On Justice Guarina’s “Economic Nationalism: Voices from the Past”

The very well-written article “Economic Nationalism: Voices from the Past” (Commentary, Philippine Daily Inquirer, September 24, 2014) was for me quite refreshing, considering that it was surprisingly written by a former high court official, retired Court of Appeals Associate Justice Mario Guarina III.

The article itself is a rarity at this time of the profligacy and dominance of neoliberalism in policy, word and rule in the country.

Justice Guarina’s commentary was a very welcome respite in the face of current mantras of neoliberalism and its mouthpieces in the state and private establishments, trying to make it appear that Asia’s long-standing economic laggard in the Philippines has now become the region’s star economic performer.

Actually, the Philippines has been turning out to be, more and more, one of the region’s worst socio-economic performers, as it now has one of the lowest industrial – and even agricultural – capability, activity and development in the region. It also has one of the largest and most deploring rate of unemployment and poverty in the region.

All this, as a result of several decades of world imperialist-imposed neoliberal economic dominance, policies and programs, that have drastically crippled the country’s industrial and overall socio-economic development and have grossly impoverished the mass of the Filipino people.

More than half a century ago, the voices of a great many advocates of national independence, economic nationalism, industrial development and social progress – notably among them, Claro M. Recto and Lorenzo Tañada – were able to openly wield wide influence in the country and promote policies and programs for these causes.

During the time the “Filipino First” policy was officially adopted and being implemented in the country in an effort to promote national industrialization and socio-economic development, local industries then developed and proliferated in the country, as Justice Guarina recalled: “in a manner unprecedented in our history”, such that “we became the fastest growing Asian economy next only to Japan.”

But imperialist attacks against and dismantling of such, and the local neocolonial puppets’ overly submissive compliance to imperialist attacks, started to take place since the U.S. imperialist-imposed “decontrol” policy of the Diosdado Macapagal regime. This was followed much later by even more comprehensive and more systemically destructive anti-nationalist and anti-national industrialization measures via the global imperialism-imposed neoliberal policies, all under very tight dictation and close supervision by the imperialist-controlled International Monetary Fund and World Trade Organization, as well as by U.S. agencies.

Instead of becoming genuinely economically and industrially self-reliant, inclusive and developed, the Philippine economy has consequently become all the more dependent on foreign capital and foreign trade, non-inclusive and underdeveloped, with only external and actually false appearances of “progress”.

The Philippine economy has, in particular, falsely “developed” in recent decades as one of the world’s main cheap assemblers of electronic parts reexported to imperialist countries, providers of ancillary call center and other outsourced back-office business process operations, and suppliers of private household help and other cheap labor in imperialist and other more developed countries.

All these, not quite far from being looked down for being just “miners of gold and hewers of wood” for foreign masters for a long time since about a century ago, as we were overly dependent on traditional agricultural, mining and other raw material exports for survival, amidst rapid and solid industrial and socio-economic development in other countries not as submissive to the imperialist powers.

All these, not far from the Philippine economy now more and more just specializing on catering to the ancillary needs of imperialists and other more developed countries, and the people in the country becoming more and more dependent on such.

Bulk of the country’s income from such has mostly gone to consumption and the development of commerce, services and the related proliferation of commercial buildings and upscale condominiums, while industry and agriculture have fallen and continue to fall way behind.

Justice Guarina’s commentary quite competently touched on problems since the past – and actually up to the present – but did not yet proceed on what necessarily should be done to decisively solve such problems.

In regard to what is to be done, the National Democratic Front of the Philippines (NDFP) and allied people’s revolutionary organizations in the country have long since submitted and continue to submit, not only direct to the people but also to the local reigning government (the Government of the Republic of the Philippines or GRP/GPH), the NDFP’s agenda for comprehensive and substantive solutions to the fundamental problems of the country and people. Among such has been the NDFP’s long since proposed Comprehensive Agenda for Socio-Economic Reforms or CASER.

As far back as February 2011, the NDFP and the GRP/GPH were supposed to immediately discuss the CASER in the resumption of their long-stalled peace talks.

But, just a few hours before the resumption of the peace talks, combined military and police forces of the GRP/GPH, with the direct go-signal of their higher ups, treacherously arrested and hauled into jail a long-standing peace consultant of the NDFP and also a regular member of the NDFP’s Committee on Socio-Economic Reforms. This, despite his and fellow peace consultants’ supposed protection from surveillance, arrest, detention, torture and other antagonistic acts that would deter their participation and work related to the peace process. This, actually, in vile effort to tie the hands of those sitting opposite to the GRP/GPH across the negotiation table.

The NDFP peace panel demanded from the GRP/GPH the immediate release of all detained peace consultants, including the then latest one arrested and jailed. The failure – actually, the refusal – of the GRP/GPH to do so resulted in the long stalling once again of the peace talks, including that on socio-economic reforms.

The NDFP continues, in principle and in practice, to press for the resumption of the formal peace talks to be able to comprehensively and substantively discuss with the GRP/GPH, and seek to resolve fundamental socio-economic and political-constitutional problems of the country and people, in the effort to achieve a just and lasting peace. The NDFP always remains open to meetings with the GRP/GPH, for as long as the latter reciprocally remains open and opportunities for serious talks and efforts to resolve standing issues and problems of the people and the country remain available.

In the meantime, the NDFP has kept on pressing the GRP/GPH for the soonest resumption of the long-stalled formal peace talks and, in particular, the start of the talks on CASER. The NDFP will continue to press on such with the outgoing present GRP/GPH regime or, if such is no longer feasible, with a successor regime seriously interested enough in the peace process and open to fundamental changes.

The NDFP is presently hopeful of the possibility of the current GRP/GPH regime’s opening up to the resumption of peace talks with the NDPF in the near future.

If the NDFP-GRP/GPH talks on CASER do pull through and turn out to be successful, then there may be a good opportunity to push for the revival – and actual advance – of real economic nationalism, national industrialization, and other socio-economic reforms that the NDFP sees eye-to-eye with Recto, Tañada, Guarina and other principled and determined advocates of these socio-economic causes in the interest of our country and people, who have already suffered too long from imperialist greed, exploitation and intentional suppression of our development as a country and people.

Alan Jazmines
NDFP peace consultant and
member of the NDFP Committee on Socio-Economic Reforms,
presently detained at the Special Intensive Care Area Jail
Camp Bagong Diwa, Bicutan, Taguig City

Advertisements

Spins about the supposed 7.8% growth

Softened and weakened a lot by “free market” neoliberalization since the 1990s, the Philippine economy under the present semi-colonial and semi-feudal ruling system has more and more become like a wimp of a kitten that has long been noted to be one of the sickest and most laggard in Asia.

 The Benigno S. Aquino III regime meows all over with a bullhorn in an effort to appear to be roaring before the nation and the world, and has been boasting as hype to its third  State of the Nation Address about its having achieved such “great economic success”: that, with the ‘”stunning” 7.8% year-on-year growth rate of the country’s Gross Domestic Product (GDP) in the first quarter of this year, it has beaten even if just by the tip of a nose that of the region’s mightiest tiger  and also  the world’s second largest economy at present – – that of China.

Compared to China’s $1.9 trillion, the mere $63 billion (P2,656 billion) 1st quarter 2013 Philippine GDP is only a pittance, a mere 3% of China’s.

It would thus take more than 30 hurried steps for the sick, frail, limp kitten of the present Philippine economy to really match every single stride of the incomparably giant of the Chinese economy.

And yet the sick, frail, limp kitten is now thumping its breast to boast that it has outperformed the giant of a tiger, as the first quarter’s 7.8% GDP growth rate of the former at a very low scale happened to be a wee bit bigger than the 7.7% GDP growth rate of the latter at a much, much higher scale.

The comparison across scales so very wide apart is actually meaningless. There is no sense at all in comparing the puny pace of the miniscule, ill-managed,  backward, shallow, volatile economy of the Philippines at present with the gigantic  stride of the heavily state-managed economy of China.

Quite importantly, varied multifaceted contexts of the decimally apparently closegrowth rates also need to be considered:

For one, the Benigno S. Aquino III regime has glossed over the fact that for the last decade, China’s GDP growth rate was always higher than 9%,many timeswent up to more than 12%,  andoccasionally even more than 14%. The present dip has been a new development brought about by much reduced exports as a result of the long pestering crisis of the world capitalist system that has turned into a prolonged Great Recession since 2008, hitting first the U.S., triggered by the subprime and housing crisis; followed by a prolonged slump, grave deficits and severe austerity measures in the European  Union, that have all worsened and worsened up to now;  and has this recently been inducing its worst effects on the Chinese economy.

The effects of all these on the more advanced and more industrialized economies have been more immediate. However, the backward, pre-industrial, agrarian economies – – like that presently prevailing in the Philippines, subserviently clutching on to the fringes of the monopoly capitalist  and other more industrialized and more advanced economies – – are not exempted, but eventually will be suffering more from the dragging effects of the current crisis of the world capitalist system.

A large part of the recent dip particular to the Chinese economy, however, has been the result of major adjustments China has been making just recently in its economy. The adjustments have been geared to fix solutions to problematic areas, crack down on speculative activities that used to only superficially generate double-digit growth rates, and further strengthen state-managed, heavy fixed-asset enterprises to ensure more solid and real growth. This,  even if returns on investments would for a time be slower and delayed, and would thus result in the temporary slowing down of China’s present GDP growth – – all in order to gain more solid and lasting growth in the future.

Even as there is no real basis for comparison, the regime’s  spin meisters have been projecting such a big, boastful roar about having bettered China’s current GDP rate, that really is only a mirage – – actually just a continuation of the mirage that had initially showed up in the last quarter of last year.

The regime described the 7.8% growth rate as “the largest in a non-presidential year in recent history.”  Indeed, the GDP growth rate had artificially shot up to the second highest then at 8.4% during the partial height of the presidential electoral campaign in the first quarter of 2010 and reached its peak, again at an artificial 8.9%, in the second quarter of 2010 at the very height and eve of the electoral campaign. All this took place in the last few months of the Gloria Arroyo regime.

On the other hand, right after, in 2011- – the first full year of the Benigno S. Aquino III regime- – the GDP annual growth rate dived to 4%.

The current regime’s propagandists are now only vainly trying to hide the fact that renewed height in public and private election campaign spending for this year’s mid-term senatorial, congressional and local elections has been one of the principal reasons behind the once again temporary artificial rise in the first quarter 2013 GDP growth rate.

The regime poured out an unprecedented increase of 45.6% in the budget for public infrastructure in the first quarter,as a big boost to the electoral campaign of its candidates from national to local levels.The surge of public infrastructure expenses and additional electioneering expenses,squeezed from here and there out of the state coffers, has boosted by 13.2% overall state spending in the first quarter.

Aside from easily tapping government funds and resources by various means, most politicos also tapped their own, their allies and their backers and financiers’ private funds and resources for their election campaigns.

Notably many among those who won in the senatorial election last May reportedly  spent more than P100 million each in their campaigns, and many others spent close to that (the unofficial expenses were actually much more), not only in the senatorial race, but also in many of the governatorial, mayoral and congressional races.

All this has resulted in the temporary  big rise in consumer purchases, a phenomenon that has not failed to take place every election campaign period, whether presidential or non-presidential.

Further, on the part of the private sector, as it was in the last quarter of 2012, the biggest boost- – 32.5% – – has again come from private construction, mainly the construction of new buildings and offices, especially as the massive transfers of call centers and other business process outsourcing (BPO) from the U.S.A. to the Philippines have recently left commercial buildings and offices with an all-time average low of 3% to 4% in vacancy – – across Metro Manila. This recent phenomenon has resulted in private construction  contributing to overall GDP at least three times more than the rise in public construction.

The influx of transfers to the Philippines of BPO and other labor-intensive, non-core and peripheral business activities (like J.P. Morgan’s move to transfer 17,000 labor-intensive, non-core call center jobs from the U.S.A. or about seven percent of its 258,965 global workforce, and thus generate for the company at least $1billion in annual labor cost savings) has increased so much, such that total income from BPO – – principally call center – – operations has now replaced remittances of overseas Filipino workers (OFWs) as the No. 1 boost to the present Philippine economy. The country has now actually become the new call center  capital of the world, replacing India, as the cost of labor is much cheaper here and the English accent of Filipinos is closer to the American accent or is at least “neutral,” unlike in India.

Still, OFWs’remittances have remained a strong second and has now reached more than $21 billion per year, amounting to 28% of the Gross National Product (GNP) – – 33% of the GDP – – of the country.

OFWs, who now number more than 10 million documented (plus about 2 million more undocumented) migrant Filipinos, comprise more than 28% of the labor force and more than 31% of the total of both the employed and underemployed in the country. Their remittances have been the main support that more than a third of the population in the country has now become quite dependent on.  OFWs’ remittances have for several years now continued to be the single biggest boost to private consumption of commodities and services in the country.

Aside from direct remittances to their families left behind in the country, a large part of OFWs’ enormous other earnings has also been directly funneled into purchases of condominium units by the more high-income among them, accounting for the bulk of the 6.1% increase in international sales last year. The recent surge in the construction of new condominium units has also contributed to a large part in the recent increase in private construction — although now second only to the putting up of new buildings and offices to accommodate the rise of BPO transfers to the country.

What used to be leading the Philippine economy in the past decade has been the re-exports (after applying cheap, sheer assembly labor to imported parts) of semiconductors and other semimanufactures of electronic parts (chips, capacitors, resistors, integrated circuits, among others) for completion in more advanced and industrialized countries

The face value (without subtracting the cost of imported parts) of the re-exports of semiconductors and other electronic semimanufactures used to have risen to more than 60% of the country’s total exports about a decade ago. But even the face value of the re-exports of these semimanufactures have for sometime continually been dropping (from $2.33 billion, amounting to 39.7% of total exports a year ago, down to 36% in February this year – – the steepest  since the 36.6% drop in October 2011). This has resulted in a total drop of exports by 12.08% year-on-year.

The declining re-exports of semiconductors and other semimanufactured electronic parts have been due to several long pestering and worsening major problems, especially of late.

For one, the worsening crisis of the world capitalist system – – with a prolonged Great Recession running for more than half a decade now – – has resulted in a slump in the world market for semiconductors and other electronic semimanufactures, which used to be the lifeblood of this country’s exports and theentire  Philippine economy.

The Philippines has also been increasingly losing in competitiveness even in the mere assembly of semiconductors and other electronic semimanufactures, as other countries  in a similarly backward state have adapted more and more advanced technologies, while the backward state of technology and industry in the Philippines has more and more been left behind by other increasingly industrializing countries.

The spurts in the seeming growth of the present Philippine economy from time to time without real basis, but only artificially spiked by false boosts such as election campaigns and externally dependent income generators- -such as the massive influx of BPO operations, OFWs’ remittances and re-exports of semiconductors and other assemblies of electronic parts- -indicate the shallowness and lack of real solid grounding of the country’s present economy.

What can we really expect in solidly reliable terms from an economy that is stimulated more by splurgings during election campaigns; pretending to be American staffs answering phone inquiries mostly to U.S. companies;  working abroad as domestic helpers, staffs or some other kind of assistants; doing cheap, technologically low-level, labor-intensive assembly work on electronic parts initially produced by and to be completed by more professionally skilled workers in more industrialized and more technologically advanced countries?

The hype about the peripheral 7.8% growth rate, without ever mentioning its temporariness and where it actually came from, only tries to gross over and hide the many deep-seated long-standing and present problems in the utterly backward basic economic structure and situation in the country, and the dire and further worsening effects of these on the long-suffering and more and more miserable Filipino people.

The gloating over the present Philippine GDP growth rate of 7.8% surpassing China’s by a wee bit and even more so those of other Asian economies (Indonesia’s 6%, Thailand’s 5.3%, Vietnam’s 4.9%, Japan’s 3.5% and South Korea’s 1.5%) only hides the fact that the Philippine economy actually has one of the most backward and weakest economic base and development in the whole of Asia.

Industrialization and the downfall of feudalism have become sine qua nonin modern economy since the breakthrough of the world’s industrial and antifeudal revolution more than a century ago. Yet, the Philippine economy has remained pre-industrial and semifeudal up to now.

Except for a couple of “emerging Asian tigers” such as  Singapore, the countries in the Southeast Asian region remain among the most backward in the world. Among these, it is the Philippines which has long been the sickest and most laggard. While Singapore is far more advanced, even the other countries in the Association of South East Asian Nations (ASEAN), which are closest to the Philippines, have already left the Philippines far behind in industrial development. Industry’s share in the 2012 GDP was 48.1% in Indonesia; 47.4% in Malaysia; 41.5% in Vietnam and 40.1% in Thailand. Far below these, it was only 30.3% in the Philippines in the 2012 GDP, down from 31-35% during the last two decades.

One simple illustration of just how utterly backward the Philippines has been compared to these neighbors of ours, is that they all already are now in the manufacture of cars and other motorized vehicles, while the Philippines still keeps on just importing or assembling imports of these.

One big problem that keeps Philippine “industrialization” stunted, very low-level and highly inadequate is that it has developed very little terms of strategic, technologically advanced and heavy industries. Actually, not even in terms of medium-level industries.

It has failed to really develop, for one, even just therequired  basic steel industry – – which for several decades and up to now has remained a crippled failure – –  so much so that mining products continue to be mostly simply exported in bulk in their raw forms to monopoly capitalist and other more industrialized countries, and various finished products from these are just brought back in trickles for sale in the country.

There is actually very little real industrialization and manufacturing – – in the full sense of these terms – – in the country. Much of Philippine manufacturing is backward, and actually just consists of cheap, low-value added, labor-intensive cottage industry, sweat shops and  the local assembly of some parts to be returned  to the mother industrial centers in technologically and industrially advanced countries for essential completion before being sold to various markets, including the Philippine market.

Bulk of such local assembly for re-export is done in secluded special economic zones, where practically all the materials for are imported and there is practically no other added local content except labor. There is thus not much interconnection – – much less, integration – – with the rest of the local economy, as the production is linked more with their real industrial centers elsewhere.

Thus, there is not much basis – – least of all is there real effort – – in the comprehensive planning and actual strategic development of industrialization and technological development in the country. This, especially so, as the present Philippine government has no real interest and has not actually been doing much in this regard.

Philippine industry – – and in fact, the entire Philippine economy – – has only been adopting to new ways of serving monopoly capitalist and other economies much more advanced and richer than ours. From being just “hewers of wood and drawers of ore” for foreign masters for a long time up to now, the Philippines has now also become as subserviently the assemblers of electronic parts, telephone attendants and domestic servants of the monopoly capitalist and other economies more well-to-do than ours.

With the mass of our tillers still remaining essentially under feudal and semifeudal bondage, and even more and more of them now than ever before having become landless, virtually without work  and comprising the biggest bulk of the country’s unemployed and underemployed – – given the many loopholes, inadequacies and general failure of the ruling state’s “Comprehensive Agrarian Reform Program” (CARP) – – the Philippines’ backward agriculture has also been deteriorating more and more. Its share in the GDP, in fact, has consistently been going down from more than 22% during the last two decades to now below 12%.

Further indicative of how distorted and underdeveloped is the Philippine economy is at present has been the overly large chunk of GDP eaten up by the services sector, which has risen from 45% in the 1990s to 57% to date, thus now actually dominating the Philippine economy and drowning the industrial and agricultural sectors.

The accelerating upsurge of BPO services (catering mainly to U.S. businesses) and the big increases in financial transactions and the consumption of commodities and other services have greatly been escalating the scale and share of services in the country’s present economy,  dwarfing and all the more keeping underdeveloped the industrial and agricultural sectors.

But the more principal cause of the underdevelopment of the industrial and agricultural sectors has been the long-standing policy of successive monopoly capitalist – and – big landlord dictated ruling regimes in the country to put their thumbs down against giving determined support and prioritization to the development of these sectors.

The long standing and pesteringunderdevelopment especially of the industrial and agricultural sectors, and of the overall economy of the country, for that matter – – despite much prated  ephemeral illusions of growth – – have actually been resulting not in the lifting of the socio-economic conditions of the people or in what is now popularly called “inclusive growth.”  Instead, these illusions of “stunning growth” have ironically been accompanied only by bigger and bigger  increases in unemployment and poverty among the people:

According to National Statistics Office (NSO) figures, contradicting the supposed 7.8%  economic growth in the first quarter of the year, unemployment in the country reached its recent peak at 7.5% and breached the three-million mark last April, from 6.9% in the same month last year and from 7.1% in January this year. Aside from this is the ever increasing underemployment (actually, disguised unemployment) that is additionally three times as large. Joblessness has actually been pestering and worsening since more than a dozen years ago, when the implementation of neoliberalism and “labor flexibility” had been starting to escalate. Since then, average unemployment rate in the country has remained high at 7.6% and additional underemployment has been three times as large.

Pathetically, unemployment and underemployment in the country have for sometime been the lowest in the region.

Meanwhile, Social Weather Station (SWS) survey results showed that self-related poverty affected 5.2% of the population (10.6 million families) in March 2013, and that hunger among Filipinos rose from 15.1% in June to 18% in December 2011,  to19.3% in March 2013, and to 23.8% in May.

About 20% of the poorest of the people have to scrimp with only 6% of the total national income while, as culled from Forbes Asia statistics, growth in wealth, amounting to $13 billion or the equivalent of 76.5% of the country’s GDP growth in 2010-2011, was amassed by just the 40 richest families in the country.  There is just some difficulty in obtaining official data to determine explicitly how much of the GDP growth was amassed by big foreign monopoly capitalists, as such is usually hidden in costs of operations, in export and import prices, in capital and in financial transactions.

All these only show how the rotten, backward, semicolonial and semifeudal socio-economic and political system prevailing in the country has been making the mass of the people suffer all the more, while the big foreign and local exploiters have been amassing the bulk of the country’s wealth.

The full development from a subservient, backward, pre-industrial, agrarian, exclusive economy to a self-reliant, modern,  industrialized, inclusive one  would urgently require first priority policy, decisive action and all-out support to independent, full-scale national industrialization, genuine agrarian reform, rural development and other fundamental socio-economic, cultural and political reforms against the impositions, maneuvers and resistance of foreign monopoly capitalists and local big compradors, big landlords and big bureaucrat capitalists.

 ALAN JAZMINES, NDF peace consultant

detained at BJMP-SICA. Camp BagongDiwa, Bicutan, Taguig City

9 July 2013