Political Educating

These is a painting done by this amazing artist here in Davao. His name is Kublai. He has an entire 4 or 5 storey hotel that's completely filled with his art. It's a really cool place. I thought this picture was suiting of the post's content.... You will see.

OK, so it's been a while since I last posted or at least it seems that way. What's happened? I've been sick, met a governor, built some houses, started my job, been disillusioned, culture shocked, home sick, explored impoverished communities, visited a female prison, been disgusted with the world, optimistic and cynical for the future, played with twenty children who were intrigued by foreigners, hung out with friends, made new friends, explained international politics and macroeconomics (many times), spent a night in an impoverished community and much more... A lot to write on, I know. So I'll just pick and choose :)

Well, I've begun work here in the Philippines. In case you don't know, I'm working for an organization called the Gawad Kalinga Foundation, which is a non-profit NGO that works to help alleviate the situation of those Filipinos in abject poverty. It targets the poorest of the poor and builds bright coloured houses for them to lift their spirits and give them hope for the future. It also provides them with pre-school programs for the children to begin learning early, scholarships for those who may have the grades to get into college, livelihood programs (ways for them to make a living - community-based projects), health education and assistance, a governance structure for the community, and continuous support with the goal of the community being self-sufficient within three years.

My job at GK is to help with their livelihood programs (which are currently quite unsuccessful), environmental issues with the communities, and their governance systems. In the first couple of weeks I have been conducting surveys of the people within the communities to better gauge their life circumstances, finances, and why the livelihood programs have been failing and what they suggest for future projects. So far I've only really adequately surveyed one community and the results were a little disillusioning. I guess I was expecting the people in the communities to be working really hard to raise their socio-economic status and to try to achieve more for themselves and their families. I was also expecting them to be better financially educated and to also be able to give me some good ideas for livelihood programs that could work for the communities. I was pretty wrong.

One family, for example, put 3 kids through college (which is very unheard of in GK villages because of how expensive it is to put kids through college). But all of the kids lived at home still and were unemployed. Most people in the villages are also in pretty deep debt to "Mumbai" and only have a grade 6 education. Mumbai is the term they use for Indians who come to the Philippines and offer loans to the poor. Unfortunately, they offer these loans at 20% interest rates and they have to be paid back in very short periods of time. Many can't make the payments on time, which causes an increase in interest and perpetuates their debt... sound like they got their cue from the World Bank. Other loans are granted from NGOs, but one of them will actually imprison the loanee if he or she cannot make a payment. This causes them to take loans from Mumbai to pay off the NGO loans if they can't make a payment because who wants to go to jail? It is a very difficult situation indeed. The major problem is the macroeconomics in my opinion because no matter what, there's a ceiling on how much the people here can help themselves. There's not enough money in the Philippine economy for everyone to increase their socio-economic status, so how do you decide who succeeds and who fails? I'll elaborate on this later in the post in my "lesson in politics and macroeconomics".

So last weekend most of the other interns here and myself went and joined in something called the Bayani ("hero") Challenge. It's set up by GK and it encourages volunteerism. basically, people come out and help build houses for people who are in dire straits. The people we were helping for this challenge were victims of a landslide. Why did the landslide take place? Because of terrible mining regulations here and multinational corporations taking advantage of those lax laws. Wow... Anyways, we went to help the people there and helped build some houses! It was a lot of fun! The people were all so welcoming and giving. They kept inviting us to share their food and they always wanted to know about us and where we are from. We were in a region that doesn't see many tourists at all so it was really cool. In fact, the governor of the province came to eat with us - and yes, I talked politics with him - and no, I didn't rant, haha, I mostly listened. It was really a great experience to be a part of. I'm really happy we went, but one of the interns got dengue and she's in the hospital right now. She seems OK, but she's there for a few days just in case... The thing is that half of us came back with bad fevers (symptom of dengue), so who knows, maybe half of us got it? I was one of the ones with a fever. But I feel fine now! Don't worry.

Oh, yeah, we also went to Davao City Jail for women. It was quite an experience. We were acquainted with the inmates and they were really wonderful hosts. You can tell they're forced into their positions circumstantially. You know, your environment. If you're surrounded by drug pushers and are living in poverty. What's the first thing you think of as a good way to make money?

GK is putting great programs in place to help rehabilitate them. I hope it's enough because eventually they'll be put back into the circumstances that caused them to be on the wrong side of the law. But, it's still really nice to see that at least someone cares about these people who made mistakes and deserve a second chance. Aaaah, there are so many here and in the world. It's so difficult to first acknowledge them and even more so to try to do something about them. So daunting...







The interns and AIESECers here. They're a lot of fun. This was taken at Jack's Ridge. An old outpost of the Japanese during WWII. It's been made into an expensive restaraunt that overlooks the city. It's really nice though.








A LESSON IN POLITICS AND MACROECONOMICS

Well, like I said, I've been giving lessons on this all week. So what's one more time? And at least this one will be timeless and I can just refer people here from now on. This may looks daunting to read, but please take the time to read and try to understand it. It's important that as many people as possible are educated as to how the world works.

So the major problem with the world is that our economic system is zero-sum. This basically means that in order for someone to make money, someone else has to lose money. This is because there is only X amount of money in the world, and if two people (A and B) both need to gain money, the sum must equal X so they can only take from each other. For example, if the whole world only had $100 (X) and there were only two people (A and B), then X = A + B. Thus, $100 = A + B. In order for A to gain more money, he/she must take from B because the sum of both always equals 100. Oh, just had to throw some math in there, right?

This is how the world works though. So if the US wants to make more money, then it takes money from other countries. The countries most exploited are those in the "developing world" or the global south. Back to the math. If the world's monetary supply is $100, then the developed world probably has $80 and the whole developing world (with a far greater population) probably has $20. This means money in poor countries is spread really thin.

This means that each poor country has a serious lack of money to spread around. The perfect analogy for this is monopoly. If you're playing a game of monopoly, and you start out with $10,000 each, everyone can buy properties and hotels and you can probably make the game last forever because there's a chance someone will land on you and you'll land on them and the game will just keep going. This is the case for the wealthier countries in the world. If, however, you're playing a game and you start out with $100 and there are hotels on every property and they're owned by multinational corporations, everyone in the game will lose. Basically... good luck.

There's actually sooo much to explain. I really can't do it in a typed message that I'm trying to get out as fast as possible so I can get on to other things...

Second major problem with modern economics. All money given out is given as a loan. Money is printed as loans from banks. So all money is basically a loan to the bank and it only has value because collectively we believe it does because after all it's just paper. Let me elaborate. Again, if we have an economy of two people plus a bank: the bank gives out $50 to each person at an interest rate of 10% (I know it's a little high, but it's easy math). So the bank gives out $100, but it expects back $110. So A and B each have $50, but owe $55. Thus, $100(X) + $10(interest) = $50(A) + $50(B). Obviously the sides don't equal out. $110 does not equal $100. Thus, if A owes $55 to the bank, he/she needs to take at least $5 from B to pay back the loan. This means that B will not be able to pay back his/her loan because he/she still owes $55, but only has $45. In short, there is no possible way that either person can pay back their loans because of interest. In addition, all money is debt anyways!! This is how our monetary system works. It's just far more complicated than this.... and far worse...

Now that I said that, I have to explain, right? WELL! Basically, if we have A and B again, they each have their money from the bank. Let's now say they each have $100 and owe $110. So there is $200 in the economy, but they owe $220. Where do people put their money? In the bank. So let's say that A and B both put their $100 in the bank as soon as they get it. Well, the bank has something called reserve rates. This means they only have to hold on to about 5 or 10% of the money you give them (depending on the country). So what does it do with 90% of your money? It lends it out at interest to other people! Or maybe even back to you! So out of the $200 in the bank, it only needs to hold on to $20. It can give out $180 as loans to someone else. Let's say it gives all $180 to person C. Well if C puts his/her money in the bank. The bank now has the initial $20 reserve (from A and B's $200) and it must keep 10% of the $180 ($18). So the bank holds the $38 and it can give out the rest of the $180 ($162). So the bank loans that to D. And I forgot to mention that all the while the bank is charging interest. I need to put this in an equation... I never thought I'd have to say that, haha.

$200(A and B's loan) + $20(A and B's interest) + $180(C's loan) + $18(C's interest) + $162(D's loan) + $16.2(D's interest) is what is owed to the bank. So total debt to the bank = $596.2.

So what's the big problem? All of this debt is owed from $200. Basically, only $200 exists to pay back the entire loan. The rest of the money doesn't exist. This mean's it's impossible to pay back $396.2 of the debt! The majority! This means that these people: A, B, C, and D, must fight each other to the financial death to be able to pay back their debt. Yes, this is how our monetary system works. Who loses? The poor - always. How does this system stay afloat if all money is basically unpayable debt? More money is printed and more debt is taken continuously! How else could the US have such a giant economy with such a giant debt? It needs more debt to pay back old debt! I'm sure they teach this much differently in finance classes...

So people wonder why I'm such a radical. Because the system obviously needs to change in order for us to live in this giant absurdity that is an insult to people's intelligence and ingenuity - if only people knew. And why am I so anti-establishment? Because the establishment perpetuates the status-quo. Schools, politicians, judges, etc.

Developing countries are just victims of an avaristic system. And it's not even avarice really, it's everyone trying to struggle for existence in this system. I mean, look at the US and Canada right now! Going through such incredible financial difficulties. I thought we should be safe in a system like this? Nope. Because internationally, rich countries take from poor. And in domestic affairs, rich people take from poor people. So in every country there are rich and poor and the gap is widening as we speak...

Why don't "developing countries" change things then? Because they are victim to two things: ignorance and international fincancial institutions. IFIs construct policies that allow multinational corporations such as wal-mart and others to go in and rape the resources of developing countries. This is because the IFIs give developing countries loans. So, loans they can't pay back AND we'll take your resources. Thank you, come again! And they will because they need more loans to pay back the initial unpayable loans. Only these new loans will have harsher conditions than the first. Like I said, Mumbai got their cue from the World Bank and International Montary Fund. Oh, and if you don't pay these loans? If you default or go bankrupt? Well, then you'll lose your membership in the World Trade Organization (WTO) and nobody will trade with you. Kind of like North Korea. We all know how economically vibrant they are, right? (They're not if you didn't know [it was sarcasm]).

Another major problem with "developing countries" is that they mainly have resource-based economies. This means they sell raw resources of their land for cheap (extracted from foreign companies, too) so the only money they make is wages and royalties (although most countries don't have any because they actually COMPETE to try to get multinationals to rape their countries). It's kind of like how China doesn't have environmental regulations or human rights regulations. Companies can basically pollute how they want and exploit the people how they want. China's using it's "comparative advantage" to use economic terms. Using laymen terms, they're just brutalizing their own people short term and with long term health problems.

Where does Canada fit in? Well, Canada has been called the world's most affluent developing country. This is because we have a resource-based economy still. The difference is that we have such an abundance of natural resources that we sell and such a low population that we can actually be affluent off of this system. Does that mean it's good? No way. We don't even have an adequate manufacturing sector. And the manufacturing sector we do have? Well they're making cars and things for foreign companies like Toyota and Ford. When's the last time you shopped at a Canadian store? Do you even know which stores are Canadian? And the oil companies in Calgary - well most of those are foreign owned, too. So we're selling valuable things like wood to the US and they manufacture it into something with more value and sell it back to us for far more money. Oh Canada... you really do need to do something about this.

Recap. Zero-sum (monopoly), all money is loans that can never be paid back, and there are gross inequalities in wealth. This isn't even all of it.... if you want to know more, ask. I'm always happy to rant and we all know this :)

What does all this have to do with my trip? How did I get on this tangent!?!?! Well, it's not a tangent. It's a serious problem that I have to deal with every day while I'm here. Basically I know that no matter what I do, I can only help these people up to a limit. At the end of the day, like the monopoly game, there's not enough money in the Philippines or other developing countries for everyone to live as affluent as we do. In fact, in order for me to help the people in the GK communities, that money will likely come from other poor people. Thus, I know that I'm just putting a band-aid on a much bigger problem. In fact, by putting band-aids on, it may prolong the actual root problem. Ironic, isn't it? It's really difficult to deal with and see these problems. But I will do the best I can for GK because I think they're on the right path and need my help. So we'll see what I can do in 5 months. Hopefully I can do as much as I hope and need to do...

I don't know how, but no matter how daunting or terrible the problems of the world are I always keep some hope. I really think that people can change. We just need mass political educating. So thanks for reading. Share if you want... and, until next time.