'Arab Spring 2011 and the Philippines' (Part II)

The uprisings in the Middle Eastern countries that we have been watching on television screens are real life dramas. These faraway convulsions affect our lives in ways we often are unaware of.

“Rising energy prices and major adjustments.” This year’s Arab Spring happenings cast long shadows on our lives and on the future. The aftermaths of overwhelming episodes in the past further continue their influences. The Arab-Israeli war of 1967, the creation of OPEC (Organization of Petroleum Exporting Countries) and the two Iraq wars have induced oil shocks to the world economy raising energy prices from US$1.20 per barrel to US$20 in the 1980s to US$ 100 in our days – peaking even to US$ 130 only in a recent yesteryear.

Such changes in energy price altered forever the alignments of our family and national budgets. They necessitated the re-engineering of personal, political, social and economic activities in our nation.

“Ghadafi was a special case.” Ghadafi of Libya had reckless adventurism that made him a gadfly to those nations that his actions had harmed. He caused great trouble for our country. By extending support to Nur Misuari and MNLF (Moro National Liberation Front), Gadhafi escalated the Mindanao rebellion and bring it within cognizance of the larger Arab League of countries.

Gadhafi became a party to the Tripoli Agreement which led our government to arrange regional autonomy for the Moro regions. Further complicated by new rebel players – the MILF (the Muslim Liberation Front) – this region continues to give us a pestering problem.

“OFW workers.” Filipino workers abroad have dispersed all around the world. One-fifths of all OFWs are mariners of the world’s sealanes. Of nearly one million OFWs who work in land-based jobs (according to our statistics), around 60 percent of them work in the Middle East. This percentage of OFWs slimmed somewhat to 45 percent of total land based OFWs in late 1990s. But this number surged toward 60 percent of total toward 2010.

Numerically, this amounts to around half a million Filipinos earning a living in the Middle East. The workers are scattered throughout many of the Middle Eastern countries. The greater bulk of them work in Saudi Arabia, in the United Arab Emirates and in Kuwait where a significant amount of construction and commercial activity had risen over the last decades.

“Cost of worker displacements -- OWWA.” Periodically, as conditions worsen in some countries, affected OFWs seek assistance to be returned home. The cost of these displacements – borne through national budgetary appropriations and from funds raised by the OWWA (Overseas Workers Welfare Administration) – could become a huge claim against national resources. As long as OFW displacements remain reasonably a low percentage of total OFW workers, as what happened for instance in the recent cases of Libya and Lebanon, the impact on the country would be manageable. But imagine a grimmer crisis, in which the scale of events is very sizeable.

“Grim scenarios… on OFWs abroad.” In an ever-changing and risky regional situation, with crisis after crisis potentially taking their respective sequences, the impact on Philippine OFWs would vary as well. OFWs finding themselves in war or in politically unstable zones would need government assistance and possible repatriation. These are costs of employment that we would not experience if OFWs were instead steadily employed at home in productive activities!

Grim scenarios of larger disturbances are not out of this world. The two Iraq wars were major disruptions between 1990 to 2010. The Israeli-Palestinian problem could be headed today toward peaceful convergence. But this expectation has been thwarted so many times before.

The nuclear ambition of Iran has caused so much confrontational diplomacy lately. It is a fearful scenario filled with portentous dangers.

The current troubles happening in Syria – with the opposition to the current leader, the younger Assad (who succeeded his father’s dictatorship of that country after the latter’s death) – appears to be getting worse. With the death of Gadhafi, what’s next after Libya?

Another worst case scenario could be any internal conflagration that involves Saudi Arabia. This country has been politically stable because the ruling monarchy has kept a tight control over its society, heightened by the security umbrella that the United States provides through an alliance. Just about the largest number of deployed OFWs works in this country.

“… on energy supplies.” Not only will this hurt incomes and jobs. The price of crude is settled in world markets, determined by various forces, some of it controlled by cartels. As a nation, we take the price determined in the world’s energy market.

Saudi Arabia is the largest oil supplier. Any disruption of supply that originates in that country has a large impact on world stocks of oil. As a substantial member and leader of the OPEC, Saudi Arabia plays the balancer of fuel supply gaps and excesses. It is often the critical player that increases or reduces its output of oil to stabilize the world’s supply. This has been a stabilizing role on that commodity since OPEC became powerful. If that role were to be disturbed, even momentarily, we can imagine the ensuing chaos.

“Supplier of capital.” The Middle East has become a major supplier of financial capital since the 1970s. This role has grown over the years, as petrodollars have continued to accumulate. These have of course fueled liquidity in the world’s financial markets. This also accounts for the singular rise of the financial markets of some rich Middle Eastern countries.

Respectability has put Saudi Arabia and the oil- and gas-rich emirates as a steady source of finance for the world’s capital markets. This is one reason for the prosperity of that region of the world despite the political instabilities. Some of these countries have used their oil riches responsibly even as we have found other countries (like Libya and Iraq’s Saddam Hussein) that used theirs for adventurisms that have caused trouble for others.

Saudi Arabia has become a significant member of the councils of the world’s multilateral institutions, especially the World Bank and the International Monetary Fund. Indirectly, their financial resources play an important role in the world’s economic fortunes. Arab capital is one resource that could play a very positive role in the financing needs of countries like us, as we strive to finance our huge needs for economic growth and development.

My email is: [email protected]. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/