Is anyone in the United States (and other, poorer nations of the world) listening? We certainly are intrigued. So, after 30 years of working on and off in the Philippines, we return to gauge the debate, among members of the nations’ new government and among ordinary Filipinos. How is the government and how are Filipinos, we asked, responding to what we call the “triple crises of vulnerability”: the global economic crisis, the food crisis, and the spreading environmental crises of water, forests, fisheries, and climate?
Some broader context is helpful here: For these past 30 years, the United States (along with the World Bank, International Monetary Fund, and World Trade Organization) has preached the merits of “free trade”—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 United States to the Philippines to Mexico, 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 poorer countries like the Philippines where governments offered lax labor and environmental standards. Over this period 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 financier George Soros calls “market fundamentalism,” the rich soared to unimaginable heights (the number of billionaires in the world jumped from 111 in 1987 to 1,011 in 2010) while workers, the environment, and fairness suffered. We now know that this strategy made poorer countries extremely vulnerable to external shocks from the economies of other nations, 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 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 shocks. About half of the Philippines’ global trade and other economic ties, for instance, are still with the United States and Europe; it thus remains vulnerable to a global economic crisis that has defied conventional predictions of recovery.
For most countries, economic crisis has been accompanied 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 rice, the country’s most important source of calories (it is the most import-dependent of the rice-consuming nations).
Meanwhile, 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 Philippine Congress members, led by Rep. Erin Tanada and Rep. Walden Bello. 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 Congressperson with whom we met in these hallowed halls has 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 alternative economic models more rooted in small businesses and small farms are spreading around the world. In the United States, the local farm movement has expanded rapidly; for the first time in decades, the number of U.S. 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 involving people more directly 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 so-called “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 (more on this in our next blog).
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.”
John Cavanagh and Robin Broad wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Robin is a Professor of International Development atAmerican University in Washington, D.C. and has worked as an international economist in the U.S. Treasury Department and the U.S. Congress. John is on leave from directing the Institute for Policy Studies, and is co-chair (with David Korten) of the New Economy Working Group. They are co-authors of three books on the global economy, and are currently traveling the country and the world to write a book entitled Local Dreams: Finding Rootedness in the Age of Vulnerability.