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| ON THE OTHER HAND |
| How the Philippines Got Left Behind, Part II By Antonio C. Abaya March 15, 2002 Among thoughtful and concerned Filipinos, soul-searching and introspection have become a favorite indoor activity and the central focus of that self-analysis has often been how and why this country, blessed with so much natural wealth and populated by talented and hard-working people, could have fallen by the wayside and into a rut from which it is having a hard time extricating itself. Those over 60 know at first hand that as recently as the mid-1960s the Philippines enjoyed the second highest standard of living in East Asia, next only to Japan�s. The younger generations feel humiliated when they visit Singapore or Kuala Lumpur or Taipeh or even Bangkok and see the prosperity, the public order, the discipline, the cleanliness around them and invariably compare it with the poverty, the decay, the chaos, the indiscipline and the general shabbiness in their homeland. Was it always like this here? In the eighties and nineties, and to a lesser extent up to now, the communists and their na�ve allies in media and the clergy made it fashionable to blame the failure of the Philippines on the evil Americans, for having made the Philippines a �neo-colony� as part of their malevolent plot to keep Filipinos poor and pregnant. But the question of �why?� was never adequately answered. Why would and did the evil Americans allow, and even help, the Japanese, the Koreans, the Taiwanese, the Singaporeans, the Malaysians, the Thais, and the Hong Kong Chinese to become rich and prosperous, but, pointedly, not the Filipinos? Why the special place in the American hell for their obsequious little brown brothers? According to communist/nationalist folklore, the Americans deliberately kept the Filipinos poor so that the stupid natives would always need the income generated from the US military and naval bases here and hence would not think of removing them. But the Americans also had/have military and naval bases � plus some 70,000 combat personnel - in South Korea and Japan, yet they allowed and even helped the Koreans and the Japanese become rich and prosperous. So rich and prosperous, in fact, that Korean and Japanese taxpayers actually pay the Americans hundreds of millions of dollars every year to keep the US bases in their countries, without suffering any diminution of their sovereignty; while the impoverished Filipinos extracted rent from similar facilities and claim to suffer an affront to their sovereignty when 660 American troopers come to help train Filipino soldiers to deal with kidnappers-terrorists. ***** To understand how and why the Philippines got left behind economically by its neighbors, one must focus on economic reasons in its recent history, and not invent geopolitical ones in order to support discredited ideological biases. In my posting of November 13, titled �How the Philippines Got Left Behind, Part I� (which appeared in the December 3 issue of the Philippine Graphic magazine), I focused on the minimum wage law, which came into effect here in the mid-1950s. I wrote that when dozens of American companies � big, medium and small � started to move their manufacturing to the Far East in the late 1960s, most of them located their factories in Hong Kong and Taiwan, not in the Philippines, even though most Filipinos spoke some English and were familiar with American culture, while most Chinese in Hong Kong and Taiwan did not speak English and were not at home in American culture. The Americans chose Hong Kong and Taiwan over the Philippines because wages there were, believe it or not, lower than Philippine wages then, and, more important, were/are not mandated by a minimum wage law. This was one instance when our vaunted competitive advantage � an English-speaking work force � did not work for us, overshadowed as it was by, ironically, a minor monument to American liberalism, the minimum wage law. ***** In the 1970s, South Korea, Taiwan, Hong Kong and Singapore deliberately geared their economies to the export of manufactured goods, instead of just commodities, of which they did not have much. In the 1980s, Malaysia, Thailand and Indonesia � all resource-rich � followed the three tigers and also geared their economies to the export of manufactured goods, in addition to their export of commodities. The Philippines did not seriously go into the export of manufactured goods until the 1990s, under President Fidel V. Ramos, but by then the global marketplace had become crowded, especially with the entry of the People�s Republic of China. That the prosperity of our neighbors, and our relative poverty, can be explained in terms of their success in exports and our failure, is evident from the following table which compares the 1965 and 1999 exports of the resource-rich Philippines and resource-poor Taiwan and South Korea: Countries 1965 exports 1999 exports increase in 34 years Philippines $769 million $35 billion 46-fold South Korea $175 million $144 billion 823-fold Taiwan $446 million $122 billion 274-fold The 1999 exports of the nine competing East Asian economies were: China $195 billion, Hong Kong $150 billion; South Korea $144 billion; Singapore $114 billion; Malaysia $83.5 billion; Thailand $58.5 billion; Indonesia $48 billion; Philippines $35 billion. Even without visiting these countries, one can tell from these export data which countries are prosperous and which are less so. Dividing export stats by population gives a good idea of the per capita incomes. ***** Ferdinand Marcos� greatest sin was not that he was authoritarian and corrupt. All the other leaders in this part of the world at that time were authoritarian and corrupt, with the solitary exception of Lee Kwan Yew of Singapore, who was authoritarian but was apparently incorruptible. The failing of Marcos was in his failure to build an export-oriented economy for this country, which the other leaders at that time built for theirs. He was therefore unable to offer a trade-off: wide-based prosperity in exchange for diminished political rights, which the South Koreans, the Taiwanese, the Hong Kong Chinese, the Singaporeans, the Malaysians, the Thais and, to a much lesser extent, the Indonesians enjoyed and (again, except the Indonesians) continue to enjoy. To be fair, Marcos made an attempt to move towards the export of manufactured goods when he inaugurated the export processing zone in Mariveles (Bataan) in the 1970s. But it was deliberately wrecked by the communist labor militants of the KMU who hit the zone with strike after strike and made unreasonable demands on the foreign factory owners, who eventually got fed up and moved their factories to other countries. As this sad episode demonstrated, Filipinos did not need the help of the Americans to ruin their own country and keep their people poor. (Communist-led labor unions were/are not allowed in South Korea, Taiwan, Singapore, Malaysia, Indonesia or Thailand. And they are not allowed to go on strike in Hong Kong, China or Vietnam, except when ordered to do so by their communist governments). ***** This article appeared in the April 8, 2002 issue of the Philippine Weekly Graphic magazine. |