EDITORIAL

Global Financial Crisis
The Alternative With Philippines As Model

by Allen Salas Quimpo, LL.B., MMPM
NVC Institute of Public Policy Studies

Two very important events have shown clearly a need to review the modern global economic order characterized by globalization, liberalization, privatization, free enterprise and multi-national enterprise, both as an economic philosophy and a socio-political policy.
The first is the global financial crisis. Technically, they explained that the cause is the defect in the “New Financial Architecture”. Or the globally integrated system of giant banks, conglomerates, financial investment houses, and their interlocking derivatives that have become so big, independent, multi nationals and hardly regulated by rules, even by government. In layman’s term, bigness and its defects. This has cast serious doubts to the fundamental economics system being practiced in the world today. No amount of growth, knowledge, talents, progress, glory could ever erase the fact that the system is flawed. It could not justify the inequity, social disorder, economic gap, political turmoil that this system has heaped upon humankind and the environment. Bigness is good is proven wrong. Lehman Brothers, the biggest investment bank. AIG, America’s biggest insurance company. CitiBank, Bank of Scotland, Lynnch & Merrill, Iceland. Look at the staggering amount of hundreds of billions in bailing out not only countries, but the big global and multinational giants. They have nothing to justify except their irrelevance. They have nothing to show except their heavy load to the people of the world.
Bigness is dehumanizing. The greatest exploitation of man against man occurred under this Order. In their desire for wealth, output and income, human existence both in values and quality of life became distorted. The Filipino Diaspora resulted to almost both in values and quality of life became distorted. The Filipino Diaspora resulted to almost 10 percent of our valuable manpower to leave our country, leave their love ones in exchange of the dollars. Many suffer in the hands of unjust employers and unjust employment relationship. Oftentimes, they are treated as chattels, not human. The families left behind bring untold social and family disorder.
Bigness is unsustainable. Like a balloon, it would have to burst. This Order feeds on human greed. Greed that is without limit. What is man that he should strive to be greater than God? Man’s physical being is naturally limited and his existence finite. For the Filipino, our average age limit is 70 years old. Yet Man craves for wealth, and means without limit. Without “enoughness”. One should realize that man is created small and small is beautiful. It is not alone in the exploitation of man against man that this Order inflicts. It covers the exploitation of man against our natural resources, against mother earth herself. Earth is finite. Our natural resources are finite. Yet, when one considers the supply of our fossil fuel, our forest, our seas, their exploitation are without limit. They are traded as daily income. Note the price of oil being traded daily. From the economist’s view, fossil fuel is not income but capital, because it is not renewable and the subject to eventual depletion. Further, this results to pollution and pollution to global warming. Mother earth has her natural way of resisting and reacting. Drought, floods and other natural disasters come in greater and more serious frequency and severity. Hundreds of thousands perished and millions rendered homeless.
This is the time to redefine “human well being”. Let us put an end to the standard that “human well being” is measured by the amount of annual consumption or per capita income he has. Never assume that the more he consumes, the better man he becomes. Believe that the “well being” of a person is his ability to preserve the environment as when he comes, to be aware of his needs and limit excesses in life, in consumption, in adopting the right attitude and viewpoint to life. We should review the measure of the national well being as the increase in the GNP. The Philippines is a case in point where the increase in the GNP did not bring national “well being” to the Filipinos. Rather, as statistics show, it brought about the increasing number of poor people and the widening gap between the rich and the poor.
Believing that great challenges provide greater opportunities, now is the time to lead a revolution in building a strong economic order as small people matters.
An order completely the reverse of this flawed “favored giant businesses”. An Order that adopts a community based, decentralized, autonomous economic structure and localized self–sustaining economic relationship. The Philippines is possessed with the right profile to emerge as a model of this economic philosophy. Consider the following data: 99.6 percent of all business is small and medium scale enterprises; 70 percent of all labor force is employed by the SME’s; 93 percent of all materials are locally produced, and mostly indigenous. Coupled by the artistic, creative, inherent talents and skills of our rural entrepreneurs, our SME’s are producing globally superior products. With the international awareness to use indigenous, organic components in products, the Philippines has the advantage of attracting well meaning customers. Consider Aklan’s three raw materials, abaca, coconut and our forest products. The first is the world’s strongest fiber, the other is the miracle tree. The third, our forest is the biggest in Region 6. They are the environmentalists and our province’s valuable resource.
However, the sad fact shows only 10 percent of our SME’s have access to credit and financial assistance. Our financial and credit lending institutions as well as our policy makers have always shown bias in favour of the big business. This favour is shown by a prohibitive, voluminous bank requirements which practically renders access by SME’s impossible. There was only one truly pro-poor credit program worthy of remembrance: the Masagana 99 Rice Productivity program under President Marcos in the early 70s. It has succeeded in increasing production, extended credit to millions and millions of farmers, enabled the country to export rice, raised the economic and personal dignity of farmers and provided intermediate technology in the rice industry. This was discontinued upon pressure by the rich agricultural producing counties which caused policy distortion by making imports easier and cheaper than supporting our productivity. As a result, we experience queuing and suffering from this flaw. Let this remind us of a chance that was lost.
The anti-poor, anti-small and medium scale policy is even made more profound by the investment policies of government owned financial and quasi-financial institutions like the GSIS, SSS, and BSP. In the case of GSIS, it decided to invest $2.5 billion of its investment funds in the global market, appointing and paying hefty millions of dollars to foreign fund managers. In its charter, it has 11 areas of investments. 10 are within Philippine jurisdiction. Only one is foreign. The GSIS neglected the 10 and chose the foreign. This is not only taking out much needed capital from our SME’s, not only as evidence of lack of trust in our people, but a grievous and unforgivable sin to the millions of GSIS members from whose contributions this money came. Members have been short changed both in service and benefits. It is but right and proper that GSIS management should be made to explain and forego with this madness. Madness when one has to consider the global financial crisis.
In advocating for a policy change, in demanding change in our government officials, it is never complete unless change start with us, our values, perspective, discipline and patriotism. We must be ready to forego personal gains in favour of the general welfare and sustainable development. It will require more than a change in attitude. It will need a change of heart. With love and God, nothing is impossible. /MP