Saturday, May 21, 2005

Globalization is Recolonization

Globalisation is Recolonisation
Asia Pacific Solidarity Conference 1998
By Renato Constantino Jr

[This talk was presented to the Asia Pacific Solidarity Conference plenary by Renato Constantino Jr, national chairperson of SANLAKAS in the Philippines.]

The fashionable buzzword these days is ``globalization''. Businesspersons and government functionaries just love to say it every chance they get. To a man they claim that this is the wave of the future. They further claim that ``it will bring modernization, prosperity and a better life for people everywhere because it is the most efficient way of organizing the world economy''.

Globalization, however, is simply this: Re-colonization. It seeks to integrate every economy into a single world system under the direction of global corporations. Thus, its proponents seek to eliminate national and territorial borders to enable their products to avail of unlimited market access without paying the usual high tariffs. This way, too, a country's natural resources may be exploited without much hindrance.

Thus, proponents of globalization promote the following policies: privatization, trade liberalization, deregulation, export-orientation, openness to foreign investments, phase-out of tariff protection and subsidies for local producers, and the implementation of labor-flexibility schemes. All these are designed to exploit the natural and human resources of the world for the benefit of big global corporations. Once all these are put in place, government, in effect, cedes or transfers its powers to the corporate sector. Government loses its ability to direct and define its own national goals. This was clearly illustrated last year in July 1997 when the boom was lowered on the Asian tigers and aspiring cubs such as the Philippines.

Quickly the Thai baht, the Indonesian rupiah, the Malaysian ringgit and the Philippine peso fell precipitously. Even South Korea, hitherto the eleventh biggest economy of the world was not spared. Yet, even before this happened, discerning academicians, analysts and institutions already had words of caution for this new phenomenon that had invaded our lives. They had an arsenal of data on how different sectors of society are being affected by globalization.

In the first half of 1997, impressive statistical growth was paraded before the Filipino people. What was not emphasized was the fact that a large part of this remarkable growth was due to remittances of our overseas workers(OFWs) whose numbers had swelled due to better employment opportunities abroad. And that child labor had in fact increased and continued to increase.

A concrete example is the development of the area comprising South Cotabato-Sarangani-Gen. Santos City or SOCSARGEN. It posted a phenomenal 12% increase in GNP. Considered as an ``agricultural Eden'', it is a paradise for agri-business. Mostly foreign. In corn production, it is #1; in pineapple output, it is #2; it is the only large-scale producer of asparagus; it is a valuable source of cash crops such as cut-flowers and bananas. Moreover, it is an important source of tuna for export aside from being a home port for different kinds of fish. The area is also abundant in iron, copper, magnetized iron sand, silver and gold.

Given all this abundance, should not the people of SOCSARGEN be living a better quality of life? Not so, according to Ibon Facts and Figures, which examined the region’s growth last year. For one, the unemployment rate remains in double digits and, in fact, the underemployment rate has increased. The minimum wages are far below the daily cost of living. Most of the people do not have enough for their needs.

But, according to Ibon, not all the people are poor. 395 families in South Cotabato and Sarangani earn as much as 8 times the average. 34% of all families share 65% of the total income while the poorest 28% live on only 8%. Definitely there is a wide disparity in income distribution. Most importantly, the significant players in the economic landscape of the area are the foreign companies such as Dole Philippines and the foreign mining companies. The example of SOCSARGEN concretely illustrates that growth can occur without equity.

Perhaps this is why, despite the glowing 7.7% GNP that had been posted earlier even before the Asian economic crisis, many Filipinos felt they were worse off now than before. For indeed, why during this period of ostensible impressive economic growth had the numbers of the urban poor grown by leaps and bounds? Why was cholera and dengue on the rise? And why was tuberculosis more prevalent during these days? These are definitely not signs of a prospering economy. These are signs of a deteriorating society. And yet, as our peoples’ health worsened, the number of luxury cars on the road increased. As the sales of Mercedes Benzes, BMW and Volvo cars rose, the homes of tens of thousands of families were demolished without mercy. If these were the conditions during the boom, one can only imagine the lives of the Filipino masses today.

What the Philippines and other nations like us have actually developed into is a subcontracting state under the direction of global corporations. You can see it in the expansion of export-processing zones and the opening of industrial estates. Less obvious is the increasing penetration of the countryside by export-oriented agri-business and industrial manufacturing tied to global interests. This is part and parcel of the accelerated march towards globalization led by transnational corporations from the North. Instead of establishing forward or backward linkages within the countries where they are located, the industries that are set up are linked to the coordinating centers of these global organizations.

Soon, the national economies of the South will become mere appendages, sub-systems of the Northern economies. With the GATT and the WTO and the looming Multilateral Agreement on Investment in place, free trade will be nothing more than exchanges between branches of TNCs. This is the rationale behind the pressure to implement deregulation and import liberalization. By reducing or eliminating tariff barriers, the movement of products across national borders will become more efficient, enhancing the competitiveness of TNCs in markets of the world.

This is what is meant by the new international division of labor. Under the old system of colonialism, colonies like the Philippines exported raw materials to the mother countries and imported these back as finished products. Under the new system, the role of countries like ours is to produce labor-intensive, low-technology, and/or semi-manufactured products needed by the North, while the rich countries concentrate on knowledge-intensive and high technology production.

This is so because the South, collectively regarded as the poor countries, has an abundance of cheap labor, workers whose wages are a mere fraction of the wages workers in the North receive.
Subcontracting, of course, is a legitimate business tool. But placed in the hands of global corporations, it can indeed become an instrument of economic subjugation.

Rather than entice local capital to invest in productive and trading activities that will primarily benefit the nation and its citizens, the Philippine government instead, reserves the incentives, tax breaks and tax holidays for the foreign investors. So much so that some Filipino investors have had to register their firms abroad just so that they can come in as foreign corporations to avail of the benefits reserved for foreign companies.

The vast majority of our citizenry who have for so long borne the burden of government’s economic policies that favor only a few do not yet see that their plight is merely the result of the continuing betrayal of their interests by our nation’s leaders. In a sense, this is an indictment against the people’s movement because of its failure to link the struggles of the past with the struggles of today.

Globalization will only cause these problems to worsen. It will bring salvation only to a few and degradation to many. Global corporations feed on our natural resources, human resources and national wealth. They displace farmers from their land, workers from their jobs and communities from their roots.

The present plight of the working people in the advanced countries should serve as a warning to us. If in those rich, technologically advanced countries — the headquarters of global corporations and international finance — so many workers are now losing their jobs, worrying about lower old age pensions, diminishing health care and other benefits, while paying higher taxes, what can the nations and peoples of the South expect if we follow the same pattern of economic policies?

Another word is often heard nowadays in relation to globalization is: privatization. Get government out of business, its proponents say. Privatization will result in a more efficient customer service. Consider, however, England's experience in this area. Water service in this country has been, we’re told, entirely privatized. The English were told that the various corporations which took over would render better service. Today, however, they still have leaking pipes. Water may even be rationed in the future. In the meantime, their water bills have gone up. What has become really efficient is bill collection.

Privatization is part of globalization. The fundamental aim of globalization is to shift power (and, of course, the corresponding profits) from governments to the private sector. In 1996 in France, for example, public sector workers went on strike with the public’s support. They protested their government's plans to reduce retirement pensions and health care benefits while raising the taxes of the workers and the poor to lower the national budget deficit. On the other hand, tax cuts and tax exemptions were given to the rich and the corporations. However, because of the massive protest and the public’s support of the protest, the Chirac government temporarily suspended the government's restructuring plan. Le Monde has called this protest ``the first revolt against globalization''.

The ill effects of globalization are now especially being felt in the tiger economies of Asia. As Filipino nationalist economist, Alejandro Lichauco wrote very recently: ``The tigers' abdication of control over their national currencies and international capital flows invited an extensive invasion of foreign funds, much of which were largely interested in exploiting the opportunities for speculative profits available in a free-wheeling economy. They were not interested in transforming themselves into fixed and real capital, meaning to say, into industrial plants, equipment and factory sites, but only in the promise of the fast buck offered by a stock market and real estate boom which they themselves had helped create and fuel. When the managers of these funds perceived, or thought they perceived, an eventual decline in the profitability of their `investments', they simply withdrew; at first gradually, and eventually in panic.

``If that panic translated into a massive exodus of capital and consequent depreciation of national currencies, it was because the tiger governments had imprudently extended to international capital the guarantee of free, unrestricted exit. That guarantee is actually the soul of financial and investments liberalization ...

``The lesson is plain enough. Any thinking, self-respecting government establishes standards for the entry of foreign capital into its jurisdiction as well as regulatory measures that would prevent the panic flight of capital, local and foreign, particularly in times of crisis.'' As a result, their economies have now come under IMF supervision. It will now be even easier for foreign capital to penetrate the beleaguered countries.

Globalization essentially means the rule of global corporations. It means that decisions about our lives are being made in corporate boardrooms in the US, Europe and Japan, instead of by our local community councils. It means powerlessness and suffering for the small and the weak. It means the break-up of our communities and the rape of our environment to serve the human and raw material requirements of global production for the global market. Its consequence, such as the collapse of our food security and the emergence of global environmental crises like pollution and global warming, may turn out to be even worse than colonization.

Like colonization before it, globalization is neither desirable nor inevitable nor so powerful that it cannot be stopped. It is wrong to presume that due to the overwhelming impact of globalization, there is no resistance to its negative effects. The people's organizations and NGOs are exhorting Southern governments not to accept globalization passively. The activities of transnational corporations must be checked through mechanisms that will ensure their accountability to their host nations.

Countries of the South should maintain the right to protect themselves against indiscriminate food imports to assure domestic food security. Speculative money from abroad must be controlled and regulated as its sudden flight causes financial instability. United action must be applied against the application of unilateral measures. Countries of the South should fight against the deregulation of foreign investments as this will threaten the position of local enterprises in the production of the same goods, even to the point of dislodging the latter from their own national markets.

To do this, however, we need governments that are able to stand up to foreign pressures and insults. We need governments strong and confident enough to defend its citizens living abroad. We need a government ready to help national industries and products so that they don’t lose out to foreign competition. We need governments whose priority is the people’s needs first and foremost. We need governments that is not afraid to truly act for and in behalf of the people — one that does not dress up bad news to make it look good.

The ill effects of globalization are now being felt all over the world. Let us urge people’s organizations and NGOs whatever may be their particular advocacies — the environment, women’s rights, children's welfare, the urban poor, labor, consumers, indigenous people, etc. — to make globalization a major concern because it will surely affect adversely all these sectors of society. And let us reach out to our counterparts in other countries so that we may learn from each other's conditions and perhaps try to coordinate our protests against our mutual economic disempowerment.

People the world over must reach out to each other; to gain the wisdom and the strength for their own better tomorrow. This is real globalization.

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