Statement of FDC President Walden Bello during a forum, dubbed "Why is Obama worried, and Gloria isn't?" held today in Quezon City
13 January 2009
Debt & Public Finance
13 January 2008
The nationalization of big US banks and government control of financial institutions, the loss of 3.6 million US jobs in just one year (according to US Bureau of Labor Statistics), and the worsening economic situation being exported to Europe and to major developing economies are evidence of the massive failure of the global capitalist system.
The developing crisis has discredited neoliberalism, the hegemonic paradigm of the last thirty years, opening up the space for new economic discourses. There is a universal clamor for more stringent regulation of the economy and greater calls for democratic decision making. The time is opportune for incorporating the voices of peasants, workers, women, and other marginalized sectors in the crafting of public policy.
The unfolding economic crisis and its being overextended militarily in the Middle East have severely undermined the hegemonic status of the United States. The budget deficit for 2007/2008 reached US$438 billion, 3.1 percent of US GDP, and is expected to hit a record US$1.2 trillion for 2008/2009. Obama faces an economic challenge of epic proportions- all before he takes over the reins of the US government.
Even as the United States and most other governments have shifted to war-footing on the economic front, the Philippine government refuses to recognize the dimensions of the storm that is about to engulf us. The country, we are told by spokesmen of the administration, will not be as badly affected as others. The reason for this reluctance is clear: presenting the current crisis as an emergency will take away from the urgency that the government would like to give its self-serving agenda to change the Constitution to allow the present occupant of Malacanang to exercise power indefinitely.
However, with sharp declines in remittances, job cuts, and massive economic contraction expected across nations, the Filipino people do have reason to fear the worst.
There are a number of short term measures that must be implemented to prepare the country, which include a moratorium on debt servicing, the cancellation of illegitimate debt, and the rescinding of VAT. However, the crisis also presents an opportunity to fundamentally reorient our economic direction. Among the strategic steps that can be taken in the coming period to build a balanced economy with firm foundations are:
- replacing the free trade approach with managed trade, which would promote domestic industry and agriculture;
- moving towards a healthy mixed economy in which private enterprises coexist with cooperatives, private-public partnerships, and state enterprises;
- undertaking income and asset redistribution to create a dynamic internal market that will fuel demand and provide a long-term stimulus to ecologically sustainable economic growth.
Of course, in this country there are still hindrances of all sorts to these reforms. For one, the economic elites are blinded by their ambition to accumulate more power and wealth, as exhibited by the lack of recognition of the crisis and by the scrapping of the Comprehensive Agrarian Reform Program. Moreover, the progressive movement has not been able to build an effective coalition between workers and peasants. The challenges are great, but they must be confronted.
The future is pregnant with different possibilities. This crisis can provoke either a swing towards the right or left; or paralysis. It is up to us in civil society to ensure that the outcome will be one that moves the country in the direction of an economy with a healthier productive base and marked by greater equality and justice. -30-