Polycrisis

At the opening last Sunday of the 12th Ministerial Conference of the World Trade Organization (WTO) being held in Switzerland, its Director-General, Ngozi Okonjo-Iweala called for global solidarity and multilateralism amid what she warned as an unprecedented “polycrisis” being experienced by the global community. The first African woman leader to head this international trade agreements body identified at least four crisis events taking place all at the same time in many countries around the world.

A Harvard-educated economist, Okonjo-Iweala noted the world community faces difficult challenges due to the following crisis happening all at once, namely: the malingering COVID-19 pandemic; the Ukraine-Russia war now going into its fourth month; the consequent soaring of food prices; and rising energy costs. The WTO Director-General listed the four “as pieces of a polycrisis” where many of its members are all suffering from, though in various degrees of difficulties.

As defined, a global “polycrisis” is any combination of three or more interacting systemic risks with the potential to cause a cascading, runaway, and irreversible catastrophe.

The June 12-15 Ministerial Conference being held at the WTO headquarters in Geneva attempts to address the inequity of distribution of anti-COVID-19 vaccines, fishing subsidies, food security, and reforming the WTO. The current WTO director-general told a news conference about these game-changing events around the world since the WTO’s last ministerial conference nearly five years ago.

International news agency Reuters reported campaign groups gathered near the body’s lakeside headquarters of the WTO, some denouncing capitalism, and others calling for an end to “vaccine apartheid.” Last Sunday’s opening of the WTO Trade Ministerial session meeting was dedicated to “challenges facing the multilateral trading system.”

Having once served as Finance Minister of Nigeria, Okonjo-Iweala acknowledged Third World countries like hers suffer the most from emerging out of crisis on top of existing crisis. Speaking to ministers at the opening, the WTO chief urged them to “show the world that the WTO can step up to the plate” and achieve agreements on subjects such as reducing fishing subsidies, boosting access to COVID-19 vaccines, addressing food security and setting a course for reform of the WTO itself.

Wire news agencies also reported divisions among the WTO’s membership after some 30-40 nations walked out when the Russian economic development minister Maxim Reshetnikov took to the Conference floor. Reports earlier came out that the trade ministers from the European Union and 29 other WTO members met with Ukraine Ministers to express their solidarity and support and wish to alleviate food supply problems.

The WTO makes decisions by consensus, meaning a single member can block progress, and negotiations often last years. The 27-year-old WTO is itself has been in trouble from within its member-states whether from richer or poorer countries since it came to existence. To date, the WTO members have only ever agreed one global deal, the red-tape cutting Trade Facilitation Agreement in 2013.

The Philippines is among the 164 members of the WTO. Our permanent representative to the WTO is ambassador Manuel Teehankee. With more than 100 trade ministers around the world attending this Conference, the WTO seeks to achieve one or two global deals this week. Attending in this Conference is Department of Trade and Industry (DTI) Undersecretary Rodolfo Perry representing DTI Secretary Ramon Lopez. The outgoing DTI Secretary flew earlier to the United Arab Emirates and Israel to complete and sign the investment promotion and protection agreements with his counterpart Ministers in these two countries.

The Philippines acceded to the WTO membership since January,1995 following the Senate ratification of the Trade Facilitation Agreement entered into by the Philippine government. Organized farmers, fisher folks and other organizations from the agriculture sector along with other affected sectors of the Philippine economy strongly opposed the Philippine accession to the WTO. They were wary over the promised free global trade regime that the WTO will supposedly be ushered in for the country once it joins this world body.

To mitigate the expected adverse impact of the removal of tariff and non-tariff barriers such as phyto-sanitary clearance, minimum access volume (MAV),etc. were imposed. The Philippine government implemented a number of so-called “safety nets” to aid affected sectors to adjust to the evolving free trade regime. Such included, among other intervention measures, the annual budget support of the national government to agri-fishery sectors.

While the WTO was still in the infancy stages, it was not apparently projected there would be such a phenomenon called as “polycrisis” events that can put well-laid plans in disarray. Albay Rep.Joey Salceda, regarded as the resident economist of Congress, shared the same concerns of the “polycrisis” have such “catastrophic” impact to consumption-led economies and dependent on imported oil products among Third World countries like the Philippines.

This projected impact, Salceda revealed, is contained in a latest study which he shared to us during our Tuesday Club breakfast gathering yesterday at the EDSA Shangrila in Ortigas Avenue in Mandaluyong City. The 146-paged study, according to Salceda, showed the Philippine economy faces the prospects of at least “five percent deflation” in the immediate future. Thankfully, Salceda noted, outgoing President Rodrigo Duterte has built a “strong house” to brace the country from what he calls as a “tsunami” out of the “polycrisis” besetting the entire global community.

Salceda, however, believes incoming President-elect Ferdinand Marcos Jr. could and should capably address the challenges of the “polycrisis” that would confront us. In the next six years of the Marcos Jr. administration, Salceda counts on more robust investments to Philippine agriculture will save the day for us Filipinos.