Otherwise Maladroit

26 March 1999 Is Globalization Conducive for the Philippines?

26 March 1999

Is Globalization Conducive for the Philippines?

Unemployment and Poverty

During the advent of the Industrial Revolution in England the polar lives of the rich and poor existed side by side. The houses of the rich and (more like pigsties) of the poor where barely a mile from each other, yet their lives did not parallel enough for them to meet. Ladies and gentlemen of privilege, most of who were nouveau riche industrial capitalists, bought the newest invention of the latest technology; for pleasure they threw and attended balls, waltzed, ate, and drank with the finest people and the choicest food; and retired into beautifully furnished bedrooms, doubtless heated, perfumed and powdered. While their unfortunate brethren worked fifteen hour days by bondage or need; lived on the barest sustenance; and slept erect, sometimes with animals, amidst their excrement. Maybe for amusement both whistled the same popular tune, but there the similarity ends.

Today, inspite of a declaration of universal human rights, and the labor union, this situation persists in tenfold the sphere of its original influence. Asia and Africa were "discovered," and plundered for the same reason the capitalists abused their own: for profit.

The Philippines, one of the first to be exploited, thrive on this faulty scheme of production, and oppressive class structure. Seated on the government, and steering at the helm of the economy is the ruling class, collaborators with foreign interest, and themselves capitalists. Little good can be expected from their actions. Aguinaldo sold out the Revolution, Quezon laid bare the archipelago for invasion, and Marcos choked the masses with a star-spangled iron hand, until he and his cronies were temporarily driven out. The latest presidencies are anything but deviations from this track record. Again the Philippines is being prepared to jump for the capitalist whim to its latest creation: globalization.

The administration is heralding liberalization, deregulation, and privatization. Three policies that would prepare the nation for full scale globalization. In spite of propaganda advertising its noble intentions of promoting nationalism, uplifting poverty, and territorial security these principles speak of a different plan.

The Ramos administration under commitment to GATT (General Agreement on Trade and Tariffs) embarked on a Super-Liberalization Program. In which tariffs are rapidly reduced to adhere to a reset deadline to the year 2004 instead of the previous 2010. Much earlier than the deadline for developed economies. {Antonio A. Tujan Jr., "Globalization And Labor : The Philippine Case," Institute of Political Economy Journals, no. 15 (March 1998): 3.} Furthermore, the policies of deregulation, and privatization gives foreign control a chance to move into vital institutions that provide basic services to the Filipinos.

This pursuit of achieving a Newly Industrialized Country (NIC) status has caused the layoff of thousands of employees. Businesses in a bid to streamline its production line, or simply on the look out for cheaper labor have increasingly hired workers on a contractual basis. This leads to the firing of older employees with high wages, and the hiring of a younger set that will be paid less. Employed for more or less a few months (six in Shoemart) contractual workers do not stay long enough to form unions, and so are not enclosed within benefits, or protected by collective bargaining for wages. Even then, factories protect themselves from unions by firing those suspected of organizing, or joining in a union. On cases that a union is able to organize a strike, or stage a picket, the factory will shut down operations to reopen at another time, or close down the plant to relocate.

But often businesses, especially Trans National Corporations (TNC's), find it more profitable to sub-contract parts of the production. This is particularly true for cottage industries like textiles, and garments. Subcontracted work is usually done in sweatshops with inhuman working conditions.

Because of this the Philippines, ridden with low generation of jobs and work akin to slavery, is losing its labor force to other countries. Migration has become a mantra for the unemployed.

In the 1970's migration of Filipino workers was at a critical level. Since migration would deflate the unemployment rate, and rake in dollars through income remittances, the government itself encouraged the trend. Now, 7 million Filipinos in 129 countries are estimated to be working abroad.

But as the cases of Flor Contemplacion and Sarah Balabagan revealed, Filipino Overseas Contract Workers (OCW's) are being exploited and discriminated abroad, plus ill defended by the Philippine administration. {Ibid., 7-9.}

As a high unemployment rate indicates, a large percentage of the population has a low to none purchasing power, and thus the phenomenon of widespread poverty. This is especially distinctive in urbanized areas that are also the sites of industrialization.

Unemployment, poverty, and the concentration of population in urban areas were also factors of industrialization in England; and today are generic to industrializing countries in the so-called "Third World."

According to the outcome of the Presidential Commission On Urban Poor Research, released in 1995 during the Ramos administration, there are up to 15 million existing urban poor. Of these 15 million, 9.75 million of these are "squatters." Squatters being people who build a semblance of communities from junked material, on private or government land, beside rivers, railways, and any other available patch of solid ground, such as sidewalks. An estimated 4 million squatters live in Manila.

In Metro Manila, one of every four citizen is a member of the urban poor, living in makeshift communities that compose 40% of the area. Life in the urban poor communities, furthermore, is always face to face with the threat of eviction, and demolition. {Roland Simbulan, Ang Maralitang Tagalunsod Sa Kalakhang Maynila: Ang Kanilang Pangkalahatang Kalagayan At Pakikibaka Para Sa Makataong Pamumuhay, Manila Studies Program Occasional Paper, no.7 (N.p.: Manila Studies Program, College of Arts and Sciences, University of the Philippines Manila, October 1998), 1-3.}

In this society wherein a decent life is assumed from one's purchasing power, it bodes ill that the economy is not generating money for its own.

The Plight of the Local Economy

Eighty per cent (80%) of the urban poor emigrated from the provinces where they used to live as farmers. {Ibid., 23.} But because of the feudal system {The agricultural hierarchy in the Philippines has been popularly identified as feudal in system. But other sectors, largely of the Socialist movement, argues that the system is already capitalistic.} of the agricultural sector, farmers find themselves landless, or forced into contractual work by big landowners, or foreign buyers. {This is the point of contention of those that identify the Philippine agricultural situation as capitalistic in working. Increasingly, farmers producing on a contractual basis are pointed out as agricultural workers.}

It is important to point out that industrialization is an important precursor to survival in a globalized economy. Because of the three pronged policies of: liberalization, wherein tariffs are lowered; deregulation, wherein the government adapts a laissez faire attitude towards matters in the economy; and privatization, wherein institutions offering basic services are to be relinquished by the government to private ownership, of most are businessmen who are, of course, thinking of generating a profit, the Philippine peso will be virtually sucked out of the country.

The Philippines has a narrow fighting chance in the global market, because of its agrarian integration, and its backward technology. Furthermore, the local economy is dependent on its export of raw materials and food products. Unfortunately, these are the very products that have a very low market value.

Products have a higher value as the level of processing increases. This is what is termed as "value-added" in final goods. The production of final goods uses up, or final goods are made up, of raw materials. In each level of the production line in a final good a value is added to it. Therefore, the finished product costs more than all the raw materials used in making it, because the values of the raw materials add up to its total value. {This is excluding the cost of labor, packaging, machinery, research, etc.} Simply put, the Philippines is trading more for less.

Much worse, is the arrival of imported food products. The methods and technology used by developed countries {Developed countries, like the United States, farm for profit and not for the actual direct consumption of the farmer.} produce gigantic proportions in contrast to local produce, which is largely cultivated by man and animal power. In addition, small plot production characterizes the Philippine agricultural landscape. The national average of farm size is only 1.2 hectares, again in contrast to the broad plantations largely controlled by foreign Trans National Corporations (TNC's). {"Fiefdom 2000," Agrarian Directions, June 1995, 2.} Already, Philippine products are feeling the heat with the entrance of cheap food imports. Notably, the Philippines is a dumping ground for US grain surpluses.

Time and again, land reform has been pointed as the solution to the feudalistic and monopolistic distribution of productive land. True land reform calls for the immediate distribution of free land to farmers who toil it, and therefore be the direct beneficiaries of the fruits of their labor. But the truth is land reform, itself, has been distorted in its interpretation by the government.

The government, caged in its capitalist framework, has launched an Agrarian Reform Community (ARC) program during former-president Ramos' term. The ARC is a bid to organize a barangay, or a cluster of barangays whose population is generally agricultural in dependence, into production units that would attract foreign investment to produce quality export crops. {"Agrarian Reform Communities: Globalizing the CARP," Agrarian Directions, September 1996, 2-4.}

Restive peasant opinion has pointed at the ARC as a re-organization of the Comprehensive Agrarian Reform Program (CARP) to be utilized for globalization. {Ibid., 1.}

Upon the organization of an ARC, the Department of Agrarian Reform (DAR) would present the following schemes to attract foreign and local agribusiness enterprises: Growership or contract-growing scheme, Joint Venture arrangements, and Lease arrangement. All of which are concentrated on increasing production, and the generation of higher profits. Instead of acquiring titles for the land they till, the farmers are compensated with contracts and leases that are temporary and subject to the foreign or local investor's power. Therefore, these schemes are oxymorons to genuine land reform. {Ibid., 8.}

Globalization as a Neo-Liberal Concept

Globalization is a term associated to the maneuvering of dominant monopoly capitalists for the ruthless restructuring of an economy along the lines of liberalization, deregulation, and privatization, and the rapid take-over of its resources. Monopoly capitalists, of who are the TNC's, found haven and justification in the concepts of Neo-Liberalism. {Antonio A. Tujan Jr., "Crisis and Globalization," Institute of Political Economy Journals, no.18 (January 1999): 4.}

But for the consumption of mainstream thinkers, the real activities of globalization are hidden under the promise of a happy global community. A global community where information, technology, and services are readily available to everyone. A supposedly miraculous event wherein the whole world is revolutionized.

In reality, globalization would mean a global community of economies that will be vulnerable to immoral speculation, provides the raw materials and cheap labor for the production of foreign final goods, and serve as the dumping ground of foreign surpluses.

In truth, it is not because of the goodwill of these monopoly capitalists that they wish to liberalize the influx of "advancements" into "backward" societies. {It should be noted that terms such as "backward," "underdeveloped," and "Third World" are coinages tagged by "advanced," "developed," and "First World" nations to the countries they victimize. It is as if to force these countries to think that they need their oppresors.} It is rather because they wish to penetrate a market in which they are not already extracting a profit from.

Nor is it because they wish to generate jobs for their poor and helpless brethren in "underdeveloped" countries. It is rather to take advantage of their poverty and helplessness to force them into having no other alternative than to produce quality products in exchange for low wages.

It is actually with little affection do they wish to ensure the distribution of quality products, of course of their making, to the whole world, but to ensure the dominance of these products that only they have the technology, and capital to produce.

It is quite ironic, and fairly ridiculous, that these neo-liberals insist that globalization, in its package of freedom from inhibited conventional thought, is an inevitable phenomenon and that it is futile to think against it. They immediately serve their "infallible" opinion that resistance will almost instantaneously lead to disaster. In a nutshell, they are asking the "underdeveloped" nations to forget their sovereignty and relinquish control to them. Why, it resembles a kind of capitalist autocracy, and this is not very liberal of them at all!

In light of the revelations uncovered, is it really even relevant to ask if the Philippines should, or should not, submerge itself into globalization? Or ask what is the future of the archipelago under it? Well, in the opinion of the author of this paper, she does not even want to consider it.

~Bibliography~

"Agrarian Reform Communities: Globalizing the CARP." Agrarian Directions, September 1996, 1-8.

"Fiefdom 2000." Agrarian Directions, June 1995, 2.

Simbulan, Roland. Ang Maralitang Tagalunsod sa Kalakhang Maynila: Ang Kanilang Pangkalahatang Kalagayan at Pakikibaka Para sa Makataong Pamumuhay. Manila Studies Program, College of Arts and Sciences, University of the Philippines Manila, October 1998, 1-23.

Tujan, Antonio A. Jr. "Crisis and Globalization." Institute of Political Economy Journals, no.18 (January 1999): 4.

---. "Globalization and Labor: Thhe Philipppppine Case." Institute of Political Economy Journals, no. 15 (March 1998): 3-9.

posted by Otherwise Maladroit @ 5:15 PM