Philippine-US Relations

By Antonio C. Abaya

Written on March 30, 2009

For the Standard Today,

March 31 issue

The Future of Philippine-American relations was the topic of a whole-day forum last week at the Asian Institute of Management (AIM), organized by the Center for Philippine Futuristics Studies and Management, of which I am a trustee.

I was asked to be a reactor to the papers read by Dr. Federico Macaranas, former undersecretary of Foreign Affairs and current professor of Geopolitics and Political Economy at the AIM; Dr. Sixto K. Roxas, chairman of the Maximo T. Kalaw Institute for Sustainable Development; and Dr. Gonzalo Jurado, professor of Economics at the Kalayaan University.

Dr. Roxas looked at current Philippine-US relations and found them wanting because they are based on the maneuvers of large major entities: the governments and major corporate players. Dr. Roxas expressed his pet advocacy that for economic development to be sustainable in the long run, much of the decision making should be done at the local and community levels.

And he took heart from the election to the US presidency of Barack Obama, who had started his public career as a community organizer in his native Chicago. And he believes that Philippine-American relations may now be more solidly based on this new foundation of local economic development, which he also found in the early phases of Mao Zedung’s Cultural Revolution when millions of households were encouraged to start their own backyard steel furnaces.

I, however, took issue with Dr. Roxas’ assertion that there was little difference between the Soviet and American models of development, both being based on large scale economic enterprises. I pointed out that there was a major difference, and this difference was the concept of profit.

In the American model, profit was and is the major motivating principle. In the Soviet model, influenced by Karl Marx’s Theory of Surplus Value, profit-making was strictly forbidden because profit was considered the cause and measure of exploitation.

In the Soviet Union, the state owned everything and everyone worked for the state, to prevent anyone from exploiting others. Thus even taxis, tobacco kiosks and shoe repair shops were owned by the state. Profit was the dirtiest word in the Soviet lexicon.

The reasoning goes as follows: when a capitalist hires a worker to work for him, he does not pay that worker the full value of his labor. The uncompensated value, the surplus value, is the capitalist’s profit and is the measure of his exploitation of that worker.

I pointed out that in my booklet A Funny Thing Happened on the Way to Communism, written in 1985 or four years before the dismantling of the Berlin Wall and six years before the implosion of the Soviet Union, the Chinese under the pragmatic Deng Xiao-ping had unequivocally rejected Marx’s Theory of Surplus Value with his slogans Get Rich through Hard Work! To Get Rich is Glorious! and It does not matter if a cat is black or white, as long as it catches mice!

.

Deng had allowed Chinese entrepreneurs in the early 1980s to hire a maximum of seven workers each. This limit was later revised upward, to 50 workers each.. I predicted in A Funny Thing that in the future, all limits would be removed, capitalism would be fully restored, and the Chinese would overtake the Soviets or Russians in economic development. And this is exactly what happened. Legitimate profit-seeking spelled the difference.

Dr. Gonzalo Jurado correctly pointed out that the current economic meltdown is directly traceable to the sub-prime mortgage downturn in the US and the unregulated profit-seeking that attended the repackaging and marketing of toxic assets.

To reverse the recessionary trends, Dr. Jurado called for expansion in both fiscal policy, i.e. an increase in government spending even at the risk of budget deficits; and monetary policy, to stimulate private investments and generate jobs, through lower interest rates

But I would have wanted to hear Dr. Jurado’s opinion on the rising trend towards protectionism. I pointed out that France last week announced the closure of a Peugeot plant in Slovenia and its transfer back to France, to provide jobs for laid-off French auto workers.

Less than two months ago, workers in the oil industry in the UK went on a nation-wide strike to protest the hiring of 300 workers from Italy and Portugal to build a new oil refinery in Scotland. The striking workers demanded, rightfully, that the jobs should go to British workers, tens of thousands of whom had recently been laid off.

During his watch, George W. Bush, premier advocate of Free Trade and Globalization, imposed numerical quotas on Canadian lumber to protect American forestry workers and producers; on Brazilian and South Korean steel to protect American steel workers and producers; on Vietnamese prawns and catfish to protect American workers and producers in the fisheries sector.

The duty of each government is to protect its own workers and producers, not the workers and producers of other countries. If the governments of France, the UK and the USA resort to protectionism, as mentioned above, to protect their own workers and producers, when their national interests so dictate, the Philippine government should not be coy and embarrassed to do the same when our national interests so dictate.

Adhering more closely to the assigned subject, Dr. Macaranas gave an overview of the current state of Philippine-American relations, saying correctly that these relations are triangulated with the relations of both countries with the People’s Republic of China.

At the same time, he said that Philippine-American relations will weaken as the Philippines develops more ties with China. This has been evident in the increasing number of economic and business contracts that the Arroyo government has signed – about 32 so far – with the Chinese government or with corporations owned partly or wholly by the Chinese government, the most notorious of which was the aborted, scandal-tainted contract with the ZTE Corp for a national broadband network.

The contract that set the pace for this development was the agreement with Beijing for joint oil exploration in the Spratly Islands, signed in October 2004. This, together with President Arroyo’s decision to withdraw the tiny Philippine contingent in Iraq in August convinced the neo-cons in Washington DC that President Arroyo was not a reliable ally and, in my reading, triggered moves to remove her from power, starting with the release of the Hello Garci tapes and the mass resignation of the Hyatt Ten, in July 2005.

Dr. Macaranas also predicted that Chinese power will rise as US power declines. I mentioned a white paper which I received from someone in the Royal Canadian Navy more than 15 years ago which said that China was planning to acquire a blue water navy by the year 2025.

Subsequent events have corroborated that prediction. The Chinese bought for scrap the HMAS Melbourne, the only aircraft carrier in the Royal Australian Navy. Before dismantling the ship, the Chinese supposedly redrew its structural diagrams, in preparation for building their own carriers. Previous to that, the Chinese had been training aircrews to take-off and land in confined spaces on dry land, marked out to approximate carrier decks.

After the Soviet Union collapsed in 1991, the Chinese bought – for $2 billion, if memory serves – a 65,000-ton aircraft carrier, the Varyag, under construction for the cash-short Soviet Navy in the Crimean port of Nikolaev. Two weeks ago, the Chinese officially announced their plans to build aircraft carriers. We knew that all along, didn’t we?

In closing, Dr. Macaranas cautioned that the US must co-exist with China, not confront it. The US may have no other choice but to do so.

More than a year ago, I mentioned in one of my columns that the Pentagon had complained that its computers in Washington DC had been hacked into by hackers in the People’s Liberation Army. So did the German Foreign Ministry in Berlin.

Just the other day, a Canadian monitoring group announced that it had discovered that hackers, mostly in China, had hacked into 1,295 government and corporate computers in 103 countries, including the Philippines. Only 1,295? How do you say ‘spyware’ and ‘malware’ in Mandarin? *****

Reactions to tonyabaya@gmail.com. Other articles in www.tapatt.org and in acabaya.blogspot.com.

To subscribe, send a blank email with the subject heading Subscribe.

To unsubscribe, send a blank email with the subject heading Unsubscribe.