox

ith the passing of the deadline for the candidates’ submission of their Statements of Contributions and Expenditures (SOCEs) last Wednesday, the 2016 election period also finally drew to a close. The 2016 national and local elections are now truly over, except—as they say—for the shouting. At the level of national positions—President, Vice President, senator and party-list representative—the overall rate of submission was not as impressive as it could have been. As of 6:30 p.m. of June 8, 2016, President-elect Rodrigo R. Duterte, Vice President Jejomar C. Binay, and Sens. Miriam Defensor-Santiago and Grace Poe-Llamanzares had all submitted their respective SOCEs. The vice-presidentiables all accounted for their contributions and expenditures, as well, Sens. Alan Peter Cayetano, Francis G. Escudero, Gregorio B. Honasan, Ferdinand R. Marcos and Antonio F. Trillanes IV, and Vice President-elect Maria Leonor G. Robredo all managed to

hand in their documents before the receiving desks of the Commission on Elections (Comelec) closed down. Unfortunately, the compliance of senatorial candidates and party-list Organizations left much to be desired, with only 28 senatorial hopefuls beating the deadline, and only 80, out of more than a hundred, party-list organizations submitting their statements. This, even though the Comelec softened its initial position and allowed submissions to continue past the original 5 p.m. deadline. The failure to submit the SOCE has consequences, of course, but this level of adherence to the rules serves to underscore one of

Typically, when rules are not obeyed, the easiest to blame will be the organization charged with enforcing those rules. And prior to the elections of 2013, I would not take issue with that—particularly in the case of SOCEs—except to point out that the dilution of the applicable laws made enforcement practically futile. the perennial difficulties encountered by the Comelec: noncompliance with the published and wellknown rules. Typically, when rules are not obeyed, the easiest to blame will be the organization charged with enforcing those rules. And prior to the elections of 2013, I would not take issue with that—particularly in the case of SOCEs—except to point out that the dilution of the applicable laws made enforcement practically futile. Where the law once specifically provided that winning candidates who didn’t submit their statements would not be able to assume office, there is now a void. As things stand now, the failure to submit SOCEs is essentially punishable only with a

fine ranging from a thousand pesos to a measly P60,000. Now, ordinarily, P60,000 is not an insignificant amount, but when you take into consideration that—depending on the position being aspired to—candidates are allowed to spend more than half a billion, well, you can see how P60,000 might not inspire fear. Quite the reverse, in fact. Without the SOCE, it could take years to determine whether overspending has occurred, not to mention how long it would take to actually build up and win a case against the offender. Paying the fine, therefore, would allow the offender to live to fight again, as it were. Since the 2013 polls, however, the Comelec has been steadily toughening up enforcement of the SOCE rule. But as the recently concluded election shows, it can use legislative help. More specifically, it can be hoped that the incoming Congress would turn its attention to amending this particular aspect of the rules by enacting tougher laws that actually require candidates to come clean with their expenses. James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

Opinion BusinessMirror

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On the rhetorical and the empirical

Being wasted on the young Tito Genova Valiente

annotations EAGLE WATCH By Luis F. Dumlao | Dean, John Gokongwei School of Management & Ser Percival K. Peña-Reyes | Lecturer, School of Social Sciences

N May 12 the incoming administration of President-elect Rodrigo R. Duterte (PRD) announced that it would assemble a Cabinet patterned after Canadian Prime Minister Justin Trudeau’s. PRD Spokesman Peter T. Laviña supposedly mentioned the following: that 1) PRD wanted “young people”; 2) PRD would promote gender balance, such that the Cabinet would be composed of “maraming babae”; and that 3) they “wanted to ideally follow Prime Minister Trudeau’s Cabinet in Canada.”

Indeed, if Trudeau’s Cabinet were to be strictly followed, then most of PRD’s Cabinet members would be under 50 years old, and they’d be composed equally of males and females, just as Trudeau’s Cabinet has 15 males and 15 females. As of this writing, 36 Cabinet posts have already been filled. How closely does PRD’s Cabinet resemble Trudeau’s? With the Internet, we’ve been able to assemble a database containing each appointee’s estimated age and sex, among other interesting data. Regarding age, we find that the average is about 61 years old, which is 11 years greater than that of Trudeau’s Cabinet. This could be misleading, though, since the youngest member is Mark Villar (Department of Public Works and Highways), who is about 37 years old. His age could be an outlier, so taking the simple average might make PRD’s Cabinet look younger than it really is. Perhaps, the median age could provide a better description. For PRD’s Cabinet, it happens to be about 64 years old, which means half of the Cabinet members are older than 64, while the other half are younger. Another way to analyze age is to cluster observations in five-year brackets. That is, how many are younger than 40, between 40 and 45, between 45 and 50, and so on? We note that 10 members are at least 50 but younger than 55. Seven are at least 65 but younger than 70. And eight are 70 or older. In terms of age distribution, we see quite a different picture from Trudeau’s Cabinet; nevertheless, we must mention that we are not discriminating against age. It could be argued that some appointees might be advanced in years but young at heart; thus, for the sake of being open-minded, let’s just say that PRD’s Cabinet is not necessarily older than Trudeau’s. Now, let’s try to analyze sex. If we go by the Bernoulli process, then we’d assume there are only two possible outcomes (either male or female), and each new appointment is independent of the previous appointment’s sex. Since we believe there are as many qualified males as there are qualified

females, we also assume there is equal probability of assigning a Cabinet post to a male or a female. On average, there should be 18 males and 18 females; nevertheless, it would be irrational to distribute appointments equally just for the sake of being equal, since we run the risk of overlooking work competency. So, let’s be open to the possibility of some variation. If all these assumptions were to hold, then there would be a 97-percent chance that the female composition of PRD’s Cabinet would range between 12 and 24 appointments. In reality, however, among the 36 would-be Cabinet members in the dataset, only three are females, and the rest are males. The probability of seeing three (at most) of the 36 appointments going to females would be a measly 0.00001 percent, which isn’t a typographical error, by the way. As statistical reasoning would suggest, there appears to be an effort (deliberate?) to do away with assigning Cabinet posts to females. Again, of course, we must mention that we are not discriminating against sex. Some might argue that there are males who have championed noble causes for females; thus, we cannot forcefully conclude that PRD’s appointments are biased against a certain sex. We can only cite observations. This brings us to the title of this piece. “Rhetorical” refers to what is said (usually in terms intended to persuade or impress people), while “empirical” refers to what can actually be seen. In the case of his Cabinet selection, it appears PRD has said one thing, and yet we observe quite another. Some say we should just give PRD a break and “hayaan siyang dumiskarte.” After all, he hasn’t even started yet. PRD himself has said that we shouldn’t take all his statements seriously, especially those that sound ridiculous. Okay. But then again, perhaps, we would all do well to take caution that leaders are ultimately judged not on the rhetorical but on the empirical. Let us wait and see.

A year ago the same group entering the campus would have been freshmen, first-year college students. They would not be herded. Their schedules would not be rigid. Their teachers would also possess a different attitude toward them. No touchy-feely speeches; no words that offer metaphorical embers. Remember our generation and the previous generations? In college/ university, you are well on your own. The ethnosemanticists would rejoice: Change the label and you change the perception. Each generation defines their youth. In the archive of Ateneo de Naga University have been gathered old photos from way back, documentations lovely in sepia and memories. The school was founded in 1940. Its main building with the splendid four pillars was completed in 1940. By December of that year, the Pacific War broke out. The buildings

became the headquarters of the occupying Japanese Imperial Army. Many of those who entered the school that year joined or volunteered to fight in the war. The most beautiful and, because

Summoning a pussycat Teddy Locsin Jr.

Free fire

IGONG is in hot water. At an interview in Davao, to which he had dragged the media, he catcalled a female broadcast journalist and wolf-whistled her. Now, I don’t know what catcalling is, but I am assured it is not like summoning a pussy cat— a species that famously never responds to calls. Cats don’t come to you; you go to them. I have always wanted to whistle like a wolf, but two things stop me. One is a literal mind. Wolves don’t whistle; they howl. And two, my lips are too thin. Indeed, most Asians

cannot whistle. Other races have no problem. Apparently, Duterte can. And he did. And this was taken as sexist and a violation of his own city ordinance.

warmer water is killing the algae that live inside and nourish the coral. The spectacle of ghostly white reef formations in oceans where brimming colors and large clusters of sea life used to be should alarm us all. They represent the death and dying of a major part of the ecosystem. They are white coral skeletons that can’t regenerate as long as the water remains warm and acidic. Ninety-three percent of the Great Barrier reef is suffering the effects of bleaching, with 81 percent of the northern third completely bleached out. By any standard of measurement this is one of the world’s greatest environmental catastrophes. As images of the devastated coral reefs enter public consciousness in the coming months and years, all of us have to ask ourselves how much of the natural world we’re willing to sacrifice by our refusal to adjust dramatically downward our burning of fossil fuels. TNS

so, the saddest, shows the first alumni homecoming when the war was over. The smiles are priceless. You could almost hear the laughter in those bright, open mouths. The youths of the mid-1940s: They looked sturdy. They would not be herded. Years ago in 1990, I was with my good friend, Dr. Matthew Santamaria, in Osaka, finishing our Japanese certificate course. We were, one day, in the flea market and antique shops area. Our Nihongo was not yet honed in the honorifics. We were the perfect gaijin (outsider/foreigner). We entered a furuhonya, or a secondhand bookstore, filled with really old books and magazines and photographs. In a box, I found an album of photographs. They were what the Japanese call kinen sashin, or “memorial photos.” The term simply means,

photographs to remember by, nothing morbid or black. The album has photos of young men, in high-school uniforms, those black, militarized coats made iconic by animé. Some of the photos were loose and they showed, I believe, the owner of the album on their way to military camps. They were all conscripted to be part of the Japanese Imperial Army. In the album, the age, the youth of these young men going off to war is beyond measure. How many of those Japanese young men in the album fought in the Philippines? How many returned to Japan and had reunion in their old school? Youth should really be wasted on the young.

The woman’s husband excoriated Duterte on Facebook. If someone did that, I would call him out in a challenge. It is a challenge you cannot lose. If he kills you, it is illegal; he is impeached. If you kill him, Leni will pardon you. Sadly, the choice of weapons lies with the challenged and not with the challenger. What if Duterte chooses feathers as weapons—you will look silly and he will appear magnanimous. The result was the threat of a media boycott, and Digong’s unexpected response was the total withdrawal from personal press conferences. His gain, our loss; but on second thought, maybe it is the other way around. These outrageous occasions when he spoke were how we were getting

to know the guy who came in from left field but in a stampede. I think he meant it when he said that, once sworn in, he would swear off swearing. These press conferences were just his way of getting his fill of them, for the long drought ahead. What he promised in the campaign he must keep or resign. What he says between winning and taking office means nothing. It could have been taken as entertainment. But that’s over now. But, in a way, it is polite of him to back off, because these last two weeks really belong to the still-incumbent president to explain why, the massive anti-daang matuwid vote to the contrary, he really did a good job. Let’s listen to him. There is something to learn from everything.

E-mail: titovaliente@yahoo.com.

Why oil prices and power rates keep on rising Cecilio T. Arillo

The authors thank Vito Caruso S. Seechung, a fourth-year BS MIS student at Ateneo de Manila University, for his valuable research assistance.

Bleached-out ocean coral is a key distress signal

umanity has reached a dubious and potentially terminal milestone—the last time there was this much carbon dioxide in the atmosphere, dinosaurs were the dominant species and the first humans were still millions of years in the future. March was the 11th straight record-setting month for global temperatures. Last month the UN convened a conference in Bonn, Germany, to assess the extent of global warming. The deteriorating state of one of nature’s greatest creations may begin to persuade even the skeptical that we’re experiencing something far beyond the typical warming cycle. In recent years, the 1,400-mile Great Barrier Reef of northeastern Australia has been decimated by warming waters. The impact of warmer, more acidic oceans on the world’s reef formations is particularly dramatic. Great stretches of barrier reef are being bleached white because the

he pedagogues will brush away my comments, but there is a strange occurrence on our campuses today: The senior high school. Some of them have reported already to their schools. In many private high schools, they wear uniforms, perhaps to differentiate them from the university students. There is a lot of effort to remind these young men and women that they are high-school students.

Friday, June 10, 2016 A11

database Continued from A1

he purchased-power adjustment (PPA) combined the purchased power-cost adjustment, fuel-cost adjustment and foreign-currency exchange adjustment. These adjustments in costs represented privileges extended to IPPs when the government contracted them to generate and supply power under PPA. Distribution utility Manila Electric Co. (Meralco), known as a Lopez family-owned company, also charged consumers the contractual costs of electricity bought from National Power Corp. (NPC) and other distribution utilities. These contractual costs were onerous because of the socalled take-or-pay provisions in the supply contracts. This meant that all contracted power was considered sold and to be paid for by consumers whether or not the electricity supply was used or generated. Included also in the take-or-pay contract were the fuel costs, which were bought in foreign currency, the US dollars, therefore subject to fluctuation in exchange rate. Consumers have been paying for fuel-cost adjustment and foreign-

currency adjustment since 1994. In 1996 the government started charging the PPA and, since then, the PPA consistently recorded rising costs. Electricity charges have been unbundled as mandated in the Electric Power Industry Reform Act (Epira). Conveniently, with rates now unbundled into major services, the PPA was no longer to be found in the monthly electric bills, but continued to be subsidized by consumers as part of the generation charge. Aside from the PPA, rising electricity costs resulted from rate increases filed by local distribution utilities (DUs) or rural electric cooperatives (RECs). The Energy Regulatory Commission (ERC) conducted the review and approval of the new rates.

Through Meralco, the same Lopez clan that controlled the larger water-concession area monopolized the electricity distribution in the National Capital Region. Even under the Epira, all other distribution utilities (private DUs and RECs) continued to individually secure franchise to ensure that the monopoly of power utility in their respective area would be maintained. This situation perpetuates monopoly pricing. For one, Meralco, the biggest distribution utility, had succeeded in clinching successive rates increases using the Epira to legitimize collection and recovery of costs for its expensive power contracts. In addition to rate increases filed to collect costs incurred in the process of distributing electricity, DUs also managed to include, in filing for rate hikes, the recovery of their income taxes. Meralco, for example, even integrated the computation of its return on rate-base asset, which has no connection whatsoever to the process of distributing electricity to consumers. When Mrs. Aquino’s administration unquestionably returned Meralco, ABS-CBN and other corporations shortly after the Edsa uprising, the Lopezes claimed they were victims of the Marcos regime. But a set of documents gathered by this writer belied their claim, showing that they sought President

Marcos’s help for financial assistance for Meralco and offering the sale of their shares in three letters signed by Eugenio Lopez on February 19, 1973, March 20, 1973 and September 17, 1973. The sale was finally consummated on December 16, 1974, to the Meralco Foundation Inc., which assumed the indebtedness of Benpres Holdings in Meralco Securities Corp. to foreign and local banks amounting to P101.1 million. The deed of sale was, in fact, guaranteed by the Philippine National Bank through a letter of credit it issued to the foundation for the purchase of the Benpres shares of stocks. The foundation also assumed Benpres’s P9.5-million debt on stock subscription and an obligation to pay Benpres P48.6 million on its equity, payable by installment over a 10year period at a 10-percent interest on the unpaid balance. In other words, what this particular set of documents showed was that the Lopezes were not victims of martial law but were, in fact, the beneficiaries, when Marcos helped them out of their financial mess. Strangely, the takeover by the Lopez family of Meralco after the Edsa revolt was shrouded in mystery despite President Aquino’s avowed policy of full disclosure and transparency. To be continued

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A12 Friday, June 10, 2016

PHL peso climbs to 8-month high on Duterte optimism

he Philippine peso climbed to the highest in almost eight months, as the incoming administration of Rodrigo R. Duterte assured investors that he will continue the pro-growth policies of outgoing President Aquino. The currency’s seven-day rally is set to be the longest since January 2015, and has been aided by $433 million of inflows into local shares since Duterte swept the May 9 elections. Finance Secretar y-designate Carlos G. Dominguez III has called the tough-talking mayor of Davao city pragmatic, and one who will build on policies that have made Philippines one of Asia’s fastestgrowing economies. Goldman Sachs Group Inc. and casino mogul Enrique Razon have expressed optimism about the new leader, who takes office on June 30. The peso rose 0.3 percent to 45.885 per dollar at the midday break in Manila, according to

prices from the Bankers Association of the Philippines. The currency’s 2.6-percent gain in a month is the best in Asia. Sentiment toward emerging-market assets has also been bolstered by indications the Federal Reserve will refrain from raising interest rates at its June 14 and 15 meeting and that any policy tightening will be gradual. “From the local perspective, the fundamentals are strong, so that’s one of the reasons why we go with Asian currencies,” said Joey Cuyegkeng, a Manila-based economist at ING Groep NV. “The main factor at the moment is the external developments,” including next week’s US central bank

policy meeting, he said, adding that ING will probably revise its year-end forecast of 47.60 per dollar to reflect a stronger peso. The Philippine economy grew 6.9 percent in the first quarter, while inflation remained subdued at 1.6 percent in May, latest data show. The country’s foreign-exchange reserves were $83.5 billion at the end of May, near a record high, according to central bank data released on Monday.

Emerging currencies

Emerging-market currencies climbed for a sixth day, as Brent crude’s rally past $52 a barrel boosted the outlook for oil exporters and optimism grew that US borrowing costs will stay low. Most stocks retreated amid the highest valuations for the regional benchmark equity gauge in a year. The ringgit led a measure of currencies to the highest level in five weeks, and the Philippine peso headed for the longest stretch of gains since January 2015. South Korea’s won fluctuated and bond yields fell to a record, after the nation’s central bank unexpectedly cut interest rates. Philippine stocks slid from a one-year

high. Indian shares retreated, and Korea halted its longest equity rally since March. China, Hong Kong and Taiwan markets are shut for holidays. Emerging markets have rallied in the past week, as dismal US jobs data curbed bets on an interestrate increase, while gains in oil and signs that China’s economy is on the mend underpinned demand for riskier assets. The regional equity index’s 14day relative-strength index rose above 70 for a second day, a level that frequently precedes a reversal, while the currency gauge is close to that threshold too. “The rally in oil prices should provide more windfall to emerging markets, while the headwind on US interest-rate concern is being removed for now,” Isara Ordeedolchest, an investment strategist at SCB Securities Co., said from Bangkok. “Valuations have been stretched for some time.” The odds of a US interest-rate increase this month are zero, Fed Fund Futures show, while traders are pricing in a 58-percent chance that the central bank will lift rates by year-end, down from more than 70 percent a week ago. Bloomberg News

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Senate finalizes revamp of prized committee posts By Butch Fernandez @butchfBM

ENATORS seizing control of a new majority grouping in the 17th Congress are now finalizing the distribution of coveted committee assignments in the upper chamber to firm up support for incoming Senate President Aquilino Pimentel III, Presidentelect Rodrigo R. Duterte’s lone PDPLaban party mate in the 24-member legislative body. The members of the emerging multiparty majority bloc, given choice committee chairmanships, have signed a resolution committing to back Pimentel’s unrivaled bid for the Senate presidency when the next Congress opens on July 25. Nationalist Peoples Coalition (NPC) Sen. Vicente C. Sotto III, who is set to assume the post of Senate Majority Leader and concurrent chairman of the Rules Committee, said at least 15 committee chairmanships have already been filled up and ready to be formalized as soon as Congress convenes on July 25. Sotto said outgoing Senate President Franklin M. Drilon of the Liberal Party is taking over as new chairman of the Committee on Banks and Financial Institutions, NPC Sen. Loren B. Legarda will chair the Committee on Finance, and NPC Sen. Grace Poe will chair the

franchise-granting Committee on Public Services. United Nationalist Alliance (UNA) Sen. Gregorio B. Honasan II will be chairing the Committee on National Defense; and Panfilo M. Lacson Sr., the Committee on Public Order; and comebacking Sen. Francis N. Pangilinan, the Committee on Agriculture. Also in the initial list of new committee assignments released by Sotto III on Thursday are Laban ng Demokratikong Pilipino Sen. Juan Edgardo M. Angara, Committee on Ways and Means; Liberal Party Sen. Paolo Aquino, Committee on Education; UNA Sen. Nancy S. Binay, Committee on Tourism; UNA Sen. Manuel D. Pacquiao, Committee on Public Works; NPC Sen. Sherwin T. Gatchalian, Committee on Local Governments; Liberal Party Sen. Risa HontiverosBaraquel, Committee on Health; Sen. Emmanuel Joel J. Villanueva, Committee on Labor; and Sen. Leila M. de Lima, Committee on Justice. Sotto said Sen. Francis G. Escudero, who is reclaiming his Senate seat after a losing his vice-presidential campaign in the May 9 elections, has been offered the chairmanship of the Committee on Energy, but was reported to be angling for the post of Senate Minority Leader, while his defeated presidential bet Poe may reclaim her chairmanship of the Committee on Public Information.