Download IBON-PRESENTATION

Impact on the Philippines & Alternatives:
COMBATING THE
DESCENT INTO
DEEPER CRISIS
IBON Foundation
10 February 2009
Main points
1. Philippines is entering a long period of
stagnation & severe crisis
2. Government is dishonest about the state of
the economy…
3. … and deceitful about supposed efforts to
cope with the crisis
4. The people need relief & real development
•
•
•
Immediate relief
Discarding failed policies
Strategic aspirations
1. Global crisis & the
Philippines
Imperialist crisis &
recession
Global economic crisis
& the Philippines
• Impact on a semifeudal & semicolonial
economy?
• Note: experience in 2000-2001
• US bubble burst in 2000, growth fell from 3.7% (2000)
to 0.8% (2001); global slowdown
• In Philippines:
• Exports growth collapsed: 19% (1999), 9%
(2000), negative 16% (2001) + Foreign investment
fell 84% to US$355 M (2001)
• Unemployment soared from 9.8% (1999) to 11.1%
(2001)
• Remittances declined slightly by 0.3% to
US$6,031 M (2001)
• * Remittances from US fell in absolute terms
Deepening Philippine crisis
Deepening Philippine crisis
1. Drastically slowing economic growth
• 2008: growth slowed in 60% of
economy
• 2009: Will fall to less than 3% which
is less than half growth in 2007
2. Worst joblessness in country’s history
is rising even further
• 2008: 10.7 million unemployed +
underemployed
• 2009: Could rise to some 12-13
million
• Of which at least 5 million outright
jobless (increase of 900,000)
• Retrenchments, less job creation,
deteriorating quality of jobs
Deepening Philippine crisis
3. Falling real incomes & worsening
poverty
• 2006, at approx P110 or less per
person per day:
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•
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Poor families – 13.9 million (official: 4.7 M)
Poor Filipinos – 70 million (official: 27.6 M)
2008: Incomes lost almost 10% of
value due to inflation
2009: Worsening poverty due to
joblessness and falling incomes:
more driven to poverty
+ deepening poverty for poorest
“Globalization” has made
economy weaker & more
vulnerable
• Imperialist “globalization” was all
about monopoly capital profiting
from the Third World
• Plundering the Philippines:
• Cheap labor – ex. OFWs, exportoriented manufacturing, call
centers…
• Cheap natural resources – ex.
coconut products, fruits & vegetables,
minerals…
• Monopolized markets – ex. power,
oil, water…
• Debt & speculation – ex. foreign
debt, “aid”, portfolio investments…
“Globalization” has made
economy weaker & more
vulnerable
1. Internal vulnerability: Shrinking
shares of manufacturing &
agriculture in the economy
• Manufacturing smallest since 1950s
• Agriculture smallest in country’s
history
• Domestic economy poorly equipped
to deal with crisis
• Shrunken productive base for
generating jobs & incomes
• Weakened domestic ability to
consume & invest
“Globalization” has made
economy weaker & more
vulnerable
2. External vulnerability: Unprecedented
dependence on low value-added exports,
one-sided foreign investment & overseas
remittances
• 84% of exports to just 10 countries
• 77% of FDI from just US, EU & Japan
• 88% of remittances from only 10 countries
• Source countries are all seeing drastically
slowing or even negative growth
3.  Externally-triggered downturn
since 2008 beginning of another long
period of stagnation & severe crisis
2. Gross government
neglect
Chronic & worsening crisis
• “Globalization” policies have
worsened economic backwardness &
resulted in false development
• Yet govt is maintaining these policies
which will keep the Philippines as
merely:
• Provider of cheap labor
• Source of cheap raw materials
• A market to dominate & monopolize
• Chronically dependent on foreign
debt & capital
Sham “resiliency plan”
or “sustainability plan”
• Reported plan/package: P330 billion
• P160 B increase in 2009 natl govt (NG) budget
• Including dole-out PPPP cash transfer program
• P40 B corporate/individual tax breaks
• P100 B off-budget infrastructure fund (GOCCs, GFI,
private sector)
• P30 B additional benefits to GSIS/SSS/
PhilHealth members
• + Alternative livelihood programs,
jobs placement services & loans
There is no “pump-priming”
• The P1.4 trillion national government
(NG) budget for 2009 is not a “pumppriming” budget
• Second smallest share of NG spending
to GDP in at least two-and-a-half
decades (approx 16.1%)
• Unexceptional increases in:
• Total NG expenditure (9% real growth)
• Larger growth in 2007, 2000, 1997, 1995,
1994, 1990, 1989
• Total non-debt expenditure (8% real
growth)
• Larger growth in 2000, 1997, 1990, 1987
The “plan” is mere spin,
pretense & propaganda
• Recycling & repackaging what was already there
• i.e., 2009 NG budget, corporate tax breaks, off-budget
infrastructure fund
• Meaningless & ineffectual measures amidst general
economic crisis
• i.e., False job placement, livelihood programs, loans
• And even narrowly targeted only at newly displaced –
what about millions of jobless and tens of
millions of poor even before worsening
of situation?
The people must guard
against being made to bear
burden of adjustment
• Business groups & government pushing
for lower pay, reduced benefits, more
uncertain work and outright layoffs
• Imperialist powers will push to further open
up Third World countries through more
“globalization” policies
• Ever a vent for their crisis
• Administration’s cha-cha offensive
• A maneuver to remain in power longer…
• … surrendering last remaining legal
barriers to foreign exploitation of the
country’s human and natural resources
3. Genuine relief &
development
Real “stimulus” needed
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•
•
Premises are: situation of deep/widespread poverty
+ vast inequalities in wealth, income & assets
+ failure of “free market” policies of “globalization”
Main objective: stimulate failing consumption and production
Through:
1. Immediate relief not just for recently displaced but for as much
of long-suffering as possible
2. Preserve current jobs:
• Public sector (e.g., no “rationalization”)
• Private sector (e.g., no retrenchments, no wage/benefit
cuts)
3. Quickest job creation:
• Immediate & wide-ranging agrarian reform
• Public works for productive rural infrastructure
4. Sustainable job creation and development:
• Real agricultural development
• Building national industry
Immediate relief: The people must get
far more of the social services and
economic share long denied them
1. Restore real per capita social services spending to
at least 1997 levels
• Additional P205 billion (education), P36 billion
(health) and P5 billion (housing)
2. Support consumption:
• P125 across the board nationwide wage hike &
P3,000 increase in government salaries
• Protection against formal/concealed cuts in wages,
salaries & benefits
3. Remove VAT on food & oil products…
• … while increasing taxation of wealth, luxury goods
& services, unproductive assets & transactions
Immediate relief: The people must get
far more of the social services and
economic share long denied them
4. Shift public spending to labor-intensive
and basic rural infrastructure projects that
directly improve people’s livelihoods
• Ex. P100 billion not for a few big projects
but small irrigation systems, farm-tomarket roads and post-harvest facilities
5. Free public resources:
• Stop debt payments and cancel odious
and illegitimate debt
• Cracking down on corruption
• Reducing spending on military and war
which just feeds human rights violations
Radical economic reforms:
back to basics
1. Agrarian reform & agricultural development (ex. GARB)
• Land to the tillers, extension & support services
• Cooperativization & modernization
2. National industrialization (ex. National Industrial Plan?)
• Filipino industry is possible…
• .. and essential for jobs, incomes, capital accumulation,
technology & sustainable growth
Radical economic reforms:
back to basics
3.
4.
Ensure gains from foreign trade and investment
•
Protect the Philippine economy
•
Reverse trade & investment liberalization
•
Control repatriation of FDI profits, dividends,
royalties
•
Support Filipino agricultural & industrial producers
•
Real technology transfer
•
Filipinization & eventual nationalization of vital and
strategic industries and utilities
Banking, finance and fiscal policy
•
Mobilize and allocate resources towards national
agricultural, industrial & social development
•
Crackdown on pervasive wasteful spending and
bureaucrat corruption
•
Oppose financial services liberalization that imports of
toxic fund management and speculative models
Strategic aspirations
• We are in a period of historical significance – amidst crisis,
building a more just, equitable, humane & peaceful world
• Lessons about the limits/nature of monopoly capitalism
• Intrinsic crisis of overproduction
• Inbuilt poverty, inequality, exploitation & oppression
• Imperialist wars of aggression & conquest
• Build on the experience with progressive economics such as in
socialist countries
• Broad-based & sustainable growth
• Society’s resources used for the people’s welfare
• Combating joblessness, hunger, disease & lack of knowledge
Salamat po
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People’s Statement on the Global Crisis
www.politicaleconomy.info