Establishing a Framework for Rural-Urban Fringe Planning-Part 3

At present, many countries have already incorporated the concept of sustainability in each of their own developmental plans and programs. For instance, in Australia, sustainable development has become a buzz word in the planning arena. In South Australia,  ideas like “land-use planning must extend into economic, social and environmental spheres of strategy” and “ a long term flexible framework need to be linked with short term plans” are considered as key principles in strategic planning exercises such as the Adelaide 21 Project (Lennon, 1996). In the Philippines, the  acceptance of “sustainability”  as a very valid developmental goal has prompted the government to formulate the Philippine Strategy  for Sustainable Development  (PSSD) in 1987.

I believe that in essence, the concept of sustainability has fully feathered and may now be used as a yardstick  for objectively deciding what is good,  right, and fair. Therefore, it was deemed  appropriate to use this concept as a framework or guide in assessing the effectiveness and appropriateness of the rural-urban fringe  management system and land-use policies  in the Philippines. 

The relevant definition of what is an appropriate and effective policy would be that which would allow the highest and best use of land  in the rural-urban fringe based on all its economic, social and environmental attributes. Built-in to the policy should be a decision-making tool for identifying what is that  “highest and best use” of land.

“Highest and best use”  is defined by Frederick Babcock in his 1932 work as “that available  use and program of future utilisation of a parcel of land which produces the highest present value” (cited in Wendt, 1972, p.133).  Fisher and Fisher defined it as “a designated use of a spatial unit which will allegedly produce the largest net income over a given period of time” (cited in Wendt, 1972, p.133). Relatedly, the Appraisal Institute defined it as “that use which at the time of appraisal is most likely to produce the greatest net return to the land and building over a period of time” (cited in Wendt, 1972, p.133).

The three above cited definitions take “highest and best use” as a concept central to real estate finance  and said definitions clearly convey the principle of profit maximisation. Another definition of the same context is that provided  by William N. Kinnard, Jr. and Bryl N. Boyce in  An Introduction to Appraising Real Property.  According to them,  “highest and best use (highest and most profitable use; optimum use) is that reasonable and probable use which will support the highest present value as defined, as of the effective date of the appraisal (cited in Webb, 1980, p.58). These definitions however are applicable only in the financial point-of-view. Other factors such as risk (Webb, 1980) and  unquantifiable costs and  benefits  are bound to be left unaccounted for. In this regard, the concept of “highest and best use”  relevant to this research study is that which  will support the optimal realisation of  economic benefits by taking into consideration as much unquantifiable costs and benefits as possible. That means, the decision-making tool for identifying what is the “highest and best use” of a particular parcel of land must grow beyond financial analysis and approximate a full benefit-cost analysis   (BCA) if it is to internalise both the concepts of productivity and sustainability. 

Establishing a Framework for Rural-Urban Fringe Planning-Part 2

The notion of “sustainability” as embodied in Khan’s paradigm actually  had its origins in the international environmental law and policy of the 1970s and 1980s. In a document known as A Blueprint for Survival (The Ecologist, 1972, cited in Basiago, 1995). It was said that the industrial way of life with its ethos of expansion, is not sustainable. The rates of growth of population and consumption are undermining human survival prospects by disrupting ecosystems and depleting resources. 

“Sustainable Development” first appeared in the World Conservation Strategy drafted by the International Union for the Conservation of Nature (IUCN) in 1980, who suggested that it should be advanced through “conservation”, defined as “the management of human use of the biosphere so that it may yield the greatest sustainable benefit to present generations while maintaining its potential to meet the needs and aspirations of future generations (Eblen and Eblen, 1991 cited in Basiago, 1995). In the same year, Cousteau wrote in his Bill of Rights for Future Generations that “future generations have a right to an uncontaminated and undamaged earth...each generation has a duty as a trustee for future generations to prevent irreversible and irreparable harm to life on Earth” (cited in Basiago, 1995). Such a duty, more popularly known as the “futurity principle” will ensure sustainability.

Similarly, the UN’s World Commission on Environment and Development in 1987, in what is more widely known as the Brundtland Report, defined sustainable development as “development that meets the needs of the present, without compromising the ability of the future generations to meet their own needs”. 

Then, in Rio de Janeiro in June 1992, the Earth Summit was held and was attended by over 120 nations to endorse “sustainable development” as an economic and environmental policy of extreme importance in the 21st century. The Earth Summit produced a document known as the Rio Declaration on Environment and Development (UNCED, 1992 cited in Basiago, 1995) wherein in its 27 principles, it was repeatedly indicated that economic development and environmental protection should be integrated. Agenda 21, a fifth accord to come out of the Summit, is a blueprint on how to make development  socially, economically and environmentally sustainable (Keating, 1993 cited in Basiago, 1995).

The applicability of sustainable development as a concept, through time, has transcended boundaries. For over two decades, a wide array of definitions  developed as its applicability  penetrated  different fields and bodies of knowledge. It is now said that if you throw a stone in any direction, you will likely hit three definitions of sustainable development.

In the arena of planning,  the notion of sustainable development could be particularly applied in pursuing a  plan or design science that will integrate growth and urbanisation with nature preservation and social enhancement.

Millichap (1993, in Basiago, 1995) posed that both  the temporal dimension of sustainable development (concern for  future generations)  and its spatial dimension are actually long established concerns of city and regional planning. The relevance of sustainability to land-use planning is in the interplay of its future and spatial dimensions. To illustrate the point, Millichap (1993, in Basiago, 1995) cited as an example the compact city that allows for efficient transport and thus reduced carbon emissions, and therefore protects the future generations from global warming. To this, Calthorpe (1993),  agreed and likewise blames suburban sprawl as the cause of some major urban ills. According to Calthorpe, urban growth boundaries should be set to preserve natural features at the edge of the metropolis and such boundaries should be large enough to accommodate growth for the next generations and small enough to encourage in-fill, redevelopment and medium to high density living.

The core of the idea is that planners must  move away from the design philosophy  which seeks to bend nature to its will and should rather  conceive new design concepts and physical plans which would be in consonance with what nature dictates. In “The Hannover Principles”, McDonough (1992, in Basiago, 1995) urged designers and planners to “ insist on the rights of humanity and nature to coexist in a healthy, supportive, diverse and sustainable condition because the elements of human design interact with and depend upon the natural world” (p.116).

The concept of sustainable development is now regarded as a new philosophy in which principles of futurity, equity, global environmentalism and bio-diversity must guide decision-making (Basiago, 1995).  An exhaustive look at the available literature on “sustainable development” since the early 70s  yielded that the concept is no longer just an aspiration or a goal. It has evolved into a principle to govern activities at all levels of a system, a quality that characterises social interaction  that will yield vitality.  According to Basiago (1995, p.118),  “it is no longer just a doctrine enshrined in the rarefied reaches of political philosophy” but can now be treated as a valid research methodology and analytical tool  in various fields, to include social sciences. The concept can be treated as similar to the empirical method which sets up a schema  for asking important questions but does not provide, a priori, an answer. It can provide selection criteria which would aid  in  identifying all the valid alternative solutions for the problem at hand. The questions that may be generally asked by virtue of the sustainability principle are: Will the future generations have an undiminished stock of natural capital? Is it equitable now and for the future? What will be its short and long-term impacts on the global environment?

Wanted: Systems View on the Traffic Issue

The traffic woes in Metro Manila could make a killer out of Gandhi. It is frustrating as watching a cross-eyed trying to thread a needle. There are many solutions that have been brought forward; some are witty and many others border on the dumb and dumber. 

As an intermittent economist who also dabbles as an armchair urban planner (oh, a potent combination!), I agree with certain proposals that focus on enforcement. People are known to respond to prices. When there is a price to pay, behavior can be changed. 

Others dwell on the obvious physical limitations of the roads. They say we have too many cars and too little road space. So, when one puts two and two together and get three, that person is likely to suggest that the solution is to have less cars by forcing them out of the system. Some others get five, so they look to requiring a minimum number of heads in a car to be allowed to partake of the limited space. 

And then there are the limited few who  get it  right between the eyes. The ones who would say, let us be holistic. If we fix the trains, people will choose it over their cars when the roads are full. People will even choose the buses if the buses are on time, clean, drivers are behaved, and have express services, the last one being a point to point service with no stops in between, and with some extra mile services such as newspapers and maybe even coffee. But then we will have to have carparks in train and bus terminals so people can park and ride. Others can even kiss and ride when the wife can drop off husbands on their way to the grocery, or that could also be husbands dropping off working wives before their muscled arms do the laundry. 

The really enlightened ones would propound creative solutions and say,  we should create systems for temporary house swapping, so families who dare participate in this system could swap houses (or apartments, condo units) so that they may live closer to their workplaces. Schools could create swap systems to optimize home-work travels for their teachers and students, government offices can also do the same for their employees. 

But wait, there's more! Malls and business establishments can seriously localize hiring of sales staff, and private companies can shift a whole work force into a 10am-7pm work schedule. I would even push it to 11am-8pm to really skip the rush hours altogether. Or for the brave CEOs, work-from-home could also be the new flexitime. Otherwise shift workdays from Tuesday to Saturday, and avoid killer Mondays like they do now in some State Unis. 

Government can incentivize these private-led solutions. 

Until we realize that the traffic is just a manifestation of lack of a systems view of urban planning issues, we will continue to get piece meal solutions from politicans. 

There I said it. Yes, i did. Now I will sit back and drink my decaf coffee. 

The Economists' Disease

Before you read on, please watch this.

As you watched through the video, I would guess that you were thinking about the beauty of nature, diversity,  sustainability, environmental awareness and so on. If I am right in your case, then you are likely not an economist, but for sure you have a beautiful heart.

If you are one of us, a gang of people burdened by a "rational brain" to the point of it being in fact an affliction, you would have not seen the beauty you just saw; the birds and the rabbits and the regrowth of willows and the less-meandering river. You would have not seen the colors and the hues as your brain connected the dots from the reintroduction of the wolves to the changing of the river.

Instead, you would have seen a multiple regression model, with predictor variables and correlation coefficients. You would have thought, "hmmm, what tests are applicable: multicollinearity, heteroscedasticity  and/or autocorrelation? Will the values of x's be true blue unbiased estimates? Do I just look at the residual plots or perform the White Test or the Goldfeld-Quandt Test?" You would be yearning, longing, thirsting, aspiring for a data set, both time-series and cross-section. You would be fumbling for what dummy variables can be used. And after all the number-crunching you would have came up with a thought: "It makes me wonder, what it we introduce dingoes and not wolves?"

Yes, we kind of always spoil it, even in the case of love and beauty.

And that is why I call it an affliction.

 

The Yuan and the Bald President

 

On the heels of China's devaluation of the Yuan, economists all over the world knew that this one will be felt all over the world in staccato fashion. China has been for a time regarded as the last bastion of the once highly-regarded BRIC nations. Brazil and Russia had seen low growth for a while now, and India had been quietly limping along. And China has finally entered a massive deceleration from a previous regime of high growth that had been mainly fueled by government spending, mostly in vertical and horizontal construction. This is not really a big surprise. From 2-3 years ago, we already knew this will happen.  A nation, even one as big as China, cannot build roads, rails and Olympic stadiums forever.

Main exporters to China, the likes of Australia, Japan, Brazil, South Korea and Malaysia, will surely take a hard hit. The construction machine has gone past its overheating point and has to slow down. It will therefore buy less of the raw materials that it once gobbled up in big numbers. With the devaluation, it will also be more expensive for China, thus adding more pressure to import less.  

The Chinese government had been trying hard to fix their woes  by way of monetary and fiscal policy; the most recent is the decision to devalue the Yuan. And every economy strongly linked to China will take a hit.

And the Philippines? Well, no matter how much we throw mud at the balding President, we have to admit, this one knows his job. There might be some stroke of luck in there where our economy currently stands, but undeniably our strong economic fundamentals is also a result of good leadership. Our well-known fiscal and monetary prudence did not happen by accident.

Thanks as well to our solid BPO industry, and the forever heroes that are the OFWs. Also a much deserved thanks to Filipinos who invest in the Philippines. Our stocks and bonds are only 10% foreign-owned. When the going gets tough, foreign investors cash in and run. But even if they do as in the case now, 10% of them is not enough to make the edifice crumble. 

I hope I have whetted your appetite about this issue. I will not repeat what has already been written, and might as well let you read it straight from the Chicago Tribune (http://www.chicagotribune.com/news/sns-wp-blm-news-bc-philippines24-20150824-story.html?ref=yfp).

As a parting shot I wish to hammer this one home: We are in good footing today despite the financial chaos elsewhere because Filipinos (incl. the OFWs) invest in the Philippines, and the bald leader has the ability to see the big picture; the acumen to put society first before politics.

Finally, the Filipino as a citizen has evolved. We keep our money here because we believe in what we have become; a new version we could aptly call Filipino 3.0. This is the version that holds real our ability to rise and rise again, until lambs become lions.

Notes:
Pic from vox.com
Join the Filipino 3.0 community in Facebook

TradeLib in the ASEAN - By Nonoy Oplas Jr.

This one here is a well-written paper on the topic of Trade Liberalization in the ASEAN by a good friend of mine, Nonoy Oplas, Jr. A must-read, for those who wish to understand the relevant economic concepts and likewise see ASEAN trade in graphs and numbers. True to his advocacy of having less government intervention in areas where the free competition should thrive, Nonoy draws the conclusion that governments should promote and not interfere in business trade. Two thumbs up!

 

The Economics of Roger Moore

I saw the link to this article (http://www.realclearmarkets.com/articles/2014/12/02/the_economics_of_roger_moore_the_greatest_bond_of_them_all_101412.html)on the internet. And the sucker that I am, of course clicked it, and enjoyed the next few minutes of my life. The quote from his new book " One Lucky Bastard" goes:

"When I started playing Bond it became apparent, in 1977, that I would have to leave the UK if I wasn't to pay ninety-eight per cent tax on my salary: an actor's life in the spotlight is short, so we need to look after our pennies, and that's why I decamped to Switzerland with its lovely snow-capped tax benefits."

The quote above from Roger Moore gives a semblance of how John Galt (of the Atlas Shrugged fame, by Ayn Rand) decided to leave the politicized society and established a separate objectivist society in a faraway hidden valley. Ah. He may not be my favorite James Bond (as I do like the swagger of Pierce Brosnan), but I will definitely hunt for this book.