By Antonio C. Abaya
In the first part of this essay, I had written that the ultimate reason why a Communist insurgency still lingers in the Philippines, decades after our neighbors had solved their Communist insurgencies, is the failure of one Philippine president after another, from Ferdinand Marcos to Gloria Arroyo, to create broad-based prosperity.
In the East and Southeast Asian context, this failure was caused by wrong choices in economic strategies and policies, most especially in exports and in tourism. Two other East and Southeast Asian countries share our failure: North Korea and Myanmar, both of which have followed autarkic economic policies – meaning they were not interested in importing or exporting anything. Both countries have also deliberately shunned the presence of foreigners, tourists and otherwise, out of a deep-seated xenophobia.
But in the case of the Philippines, our failures in exports and tourism were not the result of deliberate autarkic and xenophobic policies, but rather the result of poor, mediocre, myopic, unimaginative, even stupid, leadership at the very top, from Marcos to Arroyo.
Marcos is pilloried for having been corrupt and authoritarian. But all the other leaders in East and Southeast Asia in the 1970s were corrupt and authoritarian, with the possible exception of Singapore’s Lee Kwan Yew, who was also authoritarian but was apparently incorruptible.
The greatest sin of Marcos, I told my audience at Camp Aguinaldo, was his failure to build an export-oriented economy for the Philippines, as the other Asian leaders had succeeded for their countries at that time.
The Communists and nationalists blame our poverty on the Americans, the Japanese, the IMF and the World Bank. But neither the Americans nor the Japanese, nor the IMF nor the World Bank exerted any pressure on us NOT to develop export industries or tourism. These were the sovereign choices of our leaders, and they have been proven spectacularly wrong.
I wrote in the first part of this essay that our failure in exports and tourism, compared to Malaysia’s success, cost us 12.3 million foregone jobs, one and a half times the number of Filipinos forced to work abroad because they could not find gainful employment in the Philippines, jobs that our domestic economy failed to create because of wrong and poor choices in economic policies and strategies.
The export of manufactured goods was the basis for the industrialization of our neighbors which enabled tens of millions of their citizens to rise from poverty to middle-class status. Broad-based prosperity, generated by exports of manufactured goods, dulled any interest in and appetite for Marxist-Leninist-Maoist revolution.
Aided in no small measure by successful efforts to slow down population growth. As I wrote in comparing Thailand and the Philippines, it is far easier to feed, clothe, house, educate and provide jobs for (Thailand’s) 65 million people than for (our) 89 million.
The growth of enterprises in their export-oriented economies mopped up their pools of unemployed and underemployed, thus raising wages and salaries without the crutch of a minimum wage law, as entrepreneurs bid higher and higher for the workers and employees that they needed
In the light of the current economic crisis ravaging the entire world, there is an upside to our failures. As millions of people in the developed and developing countries lose their jobs and/or reduce their family expenses, markets for everything – including foreign tourism and imported manufactures – will shrink in the next two to four years.
As the East and Southeast Asian country with the least developed export and tourism sectors, the Philippines will suffer the least from the global meltdown, not because of any astute defensive measures taken by our stupid leaders, but because we just happen to have accumulated the least crockery that can be broken as the financial tsunami sweeps through our neighborhood.. This is our consuelo de bobo.
The tsunami also means that, for the time being, exports and tourism will not generate the GDP needed to raise tens of millions of Filipinos from poverty to middle-class status, as they did in the 1970s, 80s and 90s in other Asian countries. It is the enduring tragedy of us Filipinos that, having missed the exports and tourism buses in the past, because of the myopia and stupidity of our leaders, we now see that there is no bus going anywhere anytime soon.
While the tsunami is raging worldwide, GDP has to generated largely in the domestic economy. This means domestic producers have to be encouraged to start and expand their enterprises, with the domestic market, by necessity, their target market. This also means that global trade has to be conducted on a fair or managed trade basis, not on a free trade basis, despite the hue and clamor against protectionism in the recently concluded APEC Summit in Lima, Peru..
Under free trade – embraced foolishly by Gloria Arroyo, even while she was still a senator – rich and developed economies will always have advantages over poor and developing ones. Rich and developed countries have the capital, the technology, the marketing connections to overwhelm poor and underdeveloped ones with their products.
Poor and developing countries will never manage to develop their economies – and generate the jobs they need to survive - if they are overwhelmed right from the start by the superior products of rich and developed ones.
Under fair and managed trade, poor countries should have the option of choosing which products they can import and from which countries, so as to protect their producers and their workers from being overwhelmed by floods of imports, under the rubric of reciprocity. Nations will have to come to mutual agreements that “we will buy your products a, b and c, but only if you will buy our products x, y and z, in more or less equal measures.”
This may be the direction that President-elect Obama is heading, after he promised the American electorate that he would create “five million jobs that cannot be outsourced.” My sense is that American producers and American jobs will be protected under an Obama administration, and rightly so. Copycat Filipinos should do no less.
President Arroyo is correct in proposing a P100 billion package to stimulate the Philippine economy through a crash public works program. The US has set aside a similar bailout package now totaling $1.5 trillion, China more than $530 billion, parts of both of which will go into public works spending.
This would be similar to the New Deal emergency employment program launched by President Franklin D. Roosevelt in the 1930s to pull the US economy out of Depression. Which, for the information of McCain-Palin supporters who labeled Obama a “socialist”, was socialistic and against the tenets of laissez faire capitalism.
In the Philippine context, however, caveats have to be raised: how much of those P100 billion will really go into building infrastructure and generating jobs, how much will get attached to the sticky fingers of President Arroyo’s relatives and favored bureaucrats, and how much will go into bribing congressmen and women into passing ChaCha that will allow her to stay in power beyond 2010 as prime minister? *****
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