Making Up for the Lack of Minority-Owned Banks

MARK WHITLOCK AND FAITH BAUTISTA
SEP 15, 2014 12:00pm ET
Mark Whitlock is the senior minister of the largest black church in Orange County, Calif., Christ Our Redeemer Church. Faith Bautista is the chief executive of the National Asian American Coalition.

Regulators have promoted the growth of minority-owned banks since the Civil Rights Act of 1964. These efforts have paid off to some extent with the success of Chinese-American and Chinese-owned banks, as well as Korean-American and Korean-owned banks. But today there are virtually no black-owned banks in the country that are large enough to serve a significant segment of black or other minority communities. The U.S. also has a dearth of Latino-owned banks (excluding Cuban American-owned banks) and banks that are owned by Southeast Asian Americans or Pacific Islanders.

Because of the current regulatory and economic landscape, it is unlikely that many new minority-owned banks — or white-owned banks for that matter — will emerge over the next decade. Rather than try to swim against the current, an increasing number of minority communities are urging large white-owned financial institutions and Chinese and Korean American-owned banks to address the concerns of all underserved minority communities.

This cannot be done without strong support and leadership from banking regulators. An initial signal that the regulators may support this initiative are the reforms to Community Reinvestment Act exams suggested by three regulators on Sept. 8. The proposed changes include giving extra CRA credit to banks that lead efforts to move financially underserved populations away from payday lenders and into banking, and to banks that make microloans to small businesses. Extra CRA credit would also be available to banks that use alternative credit scoring models as part of their home origination and other loan underwriting decisions. We estimate that this last change alone could help an additional one million Americans become homeowners each year.

But even more innovation is needed in order to ensure that banks are meeting the needs of minority communities. Individual banks should be creating plans as to how they can better serve the underbanked and maximize responsible homeownership and small business development. Moreover, regulators should reward banks that pursue such changes by giving them extra CRA credit and, where necessary, relaxing unnecessary regulatory barriers.

Large and small Chinese American-owned banks in California are already taking action to broaden their CRA horizons, encouraged by discussions with black, Latino and Southeast Asian churches, business chambers and minority grassroots non-profits.

The two largest Chinese American-owned banks, East West Bank and Cathay Bank, have begun to reexamine their CRA responsibilities in recognition of the fact that Latinos, blacks and Southeast Asians often constitute the vast majority of populations in their assessment areas. Smaller Chinese American-owned banks, led by Royal Business Bank, have also begun exploring ways to assist all underserved communities.

Royal Business is now providing massive lines of credit to nonprofits that allow them purchase real-estate owned properties, rehabilitate the houses and sell them to low- and moderate-income families. And East West, Cathay and Royal Business have each started financial education programs that focus on black youth, who currently face a disproportionately high unemployment rate.

Underrepresented minority communities have also approached Korean American-owned banks, including BBCN Bank, Hamni Bank, and Wilshire Bank, about how they can replicate the progressive CRA stance of many Chinese American-owned banks.

In addition, more must be done to ensure that the nation’s 130 million minorities receive effective banking services from white-owned banks — including too big to fail banks like JPMorgan Chase, which lost its “outstanding” rating in 2013. JPMorgan could become a number-one home originator to low- and moderate-income families by developing a failsafe alternative credit scoring system to use in conjunction with responsible homeownership requirements and expectations. If other financial institutions follow JPMorgan’s lead, these measures would ward off potential for another subprime housing crisis while allowing homeownership among minorities to reach record highs. This could be a very realistic and profitable effort for many of the country’s largest financial institutions.

In the aftermath of the Civil War, Abraham Lincoln created the first black-owned bank — the Freedman’s Savings Bank. Fifty years after the Civil Rights Act was enacted and the War on Poverty began, it is time for community groups, banks and regulators to develop a new paradigm for ensuring that all minorities are effectively served by our increasingly regulated and federally-subsidized banking industry.

Mark Whitlock is the senior minister of the largest black church in Orange County, Calif., Christ Our Redeemer Church, and the director of corporate partnerships for 5,000 African Methodist Episcopal churches. Faith Bautista is the chief executive of National Asian American Coalition.

Link to the Original Article: http://www.americanbanker.com/bankthink/making-up-for-the-lack-of-minority-owned-banks-1069903-1.html

How Big Banks Can Go Beyond ‘Satisfactory’ Regulatory Ratings

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Many minority-led church groups are working closely with the federal regulators and the National Asian American Coalition in encouraging financial institutions to achieve Dr. Martin Luther King’s “I Have a Dream”approach to economic development and community reinvestment.

As representatives of these organizations, we are heartened and encouraged by Comptroller of the Currency Thomas Curry’s recent speech at American Banker’sRegulatory Symposium. Curry’s position that banks should move far beyond “satisfactory”ratings and that regulators will have “heightened expectations”when auditing internal controls are especially important to Main Street communities. They are also important in attempting to meet King’s inclusionary message of fifty years ago, which foreshadowed the 1977 Community Reinvestment Act.

For too long, large banks and the vast majority of mid-size banks have ignored Main Street needs. With the rarest of exceptions, no one from Main Street is on any large bank’s board of directors. Further, with only a few exceptions, financial institutions’ strategies are focused on profits and avoiding federal government penalties, rather than on how they can ensure the growth and well-being of their retail customers.

Curry’s “heightened expectations”for large banks should and must include whether our communities are substantially better off as a result of their presence. Otherwise, the subsidies that the people provide to the banking industry will be ill-spent, particularly during a period of budgetary constraints.

This approach is consistent with the 150-year history of the OCC, as Curry pointed out to a thousand community leaders and more than two dozen banks in his speech and comments at the National Asian American Coalition’s recent conference. Curry cited this advice that one of his predecessors provided to banks a hundred and fifty years ago: “Pursue a straightforward, upright, legitimate, banking business … ‘Splendid financiers’ is not legitimate banking, and ‘splendid financiers’ in banking are generally either humbugs or rascals.”

Every large bank has different needs and different aspirations. It is, however, up to the Comptroller of the Currency and other federal regulators, such as the Federal Deposit Insurance Corp. and the Federal Reserve, to set especially high standards that create economic development, jobs and healthy communities throughout our nation.

Main Street and faith-based communities have a few specific suggestions for the OCC and other regulators that we expect will follow the leadership standards set forth by the Comptroller.

First, all financial institutions that have $10 billion or more in federally-insured deposits should be included within the Comptroller’s aspirational standards of going well-beyond “satisfactory”ratings. Therefore, CRA ratings should be revamped and very high standards should be required before a bank receives an “outstanding”CRA rating.

Second, no mergers or acquisitions should be approved unless a large bank has either an “outstanding”rating in all categories (lending, service and investments) and/or submits, after receiving community input, a future CRA plan that will ensure a subsequent “outstanding”CRA rating.

Third, all large banks, as part of this process, should annually hold community Main Street forums attended by their CEOs and lead directors. The bank should then file a report on these forums with the appropriate regulator and include comments and input from the community.

Fourth, socially responsible community investments should reflect the asset size or the FDIC-insured deposit base of the financial institution.

Fifth, innovative programs should be required to maximize the achievement of the American Dream of responsible homeownership shared by the overwhelming percentage of Americans, including new immigrants.

Sixth, innovative plans to help our nation’s more than five million small minority-owned businesses (many located in underserved communities) through lending and technical assistance should be instituted to substantially complement and/or supplement the generally inadequate Small Business Administration programs.

Seventh, the limited financial education programs previously supported by the banking industry must be drastically overhauled. This includes major investments in K-12 financial education and a major overhaul of financial education to assist communities to withstand a broad array of sophisticated, but unethical practices. This includes the practices of unregulated institutions, such as payday lenders and debt collectors.

Lastly, all of the banking regulators should hold joint annual bank/community forums in major areas of the nation. These forums should include substantial input from Main Street that could assist regulators and the banking industry in achieving well-beyond “satisfactory”performances.

by ANTHONY HUGHES AND SERGIO DE LA MORA

Anthony Hughes is chair of the Social Action Committee of the San Diego County Interdenominational Ministerial Alliance. Sergio De La Mora is senior pastor of Cornerstone Church of San Diego. Both partner closely with the National Asian American Coalition.

Link to Original Article: http://www.americanbanker.com/bankthink/how-big-banks-can-go-beyond-satisfactory-regulatory-ratings-1063065-1.html

How to help prevent giant utility rate increases and advance the interests of Asian Americans

Link to Original Article from Asian Journal

SIX million Asian Americans in California are deeply affected by the actions of one of the most powerful California government agencies, the California Public Utilities Commission (CPUC). The CPUC influences a broad range of multibillion dollar utility and telecommunications companies. This includes PG&E, SoCalEdison, SoCalGas, SDG&E, AT&T, Verizon, and Sprint. This powerful five member commission also influences the policies of many other companies such as Comcast, Time Warner, Cox and indirectly influences Apple and Google.

The National Asian American Coalition works closely with most of the five commissioners and often, but not always, supports their actions to promote corporate responsibility.

Commissioner Timothy Simon and President Michael Peevey are the two commissioners with the longest history of advancing economic opportunities for Asian Americans and in protecting Asian American and low income communities. Both have been strong advocates for corporations awarding far more contracts to minority-owned businesses and in hiring and promoting more Asian Americans. They have also helped ensure that low and moderate income families secure discounts on their energy bills (CARE program) and secure free energy conservation resources (ESAP). Partly as a result of Commissioners Simon’s and Peevey’s efforts, all of the major utilities have Asian Americans on their boards of directors; in contrast, the vast majority of Fortune 500 corporations have no Asian Americans on their board.

The CPUC has many unfinished tasks that influence the future success for Asian Americans. One of the most important is whether PG&E, SoCalEdison, SDG&E and SoCalGas will secure $17 billion in rate increases that they have requested during a recession. We have opposed most of the rate increases as unnecessary and have questions whether rate payers should fund extravagant multimillion executive compensation packages proposed by most utilities. We have therefore urged limited or no rate increases so long as California is in a recession and our overall state unemployment rate exceeds six percent.

Another major issue before the CPUC is one where commissioners Simon and Peevey could be especially helpful. Today, the major utilities award $35 billion in contracts annually to businesses. But small Asian American businesses do not receive even one-tenth of one percent (00.1%) of these multibillions of dollars in contracts. These Commissioners have urged greater business opportunities for small Asian American businesses.

One key issue where Commissioner Simon has been particularly helpful involves effective outreach and education on how Asian Americans and others can reduce their bills through discount programs and reduce their energy consumption through various energy efficiency programs paid for by the utilities. And, with Commissioner Simon’s support, we have been advocating for a very substantial increase in funding for low income community education and outreach in all languages, including Tagalog.

Creating Competition and Lower Wireless Costs

Within the next two months, the CPUC will have an opportunity to substantially reduce the cost of wireless services. Presently, costs are often extremely high due to lack of competition. Therefore, the NAAC is urging the CPUC to support the acquisition of Sprint by Softbank (an international telecommunications company) if Softbank designs programs of public benefit to Californians. Softbank’s CEO has already committed to effectively competing with AT&T and Verizon through low-cost products. The CPUC will therefore have the opportunity to substantially reduce phone bills for Asian Americans and all Americans if it approves this merger with appropriate public interest conditions.

What Can Asian Americans Do To Protect Themselves?

Timothy Simon may also be as close as we can get to an Asian American advocate on the Commission since Governor Brown has never, during his three terms as Governor, appointed an Asian American to the Commission.

Commissioner Simon’s term ends at the end of the year. Given Commissioner Simon’s very strong, knowledgeable, and effective voice on behalf of Asian Americans and other minorities, this could endanger the success of many low-income community outreach and minority small business programs.

But, the Asian American community is not powerless. This is why we and many other Asian Americans have already written to Governor Brown to reappoint Commissioner Simon. Please join the NAAC and write to Governor Brown and urge him to nominate Commissioner Simon to a second term.

***

Faith Bautista, the President of NAAC, was chosen by the CPUC to be the only minority group to be featured at the CPUC’s 100 anniversary celebration two years ago and was a long-time member of the low income Advisory Board chaired by Commissioner Simon and is presently on the California Utilities Diversity Council.

Shalini Swaroop is the Senior Staff Attorney at the NAAC and is presently handling over a dozen CPUC cases on behalf of Asian Americans, including three major cases opposing billions of dollars in rate increases during the recession and other cases promoting greater opportunities for low income and minority families.

Creating Competition and Lower Costs for Asian Americans

Link to Original Article from Asian Journal

Faith BautistaSoftBank, a major Japanese telecommunications company, is seeking to acquire America’s third largest telecommunications company, Sprint, for $20 billion. It is possible that a combination of anti-foreign investment politicians, community groups, the Federal Communications Commission (FCC), the Department of Justice (DOJ) and the California Public Utilities Commission (CPUC) will seek to oppose this merger.

The reasons for opposing the merger will largely be driven by outdated 19th century antitrust laws and/or a fear of foreign investments in telecommunications. For example, the independent Chinese telecommunications company, Huawei, is facing overwhelming obstacles to investing                                        Faith Bautista                          in  the U.S., largely due to political considerations inspired by anti-China bashing by both political parties. Many congressional leaders are contending that Huawei could misuse its U.S. investments to engage in a broad range of economic espionage.

The National Asian American Coalition (NAAC) does not agree with those who fear foreign investments or those who oppose companies getting larger even if it is in the clear public interest. Based upon our 21st century responsible corporate investment philosophy, we have sent preliminary letters to the antitrust division of the DOJ, the FCC and the CPUC. Our regulatory letters set forth conditions that SoftBank must meet for it to successfully acquire Sprint. The conditions we have set forth could be highly beneficial to Asian Americans and the public.

We have also sent a preliminary letter to Masayoshi Son, the CEO of SoftBank, requesting a pre-Christmas meeting with him to discuss how, with Asian American and other community support, SoftBank’s acquisition of Sprint could be expedited.

Why is the NAAC, which often opposes mergers (including the Comcast/NBC Universal and the United Airlines/Continental Airlines mergers) likely to support this merger?

First, our support is based on the fact that Americans have few telecommunications options today. Almost all telecommunications options are in the hands of a duopoly, AT&T and Verizon. Sprint is a very weak third and underfunded “competitor.”

Second, we believe that greater competition is likely to create lower prices and far more innovative products for consumers.

Third, although AT&T and Verizon have been good corporate citizens, additional competition is likely to make them even better corporate citizens.

Mia Martinez

For example, in 2005, the NAAC (formerly the Mabuhay Alliance) initially opposed Verizon’s acquisition of MCI and SBC’s acquisition of AT&T until both companies committed to very major public interest advances that benefitted Asian Americans and other minorities.

Today, Asian Americans in California are benefitting from the public interest conditions the NAAC helped impose seven years ago. Our conditions included: (a) a $60 million broadband fund for underserved communities; (b) a doubling of the dollar amount of philanthropy to Asian Americans nonprofits; (c) increasing minority and women business contracts to 44% of all contracts (as a result, AT&T and Verizon have the best minority business contract programs in the nation); and (c) annual meetings                              Mia Martinez                        with the CEOs of AT&T and Verizon.

We are proposing a similar public benefits proposal to SoftBank’s CEO. It will enable SoftBank to more effectively compete for business in California where 60% of new customers are minorities and where Asian Americans are often the leaders in technology.

T-Mobile and MetroPCS

 

T-Mobile, the fourth largest telecommunications company in the U.S., has filed to acquire MetroPCS, the fifth largest telecommunications company. Although this merger has the potential to create another effective competitor, it also poses problems for low- to moderate-income consumers and many Asian Americans. Both companies primarily compete for low- to moderate-income customers. If a merger is approved, the two competitors will become reduced to one, thereby eliminating an important type of competition.

We are presently exploring the potential to ensure that this T-Mobile merger benefits low- to moderate-income families despite the potential reduction in competition.

Within the next thirty days, our Washington DC regulatory office will seek to set up meetings with the FCC and the antitrust division of the DOJ to discuss the competitive advantages and disadvantages of both mergers. After the election, we will also seek to meet with Republican and Democratic congressional leaders to convey our support for responsible foreign investments.

Hopefully, before the end of the year, we will have met with the CEOs of SoftBank and T-Mobile in joint efforts to develop public interest investment strategies that could expedite both mergers and substantially benefit the Asian American and other underserved communities.

 

Faith Bautista is the president and CEO for the National Asian American Coalition. Mia Martinez is the chief deputy for the National Asian American Coalition’s Washington DC regulatory and congressional liaison office.

Voter Guide on Key California Initiatives for November 6th: 
How Asian Americans Can Finally Make a Difference

Link to Original Article from Asian Journal

Faith Bautista, President and CEOFaith Bautista, President and CEO

The National Asian American Coalition (NAAC) is a nonprofit bi-partisan organization. It is offering its suggestions and advice on the four most crucial California ballot measures (propositions) before the voters on November 6th, 2012.
We offer our observations with reservations since we believe the initiative (proposition process), once the hallmark of California’s democratic system, is deeply flawed. It is being corrupted by big money and generally does not focus on major issues, but instead on issues that merely tinker with a problem.
Proposition 33 is an example of the hijacking of our democratic ballot process. Virtually all of its $17 million in funding (99%) comes from just one billionaire who seeks to promote a concept that may benefit his insurance company but will certainly harm new immigrants as well as low- and moderate-income families. A broad range of consumer and civil rights groups oppose the initiative but have no funds to educate the public as to why this initiative is harmful.

Good Government Reforms
Subsequent to the November elections, the NAAC will begin to work with other good government groups to modify the initiative process. Our objective is to create a tool for good government and democratic principles that cannot be corrupted by corporate greed or the self-interests of billionaires.

Our two good government reforms are:
limiting contributions to a maximum of $1,000; and
limiting the life of any proposition to ten years unless it is approved by the voters in a new election.
160 Asian Americans were surveyed at the NAAC conference on October 15th on these two proposals. 71% favored limiting contributions to a maximum of $1,000. Similarly, 82% of those with an opinion favored a ten-year maximum term.
Our recommendations for the four most crucial propositions that affect the Asian American community are as follows.

 

Rhea Aguinaldo, Deputy Director for CaliforniaRhea Aguinaldo, Deputy Director for California

Prop 30 and 38: Increase Taxes to Fund Key Services, Support for Both
Proposition 30 would increase the personal income tax on those making over $250,000 for seven years and increase sales tax by 1/4 of a cent for four years.  This added revenue would mostly go to K-12 schools, with 11% going to community colleges.  School boards would be able to decide what to spend the money on, as long as it didn’t go towards administrative costs.
Proposition 38 would raise income taxes on a sliding scale for twelve years.  During the first four years, 60% of revenue would go towards K-12 schools, 30% would be used to pay down California’s debt, and the remaining 10% for early childhood programs, such as day cares.  After four years, 85% would go for K-12 schools, and the rest to early childhood programs.
Propositions 30 and 38 are related tax increase initiatives that seek to raise revenue for crucial services over the next few years.  Prop. 30 is Governor Brown’s initiative and Prop. 38 is the initiative funded by a millionaire with a long history of serving the public and is backed by the California State Parent Teachers Association.
Unfortunately, neither initiative addresses the heart of the problem, an outdated tax system that should have been reformed by prior governors.   Prop 38, however, attempts to address a broken tax system by focusing on one of the most important services any state can provide: a quality public education.
We commend the Governor for his Prop 30 efforts, but wish that he had tried harder to truly solve the fiscal crisis.  We also commend the supporters of Prop. 38 for at least making an effort to save our public school system, an area of special concern to the Asian American community.
We therefore recommend “Yes” votes on Proposition 30 and Proposition 38.  However, the Asian American community wants, and needs, far more effective tax reform.  It must begin with our legislature and our Governor and should start early next year in Sacramento.

Prop 32: A Free Ride for Corporate Money — Oppose
Proposition 32 would forbid unions from making the automatic payroll deductions that go toward union political activities.  It would do the same for corporate payroll deductions, and prohibit both corporations and unions from contributing directly to candidates or candidate-controlled committees.

Prop. 32 presents a special dilemma for Asian Americans.  We are opposed to increasing the power of any special interest.  This includes corporations, billionaires, and labor unions influencing the unique 100 year old democratic institution of public initiatives or propositions.

Ordinarily, we would favor Prop. 32 since it curbs the clout of a powerful special interest: labor unions.  But it also fails to control the growing multi-billion dollar power of corporate America.  Neither labor unions nor corporations, nor even the best-hearted billionaire, are always looking after our interests.
When, however, corporations, labor unions and billionaires wish to put a proposition on the ballot that will level the playing field and restrict contributions to $1,000, we will consider supporting such.

Prop 33: Special Billionaire Interest that Harms New Immigrants, Oppose
All Californians are required by law to buy car insurance.  Under state law, insurance companies may only decide what rates to charge customers based on number of miles driven, driving safety record, and number of years they have been driving.  Proposition 33 would let insurance companies charge based on whether a person had been continuously insured (with any company).
The problem is that this discount would allow insurance companies to increase the cost of insurance to new insurance consumers or people who have not had insurance for ninety days.  So, if you buy car insurance for the first time, as most new immigrants do, your insurance prices will probably be higher. This is a type of redlining that is generally prohibited.
This is why many well-respected consumer organizations oppose Proposition 33, such as Consumer’s Union, the California Nurses Association, and the Consumer Federation of California.
Next year, we will be joining many good government groups, and we hope you will join us, in putting democracy and fairness back into our ballot measures.

Letters: Many Stakeholders in Executive Pay

Original Article

 

Many Stakeholders

In Executive Pay

To the Editor:

Our organizations read with interest Gretchen Morgenson’s analysis of how employees are joining in shareholder attacks on executive paypackages (“Employees, Too, Want a Say on the Boss’s Pay,” Fair Game, April 22).

But this concern also extends to consumers. In California, consumer groups have sought to require all public-utility rate increases as they relate to executive compensation to be subject to a ratepayer advisory vote. This vote would be based on a random sampling of 1,000 ratepayers, conducted by an independent pollster. Ultimately, consumers are affected as much as shareholders by excessive executive pay, because it fuels bloated budgets and executive lifestyles that consumers must eventually pay for, directly or indirectly.

In the case of a bank, this might be through higher fees on checking accounts, for example. For a gas or electric utility, however, it can mean higher rates.

Len Canty

Faith Bautista

April 22

Mr. Canty is chairman of the Black Economic Council, based in Oakland, Calif., and Ms. Bautista is president and chief executive of the National Asian American Coalition, based in San Bruno, Calif.

Protect our resources

By: Faith Bautista and Mia Martinez
Philippine Daily Inquirer

9:31 pm | Saturday, April 21st, 2012

No one doubts that the Philippines is rich in terms of natural resources, including gold and copper. In particular, China does not doubt our natural wealth as it seeks through military threats to claim our oil resources.

The West Philippine Sea (South China Sea) is estimated to hold 213 billion barrels of oil. Assuming a very conservative estimate of $50 a barrel, more than $11 trillion in a highly valuable resource partly belongs to the Philippines. The total value is 35 times its gross domestic product in 2011. Properly managed, and avoiding the corruption of Nigeria and the arbitrariness of Venezuela, the Philippines can be an economic powerhouse just based on a modest share of the West Philippine Sea oil resources. And this does not include the natural gas reserves estimated to reach 4.4 trillion cubic feet.

Fortunately, unlike Japan, our resources are far greater and diverse. We are third in gold reserves, fourth in copper reserves, fifth in nickel reserves and overall fifth in mineral wealth in the world. China’s Zijing Mining Group is planning to spend almost $1 billion in overseas acquisitions of gold and copper reserves, and has indicated that it is considering such acquisitions in the Philippines. Any such acquisitions should be part of a broad plan to resolve the West Philippine Sea dispute and maximize the benefits to Filipino workers without harming the environment.

President Aquino is to be commended for rethinking the Philippine government’s former head-in-the-sand approach to our enormous natural resources, particularly as to our huge copper deposits and very large quantities of gold, nickel and zinc.

We have one even greater resource that must be combined with our natural resources or we will be taken advantage of by nations such as China. That resource is our entrepreneurial skills, creativity and flexibility. But how can we achieve a balance that works for our nation and our people between exploitation of our natural resources and the growing need for additional productive investments?
Productive investments could lead to millions of good paying jobs.

Today, for example, almost all of the good paying jobs available for hardworking Filipinos are overseas. That does not have to be the only way. A decade ago, Lula da Silva was elected president of Brazil almost exclusively by the workers. Lula recognized that if he followed only inflexible far-left principles, Brazil would never become a prosperous nation and the vast majority of its people would remain from poor to dirt poor.

Brazil today, as a result of Lula’s policies and the continuance of these policies by its new president, Dilma Rousseff, is no longer a Third World country. It is now among the Top 10 nations and the 40 million who were very poor have been moved to the middle class in less than a decade. That is the balance we must seek.

Another former great nation closer to the Philippines is also considering the Brazilian experiment. Burma (Myanmar) has decided, after 50 years of regressive anti-entrepreneurial policies, to revisit the modern era and invite responsible investors, including the United States.

Burma, formerly the world’s largest exporter of rice, was once a rich nation. But until its president reversed two generations of anti-entrepreneurial policies, it nearly made the mistake of agreeing to an oppressive investment agreement with China. That deal would have built a dam that would have flooded an area the size of Singapore along Burma’s Irrawaddy River, and diverted 90 percent of the hydroelectric energy to China.

In Zambia, the government has invited China to develop its copper mines. But a Human Rights Watch investigation last year found that China’s state-owned mining companies consistently subjected local workers to “abusive health, safety, and labor conditions,” and threatened to fire workers who complained or refused to work under dangerous conditions.

Inside China, many set their hopes on the recently completed Three Gorges dam to bring pollution-free energy to the country. But the project has displaced 1.4 million citizens, magnified the effects of flooding and drought along the Yangtze River, and even exacerbated the river’s pollution.

China’s mining industry is also notorious for destroying the environment and has had an unusually poor safety record. More than 51,000 have died in China’s coal mines since 2001. In contrast, 348 died in US coal mines during the same time period.

As China’s leading environmentalist, Ma Jun, recently said, China’s indifferent environmental practices have prevented 300 million Chinese from having access to safe drinking water and more than half of its urban population is exposed to persistent air pollution.
The Philippines must avoid these mistakes.

Many of the Philippines’ greatest human resources today are overseas. These resources should be tapped by the President. He should form a select blue ribbon environmental and jobs committee. Two-thirds of this committee should consist of residents of the Philippines, and one-third, Filipinos residing in other nations. The committee should be charged with developing, within the next 12 months, a comprehensive plan to quadruple responsible investments in the Philippines in exchange for creating millions of middle-class jobs.

The authors of this article are too young to remember, but only 50 years ago, just before the Marcos era, the Philippines was viewed by the World Bank, the International Monetary Fund and most investors as the second wealthiest nation in Asia. And some of us remember that our parents and grandparents dreamed that one day we might surpass Japan in wealth and power because we have far more natural resources.

This dream of catching up with Japan has been dashed time and again. But we believe President Aquino, the son of a great and creative leader who viewed obstacles as opportunities, will be up to the task. If our President is another “Ninoy,” within less than a decade, at least half of the poor in the Philippines will be part of the middle class, as has occurred in Brazil. Then our expatriates will return to the Philippines to participate in the greatest economic and social revolution in our history.

Faith Bautista is the president and CEO of the National Asian American Coalition. Mia Martinez is the chief deputy of the National Asian American Coalition and the director of its Washington DC office. Both have been active in fighting the Chinese government’s efforts to buy a bank in the United States due to the Chinese government’s military threats to the Philippines, Vietnam and other countries that claim rights to the West Philippine Sea.