APEC has contributed to global inequality

By Satur C. Ocampo
At Ground Level | The Philippine Star

In the early 1990s, the mantra of neoliberal economic globalization was “prosperity to the people of all nations without exception.” The Asia-Pacific Economic Cooperation (APEC) forum has fostered the mantra in the region in the same way that the World Trade Organization has been pushing it worldwide.

At their recently concluded 27th APEC summit in Manila, the leaders of 21 member-economies vowed to achieve “inclusive growth” – substituting an esoteric term for the old, straightforward mantra. In fact, inclusive growth was already conspicuously mentioned in the documents (synthesized in the leaders’ declaration) of the 229 “brainstorming sessions” held in the country this year.

It couldn’t have been just subliminal. The organizers, including the host Aquino government, have apparently acknowledged that the APEC needs to make up for what it has failed to accomplish. The truth is: APEC has contributed to the income and social inequalities afflicting almost all nations today.

And the adoption of a plan to facilitate the participation in global trade of micro, small and medium enterprises (MSMEs) is one way APEC purports to make up for its failings. As China’s billionaire Jack Ma (who founded from scratch the $198-billion e-commerce firm Alibaba), bluntly declared in his speech at the CEO summit: the dismantling of cross-border trade barriers in the last 15 years only made the giant global companies much richer while pushing the small firms to the sidelines:

“What we should do is help the small guys and the young people,” was his advice. “Otherwise we will have more disasters coming.” Alibaba, he claimed, had helped 12 million businesses to sell their products online.

The leaders’ summit declaration cites the following as priority measures to aid MSMEs: trade facilitation, trade finance, e-commerce, and institutional support. These, it says, “will benefit consumers, create jobs, and foster development.” But how these would work out remains to be seen. That’s because much of what the APEC leaders have declared they would do to attain “prosperity for people” has failed.

In a stinging assessment of APEC’s performance, the think-tank Ibon Foundation has concluded that it is “an exclusive organization that for the last 26 years has been promoting the most exclusionary economic policies the world has ever seen.”

At its 1996 leaders’ summit held in Subic, Ibon says, APEC “reaffirmed the primacy of an open multilateral trading system based on the WTO” and launched the implementing phase of [the] free and open trade and investment agenda.” It also formed the APEC Business Advisory Council (ABAC) to “engage the business sector as a full partner in the APEC agenda.” (It was the ABAC, chaired by Doris Magsaysay Ho, that pushed the plan to “globalize” the MSMEs.)

It was noted by Ibon that in 1996 APEC leaders affirmed the commitment to sustainable growth and equitable development, and expressed confidence that “substantial, concrete, measurable and sustainable results” would be produced, with “tangible improvements” in the lives of people by the turn of the century (meaning, 15 years ago).

Zeroing in on APEC’s impact on the Philippines, Ibon points out that despite the growth in trade and foreign investments, the results are depressing:

• Agriculture’s share in the gross domestic product, between 1996 and 2014, shrank by more than half, from 21.1% to 10%; its share in total employment likewise shrank for the same period from 28% to 26.9%. (The major reason was the untrammelled inflow into the country of cheap foreign agricultural products – meat, rice, vegetables – against which Filipino farmers couldn’t compete.)

• Manufacturing saw its share of the GDP shrink from 25.3% in 1996 to 23.3% in 2014; its share of employment dipped from 9.9% to 8.3%. Over 16 years, 72,777 factories shut down, most of them small. In 1996, 97,841 firms employed 1.25 million workers, by 2012 only 25,064 firms in operation employed 1.19 million.

• The job losses have made life worse for the 66 million poor Filipinos today – compare that number with the 72 million total population in 1996! – as they struggle to survive on P125 or less a day. Our poor countrymen suffer from stagnant real wages, job instability, less and less land to till, plus the rising costs of education, health care, transport, water, electricity.

• True, new wealth was created. But much of it was siphoned off by the prime beneficiaries of globalization. The net income of the 1,000 top corporations in the Philippines (including multinational corporations and fast-growing conglomerates of local capitalists) increased 4 times from P25 billion in 1996 to P1 trillion in 2013. This year the richest 25 Filipinos are worth $65.4 billion, equivalent to the aggregate incomes of the 26 million poorest Filipinos.

Now, consider the data on poverty in the United States, the world’s largest economy ($16-trillion GDP). A column piece by Eduardo Porter in the International New York Times tells us:

Nearly 16 million Americans – 1 of 20 in the population – make do with $8.60 per person per day (for a family of four). That puts them below 50% of the US poverty line. Over 50 years of economic growth, the number hasn’t shrunk but even increased from 10 million in 1983.

More astounding fact: in 1996 the US federal government ended its assistance programs to the poor with the lowest-income level, while increasing by 74% the benefits for those who worked and earned incomes above the poverty line (deemed the lower-middle class).

“The deeply poor remain politically unorganized,” is the commentator’s observation. And because they are “out of sight, out of mind,” government conveniently ignores them.

In the Philippines, many of our poor have been organized and militantly protesting, struggling for decades. But just the same, their urgent demands for a better life keep falling on deaf ears.

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E-mail: satur.ocampo@gmail.com
Published in The Philippine Star
November 14, 2015

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