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Economics of Arroyo's Support for US War

The reasons behind the Arroyo government’s all-out support for the US retaliatory attacks against perceived enemies are more than just mere compliance to the existing three military agreements or with the recent United Nations resolution calling for a campaign against “global terrorism.” In a time of bleak economic prospects, the administration just cannot simply afford to antagonize a powerful country it has been dependent on since time immemorial.

BY DANILO ARAÑA ARAO
Bulatlat.com

The stage has been set and the battle lines have been drawn.

America’s enemy is now officially ours with the visit of United States Pacific Fleet Commander in Chief Admiral Thomas Fargo last week to inspect the former facilities in Clark and Subic which will be used by the newly formed International Counter-Terrorism Coalition (ICTC).

While Saudi Arabia and Pakistan were quite careful in defining the terms of their support on US retaliation against those responsible for the September 11 attacks, the Philippines has been quick to express its “all-out” support. It has even allowed American troops to access the former US military facilities in Clark and Subic for this endeavor.

To make things worse, the Arroyo administration has remained open to deploy Philippine troops in relation to the American retaliatory attacks against Usamah Muhammad bin Laden and his so-called international network of terrorists.

The terms of cooperation between the United States and the Philippine military are mainly defined by the existing US-RP Visiting Forces Agreement (VFA), Mutual Defense Treaty (MDT) and the Military Assistance Agreement (MAA). Based on the current actuations of the government, the abrogation of the US-RP Military Bases Agreement in 1991 has been negated by the continued existence of the three military agreements.

The Arroyo administration’s supportive attitude towards the US (even to the point of bypassing congressional concurrence), however, is more than just compliance to the three military agreements.

The country’s economic dependence on the US proves to be the more compelling reason if one were to review the latest available data.

The US is the top destination of Philippine exports. From January to July 2001, the US bought $5.2 billion worth of Philippine exports, accounting for 28.27% of the total (i.e., $18.6 billion). This figure is almost the same as last year’s when the US cornered 29.44% of total exports.

The Philippines also proves to be dependent on US goods. Japan may be the top source of the country’s imports from January to July 2001 ($3.6 billion or 20.26% of total), but the US is a close second with $3.2 billion or 17.69% of total imports.

With the country’s trade balance pegged at a precarious $667 million from January to July this year (a far cry from the $2.2-billion trade balance during the same period last year), the Arroyo regime sees the importance of not falling from the US government’s grace.

Even the country’s tourism industry is dependent on the Americans. During the first semester of this year, there were 236,668 Americans who visited the country, comprising 32.03% of the total foreign visitor arrivals of 738,851. This makes the Americans the undisputed top foreign visitors of the country.

For the whole year in 1990, 203,941 Americans arrived in the country. The year 1999 saw a 127.32% increase in visitor arrivals from the US with 463,600.

Foreign investments through the years saw Japan and the US figuring prominently in terms of number of corporations and amount of investments. Even in terms of official development assistance (ODA), whether in the form of grants or loans, both countries are always in the top two of the country’s portfolio.

What proves to be alarming for the Arroyo administration is that as early as July this year, investor sentiment has turned from boom to gloom.

At that time, the Makati Business Club (MBC) described the attitude of investors as “deflated enthusiasm” where euphoria over the change in administration in January 2001 subsided to a more somber outlook due to the government’s failure to implement expected reforms.

Prior to the September 11 attacks on the World Trade Center and Pentagon, the government projects the gross national product (GNP) to grow by 3.8% to 4.3 % this year. At this point, even the International Monetary Fund (IMF) is skeptical about reaching this target and only projects the economy to grow by only 2.5% this year.

Indeed, economic dependence on the US plays a major role in a sensitive political situation like this which, ironically, should primarily take into account the nation’s patrimony. Bulatlat.com

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