In the middle of the pain and suffering of the global economic and food crises of 2009, a group of South Asian economists and policymakers met in India and mocked the United States: “You guys messed up, and you’re taking the world economy down with you. Thank God we were smart enough to ignore your advice, so our financial sector was never deregulated, and we still grow most of our own food. We keep government grain stocks to cushion price spikes, and we’re even better than China because we rely more on internal demand than exports so we’re not taking as much of a hit.”
Is anyone in the U.S. and the poorer nations of the world listening? After 30 years of working on and off in the Philippines, we returned in July to gauge the debate and to engage with the new government and ordinary Filipinos. How is the government and how are Filipinos, we asked, responding to the “triple crises of vulnerability”: the global economic crisis, the food crisis and the spreading environmental crises of water, forests, fisheries and climate?
A word on context: For the past 30 years, the U.S. has preached the merits of “free trade,” of gearing economic activity to global corporations and markets in order to take advantage of the so-called “efficiencies” of trade and investment with other countries. From the U.S. to the Philippines, governments set incentives and rules so that firms shifted from local to global markets and, in the case of the Philippines, roughly 11 million people ended up working overseas.
Over these decades in most countries, banking was deregulated so that new high-risk financial instruments reaped big gains for investors, but small businesses that once formed the backbone of most economies had trouble getting loans. Firms produced goods in global factories that exploited natural resources and workers from countries like the Philippines where governments offered lax labor and environmental standards. In the Philippines, the big foreign exchange earners became overseas workers, call centers for Western firms, electronic exports and tourism.
In this era of what George Soros calls “market fundamentalism,” the rich took off while workers, the environment and fairness suffered. And, we now know that this strategy was also extremely vulnerable to external shocks from other countries over which they have no control.
Indeed, economic crisis struck in late 2008, emanating from the Wall Street casino as a giant bubble in U.S. housing prices burst. Then banks, stock markets and other financial markets crashed. The crisis quickly spread to Europe and to those poorer countries most tied into Western markets. Turkey and Mexico, for example, found export markets and remittances from overseas workers drying up. Many countries in Asia fared somewhat better, since they traded more with China and India which partially insulated their economies from such external shocks. About half of the Philippines’ global trade and other economic ties are still with the United States and Europe; it thus remains vulnerable to a global economic crisis that has defied conventional predictions of recovery.
Economic crisis has been coupled for most countries by a food crisis, as prices of rice, wheat, corn and other basics soared in 2008, fueled by both unusual weather and opportunistic speculators. This led to widespread protests and unrest in countries like the Philippines, which still imports up to 10 percent of its most important source of calories, rice (it is the most import-dependent of the rice-consuming nations). And, the spread of global assembly lines and trade, heavily dependent on fossil fuels, deepened the climate crisis. The Philippines sits on key lists of the 10 countries most vulnerable to climate change as the majority of rice and other foodstuff are grown on land that is barely above sea level.
In the middle of such global suffering and continuing vulnerability, what better time to rethink the overall economic and agricultural path? We asked this of a group of lawmakers, led by Rep. Erin Tañada, with whom we met in late July. Coming from various political parties, most harbored hopes that global markets would simply pick up again and the Philippines could continue to live off the largess of other countries. But every member had been spooked by the food crisis, and we found a refreshing openness to new ideas.
The good news, as we told these members of Congress, is that alternatives more rooted in small businesses and small farmers producing largely for local consumption are spreading around the world. In the U.S., the local farm movement has expanded rapidly; for the first time in decades, the number of farmers has stopped shrinking. From local farmers markets to the spread of worker-owned cooperatives, creative people are building communities based on rooted economic activity, less inequality, more ecological health, and that involve people more in the decisions that affect their lives.
We found this also in the Philippine countryside, where we spent time with dozens of farmers. We discovered a growing number who had shifted from “high-yielding” varieties of rice heavily dependent on imported and toxic chemical fertilizers and pesticides to local seeds grown organically and kept healthy by a variety of homemade “concoctions” to control pests and weeds.
Back to the India conference of 2009. The participant ended his report: The global economic crisis “is a blow, but we’ll still grow at 6 percent and we’ll catch you [in the U.S.] even sooner in the global economy than we would have otherwise. Hope you learn something from this.” The rest of the world ignores this advice at the peril of its people and the planet.