Article Pol Sci

7/27/2019 Article Pol Sci

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MANILA - Smoky Mountain, in the Tondo neighborhood across

Manila harbor, is a Dantesque vision from hell turned

postcard of global poverty. Smoky Mountain is a 40-year-old

mountain of garbage. The locals literally live off it -

they search it, burn it, separate it in plastic bags,

recycle it, sell it to junk shops, even eat some of the

remains.

Eighty percent of the children of the estimated 30,000

people living in the area don't go to school - although

there are a kindergarten and an elementary school in the

surroundings. Some of the locals set up food stalls at the

harbor, some are cargadores (porters), some are pedicab

drivers, but most live off the garbage. Under a bridge by

the Pasig River rattled by the non-stop traffic of

container trucks, stuck under the pollution, haze and that

unbearable smell, a teenager beams: "It's good to make

money here. Three hundred pesos a day [a little more than

US$5] if you work hard."

In the May presidential election, he voted for action

star Fernando Poe Jr, a close friend of ousted-in-disgrace

former president Joseph Estrada (Poe won in Manila but lost

overall to incumbent Gloria Macapagal-Arroyo). He believes



the elections were stolen, as do 55% of Filipinos. And he

wouldn't leave Smoky Mountain for anything. "There are no

jobs out there," he says, pointing toward Metro Manila.

The notoriously corrupt Metro Manila Development Authority

(MMDA) - which also indulges in a quirky form of

performance art, tagging colored walls around town with its

acronym - keeps a sinister top-10 list of the dirtiest

barangays (districts) in town. Just for the record, Smoky

Mountain is not even close to No 1; that honor belongs to

Barangay 145, Zone 16 in Pasay City - notified 225 times

(and counting) as having mountains of uncollected garbage.

It didn't have to be this way. Filipinos, rich and poor

alike, often look in awe at the so-called newly

industrialized countries (NICs) of Northeast Asia and ask

themselves: Why haven't we accomplished anything similar?

The main reason may be the absence of a real agrarian

reform - an absolute precondition for the economic miracle

in Taiwan and South Korea. Land reform created an

egalitarian distribution of income, ignited domestic

demand, and the whole thing drove an industrialization

drive in the 1950s and '60s.



Meanwhile, in the Philippines, few were paying attention:

after all, the country was growing at rates from 6-10% a

year, fueled by its own brand of import-substitution

industrialization. But in the late 1960s, the turbo-jeepney

came to a halt, because of a structural problem still not

solved in 2004: the Philippines was and remains a small

market, chiefly because of its tremendous income

inequality.

With no land reform and anemic exports, the dictatorship of

Ferdinand Marcos came up with what might have been a great

coup: exporting the country's labor force. Economists in

Manila say this was supposed to be a temporary measure. It

turned out to be the ultimate lifeline to the Philippine

economy - with remittances even helping to prevent the peso

from spiraling into total disaster after the 1997 Asian

financial crisis. No wonder: when the internal market

remains small and jobs are scarce, the only way, if you

don't want to recycle garbage, is out - often by a one-way

ticket departing from the ghastly Ninoy Aquino

International Airport in Manila. According to labor-export

specialist Jorge Tigno, almost 10% of the country's

population are now OFWs (Overseas Filipino Workers).



The Anti-Development State: The Political Economy of

Permanent Crisis in the Philippines, a recent joint

publication by the Universityof the Philippines and the

non-governmental organization (NGO) Focus on the Global

South, written by respected activist Walden Bello and co-

authored by Herbert Docena, Marissa de Guzman and Marylou

Malig, spells out a devastating case on all the reasons for

a crisis that's been going on for four decades. It's

unlikely to find readers in Malacanang, the presidential

palace. Absence of meaningful land reform certainly is one

of the reasons for the crisis. But another, almost as

compelling, has been the absence of Japanese capital.

"In the period 1985-93, some $51 billion worth of Japanese

investment swirled though the Asia-Pacific in one of the

most rapid and massive outflows of foreign capital toward

the developing world in recent history," the publication

states. Thailand, Malaysia and Indonesia could not but grow

at dizzying rates - while the Philippines was almost

totally bypassed. According to Japanese figures, from 1987-

91 Thailand benefited from $24 billion in Japanese, Hong

Kong and Taiwanese investments. The Philippines, on the

other hand, got only $1.6 billion.

The authors speculate: were the Japanese put off by

Philippine corruption? Not really, because South Korea was



as corrupt, and Indonesia under Suharto infinitely more

corrupt. The answer, once again, refers to the anemic size

of the Philippine market. "Japaneseinvestors are strategic

investors - that is, they invest if there is the prospect

of a growing market ... In the late 1980s, the Philippines

was simply not attractive since development, expansion of

the market, reducing poverty to create more purchasing

power were all being sacrificed to the national priority of

repaying the foreign debt - a goal forced on the country by

the IMF [International Monetary Fund] and the World Bank

acting on behalf of the country's foreign lenders."

So the Philippines under President Cory Aquino was

basically servicing the huge debt incurred by the Marcos

dictatorship. The country's physical, technical and

educational infrastructure was left to rot - as it is

still. Aquino sank the country further into debt - to pay

for the past pile of debt. When Japanese executives

examined this situation, they identified nothing else than

a strategically depressed market.

As for the poor Filipino taxpayer, he will keep paying for

Marcos' debts until at least 2025, according to a recent

report by the Ibon Foundation. The foundation reminds

everyone that "before Marcos became president in 1966, the



country's foreign debt was only $599 million. When he fled

Malacanang 20 years later, the foreign debt had already

ballooned to $28 billion. Most of the debts were incurred

during martial law, when foreign debt grew by 27% per year

from 1973 to 1982."

In his monumental Crime of Empire, Filipino economist Ricco

Alejandro Santos estimates that the Marcoses, Ferdinand and

Imelda, "have looted $10 billion in the course of 20

years". As for his American business and government

patrons, they certainly were not innocent bystanders: "They

were the first to know about this, before most Filipinos

would." The US Central Intelligence Agency knew about it as

early as 1969. "And yet American foreign investors and

government, then under presidents [Richard] Nixon, [Jimmy]

Carter and [Ronald] Reagan, would be Marcos' prime backers

and patrons until his ouster and exile."

Arroyo inherited this giant bitter pineapple from Marcos

and subsequently Aquino, Fidel Ramos and Estrada in early

2001. But according to many a Manila businessman, she came

up with no development strategy whatsoever. Not that

Estrada, her predecessor, had any. The authors of The Anti-

Development State ram the point home: the only "strategy"



by Arroyo was to attach the Philippine jeepney to

Washington's B-52s after the attacks on the United States

on September 11, 2001. "Massive economic aid and investment

from US business was at the top of President Arroyo's

concerns when she reversed 10 years of an increasingly

independent foreign policy followed by the country since

the expulsion of the US bases in 1992. 'It's $4.2 billion

and counting,' she gushed during her state visit to

Washington in October 2001, calculating the sums of aid and

capital promised by President George W Bush."

The problem is that most of the money - like the billions

promised to Afghanistan - never materialized. And it won't:

Washington is still obsessed with Iraq. So throughout 2002

and 2003 the Philippine fiscal crisis spiraled out of

control, leading to the current climate of panic and

hastily arranged austerity measures in Malacanang.



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