Aquino’s development plan, mere rehash of Arroyo’s policies

Using Einstein’s definition of insanity, Ibon’s Jose Enrique Africa said that with the Philippine Development Plan of President Benigno Aquino III, the government is doing the same things all over again and expecting different results.


MANILA – President Benigno S. Aquino III’s Philippine Development Plan (PDP) 2011-2016 is just a continuation of Gloria Macapagal-Arroyo’s Medium-Term Development Plan (MTDP), the independent think tank group Ibon Foundation said.

Ibon’s research head Jose Enrique Africa said in a forum held last June 21 that the PDP or the six-year development plan articulates what the administration aims to do with the problems in the country such as the high unemployment rate and widespread poverty.

Ibon said the PDP is the government’s blueprint for implementing its declared “social contract with the Filipino people.” The plan sums up the administration’s chosen economic direction and defines its strategies and program for the next six years.

According to NEDA, the plan envisions inclusive growth for the country. “Inclusive growth means growth that is shared by all as pposed to the trickle down, jobless growth that we have seen over the recent years.” Thus, the Ibon said, in its critique, the PDP acknowledges how the large majority of the Filipino have not benefited from economic growth.

To respond to these needs, Ibon said the plan proposes massive investments in physical infrastructure, fostering business confidence, giving short-term cash outlays, and ensuring transparent and responsive governance to develop the country. “The essential economic thrust is straightforward: stick to globalization policies implemented over the last decades, deepen and broaden privatization through Public-Private Partnerships (PPPs), and selectively implement social protection programs especially conditional cash transfers (CCTs).”

Sticking to free market economics

Using Einstein’s definition of insanity, Africa said, the government is doing the same things all over again and expecting different results. Africa said that Aquino’s PDP only upholds the globalization policies of the past administrations. Ibon said the PDP does not offer anything new in terms of strategies for more genuinely inclusive economic growth. “The plan’s main problem is that it dogmatically stays the course of ‘free market’ policies of globalization that have been so destructive for the country.”

Africa said that it was proven that the free market policy is a failure. “Free market does not give development. In the history of the advanced developed countries in the world, whether the US, United Kingdom, France, Germany or even the former socialist countries like China, Soviet Union, or even the newly industrialized countries like Taiwan, South Korea, not any of those developed because of free market economics. In that sense, free market is passé.”

In fact, according to Africa, advanced capitalist countries like the US and countries in Europe are now implementing non-free market policies since the onset of the global crisis in the late 2008. “Governments around the world have been implementing between 400 to 500 protectionist and discriminatory measures annually since the onset of the global crisis.”

However, the government insists on implementing free market economics because it believes that the country’s economy will grow when big businesses rake in big profits, Africa added. He also said that the PDP focused on free market policy with the false assumption that everyone will benefit from this.

“The free market has in practice particularly meant creating the most profitable conditions for businesses in export sectors that foreign investors find desirable. Yet the country’s experience with such policies in the last two-and-a-half decades has been unambiguously negative. There has certainly been growing investments, rising exports, and economic growth. However there is also persistently high unemployment, poor quality work, low incomes, extensive poverty and severe inequality. Filipino manufacturing and agriculture have even declined and do not serve as the backbone of the economy,” Ibon said.

The plan targets (globally) competitive industries and services such as foreign tourism, cheap labor business processing outsourcing (BPO), low value-added electronics for export, extractive mining, export-oriented agri-business and forestry, and foreign dominated ship-building. There are investment and export opportunities in the said sectors, the question is, Ibon said, to what extent it will contribute to the broad-based and long term national development.

“They are apparently meant to be leading sectors of some sort for the economy but, as conceived, none of them pertain to Filipino industrialization or reducing the country’s dependence on foreign capital. If anything, the main focus is simply to attract foreign investors to exploit cheap Filipino labor (skilled and unskilled) and the country’s natural resources (mineral and agricultural).”

Ibon also noted the priority areas of development that are similar to the “Seven Big Winners” being pushed by the Joint Foreign Chambers of the Philippines (JFC) in 2009 and again in 2010 which are tourism, BPO, manufacturing (especially electronics and also ships) and logistics, mining, agri-business, creative industries and infrastructure (especially transport, power and water).

According to Ibon, the JFC is composed of American, Japanese, European, Canadian, Australian-New Zealand and Korean chambers of commerce and the Philippine Association of Multinational Companies’ Regional Headquarters.

However, Ibon said the demands for nationalist development by Filipino workers, peasants, people’s organizations, civil society, small business and industrialists have not made their way into the government’s PDP.

Pro-business biased and intensified privatization

Not only did the plan focus on the failed free market economics, it is also biased on big business, especially for foreign investors. Ibon said, while the plan is preoccupied with “global competitiveness indicators” because “the country’s capacity to attract trade and investments” are affected by its poor international rankings. But such indicators are about the things that matter for individual firms and which foreign investors complain about: business procedures, competitive markets, labor market flexibility, power rates, transport costs, property rights, low business taxes and the like.

Africa explained that the said indicators do not have anything to do with the social development of the country. “In the nearly 400 pages of the plan there is no mention about the needs of the majority of the people, because the government wants to give all the concerns of the foreign investors.” Africa added that if there are foreign investments, regulations should be instituted and the country should at least benefit from them.

Ibon’s critique also said, measures for real national development such as greater regulation of foreign capital and more protectionist trade policies are actually avoided for undermining these “competitiveness.” It also says that the plan steers clear of expropriation of land and distributing this for free to peasants, mandated substantial wage hikes, protecting agriculture and subsidizing small farms, purposeful pro-Filipino industrial policy, and ensuring direct public delivery of education, health and housing.

“The current plan though continues the misplaced priorities of those before it – foreign investments over Filipino capital, exports over the domestic market, business owners’ profits over worker/employee welfare, and landlord rights over peasant entitlements,” the critique said.

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  1. To the author:

    You have been saying a lot about “failed free-market economics”. I supposed you know what is meant by free-market economics, or do you?

    Because I can sense you do not know what you are talking about. You think free-market is the same with govt-managed economy. They are not. USA is no free-market economy and it is baseless to say USA is abandoning free-market policies because there is no free-market in the first place. Corporatism is not free-market. For god’s sake. You can rewrite your write-up in much more better way if you knew what you talk about.

    I suggest indulge in Wikipedia to be clear to some simple concepts.

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