EDCA economics

Photo from here

Photo from here

IBON Features

Philippine sovereignty remains seriously challenged even as the country marks its (supposed) 116th Independence Day on 12 June. The biggest threat still comes from the US especially amid its so-called pivot to Asia. This foreign policy of the Obama regime involves the deepening of US-PH colonial ties such as through the Enhanced Defense Cooperation Agreement (EDCA).

Recently signed, EDCA is now the most blatant symbol of US intervention in the country, much like the old US military bases in Subic and Clark. And like before, government is reciting all sorts of benefits to justify what is an essentially new basing deal with the Americans.

Economic gains?

One of the supposed gains is economic. The Department of Foreign Affairs (DFA) claims that EDCA will further benefit the Philippines “through the provision of jobs and other economic opportunities in the construction activities… and procurement of local goods and supplies by the US military and personnel.”

Local construction firms, professionals and experts are expected be hired by the US military to build their facilities in so-called “Agreed Locations” under EDCA. Entrepreneurs near these agreed locations will profit as well due to demand for services and products from American troops.

EDCA defines Agreed Locations as facilities and areas that are provided by the Armed Forces of the Philippines (AFP) for access and use by US forces and contractors. Although denied by officials, these shall effectively function as military bases for the US, including prepositioning materiel. Agreed Locations can be anywhere in the Philippines, even in areas where there are no existing AFP bases.

Meanwhile, improved business confidence is another purported economic gain from EDCA. The presence of US forces is claimed to provide stability that local and foreign investors seek. The military deal is said to reinforce stability in Asia, which underpins growth in the region.

No preferential treatment

Alas, like its supposed defense and security benefits such as AFP modernization, maritime domain awareness, etc., authorities are overstating EDCA’s economic gains.

For one thing, EDCA does not require the US to give preferential treatment to Filipino firms to build facilities in agreed locations or supply the needs of American troops. On the contrary, it gives the US the exclusive right to choose its own contractors and suppliers.

Article VIII paragraph 1 of EDCA states: United States forces may contract for any materiel, supplies, equipment, and services (including construction) to be furnished or undertaken in the territory of the Philippines without restriction as to the choice of contractor, supplier, or person who provides such materiel, supplies, equipment, or services. Such contract shall be solicited, awarded, and administered in accordance with the laws and regulations of the United States.

What EDCA merely requires is for the US to make the best effort to hire Filipino contractors and suppliers although this too shall conform to US policies. Paragraph 2 of Article VIII states: United States forces shall strive to use Philippine suppliers of goods, products, and services to the greatest extent practicable in accordance with the laws and regulations of the United States.

Bases for US profits

Building and maintaining foreign military bases have become a lucrative industry in the US, and is dominated by a handful of private American contractors. Based on one rough estimate, private contractors raked in $385 billion in overseas bases in the past decade with the 10 biggest groups cornering one-third of the amount.

The central role that profit-seeking contractors play in nearly 1,000 US foreign military bases worldwide has been made possible by the privatization of logistics and core military roles in US wars and intervention. As one study published in the Indiana Journal of Global Legal Studies put it, “To economically and efficiently ‘manufacture’ the ‘product’ known as security, the DoD (US Department of Defense) has increasingly operated like a transnational corporation: it has adopted the corporate strategies of rightsizing, outsourcing, and offshoring.”

Private contractors perform various functions outsourced to them by the US Defense department – from the construction and security of foreign military bases to “running dining facilities and performing laundry services” inside these bases. Retired US defense and military officials usually found and head these private contractors, explaining their tight relationship with Pentagon.

Thus, it is not surprising that the US Defense department ensured that EDCA would not tie their hands as to their preferred contractors that will provide goods and services in Agreed Locations.

American contractors

Even before EDCA was signed, some of the biggest American private contractors have already been working in the Philippines to support US military operations here. One of them is DynCorp International, which has a $16.34-million contract with the US Navy to perform “labor, supervision, management, tools, materials, equipment, facilities, transportation, incidental engineering, and other items necessary to provide support services” to the US Joint Special Operations Task Force – Philippines (JSOTF-P).

JSOTF-P forces have been rotationally deployed by the US in Mindanao since 2002 through the Visiting Forces Agreement (VFA). Their deployment was part of the so-called war on terror of the then Bush administration. They keep facilities inside AFP bases in Zamboanga City, Maguindanao and Sulu. These facilities are being maintained and secured by DynCorp.

Another is Huntington Ingalls Industries, which builds ships for the US Navy and Coast Guard. In 2012, Huntington Ingalls forged a service deal with giant South Korean firm Hanjin Heavy Industries to provide maintenance, repair and logistics services to the US Navy at Subic Bay. The contract was apparently in anticipation of increased US military presence in the country that will now materialize under EDCA.

Exploiting workers

At best, the only possible economic “benefit” that Filipinos may have under EDCA is as a source of cheap labor. To further bloat their profits, US military contractors usually subcontract to a third party (e.g. recruitment agency) the hiring of workers to perform low-paying jobs inside US military bases.

This system, as a study by Al Jazeera disclosed, is being used to exploit the workers. DynCorp and other US contractors in Afghanistan, for instance, collude with recruiters to charge exorbitant fees to workers and pay them cheap wages while working 12-hour days with little or no time off to do the “cooking, cleaning, laundry, construction and other support tasks necessary to operate military facilities”.

Worse, EDCA does not only not provide protection mechanisms to workers but also in fact deprive workers of using Philippine laws to safeguard their rights and welfare. As pointed out by the petition submitted by Makabayan and others to the Supreme Court (SC) questioning EDCA’s constitutionality, Article XI of the deal states: “Disputes and other matters subject to consultation under this Agreement shall not be referred to any national or international court, tribunal, or other similar body, or to any third party for settlement, unless otherwise agreed by the Parties.”

Such disputes may include violation of labor rights, which is worrisome since Article VIII of EDCA allows the US to hire contractors without any restriction. This means that even the most notorious contractors such as DynCorp and their partners like Hanjin (also infamous for the series of deaths of their shipyard workers in Subic) will continue to land deals under EDCA.

Another possible source of “jobs” are the services for the “rest and recreation” of American troops. But this also means increased exploitation of Filipino women as red light districts near Agreed Locations are sure to thrive like in the heydays of Subic and Clark.

Certainly, these are not the sorts of “economic opportunities” we seek under EDCA.

Generous perks

In reality, it is the US and its contractors who stand to gain the most economic benefits from EDCA. Agreed Locations, as specified in Article III paragraph 3 of the agreement, for instance, shall be made available without rental or similar costs.

And while the country allowed the US to use the Agreed Locations rent-free, the Philippines may still have to compensate the US for the “improvements or construction” in the Agreed Locations, as stated in Article V paragraph 2 of EDCA. The same thing is true with equipment stored in the Agreed Locations, which the Philippines may still need to purchase from the US subject to its laws and regulations (Article V paragraph 5).

Furthermore, US contractors and troops can use public utilities such as water and electricity tax-free, as stated in Article VII paragraph 1 of EDCA. It will be the Filipino taxpayers who will be shouldering the tax burden on the use of such public utilities by US contractors and troops. As noted by the Makabayan petition against EDCA, no private company in the Philippines currently enjoys such generous privilege.

Impact on livelihood

Government is clearly exaggerating the supposed economic gains from EDCA while concealing the fact that negotiators gave too many unjustifiable perks to the US. Aggravating the matter is the likelihood that increased US military presence and operation under EDCA will harshly impact on the livelihood of local communities where the Agreed Locations will be established. Already, Balikatan military drills have been affecting local livelihood such as the small fishers who are being displaced during naval exercises by US and Filipino troops.

Government will also likely acquire more lands or areas to build military facilities in order to accommodate Agreed Locations that the US wants to establish. This is because some locations that the US finds suitable may not be hosting AFP bases. In Subic, for example, which is now a free port zone, the AFP is negotiating with civilian authorities to establish its bases there so that a portion of it can be used as an Agreed Location.

What if the US wants to build a naval or air force facility in Palawan or Batanes where there are fishing or farming communities? The US is notorious for displacing whole communities just to build its bases such as what it did in Okinawa and Diego Garcia.

EDCA is evidently a lopsided agreement that violates our sovereignty while promising false gains. It has always been the case in our more than a hundred year old relationship with the US. Something needs to change. ###

Obama and the US Cha-cha lobby

Photo from here

Photo from here

Malacañang announced that defense and security would be on top of the agenda during US President Barack Obama and President Benigno Aquino III’s meeting on April 28. This, of course, is expected. In time for the visit, negotiators have rushed a new defense accord that will facilitate greater US access to and use of Philippine military facilities amid the country’s continuing territorial row with China. Obama and Aquino may sign the controversial Agreement on Enhanced Defense Cooperation next week as one of the concrete results of the highly anticipated meeting.

But another controversial topic may be discussed when the two presidents meet – Charter change (Cha-cha). Obama may discreetly push Aquino to give his open support to ongoing efforts to amend the 1987 Constitution.

Note that the US government and American corporations are among the long-time advocates of removing the constitutional restrictions on foreign investment. In fact, the Obama administration is more direct in its lobbying for Cha-cha compared to its predecessors.

Behind the cover of development assistance and promoting good governance, the Obama administration is quietly propping up the Cha-cha campaign through its so-called Partnership for Growth (PFG). The PFG is a signature inter-agency effort of Obama’s Presidential Policy Directive on Global Development, which claims to “elevate economic growth in countries committed to good governance as a core priority for US development efforts”. It supposedly aligns with policy reform areas outlined by the Aquino administration in its Philippine Development Plan (PDP).

The PFG is defined by the active participation and coordination of more than a dozen US government agencies led by the State Department, US Agency for International Development (USAID) and the Millennium Challenge Corporation (MCC), as well as multilateral donors like the World Bank, International Monetary Fund (IMF), United Nations (UN) agencies and even non-government organizations (NGOs) and private corporations.

In the Philippines, among the initiatives being supported by the PFG through the USAID is the Cha-cha lobby, which is being led by US companies under the American Chamber of Commerce (AmCham). In February 2013, AmCham and USAID launched The Arangkada Philippines Project (TAPP). This initiative pushes for the implementation of the policy proposals contained in the comprehensive advocacy paper “Arangkada Philippines 2010: A business perspective” prepared by the Joint Foreign Chambers of Commerce in the Philippines (JFC) where AmCham is a key member. Among the numerous policy proposals of the Arangkada initiative is addressing the 60-40 constitutional restrictions on foreign investments as well as other reforms for liberalization, deregulation, privatization and denationalization.

Meanwhile, even before the TAPP, the US government has been advocating Cha-cha through the Office of the US Trade Representative (USTR), which regularly brings attention to policy makers the restrictive economic provisions of the Constitution and the implicit message to remove them because they are barriers to US trade and investment. In March this year, the USTR released the 2014 edition of its National Trade Estimate Report on Foreign Trade Barriers covering 58 countries and trade partners of the US. The report is an inventory of the most important foreign barriers affecting US exports of goods and services, US foreign direct investments (FDI) and protection of intellectual property rights (IPR).

For the Philippines, the USTR identified the 30% constitutional limit on foreign ownership in advertising; 40% limit on foreign investment in the operation and management of public utilities (water and sewage treatment, electricity distribution and transmission, telecommunications and transportation); ban on foreigners to practice law, medicine, nursing, accountancy, engineering, architecture and customs brokerage; and restrictions on foreign ownership of land, aside from existing national laws, as among the barriers to trade being implemented by government.

Providing the backdrop to the US Cha-cha lobby is the Trans-Pacific Partnership (TPP), a potential free trade agreement (FTA) to create more profit opportunities for American businesses. The TPP is a key component of the so-called US pivot or rebalancing to Asia, which is the overarching agenda of the Asian tour of Obama that aside from the Philippines also includes Japan, Malaysia and South Korea. Obama’s former national security adviser called the TPP the centerpiece of US economic rebalancing to Asia and platform for regional economic integration. Aside from their territorial disputes with China, another common thread among the four Asian countries that Obama will visit is the TPP where Malaysia is already a negotiating party while Japan and South Korea are expected to join soon, and the Philippines pushing for its inclusion.

While the TPP and US-PH bilateral economic ties are not as controversial as the rushed and secretive new defense agreement between Manila and Washington, these items in Obama’s agenda during his meeting with Aquino do have far-reaching implications, such as Charter change and its impact on Philippine sovereignty and economic development. Several US officials have declared – and admitted by some of Aquino’s Cabinet secretaries – that Philippine membership to the TPP will require amending the Constitution given the highly ambitious liberalization that the US-led FTA is aspiring for.

Obama’s discussion with Aquino on TPP will further heighten persistent US pressure to implement Cha-cha. Last month, a top official of the USTR was in the Philippines and met with Trade, Agriculture and Tariff Commission officials to discuss the country’s possible participation in the TPP. In January last year, a “powerhouse” trade mission composed of executives from US giants Citigroup, Chevron, Coca Cola, General Electric, Procter & Gamble and JP Morgan Chase, among others, also met with Aquino to lobby for Cha-cha and the TPP. The US trade mission was facilitated by the US-Philippine Society (USPS), a business lobby group co-chaired by Manny Pangilinan, a perceived Cha-cha supporter whose businesses are bankrolled by substantial foreign capital (beyond constitutional restriction, such as PLDT).

Do not expect Obama’s Cha-cha lobby to land in official press statements after the visit because the US is not supposed to meddle in the Philippines’ internal affairs and violate its sovereignty. We may just notice, however, a Cha-cha campaign that is more energized than ever. ###

Read more on US-Philippine relations under the Obama and Aquino presidencies

US-PH Partnership for Growth: Greater economic intervention

Obama’s victory: the fallacy of lesser evil and illusion of choice

“2+2” equals more secret US bases in PH

Obama’s dreaded drone war arrives in PH

US agenda in Asia and the risks that Aquino is courting

Tubbataha grounding: expect more abuses as US pivots to Asia

IBON infographic: US military operations in PH, 2001-2011

Obama’s dreaded drone war arrives in PH

The use of lethal military technology from the US violates Philippine sovereignty and puts Filipinos in great danger (Photo from guardian.co.uk)

The Philippine Air Force (PAF) has denied that it used US-satellite guided missiles or smart bombs in an operation against the Abu Sayyaf Group (ASG) in Sulu last month. It was in reaction to an Associated Press (AP) report claiming that US smart bombs were used in the February 2 air raid that allegedly killed an ASG commander and two top Southeast Asian terrorists along with 12 others. AP claimed that its report was confirmed by four senior Philippine security officials.

Earlier, another article in the Asia Times Online said that the Sulu operation used unmanned aerial assault craft or drones provided by the US. (See illustration below) The article claimed that it was the first known use of US drones in the Armed Forces of the Philippines (AFP) counter-terrorism operations. No less than President Benigno Aquino III admitted that US drones are circling over the country but supposedly only for reconnaissance. The AP report also said that US drones were used but only provided thermal imaging of the aftermath of the air attack. But the clandestine nature of drone missions leaves us nothing to rely on but the assurance by the rabidly pro-US Aquino. And his assurance does not answer the basic question – if US drones can fly over the country secretly from locations we do not know, what prevents them from launching attacks on Philippine soil?

Illustration from ph.news.yahoo.com

The official account of the air raid on the ASG lair claims that the military used “smart pilots” and not smart bombs. A PAF commander based in Zamboanga City appealed to skeptics to “please credit our Air Force”. OV-10s, the aircraft used in the attack, are too old to handle guided missiles, he said, while admitting that the pilots were trained by US forces.

Thus, whether drones, guided missiles, or simply smart pilots were the key, what is clear is that the US played a crucial role in the Sulu operation. However, the use of drones and smart bombs, which are not totally unfounded allegations, steps up US military intervention in the Philippines, raising anew serious concerns on national sovereignty and possible escalation of US atrocities against innocent Filipino civilians.

Unmanned aerial vehicles

Many do not buy the official PAF account of the Sulu air strike. One of them is a former PAF pilot, Captain Joenel Pogoy. Pogoy, detained for two years after exposing corruption in the air force, maintains that it is unbelievable that OV-10s were used in carrying out the attack in Sulu. Without possible enemy fire, the minimum altitude of an OV-10 should not be below 500 feet above ground level (AGL), Pogoy explained. But if there is an expected enemy attack, it should fly at least 1,000 AGL. He added that OV-10s should fly higher during night operation because of terrain height variation. Pogoy seriously doubts that OV-10s – even if manned by smart pilots as claimed by PAF – could achieve pinpoint accuracy in a mission conducted at 3 AM in a Sulu jungle. The only logical explanation is that drones were used, Pogoy said.

That the PAF could have employed drones from the US in the Sulu operation, which reportedly killed Umbra Jumdail or “Doc Abu” (an ASG commander), Singaporean Muhamda Ali (a member of Jemaah Islamiyah or JI), and Malaysian Zulkifli bin Hir (a top JI leader and one of Southeast Asia’s most wanted terrorists) is not farfetched. The US has long been using drones or unmanned aerial vehicles (UAVs) in the region, including the Philippines. In fact, a number of US drones has reportedly crashed or shot down in Mindanao including in Zamboanga (2002), Sulu (2006 and 2007), and Maguindanao (2008).

The current US drone program, under the auspices of the Central Intelligence Agency (CIA), started immediately after the 9/11 attacks. Previously used for simple intelligence gathering, the drones were armed and used for assassination of targeted individual terrorist leaders, even including those outside official war zones, thus further inflaming the fundamental question of US intervention and sovereignty issues. It was first used in February 2002 in the former mujaheeden base Zhawar Kili in Afghanistan against a “tall man” that CIA operatives thought was Osama bin Laden. It turned out that the target was an impoverished Afghan scavenging for scrap metal, according to journalists who probed the incident. He was killed with two others that the CIA, despite the later admission that the tall man was not bin Laden, insisted were “legitimate” targets. (Read brief history of US drone program here)

Under the Obama administration, it has been noted that the use of drones in America’s counterterrorism campaign has greatly intensified. President Barack Obama has not only publicly recognized US drone strikes but has even defended them saying that a “pinpoint strike” is “less intrusive” of other countries’ sovereignty than other military ways to target al Qaeda. (Watch video below).

Was the use of US drones to eliminate al Qaeda-linked terrorists basing in Sulu “less intrusive” of Philippine sovereignty? Not for countries like Pakistan, which is demanding that US drones be removed from their country; and Iran, which captured a US drone flying over their airspace calling it an invasion and dangerous act.

Obama, the Nobel Peace Prize winner, deploys a missile-bearing drone about once every four days while former President George Bush, who initiated the discredited US global war on terror, deploys a drone only once every 47 days, according to one estimate. The US today is also said to be spending more than nine times on drones than when the CIA first used attack drones under the war on terror in 2002.

“isn’t perfect, never is”

Worse, the use of remote-controlled aircraft does not only seriously impinge on other countries’ national sovereignty. Their increased use under Obama has also resulted in a significant number of civilians killed. Pakistan is a case in point. According to data culled by non-profit think tank New America Foundation, there were only 42 US drone strikes in Pakistan from 2004 to 2008. When Obama took over in 2009, the number went up to 53, and more than doubled to 118 in 2010. Last year, there were 70 reported US drone strikes in Pakistan, and 11 so far this year (as of March 13, 2012). The New America said that based on their account, some 17% or almost two out of every 10 people killed by US drones were neither leaders nor members of al Qaeda, Taliban, or any terrorist group. From 2004 to 2012, it has monitored 290 reported drone strikes that killed as much as 2,764 people, of which almost 470 were civilians. One example is the case of a 12-year old Pakistani boy who was killed in a drone attack on Oct. 31, 2011 as exposed by UK-based lawyer Clive Stafford Smith, a campaigner against the use of drones. The child victim had volunteered to help Smith by taking photos of people killed by US drones. In Yemen, an Al Jazeera report said that drone attacks have become more frequent than in Pakistan, killing up to 500 people many of whom were civilians.

The same danger is true with so-called smart bombs, which are not as smart as claimed. For instance, during the February 2001 air attacks on Iraq launched by the US and Britain, Pentagon admitted that most of the smart bombs missed their targets. A separate account said that the bombs missed their targets by as much as 100 meters. US defense officials gave the bombs an accuracy of “about a B minus or a C plus”. In the Kosovo War, it turned out that the accuracy of the smart bombs used by British forces was only 40 percent. In another incident, US smart bombs “accidentally” hit the Chinese embassy in Belgrade during the Kosovo War. Former Pentagon spokesman Rear Admiral Craig Quigley described air strikes using smart bombs this way: “It isn’t perfect. It never is…” Unfortunately for the population where these bombs are being dropped, even the slightest miscalculation could prove massively fatal.

Projecting US power

Drones, together with special operations troops, are expected to play an increasingly more prominent role in US global defense strategy. Facing its worst economic crisis since the 1930s Great Depression, the US has been forced to cut back on its defense spending to address its burgeoning debt and budget deficit. Consequently, it has been looking for more cost-effective ways – in the economic as well as political sense – to continually project US military might globally.

In its budget request for fiscal year 2013, the US Defense department is calling for a 30% increase in its fleet of armed drones in the coming years, according to a report by the Wall Street Journal (WSJ). Quoting Defense officials, the WSJ said that from the current 61 drone combat patrols around the clock, with up to four drones in each patrol, Defense Secretary Leon Panetta intends to “operate 65 combat air patrols constantly with the ability to temporarily surge to 85 combat air patrols.” US defense officials are also planning to deploy more special operations teams at a growing number of “lily pads” or forward operating bases (FOBs). The US plans to increase special forces by 10%, from 63,750 this year to 70,000 by 2015. (See illustration below)

Illustration from online.wsj.com

The increased use of secretive combat drones and special forces will be felt in the Philippines and the rest of the Asia Pacific, which the US has given a more prominent role in its current defense strategy that has special attention on China. (Read document here and analysis here) Negotiations are ongoing between Philippine and US defense and foreign affairs officials to expand US military presence here including the deployment of more special forces, holding more and bigger military exercises, and stationing of US Navy ships. Meanwhile, the largest Balikatan war games yet have been scheduled from April 16 to 27, involving 4,500 personnel from the US Pacific Command. And of course, the admission by Aquino that deadly US drones have been regularly flying over Philippine airspace from undisclosed destinations. Aside from the Philippines, Australia has also already committed to host up to 2,500 US Marines in Darwin in Northern Australia as well as possibly allowing the basing of long-range US drones on Cocos Islands, atolls in the Indian Ocean off northwest Australia.

The idea of people in supposedly sovereign countries being killed at a touch of a button by unaccountable and anonymous CIA operatives from some remote area pushes the cold-bloodedness of US intervention to unprecedented heights.

The use of lethal military technology from the US and the increased presence of their troops in the Philippines seriously violate our sovereignty as a country while further inflaming our internal conflict and unnecessarily escalating our tension with China. The Aquino administration, behind the pretext of improving our national security and protecting the country’s territorial integrity, is putting the Filipino people in a great and unimaginable danger. #