Archive for the ‘North-east Asia’ Category

Weekend reading: Italy and Spain and more

April 28, 2013

Italy gets a government that surely cannot last, led by a ‘left-wing’ politician whose uncle is the chief of staff to Silvio Berlusconi. Front up  a younger guy and put more women in the cabinet so the Germans think we’ve grown up, seems to be the plan. FT (sub needed) has a sensible leader about how political reform may be the only way to unlock the door to economic reform.

Meanwhile, in The Guardian Simon Hattenstone writes about his long correspondence with Amanda Knox, who faces a retrial for failing to be guilty of murder when everybody in Perugia knows she’s a witch.

In Spain, Almodovar has a new movie out about his country’s economic crisis. It sounds dark, funny and uplifting — whereas Italy has become shallow, unfunny and boring.

I quite like Krugman’s habit of leavening his blog with some decent music. And he has this very funny take-down of the Reinhart-Rogoff controversy over the relationship between debt and GDP from Colbert (you may need a VPN set to the US to view this). The theme of picking your data points to fit the hypothesis you already decided on is entirely consistent with what How Asia Works describes happening in World Bank reports about east Asian development in the 80s and 90s. Harvard, eh? Martin Wolf (sub needed) has a nice reminder of British industrial revolution history when debt was twice GDP. The best thing in How Asia Works on the non-linear relationship between debt and GDP growth is the financial history of South Korea, set out in Part 3. South Korea was more indebted than any Latin American state in the 1970s and 1980s but, unlike them, didn’t go bust because of what the debt was spent on.

If you are in London, this is superb. And very much on the theme of development.

Need more mirth?

Have a look at the curious tale of the Management Today review of How Asia Works…

Oh, the land…

April 15, 2013

Here is a link to a piece I wrote recently for the China Economic Quarterly about the agricultural underpinnings of development. It is something of a taster for a key theme of How Asia Works.

CEQ Q1 2013 Land Policy

How Asia Works

April 5, 2013

I was just sent a link to a first review of my new book, carried in the FT. If you want to see other reviews (assuming there are any), check www.howasiaworks.com. This one I will paste in here since it gives a pretty good synopsis of what the books is about (and, let’s be honest, isn’t entirely negative either).

 

Reap what you sow

David PillingReview by David Pilling

How Asia Works: Success and Failure in the World’s Most Dynamic Region, by Joe Studwell, Profile, RRP£14.99, 288 pages
A woman plants rice seedlings in a flooded paddy field, Taiwan©GettyA woman plants rice seedlings in a flooded paddy field, Taiwan

Why are the northeast Asian states of Japan, South Korea and Taiwan rich, while the southeast Asian ones of Thailand, the Philippines and Indonesia are relatively poor? Is the failure of the latter because of their geography or climate, or is it because their leaders chose wrong-headed policies?

One of the many virtues of the pithy, well-written and intellectually vigorous How Asia Works is that Joe Studwell does not equivocate. South-east Asian nations have ended up on what he calls the “rubbish heap of industrialisation” because they failed to learn the lessons of history. Instead of taking what he presents as relatively simple steps to technological advancement, leaders were captured by their ruling elites or took bad advice from international institutions such as the World Bank. The latter pushed neo-liberal policies – including no protection for fledgling industries – that Studwell considers wholly inappropriate for countries trying to get on the first rung of the developmental ladder. His recommendation to poor nations is to emulate Park Chung-hee, the South Korean strongman who oversaw what became known as the miracle on the Han river: “make public pronouncements about the importance of free markets, and then go quietly about your dirigiste business.”

The measures taken by Japan, then South Korea, Taiwan and, after 30 years of Maoist missteps, communist China were, argues Studwell, threefold. They involved land redistribution, the development of an export-oriented manufacturing policy, and the formation of a closely controlled finance system. The three important development insights, he argues, are that “a country’s agricultural potential is most quickly released when its farming is transformed into large-scale gardening supported by agricultural extension services; that the technological upgrading of manufacturing is the natural vehicle for swift economic transformation … and that finance must be harnessed to both these ends”. Only the small city-states of Hong Kong and Singapore have successfully taken a different path.

The most original part of the book deals with farming. Studwell, whose Asian Godfathers (2007) dissected the failures of crony capitalism, argues convincingly that successful Asian nations were built on radical land reform. Japan began parcelling out land after the Meiji Restoration of 1868, a policy continued after the war when the US occupation oversaw a seemingly un-American exercise in land confiscation and redistribution. South Korea and Taiwan followed suit. Large farms are often considered more efficient because they can be highly mechanised to produce higher yields per farmer or per unit of investment. In other words, they are more profitable. But in poor, labour-abundant countries, Studwell contends, that is not the point. The goal should be to use available labour to maximise yield per hectare, something achieved on smaller, intensively farmed plots.

Maximising yields serves several broader development goals: farmers earn money to spend on local manufactures; higher food production means the state doesn’t have to waste precious foreign exchange on imports; and farmers’ savings can be recycled through the banking system into industry. Both the indulgent leaders of the Philippines, who left vast haciendas in the hands of absentee landlords, and Maoist ideologues, who collectivised land into unproductive large-scale co-operatives, ignored the basic insight on what he calls “the triumph of gardening”.

The sections on industrial policy and finance are more familiar, though the ideas remain controversial among free-market economists who argue that governments can’t “pick winners”. Such economists, says Studwell, misunderstand what Japan, and later South Korea, actually did. The key was to force manufacturers, whether of steel or cars, to export and thus compete on international markets. Those that couldn’t hack it were killed off. Korea, for example, had three putative car champions in 1973 at a time when local auto sales were only 30,000 cars a year. In the early years, the market leader was the now-forgotten Shinjin. Only later did Hyundai emerge as the last car company standing. “The economics of development requires nurture, protection and competition,” he writes. The alternative to such hard-headed, nationally driven policies, he says contemptuously of the Philippines, is “an authentic, technology-less Third World state with poverty rates to match”.

Studwell’s thesis is bold, his arguments persuasive, and his style pugnacious. It adds up to a highly readable and important book that should make people rethink the glib equation of free-market policies with economic success. He also writes with disdain for those who would peddle the “fairy tale” that poor countries can become rich by skipping industrialisation. Of India’s attempt to build wealth through IT services, which employ only a few million people, he says: “Punditry that likens India’s economic development to that of the more northerly countries is fatuous.”

The implication of Studwell’s analysis is that talk of globally converging living standards is overdone. Those countries that do not begin with comprehensive land reform or bully their entrepreneurs into nation-building – as opposed to rent-seeking – are bound to fail. Even the relatively successful ones won’t get further than Malaysia, he says, a country whose botched efforts at industrialisation he likens to attending school but not paying much attention.

That leaves China, which in many ways has emulated the successful northeastern model, through post-1978 land reform and the creation of state champions financed through policy banks. China’s biggest companies, he argues, are closing in on international standards in heavy industry. But consumer businesses are not. As demographics worsen and as vested interests worry more about personal gain than national development goals, he wonders whether China will get stuck.

Studwell’s book is a warning to those who believe that developing countries in Asia, Latin America and now Africa have cracked the secret of growth and will inevitably catch up with rich ones. Only those nations with good policies will make it, he argues. And good policies are out of fashion.

David Pilling is the FT’s Asia editor

 

 

He talked a lot

March 6, 2013

Chavez

Park Chung Hee

Hugo Chavez might have seemed, momentarily, to be a Latin American Park Chung Hee. He was a military officer and a coup leader with communist sympathies who promised to sweep away the post-colonial oligarchy and the vested interests that kept his country poor.

But there any similarity ends. Park was a doer, Chavez a talker. Within weeks of coming to power, Park locked up South Korea’s leading oligarchs, and did not let them out of detention until they agreed to cooperate in building a new Korea. He poured money into improving agricultural infrastructure and support services, so that the poor could feed themselves and generate an agricultural surplus.

Hugo Chavez was a populist who spent oil money to alleviate the immediate suffering of the poor. But he did not give peasants the means to generate their own wealth or create an industrial base that would turn Venezuela into a different kind of country. In China, he found a post-colonial ‘red buddy’ to build him roads and power stations, instead of having Venezuelans learn to do such things themselves.

And he talked. He talked to fellow third-world bullshitters like Fidel Castro and Robert Mugabe. He occasionally brought in smart people from outside to advise on how economic development really works, but if they dared to talk he just talked even louder. He talked remorselessly against the United States and thereby brought upon himself the wrath of the world’s most powerful country. Unnecessarily and unhelpfully. In sum, he talked too much.

Park Chung Hee didn’t talk. As he wrote soon after coming to power in 1961: ‘‘We need wordless deeds and ambitious construction programmes.’ He liked Goethe’s maxim that genius is the crystallisation of perseverance.

More on Chavez and China:

Bloomberg details China’s loans for oil deals with Chavez.

This is a deeper analysis of Chavez’s relationship with his red buddy, but in Spanish.

There is also quite a bit on Chavez and China in this good new book about China’s main development bank.

Footage of Chavez talking:

Rory Carroll has a good short video of Chavez in action.

A perfect 10

November 28, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There have been a few of these cock-ups in recent years. But this latest one takes the biscuit.

The People’s Daily, mouthpiece of the Communist Party of China, has reprinted a story from The Onion claiming that North Korean leader Kim Jong-un has been voted ‘sexiest man alive’.

The Associated Press explains here. Or read the same in the Washington Post. The original Onion article is here. Sadly The People’s Daily has now taken its story down.

Pity for the rich

October 20, 2010

It has been a very long break while I write the first part of a new book. When you are spending all day working on writing, the idea of writing a blog as well becomes rather less attractive. Nonetheless, with all the fun things going on in the world, I am going to see if I can get back into it after the summer break.

Joe Stiglitz (you will need a subscription) has come out swinging with an attack on what has been dubbed ‘QE2’ or a second round of quantitative easing of the US money supply. What is best about his analysis is that it points out the fallacy that monetary interventions are costless (whereas fiscal interventions raise public debt, as we all know). Stiglitz points out that QE1, which involved the purchase of around US$1 trillion of US government bonds and mortgage securities will have a cost down the line as US bond prices fall (or, put another way, as interest rates rise to more normal historic levels). With QE2 set to be of the order of as much as US$2 trillion, the quantitative easing expected to be confirmed in November will involve long term public costs of an even greater magnitude.

Stiglitz points out that fiscal interventions (can) have clear benefits. Of course there is the money you throw down in welfare benefits to those who lose their jobs. But over and above this, you build schools, railways, new energy infrastructure, etc, etc, which has a long term benefit to society. Things may not be the same with the long-run public cost of unconventional monetary policy.

What Stiglitz doesn’t do is to say where the gain from quantitative easing investment is likely to end up. The answer, surely, is that much of it will end up in the hands of the rich. The expectation of QE2 is already driving a big rally in the US stock market. Where QE1 probably prevented rigor mortis in the banking system during the initial shock, QE2 is mainly telling the financial system that stock prices are likely to rise, if only for ‘liquidity’ reasons. From a bullish stock market, the rich benefit disproportionately. The poor see little or no benefit, consistent with a 40-year trend in the US to make the rich richer relative to the poor.

The real gainers from QE2, I think, are going to be the decidedly rich and the super-rich. This is because, unlike the loose monetary policy after 2001 which fed housing bubbles, this time the liquidity is going to drive asset bubbles and stock market bubbles in developing country markets in which ordinary people do not much play. A flood of cheap dollars, passing through the hands of hedge funds which serve the rich, is headed for the stock markets of Thailand and Indonesia, condo purchases in Hong Kong and Singapore, Latin American local currency government bonds, and so on. The financial managers of the already-rich know how to trade these markets, ordinary Europeans and Americans do not.

There was an Asian stock market bubble in 1991-4 during the last great Euro-US recession. But that was largely based on ‘discovery of Asia‘ overexcitement. The emerging markets bubble we should expect next year will be based much more on domestic US monetary policy (remember that interest rates were high in the early 90s). It may serve, indirectly, to force some warranted currency realignments by pushing up the value of currencies that have been artificially held down by government interventions in east Asia. But above all, within the US, the experience is likely to see a large transfer of wealth from the taxpayer to the already opulent.

It’s all wrong

April 13, 2010

I have written nothing on this blog for over a month while I try to think through the logic of financial sector reform in the wake of the global financial crisis. Frankly, I haven’t got very far. I am not sufficiently knowledgeable about the detailed systemic workings of contemporary banks and ‘shadow banks’ (the bits, like brokers and pension funds, that cause bank-like problems without being banks) to be able to offer a clear blueprint.

Today, however, I was reading some of the now declassified material surrounding a policy choice by the United States government that was clear, decisive and hugely beneficial to tens of millions of people. This was the decision at the end of the Second World War to confiscate all rented farmland in defeated Japan, and to redistribute it to actual cultivators. Reading the original memorandum that led to the policy, one is struck by the extraordinary simplicity and clarity of the thinking: here are the lesser interventions we could attempt – most obviously tenancy reform – and here is why, though such interventions seem superficially tempting and easier, they will either change nothing or make the situation worse. Here is the case for a radical intervention (expropriation). Here is how it can be achieved and the valuation mechanism that will make the process affordable to the Japanese government (offering some small compensation to landlords). And that, of course, is what the US and the new post-war Japanese government did. They changed the institutional terms under which Japanese agriculture, and half the country’s population, operated, setting the stage for the most remarkable developmental story the world has seen (more remarkable than anything we have yet observed in China).

I mention this because reading a memorandum about an effective policy intervention reminds me that I can state a case about financial reform without spelling out every detail. The logic is the same as with the Japanese example for no other reason than that the case for radical change in finance is now just as compelling, and the likelihood that lesser interventions will achieve nothing or worse is just as great. In essence, financial reform requires its own act of expropriation: we have to take away from bankers, shadow bankers, and other speculators all money which they can play with in the current financial system but do not stand to lose because of explicit and implicit government guarantees.

Martin Wolf in The Financial Times (here and here and here, though possibly not if you do not have a subscription) thinks this is impossible because the financial system is too complex. His colleague at The FT, John Kay, thinks that it is possible if you hive off the most core ‘core’ of finance – the so-called ‘payments system’ – and restrict that bit of banking to buying only government securities with the retail deposits it takes in. This of course leaves huge chunks of finance – including things like mortgages – outside of what Kay and others call ‘narrow banking’, the little bit that under Kay’s proposals government would explicitly guarantee.

Japanese land reform makes me think that one should be able to do something more practical and far-reaching than what Kay proposes, given the political will. The counter to Wolf’s arguments is simply that finance is whatever politicians make it; they can rewrite the rules as they like. This, though we have forgotten it, is why we have politicians. And this means that the objective of separating speculative from non-speculative money is feasible.

In the UK, where the government already owns most of the retail banking sector, I would force all core banks to become mutuals (building societies), owned by their members. This is the appropriate form of ownership for the core, boring, low-cost bank activities, which should serve the needs of customers rather than third-party investors. These mutuals would take in government-guaranteed deposits which they would use as the float we employ to make regular payments, to finance mortgages on first homes, to provide working capital to business, and to purchase government securities — all within bands set by the Bank of England. The central bank would hence have a somewhat expanded mandate, giving core banks modestly changing limits for the amount of treasuries they could hold, the minimum business lending they had to do, and their mortgage lending range. This would not be finance by bureaucratic dictat because the Bank of England would be acting within its own limits and because the core mutuals would not provide all mortgages, all business finance, or buy all government debt. But people would use the mutuals because their deposits were guaranteed and credit would tend to be cheaper because the assets and guarantees behind it would tend to be better than outside the mutuals.

In effect, individual citizens would have a certain amount of core mutual ‘entitlement’ and would be encouraged, through voting, to set the agenda and objectives of their mutual. One role of the mutual part of the financial system would be to address the welfare needs which private bankers claim have been supported by private sector bank deregulation – they mean by this access to more mortgage lending for poorer people. Government would probably mandate the Bank of England to force the mutuals to lend a certain amount of their money to poorer people who maintain long-term exclusive accounts and (in a financial sense) behave themselves, such that they could borrow in excess of normal loan multiples to buy first properties. Separately, the mutuals would probably also offer some forms of ‘plain vanilla’, low(er) yield pension products that might be given capital guarantees – contraversial – or some other advantage, say preference in the allocation of government debt or legally-mandated first dibs on private sector initial public offerings (IPOs).

None of this would reduce risk outside the core banking field, indeed it might well increase it. Not to worry: more frequent, more limited collapses among non-guaranteed financial institutions would almost certainly be a good thing. When a crisis occurred, it would – unlike today – be possible to bankrupt the institution in question and send a clear message to people about the risk associated with investing in ‘the real world’. This would be possible, of course, because there finally would be a real world, instead of the unified Never-Never Land that global finance has become since the demise of clear regulation, beginning in the early 1970s. We would all have our building society account, and our other uninsured investments, and no one could be in any doubt about which was which. The system, I suspect, would also be fantastic for competition because it would allow lighter-touch regulation of uninsured financial institutions. My feeling is that politicians are far too keen at present to put the boot into hedge fund managers, who are a real font of new ideas (compared with bankers), because it is so much easier than changing an economy’s overarching ‘financial architecture’.

None of the above will happen, because it would need another World War with 50 million dead to make it happen (which brings us back to Japanese land reform). But it would still, I think, be the right thing to do and hence is worth discussing. Of course there are lots of problems with what I have outlined, not least finding a new, workable balance between the mutual and uninsured financial sectors.  Any thoughts on how to address such issues would be gratefully received.

Related items of note:

Paul Krugman suggests that the financial reform package in the US is likely to be so lame that it is best to boycott it.

http://www.nytimes.com/2010/03/01/opinion/01krugman.html

Roger Alcaly, in the NYRB, reminds us that a lot of hedge fund managers (like him) are much nicer and more intelligent than a lot of bankers, with the best review of the mechanics of the crisis I have seen.

http://www.nybooks.com/articles/archives/2010/mar/25/how-they-killed-the-economy/

The manifesto of the British Conservative party for the 6 May 2010 election is full of bluster about mutual-style organisations, as are other party proposals. But no one I am aware of is proposing that a core banking system be restricted to mutuals, which would be a significant policy.

http://www.guardian.co.uk/politics/2010/apr/12/conservative-manifesto-cameron-power-people

We should not forget the fiscal travesty in our financial system – the fact that interest on debt is tax deductible for business where dividends on equity are not. In essence, this provides a fiscal/legal guarantee of acute over-indebtedness at some point in every economic cycle. Various people have mentioned the fiscal issue in the past year (Martin Wolf, Clive Crook, someone at The Economist, me on this blog, me in a Mr. Angry letter to The FT). Unfortunately the tendency among the journalists is to drop the point down to the eighth paragraph (hard to avoid when no politician will even speak about the question). Still, the fiscal thing ought to be written about in its own right.

Upload: final three FEER articles

January 20, 2010

There have been various requests for me to upload some journalism and book-related work, so here is a (small) start. The following links connect to the last three articles I wrote for the Far Eastern Economic Review. We know they are the last articles, because in December the Wall Street Journal (now controlled by Rupert Murdoch), the owner of the FEER, closed that venerable magazine down. I was fortunate to be asked to contribute to the final issue, and wrote a piece contextualising China’s development in terms of what we have seen, historically, elsewhere in east Asia.  From the autumn of 2009 there is a piece about how China developed its iron and steel industry, again with lots of developing country perspective, which also explains why iron ore producers in Australia, Brazil, India and elswhere are making so much money out of China. Finally, in true Chinese spirit, there is a self-criticism of my 2002 book The China Dream, written in late 2008.

Lost in translation

November 17, 2009

A four-state research trip begins at Fiumincino in Rome, where on a Sunday afternoon the worst chaos I have seen in the Italian capital’s airport reigns. Hundreds of people are crammed into the main security area, a single incoherent mass that takes an hour to pass through the security check. Amid the crush, a British genius yells ‘You need to open more channels’ as if he is the only person in the room that this has occurred to. One guesses the airport cannot find enough people to work on a Sunday afternoon, despite an economy shrinking five percent this year. A couple of Italians lose control completely, screaming like lunatics at the security staff; one of them continues in the same vein at a policeman who appears on the scene.

My Air China flight is delayed a couple of hours because it has been snowing in Beijing, so I can afford to be more patient than some; eventually I get to the gate. Seated in economy I dread a sleepless night travelling east, followed by the jetlag from hell. But soon after take-off I doze off and sleep better and longer than I often do when given a business class seat-bed for a speaking engagement.

The reason for my plane’s delay is snow in Beijing – where I am going first – which closed the airport for half a day. The BBC reports this is due to ‘cloud seeding’, a technique developed in the United States but popularised in China. It involves using airplanes or small rockets to seed clouds with silver idodide that induces rain. You cannot make extra rain like this, as I understand it, but you can make rain fall in places other than where it might fall naturally. The Beijing area is perennially short of water. According to media reports, Chinese meteorologists failed to calculate that wind and temperature conditions on this occasion would cause precipitation in the form of snow. The same thing is said to have occurred in February.

It is a brief, one-night stop in Beijing. On both occasions that I pass through the airport, for landing and for taking off to Tokyo, I have a good look out of the window at the Beijing area. Stories continue to be published in the press that pollution has improved. But all I see looking out of plane windows is a cigarette-smoke yellow haze that sits like an inverted shallow bowl over the city area. A pollution report published by the US embassy in Beijing suggests that the pollution story depends on which pollutants you choose to measure; it focuses on fine particles and tells a less sanguine tale than the official Chinese one.

And so to Japan, where I am ever-more struck by just how little English people speak, even in big cities. I am headed out to the countryside to look at the history of land reform, in what promises to be a supercharged, bucolic version of Lost in Translation, minus Scarlet Johansson.

On the upside, I can read about a quarter of the characters I see in Japan, because they come from Chinese. On the downside, I manage to leave my ‘Survival Japanese’ phrasebook at the friend’s house in Tokyo where I stay the first night.

The car I hire in suburban Tokyo has satellite navigation, but only in Japanese. The one real break I get is that before driving out of Tokyo I manage to enter a marker in the navigation system at the place I am staying. If not, I doubt I would ever have returned.

As much as any place I have been, Tokyo has to be seen to be believed. The vast majority of this vast city is low-rise, clap-board style houses reached by narrow (perhaps six metre wide) lanes which, in my experience, are never cul-de-sacs. These lanes, which are all demarcated with white lines that set aside a little of the precious space on either side for pedestrians and cyclists, go on and on and on.

To prove the point, I leave Tokyo by randomly weaving – following a general north-west trajectory shown on the navigation system – and drive for more than two hours through the lanes until I have had enough and switch to a bigger road. Every so often I come across a market, a school, a group of small one-room restaurants and bars, or a railway line. The more central parts of Tokyo are charming. But the sprawl that connects Tokyo with a series of what claim to be separate towns and cities (you only know it from the names) is ugly and unpleasant. I had not realised before how much Japan has succumbed to the American acceptance of acres of malls, discount stores, fast food restaurants and car showrooms along every significant highway in the country. This has brutalised large swathes of a naturally very beautiful place.

Still, driving into the central mountain range of Honshu island, I eventually reach hills too steep for development. This is where the forest land that covers so much of Japan begins. And it is very attractive forest, comprised of many different tree species, part evergreen and part deciduous. At this time of year the colours are phenomenal. I stay a night in Chichibu, epicentre of a large-scale nineteenth century peasant revolt, and then head across to Niigata on the west coast, an area famed for Japan’s best rice (and hence sake). It is here that a small number of pre-Second World War landlord houses I want to look at are preserved.

Niigata City itself is a reasonably attractive place, easy to navigate, and with excellent food. It comes as a shock that three hours on the expressway through the mountains to get there costs Euro50 in tolls.

The lack of English thing isn’t getting any better. There are shops I go into where the staff appears to have not a single word of English among it. I wander out again, empty-handed. I stay in quite a reasonable hotel, but the English there is up to very little. Eventually I find a woman in the back office who speaks enough English to help me programme the navigation system to find the farms I want to see. I don’t think I have ever felt so cut off from people around me in a place I have visited. They are very friendly and polite. We just cannot communicate.

After a couple of days it is time to head back to Tokyo. Getting to the capital is easy enough. Getting across the capital to my friend’s house is where the navigation system marker turns out to be critical. On a Sunday evening I am led by the machine through a maze of flyovers, tunnels, and complex intersections that would have seen me make a dozen mistakes or more trying to follow a map. Even with the satellite system, I get back after five or six hours in the car remembering why I have come to loathe driving: it is all wasted time; you can’t do anything while you are controlling a car.

Next day I fly to Taipei, stay in a grotty airport hotel, and go back to the airport for an early connection to Manila. There I switch to a local flight to Bacolod, the capital Negros Occidental, a place that has been dubbed ‘Sugarlandia’. In the 19th century it was turned into a sugar estate monoculture by European and American families and has remained pretty much that.

As the plane descends, you can already see multiple fires where farmers are burning off the residue in fields where sugar cane has been cut. There is sugar everywhere, even around the airport. November is part of the cutting season and every road seems to have one or more big trucks piled high with brown cane heading towards the nearest Central, as the sugar refineries are known.

I spend three days trying to understand why the land reform programme introduced after the 1986 flight of Ferdinand Marcos has failed to change the lives of most farmers here. Many landlords have found ways to hang on to their estates – the biggest local player is Eduardo ‘Danding’ Cojuangco, perhaps Marcos’s number one crony, who has never been brought to book – while farmers who have obtained plots have often ended up selling them because of debts to usurers. They then become estate workers again earning, at current exchange rates, about US$2 a day. With the help of some well-informed contacts, I manage to visit land reform cooperatives that are being somewhat more successful. We travel into deep countryside that is as stunningly beautiful as it is poor.

Then it is time for a stopover in Manila so that I can obtain a difficult-to-come-by book, a recent biography of Danding Cojuangco. Reading this on the plane home, I am pleased to note a striking parallel between the late Filipino fantasist duce Ferdinand Marcos and current Italian fantasist duce Silvio Berlusconi.

It seems that not only was the latter embarrassed by secret recordings of his pillow talk. Back in 1972, just before Ferdy plunged the Philippines into more than a decade of martial law, recordings of his bedroom exchanges with a B-movie actress called Dovie Beams (who had been making a movie in the Philippines) began to circulate in Manila. The tape, recorded by the actress before she fled the country, featured Ferdy moaning, singing his favourite folk songs, and begging for oral sex. The University of the Philippines radio station took to playing the recordings over and over. Ferdy, as was his standard refrain, said the whole thing was a communist conspiracy and sought to have various journalists jailed. Now where else have we heard and seen that?


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