ANALYSIS
RP
Economy: On the Road to Success or Perdition?
President Gloria
Macapagal-Arroyo told the recent 27th National Conference of
Employers that by working with her government, they can take the country
to the “Enchanted Kingdom of First World Success.” But the country is
nowhere near the road to success. On the contrary, it is well on the road
to perdition.
BY BENJIE OLIVEROS
Bulatlat
President Gloria
Macapagal-Arroyo told the 27th National Conference of Employers
at the Manila Hotel May 23 that by working with her government they can
take the country to the “Enchanted Kingdom of First World Success.”
President Arroyo may be enchanted with the U.S., Japan, and Germany, the
three most economically powerful countries in the world, but the
Philippines is nowhere near the road to success.
The existing economic
and political relations of the country with these countries, especially
the U.S., prevent the country from advancing beyond the backward,
agricultural and pre-industrial state that it is in.
Philippine trade with
the U.S., Japan, and the European Union (EU) illustrates not only the
unequal or unbalanced relations but also the vast differences in the state
of production between a backward country like the Philippines and the
so-called First World countries.
The U.S. is the main
trading partner of the Philippines. The country mainly exports
electronic products
to the U.S. followed by articles of apparel and clothing accessories.
Imports from the U.S. consist of electronic products, industrial equipment
and machinery, and cereals and cereal preparations.
Japan is
the second biggest trading partner of the
Philippines.
Philippine exports consist mainly of electronic products and ignition
wiring and other wiring sets. Electronic products, industrial equipment
and machinery, and transportation equipment comprise the country’s main
imports from Japan.
Electronic products top the export items to the EU. Other top exports are
apparels and clothing accessories, coconut oil, other products
manufactured from materials imported on consignment basis, and woodcraft
and furniture.
Likewise, electronic products have the biggest share among the major
Philippine imports from the EU. Other top imports are industrial machinery
and equipment, medicinal and pharmaceutical products, transport equipment,
and telecommunication equipment and electrical machinery.
The Philippines
exports electronic products in the form of semi-conductors and computer
chips. But it imports finished electronic products for consumer and
industrial use. It is also worth noting that 80-90 percent of the
components of the chips the country exports are imported.
The country exports
motor vehicle wiring sets to Japan but imports transportation equipment.
It exports garments, coconut oil, woodcraft, and other peripheral and
semi-processed products but imports industrial necessities such as
machinery, telecommunications equipment, mineral fuel, iron and steel, and
chemicals. It also imports plastics, textiles, medicinal and
pharmaceutical products, and cereals. Even the mining industry that the
Arroyo administration intends to develop as part of the export sector will
not alter the existing state of things.
Moreover,
transnational corporations (TNCs)
dominate the small, stunted, and shrinking manufacturing sector in the
country. TNCs account for over three-fourths of the total sales of
manufacturing corporations in the country’s Top 1,000 corporations in
2003. These in turn accounted for nearly 80 percent of the country’s
total manufacturing output. TNCs characteristically set up shop in
export-oriented enclaves importing most of their inputs. The main linkage
they have to the local economy is the exploitation of cheap unorganized
labor and taking advantage of infrastructure and utilities subsidized by
public resources.
TNCs
only contribute around five percent to the Gross Domestic Product (GDP)
and averaged a measly 3.9 percent in 1991-2000. They also contributed
barely one percent to total employment last year: 335,000 jobs out of the
31.6 million employed.
The
theme of the employers’ convention, “Survive, Compete, Succeed”, is
appropriate, as the country’s economy is barely surviving the crisis it is
in. It is, however, almost impossible for the country to compete and
succeed with its current state and orientation, much less be in the
company of the world’s most economically and politically powerful. That
is, unless the country breaks away from its existing economic and
political relations with the U.S. and start asserting itself as what is
being done by Venezuela, Cuba, and Bolivia.
Bolivia
recently nationalized its oil industry.
But if
the country continues with its current direction, it will accumulate
bigger trade deficits, incur more debts, and plunge deeper into a state of
backwardness and crisis. The balance of trade in goods (BOT-G) deficit for
the Philippines in January 2006 has reached $415 million, higher compared
to last year’s deficit of $207 million. Total public sector debt amounted
to P5.48 trillion by June 2005. The Arroyo administration is making
things worse by intensifying its policies of liberalization, deregulation
and privatization. If it succeeds in amending the 1987 Constitution to
keep itself in power and to further open up the country to exploitation
and profiteering by foreign monopoly corporations, the only road the
country would take is the road to perdition. Bulatlat
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