AS President Aquino and his foreign-policy advisers grapple with the tensions unleashed by reported Chinese provocative acts in the Spratlys, it maybe be well for all of them to read the latest book of former US Secretary of State Henry Kissinger, the man who initiated the opening of China to the Western world as the US and its European allies used to be called. Appropriately titled On China, the book presents a clearer perspective on how China views the world after that US-China diplomatic breakthrough in 1975. Of particular interest should be how Kissinger looks at Chinese negotiators as stated in a recent essay written by Niall Ferguson for the May 23 issue of Newsweek.

“Chinese negotiators,” Kissinger observed, “use diplomacy to weave together political, military and psychological elements into an overall strategic design.... American diplomats by contrast generally prefer... to be flexible; it feels an obligation to break deadlocks with new proposals—unintentionally inviting new deadlocks to elicit new proposals.... Our tendency is to have an agenda of 10 different points each one to be dealt with separately. They have one big game plan. We are always in a hurry for closure, anxiously watching the minutes tick away. The Chinese value patience. measuring time in millennia....” We urge our officials and the designated negotiators to study the Chinese well, be patient, and do things responsibly.

So, OK. It is well and good that Moody’s Investors Service just upgraded the country’s foreign and local currency long-term bond ratings from Ba3 to Ba2 with a stable outlook. The new ratings are just two notches below investment grade, which means we will have better rates for much-needed borrowings from hereon. Coming as it did months after two other credit-ratings agencies, Standard & Poor’s and Fitch Ratings, also raised their own ratings, investors will now appreciate the country’s macroeconomic situation, which could prompt more direct investments in priority sectors. Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. enthused that Moody’s action “...confirmed that the macroeconomic policy settings of the Philippines are consistent with stronger sovereign debt fundamantals...as it specifically mentioned that the Republic benefits from the absence of economic overheating and inflation pressures which has been due largely to the adoption of an appropriate policy mix....” Indeed, given the financial debacles now afflicting more developed countries such as Portugal, Ireland, Greece and Spain, or PIGS, within the euro zone, as these economic laggards have come to be referred to, we can rightly say that we have been able to ride out the effects of the 2008 global financial crisis better than most countries.

But it is too soon for administration loyalists to start blowing their horns. As BSP noted, while the upgrade is well deserved, it should be noted that we are where we are now after almost a decade of prudent management. “We have grown quite impressively through the crisis,” the BSP noted, “as inflation has been muted, the balance of payments [BOP] has been in surplus, gross international reserves [GIR] have climbed many folds, the banks have been strong and stable, and fiscal consolidation has been entrenched....” It is to the credit of this administration that it has allowed these policies to stay even as it has been criticized as having unduly jeopardized our growth prospects this year in the name of taming the “budgetary deficit” and, in the process, sacrificing the roll out of much-needed infrastructure projects, especially in the countryside. Instead of stimulating the economy using approved budgetary allocations, that move has somehow stymied it with immediate negative impact. Coupled with the return of thousands of our countrymen from good-paying jobs in the troubled countries of the Middle East and North Africa, these “forced savings” disguised as a “review” of all important public-works projects are now coming back to haunt us. Joblessness remains a major concern, as well as decelerating economic activities in the countryside.

In the end, even as we will still experience some growth, it may turn out to be a case of “jobless growth” as former National Economic and Development Authority (Neda) director general and Economic Planning secretary Cielito Habito noted.

Jobs, jobs, jobs

Indeed, the number of jobless Filipinos as of April remains high at 2.9 million, which translates to an unemployment rate of a high 7.2 percent. Although this is lower than last year’s 8 percent over the same period, as well as the United States’  almost 10-percent jobless rate, it remains a formidable block to our growth aspirations, especially if taken in the light of growing underemployment from 12.5 percent last year to more than 14 percent over the same period this year. Even those jobs filled up this year may be classified as short term and even unsustainable, another former Neda official advised. He also noted that a good percentage of those jobs are at minimum-wage entry levels not higher compensated, needing more skilled workers.