The 42nd SGRA Forum was held in collaboration with Kita Kyushu University on October 29, 2011 at Waseda University. I helped in the translations, and was in charge of the panel discussion at the end.
The main issue of this forum was about how to secure energy in order to support high economic growth while protecting the environment. In this connection, enhancing energy efficiency was a common point of discussion by the presenters. In enhancing energy efficiency, adjustment of the energy supply to meet demand becomes possible, while reducing the burden on the environment.
By the way, in the energy field, “3E”, a key term in the forum, seems to stand for Energy Security, Economic Growth, and Environmental Protection. In my field of development economics, I have used 3E to refer to Efficiency + Equity + Environment (please refer to the Manila Report 2010 Spring).
Energy efficiency was such a common point of the discussions/presentations that I prepared a slide compiling the energy efficiency of 120 countries (where energy efficiency = GDP divided by the total energy consumption)—please see slide. Energy efficiency seems to be on average not significantly different between low and high income countries.
Mr. Kritsanawonghong of Thailand and Mr. Ireland of Australia presented an energy conservation method which utilized a market-based mechanism for the environmental evaluation of buildings and electric devices. The actual introduction of such a mechanism led to increasing the environmental awareness of users, and improving energy efficiency. However, even though it is market-centered, the government plays a big role in setting up and diffusing such a system.
Speaking of markets, the correct pricing of energy resources and electricity is important. Ms. Balbarona of the Philippines reported that the electricity rates of the Philippines have overtaken that of Japan as being the highest in Asia. She explained that the distributing company passes all of the cost to the user, and that the Philippine government, unlike neighboring countries, does not provide substantial subsidies for electricity rates. Owing to this, various energy conservation movements naturally take place, such as the project headed by Ms. Gilles, wherein energy conservation was achieved in a Manila building through the creative balancing of daily usage of electricity. Mr. Ireland added that the Australian government’s subsidy on coal has led to the excessive use of this resource.
Next, some methods were reported for improving energy efficiency, which emphasized the importance of a low-cost and low-income (the poor) perspectives. Ms. Paramita of Indonesia raised the concept of urban optimal density. There is the thinking that for the sake of improving energy efficiency various resources should be concentrated in the city, but there should also be the thinking that, once the urban optimal density has been exceeded, problems such as slums arise, wherein efficiency begins to actually go down. Mr. Faisal of Indonesia emphasized that his country is not an exemption, since it has been promoting a concentrated-type of urban development, but what is really needed in fact is “reversed urbanization”. Incidentally, in the first joint forum of SGRA and Kita Kyushu University last year, I referred to this as “ruralization”. The urban problem should not be considered as separate from the rural sector. In addition, Ms. De Asis of the Philippines shared stories of recycling projects in the field of architecture such as the use of containers and plastic bottles. In the Philippines, there are projects such as largescale wind farms (first in Southeast Asia) and environmentally friendly shopping malls, but these are very costly. It is doubtful whether such technologies are really appropriate for developing countries such as the Philippines. Architecture based on recycling seems to have started in the countryside. Mr. Ireland pointed out that the rural-urban gap is also an important problem in developed countries such as Australia and Japan.
Another method that was mentioned for improving energy efficiency was the development of renewable energy. Unlike oil, coal, or uranium, renewable energy relies on unlimited energy resources; hence, the risk of resource costs going up is practically non-existent. In fact, as technologies progress, it is highly possible for costs to go down. The question as to whether renewable energy could replace nuclear energy in the medium- to long-term, was posed to Mr. Iyadurai of India and Ms. Balabarona of thePhilippines, who reported on renewable energies in their respective countries. The two countries also shared the same experience of forbidding the use of nuclear power plants that were being constructed. They shared the opinion that citizen sentiments against the use of nuclear power would continue to be strong. Mr. Kritsanawonghong added that the situation appears to be the same in Thailand. However, there were also participants in the forum who stated that nuclear power will not completely go away.
The above are some of the examples by which each Asian country grappled with the issue of improving energy efficiencies. Taking one step back, with the objective of promoting the consideration of an East Asian regional perspective, I shared with the forum participants a certain Japanese initiative. This initiative is particularly significant given that for the past few decades Japan has not come out with a compelling strategy for East Asia. I first came to learn about this initiative from a Fuji Television program called Prime News Live, where it was referred to as the “Asia-Pacific” Electricity Network” or “The Energy Version of the Trans-Pacific Partnership (TPP)”. –please see slide
Behind this initiative was the unstable electricity supply situation caused by the Great East Japan earthquake of March 11th. This initiative was proposed by the Japan Creation Council (Nihon Sousei Kaigi), which was headed by Mr. Hiroya Masuda, former governor of Iwate Prefecture (one of the seriously stricken prefectures of March 11th). The issues being addressed by this initiative are the ensuring of energy security, the improvement of the international competitiveness of industries, and environmental sustainability. The ultimate objective is the establishment of a renewable energy state.
This initiative is very ambitious but I think it promotes a balanced integration of East Asia (together with Oceania). I am hoping that it could also be a policy for extricating Japan from its decades of debilitating despair. I refer to such an initiative as regional shared growth, which is a concept based on the Flying Geese Model of Development that I have learned from Japan. For many decades now, Japanese firms going overseas have tended to concentrate on selected countries. This is very disappointing since it actually runs opposite to the diversified-type of division of labor that Japan has earlier espoused. I have actually raised the alarm against such type of division of labor many years ago. No matter how many crises occur due to globalization or climate change, nobody seems intent on learning the lessons.
The current initiative strikes a beautiful image in my mind’s eye: the electricity network flies southward, jumping from one island to another, connecting the three East Asian archipelagoes of Japan, the Philippines, and Indonesia, and merging with its sister ASEAN power grid from the western side.
At long last, an East Asian strategy has come out from Japan that is truly Japanese in spirit.
Notes: 1. I would like to express my heartfelt gratitude to Professors Soichiro Kuroki and Weijun Gao for inviting to Kita Kyushu University’s exchange program three graduate students from the University of the Philippines (i.e., Stephanie Gilles, Juvy Balbarona, and Josefiina De Asis) on recommendation by Professors Edwin Quiros (Department of Mechanical Engineering, UP) and Mike Tomeldan (College of Architecture, UP) 2. I would also like to express my thanks to Professors Hidetoshi Nakagami and Hiroto Takaguchi for emphasizing the importance of an energy policy that puts weight on a long-term perspective and traditions.
SGRA Kawaraban 317 in Japanese
The main menu for my last Manila visit was the conference held at the University of the Philippines School of Labor and Industrial Relations (UP SOLAIR) on the 24th and 25th of August. As I have announced in previous Manila Reports, our group, consisting of Professor Hitoshi Hirakawa (SGRA advisor) of Nagoya University, Professor Bich Ha of the Foreign Trade University in Hanoi, and Dr. Than Than from Myanmar, presented two papers.
The Keynote Address was delivered by the Vice President of UP, Professor Amante, who was in Japan for further studies at about the same time as I was. After finishing his studies (Keio University), he went back home to UP, taught in a Korean University for a while, and became one of the former Deans of UP SOLAIR. In his Keynote Address, he stressed that since its inception in the 1950s, SOLAIR was a prestigious educational and research institution in Southeast Asia in the field of labor and industrial relations, and suggested the issue of maintaining that status. Faced with the reality of the Philippines being overtaken by other ASEAN countries, he encouraged continued learning from Japan, mutual constructive criticism and new ideas in the School, and efforts towards kaizen (continued improvement).
Although it has been quite a while since I last met Professor Amante, he kindly re-directed a question from the floor to me in the audience, perhaps remembering that my field was in development economics. The question was actually closer to international finance, and was about the establishing of an Asian currency in view of the current world crisis. My reply went more or less this way.
East Asia’s degree of intra-regional trade has become bigger than that of NAFTA, and is expanding to catch up with that of EU. Such economic integration was achieved without any formal institution such as the Euro. The cause, I think, lies in the international division of labor in East Asia pursued by Japanese-affiliated firms such as Toyota. As Mr. Sobrevega of Toyota Motors Philippines (also the President of the PIRS) just pointed out, when dealing with Toyota-related enterprises in other ASEAN countries, it is necessary to strike an exquisite balance between standardization and respect for diversity. ASEAN has relatively done well up to now perhaps because of the principle of non-intervention. The Philippines has been considered as a showcase of democracy in Asia—something that is worth being proud of, but not exaggerating. We should bear in mind that, in ASEAN countries like Vietnam and Myanmar, where governments are strong, as Dean Sibal and Professor Amante have pointed out earlier, could very well just overtake the Philippines, if we become too complacent. Of course, we should be very happy that our neighboring countries are developing, but this must not come at the expense of the Philippines: we must develop with them. Hence, what is important to the Philippines at this moment, I think, is to skillfully get on the international division of labor in the real sector, which is driving East Asian integration, rather than having a monetary institution such as a common currency.
On the encouragement of Professor Macaranas, Professor Hirakawa was kind enough to share his opinion. He pointed out that there was once an attempt to establish a common currency in East Asia, but this ended up failing due to the strong resistance of the US. He sees that the Chinese yuan right now could naturally become a common currency.
Professor Bich Ha of Vietnam also kindly shared her thoughts. Since she was more fluent in Nihongo, I translated into English. Her remark was roughly as follows. There was a time that in Vietnam the development of the Philippines was considered to be very impressive. As I visit the Philippines for the first time, despite the progress in infrastructure, I was surprised to see various problems such as slums, and that the standard of living of ordinary citizens is not that good. The main reason for Vietnam’s relatively good development is direct investment from abroad. It is hitting three birds with one stone. Due to foreign direct investments, employment, technology transfer and the formation of domestic small- and medium-scale enterprises become possible. Moreover, I think that the cooperative relationship between the government and labor unions in Vietnam could be a constructive point of dialogue between the Philippines and Vietnam. I hope to contribute to such a dialogue.
In the afternoon, Dr. Than Than of Myanmar, backed up by Professors Hirakawa and Bich Ha, presented in English the results of their research survey in Vietnam. Prior to her presentation, Dr. Than Than consulted me about some implications to the Philippines, which she kindly added at the end of her presentation. Apparently, in Vietnam, there is a tendency to suppress the outflow of migrant workers, which has actually contributed to the enhancement of the competitiveness of the country as workers are trained within the country. On the other hand, in the Philippines, sending workers abroad is a national strategy, and the country’s competitiveness has not significantly improved. How to keep Philippine workers in the country or to re-integrate OFWs are important policy issues.
The above are some examples of the active participation of our foreign (non-Filipino) guests in the conference. Learning from each other, I think, may be one way by which the road to cooperation among ASEAN countries could be further paved.
Unfortunately, I was in a separate session so I could not participate in their session. I had, however, a different agenda for my session: how to learn from Japan. There were three presenters, and I was first to go. I compared the labor contracts of US and Japanese enterprises, from the point of view of shared growth. I was followed by Mr. Sobrevega, who talked about Toyota Motor Philippines of the manufacturing sector. He was followed by one of the leaders of the labor union of Philippine Airlines of the services sector. In the open forum, I was happy to note that the participants (including the audience) applied, with no great difficulty, the shared growth principles I presented to the cases of Toyota and Philippine Airlines. Indeed, one of the objectives of my presentation was to raise the awareness that the Philippines could be a safe haven for the various shared growth institutions that could be learned from Japan, thus, ultimately contributing to the preservation of institutional diversity.
All four of us joined in the same sessions in the second day of the conference, where we had the invaluable opportunity to think about issues caused by poverty and social inequality, such as child prostitution, Japayuki, gender discrimination, migrant labor, and land reform. It was the first UP SOLAIR conference for the four of us. There is certainly room for kaizen, but I hope that the good presentations/discussions and the warm reception of the UP SOLAIR + SGRA family were able to compensate.
On the day following the closing of the conference, I passed by the hotel of the three guests at 7AM, picked up a collaborating professor at the UP College of Architecture at 7:30AM, and headed for Subic Free Port Zone on the expressway which Kajima Construction helped build (2.5 hours trip by car). Typhoon No. 11 had just hit landfall in the Philippines, and the weather was a bit rough. Nevertheless, we arrived right on time for our 10AM appointment at the Subic Bay Metropolitan Authority (SBMA) headquarters. We paid a courtesy call on SBMA Chairman Garcia with whom we were able to talk to until 11AM. This was followed by a briefing by his staff up to about 12 noon, at which time we discussed about how to proceed with Professor Hirakawa’s research project on the manufacturing sector. After lunch, we had a brief tour of the Freeport Zone for about an hour, and were back in Manila by 5PM.
During our talk with SBMA Chairman Garcia, I pointed out that, despite a very good start, the Freeport Zone recently seems to be advancing a bit more slowly. The Chairman cited some examples of firms leaving Subic to explain the somewhat sluggish situation. There apparently was, at the start, a plan to build a free trade corridor between Kaohsiung (Taiwan) and Subic, leading to the construction of a 300 hectare Taiwan Techno Park, but this stalled due to reactions from China. The international airport in Subic was also the Asian headquarters for FEDEX, which has since been transferred to China. A US firm operating in the container port built through a loan from Japan has since transferred to Mexico so as to be closer to its NAFTA market.
The common point of the above examples seems to be that the “half-baked” nature of Subic tends to make it lose its prize catches to bigger ships (areas of operation). However, the Chairman pointed out that it is precisely this feature that could be leveraged to develop Subic as a regional warehouse.
Because Subic is about 3 and half hours by plane away from the major East Asian cities, it is also in a strategic position in terms of sea routes. Another reason why it was chosen as naval bases by Spain and the US is its naturally deep port. (In fact, despite the proximity to typhoon no. 11, the waters in the port area were relatively calm). Finally, since Subic is in a Freeport Zone, it has a certain level of independence, legally and administratively, from the Philippine government so that the equation that Subic equals the Philippines may not really hold.
If we consider the above factors, Subic actually has the potential to drive the development of the Philippines. There is in fact a glimmer of hope amidst Subic’s current underutilization. Korea’s major shipping conglomerate, Hanjin, has built and is managing in Subic the fourth largest shipyard in the world. Moreover, it is planning to increase its area of operations by 200 hectares, and to start subcontracting the production of currently imported inputs to local manufacturers. Although there is now a global recession, the ship building projects of Hanjin have not really slowed down. Hanjin is very aggressive in supporting Philippine development.
The Chairman is also hoping on support from Japan.
※Some photos of the conference could be found in PIRS FACEBOOK. http://www.facebook.com/pages/Philippine-Industrial-Relations-Society-PIRS-Inc/19646091 0379580 ※I would like thank Professors Teodosio and Macaranas, my dad (Mac), and sister (Lenie) for taking care of our guests during their visit. I would also like to thank again Professor Hirakawa for inviting Professors Teodosio and Macaranas to Nagoya University last March, and Professor Bich Ha and Dr. Than Than to the UP SOLAIR conference.
SGRA Kawaraban 311 in Japanese
“We Can Take It” (for SGRA Kawaraban #286) Max Maquito
Thank you for all your phone and internet mails from Manila, Toronto, and Alberta.
I was accompanying the educators of the University of the Philippines, who were touring the town in the vicinity of Nagoya Station, when the Tohoku Pacific Earthquake hit. To calm down the surprised educators, we stood at the exit of the building, with me reassuring them that “Japan could take this much of shaking”. After the initial tremor had passed, we continued our tour of the area as if nothing happened. The educators have been walking around a lot since the previous day, so we returned to the hotel relatively early. Before getting on the subway, I got a call in my mobile phone from Professor Hitoshi Hirakawa, who is a SGRA adviser, and we confirmed each other’s safety. Taking lightly the professor’s words “It appears to be quite bad”, we returned to the hotel. It was when I turned on the TV that I first came to realize the severity of the situation. Through my mobile phone mail, I immediately transmitted our safety to my and the visiting educators’ families. Together with educators in the University of the Philippines, I received quite a number of messages saying that they were virtually down on their knees praying for Japan as well as the Philippines, which is also an archipelago.
The day after the big quake, in Nagoya University the workshop on the theme “Towards a Sustainable Shared Growth in Industrial Asia” was held as scheduled after a brief moment of silence on Professor Hirakawa’s request. While being concerned about Japan, the speakers earnestly made their presentations. Around that time, news came about Fukushima Nuclear Reactor No. 1 exploding, which prompted talk about the nuclear power plant that was being built many years ago in the Philippines, but was stopped by resistance from civil society. The next day, getting guidance from Professor Hirakawa, I brought the educators to the Chubu International Airport and saw them up to immigration. The airport was surprisingly peaceful. While mulling over the next week’s classes, I then headed right away to Tokyo on the Tokaido Shinkansen, which was by then running again.
Checking closely the news, I came to understand that a great tragedy has just visited Japan, that magnitude 7 aftershocks have a 70% probability of occurring in the next few days, and that scheduled brownouts will be implemented. On the Monday (13th) after the earthquake, I checked the email announcements of the university, which was still in the midst of Spring semester, for any announcements on class suspension. Having found none, I immediately sent emails to all of my students that they do not have to go to the university for my classes on Tuesday (14th). Several hours later, I found out that the university had suspended all classes, and had made arrangements for a flight for Hong Kong and a bus for Kansai for faculty, students, and others. Since then resumption of classes has been repeatedly postponed. At this point, resumption of classes has been tentatively decided to be on April 4th. Since the weekend after the earthquake, you, my family, have been imploring me to go home. In order to somewhat allay your fears, I have been sending out, through my mobile phone, information that I have picked up from Fuji TV, which has been most prompt in organizing the information, and other sources.
The behemoth finally awoke from its deep sleep where it has been building up its strength for more than half a century. With a growl that could be heard as far away as another island nation, the Philippines, 3000 kilometers away, the behemoth rose from the sea floor off Tohoku. Indiscriminately and in a wide area, it wielded its might. The people bravely put up a fight. With sirens filling the air, the warning “It has attacked! Everyone, quickly get out!” continued until the behemoth reached the shore. The young girl issuing the warning together with the town officials and firemen stationed at the fort’s walls, which was designed to keep out the behemoth and protect the town, lost their lives in the fight. Having been bought some time, the people who were able to make it to high ground held their breath as they watched the behemoth being held back at the fort’s walls. “It’s taking it! It’s taking it!” but this soon changed to screams of “It’s over the wall! It’s over the wall!”
The behemoth left after leveling down the town. At times we could still hear its growl from far away. The behemoth’s poison remains in the island nation, and even now is causing damage. Holding each others hands, everyone is earnestly exerting efforts to suck out the poison.
There’s going to be a lot of hardship in the interim, but I would like to repeat that Japan could take this much of damage. Recovery is inevitable, but I think that we have been given a very good opportunity to think about what form this recovery would take. Shall we return to the lost decades Japan, whom I have found very disappointing? Shall we return to Post-WWII Japan, whom I have come to love?
After the war, about 90% of Japan’s manufacturing capacity was destroyed, causing a severe lack of goods. After the dropping of the atomic bombs, about 250,000 people (including those from radiation) died in the first four months. Japan was remarkably able to achieve recovery to such an extent that it came to be called an “East Asian Miracle”. Moreover, from the burning fields of the war was born several visions, which have caught the imagination of a large number of global citizens, including myself: the Peace Constitution, the Three Non-Nuclear Principles, and my research theme of Shared Growth, among others.
This time around, the attack on Japan’s mainland was not from the armies of foreign lands, but from Japan’s ancient foe, the behemoth. From the scars of war would hopefully emerge, among others, a new Peace Constitution, a new Three Non-Nuclear Principles, and a new Shared Growth. A new Peace Constitution which strengthens the Self Defense Forces and the private sector’s abilities to protect the lives and properties of citizens of Japan and other Asian countries which are also weak against earthquake and tsunami. A new Three Non-Nuclear Principles which makes a fundamental review of the nuclear energy program. A new Shared Growth which also considers the genuine division of labor in East Asia and the promotion of a safe and secure ecological system. I am filled with excitement by simply imagining these alternatives.
It is not clear which recovery path Japan will eventually take, but I would like to put my stakes on the strong determination and wisdom of the Japanese people not to waste this tragedy.
Please continue to support me as I shuttle between Tokyo and Manila for my research about Japan.