Stability from Failures

By Antonio C. Abaya
from Standard Today

In my article No More EDSAs (Feb 23), I had commented on President Arroyo’s assertion that our political stability has insulated this country from the worldwide financial meltdown. “She noted that the financial crisis had driven two thirds of the world into recession, while the Philippines remained relatively unscathed. ‘Our political stability today is one of the reasons why we have escaped thus far the worst effects of the global recession.’” President Arroyo is falsely claiming credit for why “the Philippines remained relatively unscathed” by the “worst effects of the global recession.”

The main and major reason why this country has not been as shaken as our neighbors have been by the global recession is our failures to develop exports and tourism to the same extent as our neighbors have. These two sectors are the lynchpins of our neighbors’ prosperity, and the collapse of these sectors worldwide has unhinged their economies, leading to closure of hundreds of thousands of enterprises and the loss of jobs for tens of millions of workers and employees. In other words, our failures in exports and tourism have ironically become our temporary salvation.

We can conceive of the current financial crisis as an Intensity 6 earthquake that has struck our neighborhood. Those of our neighbors that have built skyscrapers as a result of their success in exports and tourism have suffered the most structural damage, while our modest 3-storey walk-up has so far remained unscathed. Small is beautiful. Truly our consuelo de bobo.

In The World Almanac and Book of Facts 2009, the export figures for East and Southeast Asia in 2007 (BC or before the crisis) are as follows: China, $1.2 trillion; Japan, $676.9 billion; Singapore, $450.6 bn; South Korea, $371.5 bn; Taiwan, $246.7 bn; Malaysia, 181.2 bn; Thailand, $151.0 bn; India,150.8 bn; Indonesia, $118 bn; the Philippines, $49.3 bn; and Vietnam $48.1 bn.

It is no wonder that the worst hit economies in East and Southeast Asia are China, Japan, Singapore and South Korea, as global demand for their export products, especially in North America and Western Europe, decline drastically as consumers lose their jobs and/or their homes, reduce their purchases for fear of losing their jobs and/or their homes, and are unable to obtain credit for high-ticket purchases, either because their equities in their homes have been reduced or their bankers have been bankrupted by the failure of millions of their borrowers to repay their loans. In tourism, the picture is just as discouraging.

The World Almanac and Book of Facts 2009 does not give the data on tourist arrivals, only the estimated income from tourists. (I have written the publishers that they should enter tourist arrivals, not estimated income from tourism, as the more accurate gauge of performance in tourism.) The income figures for 2007 (BC, or before the crisis) are as follows: China, $33.9 bn; Thailand, $13.4 bn; Malaysia, $10.4 bn; India, 8.6 bn; Singapore, $7.2 bn; Japan, $6.5 bn; South Korea, $5.8 bn; Taiwan, 5.1 bn; Indonesia, $4.4 bn; the Philippines, $3.5 bn; and Vietnam $3.4 bn.

This is more or less consistent with press reports that in 2008, China attracted 26 million tourists, Malaysia 16 million, Thailand 13 million, Indonesia 6 million, the Philippines 3.2 million, and Vietnam 4.2 million. (President Arroyo recently gloated over the fact that tourist arrivals in the Philippines grew by 10 percent from 2004 to 2008. But that’s only an average of two percent a year. Nothing to brag about, really, but for which Tourism Secretary Ace Durano was voted “one of the Ten Outstanding Young Men” by the Philippine Jaycees. Amazing! (Vietnam’s tourist arrivals grew by 15 percent in one year, which is how and why Vietnam has just overtaken the Philippines in tourist arrivals by one million in 2008, just as Vietnam is about to overtake the Philippines in exports. See the data above.)

But this is all BC, before the crisis. The tourism industry worldwide has been decimated by the

Publish Post

financial crisis as consumers cancel or postpone their holidays abroad because they have lost their jobs or fear they may lose them soon. Hotel occupancy even in Metro Manila declined last December 2008 from 79 percent to 61 percent. An omen of things to come? Those who are exalted will be humbled, as our more successful neighbors’ economic skyscrapers crack or crash in the Intensity 6 earthquake, while the modest Filipino 3-storey walk-up remains relatively unscathed, so far. Thank God or Allah - as well as our clueless trapos, - for our failures. *****

Reactions to tonyabaya@gmail.com. Other articles in www.tapatt.org and in acabaya.blogspot.com.