Ronald Goseco l February 17, 2023 l The Manila Times
THE Year of the Rabbit, which was ushered in on January 22, represents new beginnings and a renewal of good health, happiness and fortune. It also marked the global transition of the pandemic into a public health emergency of international concern. This almost sounds like the same thing, but things have changed. You can see it in the crowds going about their business without masks and the offering of thanksgiving prayers. The Year of the Rabbit is certainly off to a good start.
According to the 2023 Global Risk Report of the World Economic Forum (WEF), we are facing what appear to be familiar risks that could affect what is expected to be an auspicious year. The rabbit, after all, symbolizes longevity, positivity, wittiness, cleverness, deftness and most importantly, in a world of uncertainty, self-protection. This particular zodiac year is also attached to the element of water. Like water, this year is expected to flow smoothly and calmly. Unlike the pandemic years, the Year of the Water Rabbit is forecasted to be relaxed and quiet.
This tranquility could be disturbed by global developments. According to the WEF, the energy crisis is ranked at the very top this year, followed by the food crisis and cost of living. In the next two years, the cost-of-living risk is expected to leap to number one in the global agenda. As we all know, Russia’s invasion of Ukraine plunged Europe into a major energy crisis and set inflation on an upward spiral, pushing the cost of living and creating a food crisis that has spread beyond Europe. This affected commodities like grain and oil, which weigh heavily on the global basket of commodities.
According to the Philippine Department of Energy, the power outlook this year will likewise be challenging, as tight power supply in Luzon and Visayas will be met by higher demand as the economy recovers further from the pandemic. They projected that there would be at least 17 yellow alerts and three red alerts. The red alerts may occur during the peak months of May and June as capacity may fall below the required regulating reserve. It was pointed out that many existing coal-fired power plants have experienced unplanned outages and exceeded their mandated allowable outage limits last year. If the same thing occurs this year, this could lead to widespread power outages. The Institute for Climate and Sustainable Cities also pointed out that there were very few improvements in the supply side from both coal and fossil gas power plants. The entry of new renewable power plants are likewise constrained by limited transmission and distribution interconnection capacities. This situation portends a real problem.
Second on the list are natural disasters and extreme weather events. The earthquake in Turkey and Syria, which has already claimed 33,000 lives — in which the United Nations predicts could rise to 50,000 — is a reminder to us that as a country in the Pacific Ring of Fire, we have to ensure that our buildings are built to standards that would give their inhabitants enough time to evacuate. We also have to revisit evacuation procedures, as these have not been reviewed nor exercised because of the pandemic. The changing weather patterns, which have unleashed the coldest winters in the Northern Hemisphere, could also bring torrential typhoons in our region this year.
Third on the list is geopolitical confrontation. As geopolitics is prioritized over economics, a longer-term rise in inefficient production and rising prices becomes more likely. Geographic hot spots, particularly in the Asia Pacific, pose a growing concern. We’ve been hearing a lot about Taiwan but just this month, the Philippine Coast Guard (PCG) accused China of breaking maritime laws after a Chinese coast guard vessel flashed a military grade laser at a PCG ship that temporarily blinded its crew off Ayungin Shoal. The PCG said that preventing the Philippine government ships from resupplying the BRP Sierra Madre is a clear violation of Philippine sovereign rights. This is on top of numerous incidents in the past where Chinese maritime ships prevented Philippine fishermen from fishing in our waters, not to mention an actual ramming incident that was obviously done on purpose to discourage us from venturing out in our territory.
Meanwhile, the United States military is holding joint exercises in the South China Sea at a time of heightened tensions with Beijing over the suspected Chinese spy balloon that was shot down. President Ferdinand Marcos Jr. has also expressed his support to give the United States military access to four new bases under the Enhanced Defense Cooperation Agreement. This is still being debated, but it is becoming evident that a military buildup in our region is almost certain, and no one knows where this will all lead to.
There you have it, the top three risks in the Year of the Water Rabbit. Some of these have already happened. The invasion of Ukraine, inflation and the rise in commodity prices, the earthquake and the military buildup all across the globe. These compounding crises are increasing their impact across societies, hitting livelihoods and destabilizing more economies in the world aside from the traditionally vulnerable communities. Economic impacts have been cushioned by countries that could afford it, but lower income countries are suffering the most as the cost-of-living crisis is rapidly spiraling into a humanitarian crisis.
The WEF report concludes that with a crunch in public sector funding and competing security concerns, our capacity to absorb the next global shock is shrinking. Fewer countries will be able to afford to invest in future growth, green technologies, education and health care which are necessary to mitigate the shock. The accumulating impacts will be corrosive to the strength of human capital and development. Some of the risks in the report are close to the tipping point, but there is still time to reverse all these. We all have to act collectively, decisively and with a long-term lens to shape a pathway to a more positive, inclusive and stable world. There is hope amid this madness, but time is running out, and we have to act our parts individually and collectively to achieve this stability.
*** Ronald S. Goseco is a Finex Foundation trustee and president of the first energy transition mechanism company ― EPHI. His opinions are his own.