Philippines left confronts the economic crisis

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Philippines left confronts the economic crisis

MANILA — FRANCISCO NEMENZO, a founding member of BISIG (Union for Socialist Ideas and Action) and the newly-established AKBAYAN! (Citizens' Action Party) spoke to Green Left Weekly's REIHANA MOHIDEEN about political impact of the Asian economic crisis on the Ramos government and the left.

The financial crisis hit us last July and there are no signs of recovery. The Philippine peso depreciated from P26 to P45 for every US dollar. But, so far, the crisis has not been as devastating as in Thailand, Indonesia and South Korea.

I am surprised to learn that our GNP growth rate was 5.8% in 1997. Even the IMF is surprised. It is a drop from the 7.2% the previous year, but still a significant improvement because we were used to GNP growth rates of plus or minus 1%. But I doubt if this can be sustained.

Question: How has the Ramos government responded?

Instead of taking measures to protect our economy like Mahathir has done in Malaysia, Ramos is speeding up the pace of deregulation. Until recently, he kept assuring the Filipino people that "our economic fundamentals are sound", that the Asian financial crisis is a temporary consequence of the transition from protectionism to a free-market economy.

Two weeks ago, however, a resourceful journalist got hold of a secret memorandum from the director-general of the National Economic Development Authority. The memorandum urged the president to tell the truth about the economy and that people should prepare for worse. Heeding the advice of his top technocrat, Ramos reluctantly admitted that our economic fundamentals may not be sound after all, yet he has done nothing to reverse or slow down the implementation of IMF-imposed structural reforms.

Question: Does the Filipino ruling class agree with this response?

It is seldom united on any major issue. The native capitalists, who benefited from protectionism, have always opposed liberalisation. Their opposition slackened as the economy surged in the last five years. Now they are having a second wind; they are getting more aggressive in their campaigning for the restoration of import and exchange controls.

How is the crisis affecting ordinary people?

The prices of basic commodities are rising. Some companies are retrenching and a few stand at the edge of bankruptcy. But the impact is not yet as painful as in Indonesia and Thailand. No bank has closed down, although five are tottering due to overexposure in real estate. Distributors of motor vehicles and imported appliances are even offering generous discounts. They want to dispose of their old inventories to pay their debts before the peso sinks further.

Since the Supreme Court declared the oil deregulation law unconstitutional, oil cartels are unable to arbitrarily raise the price of oil. But Ramos is putting pressure on Congress to enact a revised oil deregulation law, minus the features which the Supreme Court deemed violated our constitution. Once the new law gives the oil cartels a free hand, the prices of all commodities are bound to shoot up. Only then will ordinary people feel the full impact of the crisis.

Question: What are the prospects of a campaign against the World Bank and IMF prescriptions?

The campaign is gaining momentum, but victory is not certain. The odds are formidable.

Question: How well placed is the left to respond to the crisis?

The left has been weakened by a series of splits. As one newspaper put it, "[it] is splitting like an amoeba". The crisis would have been an opportunity for the left, but it is in no position to avail itself of that opportunity.

Question: How will this impact on the coming elections?

Before the financial meltdown, all major political parties professed unbounded faith in neo-liberalism. Even the opposition promised to continue the process of deregulation and privatisation. Today they are sneering at Ramos's "Philippines 2000" program, but they have not offered an alternative. AKBAYAN! is the only party to come out boldly against the neo-liberal globalisation.

Elections in the Philippines tend to create an artificial and short-lived boom because millions of dollars (mostly ill-gotten wealth) in foreign banks are brought back to finance the campaigns. This is probably one of the factors that cushion the full impact of the Asian crisis. Watch out for what happens after the elections.

Question: Can you explain AKBAYAN!'s purpose and prospects in the elections?

AKBAYAN! was founded on January 17, although the arduous party-building process began three years ago. It brings together left-wing and other progressive forces that recognise the need to fight on the electoral front. Its program spells out an alternative to neo-liberalism.

Although not avowedly socialist, its program contains a host of socialist elements. The socialist organisations within it, like BISIG, see this new party as an arena for conducting the struggle for socialism. We will try to push AKBAYAN! to the left.

Question: How do you see BISIG's prospects and tasks in the short term?

BISIG has grown into a big organisation. When it was launched in 1986 it had chapters only in Metro Manila and Pampanga. Now we have large and very militant chapters in the Visayas and Mindanao, as well as other provinces in Luzon. In the last local elections we elected two mayors, one of them in a major city in Mindanao.

While the traditional left groups are having difficulty attracting young people, BISIG's youth arm has been expanding. BISIG-led campus parties captured the student councils at 26 universities throughout the country. The BISIG-led trade union centre is also expanding rapidly.

BISIG has formed alliances with blocs that broke with the Communist Party of the Philippines in 1993. No, they have not joined BISIG, neither are we encouraging them to do so. There are still outstanding ideological differences between us. But we are gradually converging. We engage in common projects and hold joint mass actions. The other left groups pattern the curricula and syllabi of their cadre schools after BISIG's. We are now exploring the feasibility of establishing one school to which the various groups may send their cadres.

AKBAYAN! is the most ambitious common project initiated and sustained by BISIG. If we can consolidate our unity within the framework of this party, perhaps the various political blocs, including BISIG, will gradually lose the reason for separate existence. AKBAYAN! represents a major step towards the reunification and renewal of the Philippine left.