Illicit trade, a bane to Philippine economic growth

Dr. Jesus Lim Arranza MAKE SENSE

While the pact signals Pita’s willingness to set aside a key plank of Move Forward’s campaign promise at least until his government can come into power, it wasn’t enough to calm investors worried over who will lead Thailand— something that has kept markets on edge.

regardless of which parties back it.

“We’ve been very consistent before and after the election that the law amendment will be continued but it won’t be a pressure for our coalition parties,” Pita said. The law, also referred to as Article 112, punishes criticisms against the king and other members of the royal family, and can put offenders behind bars for as many as 15 years if they’re convicted.

Pita’s alliance also agreed on several other initiatives, including making military enlistment voluntary except during times of war, and a push for a marriage equality bill. The eight parties also pledged to take steps to revitalize the economy, decentralize the budget and dismantle monopolies especially in the liquor industry.

The signing of the coalition agreement came hours after a lawyer asked the Election Commission to seek a ruling from the Constitutional Court on whether Move Forward’s call to amend the lese majeste law undermines the monarchy. Pita said he isn’t worried about this latest complaint or an earlier allegation that he violated election rules by holding shares in a defunct media company.

Move Forward’s push to amend Article 112 draws opposition not only from members of the Senate, which is stacked with allies of the pro-military establishment of caretaker Prime Minister Prayuth ChanOcha, but also from other conservative parties.

The Bhumjaithai party, the group that championed the liberalization of cannabis and finished third in the election with 70 seats, ruled out support for Pita as prime minister, saying it won’t back a candidate from a party planning to make changes to lese majeste.

The conservative Democrat Party hasn’t begun a discussion on its stance on Pita’s bid to become prime minister but it disagrees with amending the law against royal insults, party spokesman Ramate Rattanachaweng said Monday.

The coalition said the deal forged Monday is also a move to restore full democracy in Thailand. A new government under Pita’s leadership would mark the end of nearly a decade of military-backed rule that began exactly nine years earlier with Prayuth’s coup in 2014, said Cholnan Srikaew, leader of Pheu Thai party.

“We’re declaring today, on the anniversary of the 2014 military takeover, that we’re ending the cycle of coups,” he said. With assistance from Philip J. Heijmans, Anuchit Nguyen, Ishika Mookerjee and Hooyeon Kim / Bloomberg to development of a North-South trading corridor.

While the US and its allies have already turned Russia into the world’s most sanctioned country over the war, the Kremlin has cushioned the blow to its economy by boosting ties with China, India and other countries that have stayed neutral. Blacklisting by the FATF, however, would make it extremely difficult for these countries to continue doing business with Russia, and would intensify the economic pain for the Kremlin.

Let me start my column this week by thanking Japan tobacco International for sponsoring the recent Global Anti-Illicit trade Summit at Bonifacio Global City’s (BGC) Shangrila Hotel. However, I was surprised when the Summit host stopped me, as one of the resource speakers, from reading the findings of a research study about the impact of the over P900 billion worth of eight illicitly traded goods on the Philippine economy and local businesses.

Granting that time constraint, as the host mentioned, was his reason for preventing me from sharing the research to the summit participants, I think it would have been fair to the summit participants and to myself, if the host got back at me for the important data after he gave the other resource speakers all the time to share their thoughts on illicit trade and to answer his questions during our session. After all, I followed the discussion sequence indicated in the copy of the program provided to us by the summit organizer.

For whatever reasons the summit host may have had in preventing me from sharing the recent study about the impact of illicit trade on the country’s economy, I find the over P900 billion worth of illicitly traded commodities an alarming figure, knowing that illicitly traded products displace the legitimate goods in the market. Illicit trade, after all, creates an unfair environment for legitimate businesses. Imagine the huge amount of rev-

By Samya Kullab | The Associated Press

KYIV, Ukraine—the nine-month battle for Bakhmut has destroyed the 400-year-old city in eastern Ukraine and killed tens of thousands of people in a mutually devastating demonstration of Ukraine’s strategy of exhausting the Russian military.

The fog of war made it impossible to confirm the situation on the ground Sunday in the invasion’s longest battle: Russia’s defense ministry reported that the Wagner private army backed by Russian troops had seized the city. President Volodymyr Zelenskyy, meanwhile, said Bakhmut was not being fully occupied by Russian forces.

Regardless, the small city has long had more symbolic than strategic value for both sides. The more meaningful gauge of success for Ukrainian forces has been their ability to keep the Russians bogged down. The Ukrainian military has aimed to deplete the resources and morale of Russian troops in the tiny but tactical patch of the 1,500-kilometer (932mile) front line as Ukraine gears up for a major counteroffensive in the 15-month-old war.

“Despite the fact that we now control a small part of Bakhmut, the importance of its defense does not lose its relevance,” said Col.-Gen. Oleksandr Syrskyi, the Commander of Ground Forces for the Ukrainian Armed Forces. “This gives us the opportunity to enter the city in case of a change in the situation. And it will definitely happen.”

About 55 kilometers (34 miles) north of the Russian-held regional capital of Donetsk, Bakhmut was an important industrial center, surrounded by salt and gypsum mines and home to about 80,000 people before the war, in a country of more than 43 million.

The city, named Artyomovsk after a Bolshevik revolutionary when Ukraine was part of the Soviet Union, was known for its sparkling wine produced in underground caves. It was popular among tourists for its broad tree-lined avenues, lush parks and

The sectors Russia identified as at risk are particularly sensitive in the strategic partnership with India. Russia is India’s largest provider of weapons though defense supplies have stalled for lack of a payment mechanism that doesn’t violate US sanctions.

India has also scooped up cheap Russian oil after the US and its allies imposed a price cap and Europe rejected supplies.

Another 23 countries are on the FATF’s “gray list,” including Albania, Turkey, South Africa and the enues the government is losing from the over P900 billion worth of illicitly traded commodities in the country’s petroleum, steel, resin, wood, cigarette, sugar, palm oil and automotive battery industries. Worse, there are millions of Filipino workers losing their jobs because of these illegal business activities.

Imagine the huge amount of revenues the government is losing from the over P900 billion worth of illicitly traded commodities in the country’s petroleum, steel, resin, wood, cigarette, sugar, palm oil and automotive battery industries. Worse, there are millions of Filipino workers losing their jobs because of these illegal business activities.

With illicit trade not only being done through smuggling but also including cartels, hoarding, price manipulation, or any business activity that is anti-competitive and violates the Philippine Competition Law (RA 10667), it’s really time for the Filipino nation to be aware of the extent of illicit trade happening in our country today and its adverse impact on the economy and our daily lives. The government is losing billions of pesos in much needed revenues in duties and taxes from illicit trade. And because many smuggled goods brought into the country by smugglers are sub-standard, this form of illicit trade also threatens the lives of consumers who are not aware of the risks they put themselves into when they buy and use sub-standard products. Thus, while explaining the ails of illicit trade to a Filipino who may have lost his job because of this illegal activity would be the hard part, the government should take the cue and seriously try to solve the problem of smuggling and all forms of illicit trade. it opens the door to more grinding battles in the direction of Sloviansk or Kostiantynivka, 20 kilometers (12 miles) away, said Kateryna Stepanenko, a Russia analyst at the USbased think tank Institute for the Study of War. stately downtown with imposing late 19th century mansions. All are now reduced to a smoldering wasteland.

I am hopeful, though, that with the President’s sensitivity to illicit trade issues and his determination to stop smuggling, these concerns would be appropriately addressed in due time.

Dr. Jesus Lim Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade; a broad-based, multisectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.

Ukrainian military leaders say their months-long resistance has been worth it because it limited Russia’s capabilities elsewhere and allowed for Ukrainian advances.

Fought over so fiercely by Russia and Ukraine in recent months has been the urban center itself, where Ukrainian commanders have conceded that Moscow controlled more than 90%. But even now, Ukrainian forces are making significant advances near strategic roads through the countryside just outside, chipping away at Russia’s northern and southern flanks by the meter (yard) with the aim of encircling Wagner fighters inside the city.

“The enemy failed to surround Bakhmut. They lost part of the heights around the city. The continuing advance of our troops in the suburbs greatly complicates the enemy’s presence,” said Hanna Maliar, Ukraine’s deputy defense minister. “Our troops have taken the city in a semi-encirclement, which gives us the opportunity to destroy the enemy.”

Ukrainian military leaders say their months-long resistance has been worth it because it limited Russia’s capabilities elsewhere and allowed for Ukrainian advances.

“The main idea is to exhaust them, then to attack,” Ukrainian Col. Yevhen Mezhevikin, commander of a specialized group fighting in Bakhmut, said Thursday.

Russia has deployed reinforcements to Bakhmut to replenish lost northern and southern flanks and prevent more Ukrainian breakthroughs, according to Ukrainian officials and other outside observers. Russian President Vladimir Putin badly needs to claim victory in Bakhmut city, where Russian forces have focused their efforts, analysts say, especially after a win-

United Arab Emirates. A report by the International Monetary Fund in 2021 found that being gray-listed, which comes with closer monitoring requirements, results in a “large and statistically significant reduction in capital inflows.” Senior Russian officials have corresponded with counterparts in partner governments asking them to oppose any such proposals, said other people with knowledge of the situation, who asked not to be identified as the matter is sensitive. Russia warned that being on ter offensive by his forces failed to capture other cities and towns along the front.

Some analysts said that even Ukraine’s tactical gains in the rural area outside urban Bakhmut could be more significant than they seem.

“It was almost like the Ukrainians just took advantage of the fact that, actually, the Russian lines were weak,” said Phillips O’Brien, a professor of strategic studies at the University of St. Andrews. “The Russian army has suffered such high losses and is so worn out around Bakhmut that ... it cannot go forward anymore.”

Ukrainian forces in the outskirts of Bakhmut and in the city bore relentless artillery attacks until a month ago. Then, Ukrainian forces positioned south of the city spotted their chance for a breakthrough after reconnaissance drones showed the southern Russian flank had gone on the defensive, Col. Mezhevikin said.

After fierce fighting for weeks, Ukrainian units had made their first advance in the vicinity of Bakhmut since it was invaded nine months ago.

In all, nearly 20 square kilometers (eight square miles) of territory were recaptured, Maliar said in an interview last week. Hundreds of meters (yards) more have been regained almost every day since, according to Serhii Cherevatyi, spokesman for Ukraine’s Operational Command East.

“Previously we were only holding the lines and didn’t let Russians advance further into our territory. What has happened now is our first advance [since the battle started],” Maliar said.

Victory in Bakhmut does not necessarily bring Russia any closer to capturing the Donetsk region— Putin’s stated aim of the war. Rather, the “gray list” would make it hard to fulfill commitments on weapons supplies and other projects to India, said an official with knowledge of the situation. Moscow has repeatedly appealed to Delhi for assistance at meetings of the watchdog since the invasion, the official said.

Russia noted in a document in early May that India held “special credibility” within the FATF and it was regrettable that Delhi didn’t speak up to oppose Russia’s suspension.

The Paris-based FATF said Mos-

Satellite imagery released this week shows infrastructure, apartment blocks and iconic buildings reduced to rubble.

In the last week, days before Russia announced that the city had fallen into their control, Ukrainian forces retained only a handful of buildings amid constant Russian bombardment. Outnumbered and outgunned, they described nightmarish days. Russia’s artillery dominance is so overwhelming, accompanied by continuous human waves of mercenaries, that defensive positions could not be held for long.

“The importance of our mission of staying in Bakhmut lies in distracting a significant enemy force,” said Taras Deiak, a commander of a special unit of a volunteer battalion. “We are paying a high price for this.”

The northern and southern flanks regained by Ukraine are located near two highways that lead to Chasiv Yar, a town 10 kilometers (6 miles) from Bakhmut that serves as a key logistics supply route, one dubbed the “road of life.” cow remained “accountable” for implementing the organization’s standards after its suspension and that the body would consider whether to lift or modify the restrictions at every plenary meeting.

Ukrainian forces passing this road often came under fire from Russians positioned along nearby strategic heights. Armored vehicles and pickup trucks driving toward the city to replenish Ukrainian troops were frequently destroyed.

With the high plains now under Ukrainian control, its forces have more breathing room.

“This will help us design new logistic chains to deliver ammunition in and evacuate the injured or killed boys,” said Deiak, speaking from inside the city on Thursday, two days before Russia claimed it controlled the city. “Now it is easier to deliver supplies, rotate troops, [carry out] evacuations.” Danica Kirka in London contributed to this report.

Ukraine welcomed the suspension and said it would continue to push for Russia’s inclusion on the black list. Russia’s ambassador to the US called it a dangerous step that could lead to the destruction of the global architecture for countering the financing of terrorism. With assistance from Alex Wickham / Bloomberg

A16 Wednesday, May 24, 2023