hen Philippine President Arroyo first took office in 2001 after the Supreme Court unanimously declared the position of President vacant. I had hopes that things may change for the better. Here was a women that is a daughter of the late R.P. President Diosdado Macapagal and was Vice President, so politics were well known to her.
Her educational background is impressive and includes being valedictorian of her high school class, was consistently on the Dean’s List in Georgetown University in Washington DC, and graduated magna cum laude at Assumption College. She obtained a Master’s degree in Economics from the Ateneo de Manila University and a doctorate degree in Economics from the University of the Philippines.
In addressing the recent rise in world oil prices she has given a warning:
Arroyo issued the warning during her speech at the Asia-Africa Business Conference in Jakarta, Indonesia, where she called on leaders of the Asia Africa Summit to push for greater stability in oil prices in order to avert a “full-blown economic crisis.”
She said while oil prices have softened in the past few days, “the trend could worsen to levels that could halt economic growth or even prompt a global recession.”
She said the high price of oil has the potential to “put the brake on economic expansion” because it is stripping oil-importing countries of the ability to pursue economic development programs and move towards global competitiveness.
Generally I agree. Certainly a continuing rise in prices will effect the global economy, more so in the Third World. A booming economy in China has created a greater demand and higher prices. Coupled with what I call the “summer effect”, (history shows oil prices always rise as vacation season starts in western countries) the inevitable happens, higher oil prices. The current market prices have already started to soften somewhat. Why? The supply lines are pumped full with a 2-3 month supply at the higher prices. Just enough to cover the June – August peak travel season.
Madam President wasn’t content stating the obvious, or understanding it, she had to wonder off into moonbat territory on two counts.
“It’s (oil price hike) increasing poverty and further widening the gap between rich and poor countries. This is a toxic formula that could increase global terrorism,” she added.
Arroyo said world leaders should enjoin oil-exporting countries in Asia and Africa, where most of the oil supply comes from, to “offer solutions that would temper the volatility of crude oil prices (and) slow the demand for oil.”
That “toxic formula” she refers to is the long used mantra of those that feel the need to excuse murderous behavior by jihadist cut throats. At best the theory is highly debatable and based on one study of 500 members of Osama bin Laden’s organization it may be flat out bunk!
Then we get to Arroyo’s alleged field of expertise, economics, and her suggestion that slowing demand for oil would cure anything beyond her standing as a politician. Followed to its logical conclusion her suggestion of slowing demand means only one thing. A world wide conservation effort.
For the sake of argument let’s assume the entire travel industry cuts back 10%. Less airline traffic is a good start, and 10% less auto mileage due to reduced vacations would also conserve oil. The effort would result in 10% less luxury cruises made. Less hotel reservations are made and a resulting drop in travel agents, both in commissions earned and total number on the job.
Now spread that scenario over every industry that relies on oil products to either manufacture goods or provide service to the public. And there are damm few that don’t use oil in one form or another. And that Madam President results in the exact opposite to want she’s tryng to avoid, a world wide recession.
Now someone tell me the value of a Masters degree in economics? And while you’re at it, tell President Arroyo she should be more concerned about a Philippine economy staggering from one crisis to the next than something she has no control over.
UPDATE: Another valid question for Madam President: Why is the Philipines running out of anaesthetists, obstetricians and paediatricians? As a follow on question, why do 2,000 doctors leave the country each year, while only an estimated 1,000 graduate from medical schools?
The obvious answer is Arroyo spends more time making political statements that have no basis in fact, vice making a valid attempt at actually doing her job.
Cross posted On the Third Hand