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| Losing the Export Battles By Antonio C. Abaya April 19, 2002 This continues the article entitled "How the Philippines Got Left Behind, Part II", which had been truncated in the April 8 issue of Philippine Graphic magazine for lack of space. Additional material has been appended to drive home the point that losing the export battles, by default or otherwise, in the 1970s and 1980s lost for the Philippines the war to wipe out poverty and to build a prosperous society. That the prosperity of the Philippines' neighbors and our relative poverty, can be explained in terms of their success, and our failure, in gearing their/our economies to the export of manufactured goods is evident from the following table which compares the 1965 and 1999 exports of 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 table clearly shows that up to the late 60s, when Asian countries (except Japan) exported mostly commodities, the resource-rich Philippines lorded it over resource-poor Taiwan and South Korea. But when these two countries, along with Hong Kong and Singapore, deliberately geared their economies to the export of manufactured goods, starting in the 1970s, their economies shot past the laggard Philippines', leaving it to eat their dust in the race towards prosperity. In 1999, the 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, the Philippines $35 billion. Even without actually visiting these countries, one can tell from their export data which countries are prosperous and which are less so. Dividing export statistics by population gives a good idea of their per capita GDPs. I have purposely omitted Vietnam from this list because it is a unique case, having spent 40 years of the last 60 in almost endless struggle against foreign invaders (French, Chinese, American) and, though emerging magnificently victorious over all of them, was deprived of the time and energy needed for economic struggle. The news from Vietnam, however, is that it is moving faster than the Philippines in eradicating poverty even if its per capita GDP is still substantially less than ours. ***** Ferdinand Marcos' most grievous 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 Singapore's Lee Kwan Yew, who was authoritarian but was apparently incorruptible. The biggest failure of Marcos was 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: widely-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 under Suharto 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 communist labor militants of the KMU, who hit the zone with strike after strike and made unreasonable demands on the foreign factory owners (including the dismantling of US bases!, as if they had anything to do with the it), who eventually got fed up and moved their factories to other countries. As this sad episode clearly showed, Filipinos did not need any help from the Americans to ruin their own country and keep their people poor. It should be kept in mind that communist trade unions were/are not allowed in South Korea, Taiwan, Singapore, Malaysia, Thailand or Suharto's Indonesia. And they were/are not allowed to go on strike in Hong Kong, Vietnam and China unless ordered to do so by their communist governments. That in itself was an advantage not enjoyed by the Philippines, where wishy-washy liberalism, even under Marcos' authoritarian rule, allowed/allows communist-led unions to control key sectors of the economy. ***** In the mid-1980s, Marxist-Leninist ideologues Walden Bello and Horacio Morales co-authored a book which argued that export-led economic growth was not a viable model for the Philippines on the grounds that the national economy should not be held hostage to the vagaries of the global marketplace. Other Marxist-Leninist ideologues like Renato Constantino Sr. and Edberto Villegas (brother of Free Trader Bernie),at the time head of the communist propaganda organization Ibon Data Bank, argued that production should be geared towards domestic consumption and only the surplus, if any, should be exported.They cited as model the Hermit Kingdom of North Korea, whose policy of juiche or self-reliance they lavished praise on. In future articles, I will examine these anti-export voices which, I submit, contributed to the Philippines' kulelat position in exports and to the crippling of this country's drive towards prosperity. ***** This article appeared in the May 6 issue of the Philippine Graphic. |
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