Neither Singapore nor Libya

DIE HARD III
Herman Tiu Laurel
3/4/2011



If Marcos had not been forced out of the country and continued to govern, would the Philippines be a Singapore today as Sen. Bongbong Marcos claims? Or would it be, as Aquino III countered, a Libya wracked by internal strife with thousands dead and an uncertain future?

I discussed this recently on my Global News Network cable show with UP Solair (School of Labor and Industrial Relations) economics professor Dr. Rene Ofreneo, Manila Standard columnist and author Rod Kapunan, and the Fertilizer Industry Association of the Philippines’ past president, Jun Aristorenas.

With our topic, “RP Economics: From Marcos to the Present,” we got to review 21 years of Marcos and 25 years of the Yellow movement’s control of the direction of this country; and there was only one common conclusion. It’s definitely something that will make Cory Aquino turn in her grave while Ferdinand Marcos and his Agriculture Secretary Bong Tangco smile from wherever they are.

Ofreneo’s historical account of the Marcos period divides it into two — the first half in the early ’70s marked by Marcos’ acquiescence to the IMF-WB economic prescriptions and the second half, as the ’80s began, with Marcos launching the “11 Industrial Projects” that would have made the Philippines among the first Tiger Economies in Asean.

Kapunan puts the thrust toward industrialization under Marcos earlier, as early as the mid-70s. He took the view that if Marcos had continued on, the Philippines today would not be a Singapore, which developed more as a trading and financial entrepôt, but more like South Korea, with heavy industries such as steel, petrochemicals, automotive manufacturing, and the like.

Aristorenas, who started his career in 1976 with the Department of Agriculture under Bong Tangco, described the Marcos-Tangco vision as “25 years into the future,” with the domestic fertilizer industry in partnership with the Republic of Nauru as a base to become a food production powerhouse.

Reviewing 46 years of economic history is surprisingly easy; hindsight allows us an easy view of the essential issues. Ofreneo said that the Marcos regime’s epiphany as a National Economic Development advocate and leader came with Marcos’ landmark book, Revolution from the Center. Co-written with nationalist intellectuals, it really had the Japanese “Meiji Restoration” and its crash agro-industrialization program in mind. This paradigm, Ofreneo said, is the same that China has adopted, propelling it to its status today as an economic superpower — the same path being taken by Vietnam.

Of course, all the other Tiger Economies used the same paradigm, all following Marcos’ lead. The only tragedy, Ofreneo asserts, is that by 1981, Marcos accommodated the IMF-WB prescriptions (under the Structural Adjustment Program) and accepted “neo-liberal, free trade” with Cesar Virata and Gerry Sicat as economic managers, which actions led to the scuttling of his agro-industrialization program.

After the fall of Marcos, Ofreneo lamented, agro-industrialization was completely supplanted by neo-liberalism. Thereafter, the industrial projects were privatized or completely abandoned. The national steel company went to seed, its equipment looted, its viability undermined by the “highest electricity cost in Asia,” with the Indian company that runs it today suspected of using it only as a front for dumping steel products.

PhilPhos, the Marcos-era state fertilizer company, used to provide chemical and organic fertilizers at very low cost, helping the country achieve rice self-sufficiency and export capability throughout the late ’70s and ’80s; but now, the Philippines is dependent on both fertilizer and rice imports.

Other projects such as car manufacturing, Kapunan pointed out, provided economic multiplier effects such as production of radiators, automotive glass, rubber seals, car seats and upholstery. All these provided thousands of jobs which have all been lost today.

There was very little to discuss about Cory Aquino or Yellow-era economics, evincing the fact that there’s really very little or no economic initiative that can be attributed to it. Indeed, everything that happened after Cory assumed power seems to have emanated from the IMF-WB.

Liberalization, privatization and deregulation have been the rule since — accentuated even further by the Fidel Ramos and Gloria Arroyo regimes. The results have been tragic — food import dependency, de-industrialization, jobless growth, the decline of the middle class, growing poverty and hunger, ad nausea.

When I brought up the debt issue relative to the capital needed to restart economic development, Ofreneo cited the 2002 debt default of the late Nestor Kirchner of Argentina, who got an 80-percent discount on the country’s debts, allowing it to achieve “one of the highest growth rates today not only in Latin America but the world.” So, obviously, my last question was: Is it too late to restart RP’s economic renaissance?

Ofreneo, in a tangential reference to the OFW evacuation crisis in the Middle East, rhetorically asked, “Where’s the evacuation plan for the economy?” When I asked if Aquino III has the capability to solve the crisis, Ofreneo only had this to say: “He has to if he is to survive.” But then, Kapunan doesn’t believe Aquino III will survive. And even as Aristorenas said it may no longer be possible to compete with China’s very cheap fertilizers, still, he said, Filipino farmers must be supported with micro-financing and price subsidies, just as Japan, South Korea, and many countries are doing.

My conclusion is that the Philippines would neither have become a Singapore nor a Libya (since Marcos had already vanquished the Moro National Liberation Front and the New People’s Army, with Nur and Joma exiled); nor a copycat of South Korea. And since no one really has a copyright on good ideas, Aquino III might as well adopt Marcos’ “Revolution from the Center” and forge the path toward a Greater Philippines.

(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; TNT with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “Reviewing the Marcos Path;” visit http://newkatipunero.blogspot.com for our select radio and GNN shows)