The Changing Economic Landscape & the Philippines

The ideas that I am sharing here now are still inspired by the conversations and papers presented at my alumni reunion at the Institute of Development Studies (IDS) at the University of Sussex in Great Britain. One of the big topics tackled is the changing economic landscape and we kept referring to the old world starting the year 1492, because as Tom Lines, an expert on trade & development, who was one of the keynote speakers at the opening of the 2009 IDS Alumni Reunion said in his concluding remarks, “ My final, final thought is about the very widest landscape, and the extent of the hegemony crisis we might be facing. The banking crash of 2008 may well mark as big a turning point in world history as 1492, the year of Columbus’ first voyage to America. This symbolically marked the start of 500 years in which European countries, and their offshoots like the US, dominated the world….”
Should the United States undergo structural adjustment, as we know it, since it is now the biggest debtor nation in the world? Perhaps, the conditions or prescriptions of the U.S. government to huge banks and financial institutions that it bailed –out and the reforms in the education and health sectors are some forms of structural adjustments to cushion the impact of the crisis. In the so called Third World Debt Crisis of 1982, countries in debt like Mexico, the Philippines and the others have had to undergo structural adjustment ( read : import liberalization and shift to an export oriented economy). Obviously, for the Philippines, these prescriptions are not working. On cursory examination, one difference is that the Philippines is a democratic country ( at least in tradition or policy) while the emerging successful markets in East Asia like China, Singapore, South Korea or the tiger economies are more authoritarian nation states or state–controlled economies.
Some economists have labeled the global economic crisis, which started in 2007 in the United States as the “First World Debt Crisis.” Describing vividly our changing landscape, let me quote Tom Lines again,

….” The broader policy conclusion is also opposed to that of the 1980s Debt Crisis: not that free market policies must be pursued but that this crisis demonstrates their failure, so more regulation and a bigger role for government will be needed…. Now the US is the biggest debtor nation. Its capacity for economic hegemony has ended. Of the biggest creditors, only one (Germany) is part of the tradition which grew out of Europe. The others are China, Japan, Brazil, India and Russia (which is only partly European and lies outside that tradition for its own historical reasons). By far the biggest creditor is China: an up-and-coming country, self-sufficient and inward-looking (although hardly young), and unwilling to take on a dominant role at present. One thing is clear: whatever power relations may finally emerge, the previous Core: Periphery arrangement has been upset, probably for ever…. If the US no longer has the economic power to control things, and that power is moving to China or Japan or India, it marks a far bigger cultural shift than that of the 20th Century from one English-speaking, Common Law country (the UK) to another (the US). Power relations are indeed changing, but in view of the horrific events in Europe between 1914 and 1945 it leaves me with some apprehension about where this crisis might lead before a new settlement is reached. “
As we say, the shortest distance to trading with the new emerging economies like China is language, to start with. Mandarin, Fookien, Cantonese will be the new chic languages. We will have to get used to yuan, China’s currency which up to now most of us have not used. It helps that Filipinos, and most everyone in the world, are already into things Chinese. There is a Chinatown in virtually all cities of the world. We just wish that events such as Tiananmen Square protests of 1989 which culminated in the infamous Tiananmen Square massacre and all the human rights violations allegedly associated with it are not part of our future. It is a tribute to Asian human rights defenders under the auspices of our regional organization Forum-Asia that they are crafting a human rights mechanism to parallel the crafting of the Asean human rights mechanisms at the ASEAN. The other important proposed reform is a regional United Nations in this part of the world because the United Nations which was born in the wake of the Second World War was precisely created so that we will never again have to have a repeat of the untold sorrows of world wars.