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University of the Philippines Cebu College Social Science Division

THE ANTI-DEVELOPMENT STATE: The Political Economy of Permanent Crisis in the Philippines
By Walden Bello

(A Book Review)
Submitted by: KRISTINE JOY P. ARGALLON JOHN DARWIN KITT P. MURALLA B.A. Political Science 2

Submitted to: Weena Jade Gera, Ph.D. Instructor, Social Science Division

October 10, 2011 I. INTRODUCTION The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines by Walden Bello was a product of the joint efforts of the different faculty members of the Department of Sociology College of Social Science and Philosophy in the University of the Philippines Diliman in Quezon City, Philippines. This book was co-authored by Herbert Dacena, Marissa de Guzman, and Mary Lou Malig. All the people who were behind the creation of this book were duly acknowledged by the author in the early part of the book. As the author calls it, the book is really a product of a truly collective process (p. 7, par 2). This book basically tackles the issue on whether or not the intervention of the state in the market and economic affairs would hinder a country in developing and moving forward to progress. The book, being entitled as The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines, means that this book will dig on the matter regarding the different crises that the Philippines faced and what measures did the government do to address these problems. According to W. Bello (2004), "the book seeks to understand how and why every attempt at economic and social change failed during the EDSA Period" (p.5). The book would best discuss the underlying factors on why and how the emergence of socio-economic undertakings to establish change are difficult to attain and are always deemed as failure by people and the civil society. The book does not only discuss the factors about the attempts on changing the system but also the effects that it inflicted in the society. This will also give a full understanding of why is there a failure in the movements to change the system. Is it because of the failure of the people or the failure of other factors? The seven chapters that consists of this book talks about the different situations that the country faced in the last three decades starting from the
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dictatorship of Marcos until the Arroyo administration in the year 2004 (year of the publication of the book). The main issues that are presented in the book are the different programs and policies that the different administrations implemented with the hopes of making these policies work for the progress of the country. II. CONTENT SUMMARY In the first chapter of Walden Bellos book, it states that the Philippines has been under many administrations but still, not much has improved in the economy of the country. The victory of EDSA 1 has not been an avenue to create societal and economic change in our country. Disparity among the rich and the poor is still very evident in the country and yet, the government is focusing more on other matters such as trade liberalization for the Philippine economy. Today, our country is focusing on implementing trade liberalization and privatization so as to pattern our economy with that of other Asian nations who also practice the same trade method and have progressed. By adapting this pattern, the government assumed that it would yield the same effect for our country. But that was not the case. Our country suffered remarkable effects of this system. The administration, in its quest for a neoliberal economy

administration choose to prioritize the debt servicing rather than any other problems in the country, and the main reasons why the country decided to become part of the WTO and decided to apply liberalization programs. It was during the Marcos regime that the state had its intervention in the market economy. It was also during this time that contract migration of Filipino workers started due to the low number of jobs in the Philippines. Although there was a decrease in the workforce of the Philippines, the remittances from overseas workers somehow helped in the economy of the country. In the later part of the Marcos regime, motions for the trade liberalization were

made. This also included the privatization and regulation of some of the government owned firms and establishments. After the dictatorship of Marcos, the Aquino administration

implemented agrarian reform programs. Agrarian reform is the expression of a constitutional directive to provide restitution for the Filipinos whose families have lived and labored for generations under feudalism" (Ibid, 79). The promise and reality of agrarian reform in the Philippines is discussed in Chapter 2 of this book - its history, what have the previous administrations (until that of former president Arroyo) done in order to address the issues on agrarian reform, and how to assess the implementation of the current agrarian reform program of our country. The ascendancy of Corazon Aquino into power paved way in creating great expectations and even regarded her as the "last hope" for a peaceful struggle for land redistribution. Prior to the drafting of the 1987 constitution, Aquino possessed legislative powers as head of the 1986 revolutionary government. Such powers could have been used in order to implement a radical agrarian reform program. But Aquino coped out and left the discretion to Congress. In doing so, a hastily and fast-paced CARL (Comprehensive Agrarian Reform Law) was created on April 21, 1988, thus CARP (Comprehensive Agrarian Reform Program) was given life in the Aquino Administration. CARP became the only legal hope for landless farmers to acquire land. Each administration tends to say that such program or agrarian reform as a whole is at the top of their priority. But each performed otherwise. Administration after administration prioritized debt servicing and succumbs to the pressures given by World Bank and the International Monetary Fund (IMF). Such act of the government "left extremely limited funds to invest in development and agrarian reform" (Ibid, 44). Moreover, CARP was a Compromised Agrarian Reform Program which clearly showed that the passage of such program became an affirmation of the reestablishment of
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the class power of the landed class and the utilization of the resources of the state for their own benefits. Thus, continuing the existence of feudalism in the society. In the third chapter of this book, the neoliberal revolution during the administration of Fidel V. Ramos was introduced. It is in his regime that the government already pursued economic reforms which included the liberalization of the market economy. It is during this period that the dominant sector in the country is pushing for the liberalization of trade in the country in order to pattern our economy with those of other Asian countries whose economies boomed upon liberalizing their trade. The president wanted that our economy be like other Asian countries which are products of free market policies and not of strategic state interventions in the market (p. 93, par. 3). Ideologically, the liberalization of trade would lead to an all around prosperity of a countrys economy. It is also in his regime that the motions for privatization of government firms and other establishments were pushed. Because of this leap of the Philippines towards liberalization, the country entered into a lot of agreements with other countries. For the Ramos administration, the liberalization of trade in the country would invite foreign investors in the country since most of international companies would want to invest in an economy where they can freely do what they wish without much opposition from the state. The Ramos administration believed that the best way to manage an economy is not to try to manage it at all (p. 112, par.3). Also during this period of the Ramos regime, the Asian financial crisis occurred and greatly affected the economies of the Asian countries, including the Philippines. The country was not really able to stand o its own after the Asian financial crisis hit the region. With that, most of the local industries were taken over by foreign companies in order to save them from shutting down. This event further invited foreign companies to come to the country and become partners with the local firms. His legacy of a failed liberalization policy caused too much consequence for
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the countrys industries. Ramos left the presidency with a burden for his successor, Estrada. The bitter reality that the whole WTO (World Trade Organization) agreement and not just the AOA (Agreement on Agriculture) was an instrument that benefited the few gainers of globalization at the expense of the majority was experienced and resented all throughout the developing world (Ibid, 159). The fourth chapter, Multilateral Punishment: The Philippines in the WTO, 1995-2003 shows how the Philippine Government paved the intrusion of WTO and the US-EU hegemony in the political economy of the Philippine State, and the effects of such intrusion to the socio-economic development of our state. Clearly, it has been prevalent in the Philippine economy the intervention of the US in the affair on import-export policies. Socio-economic legislations in the Philippines became in line with WTO agreements by the pursuance of US Agency for International Development (USAID) Program called AGILE (Accelerating Growth, Investment. And Liberalization with Equity) and the US trade Representative (USTR) which acted as the WTO enforcer for TRIMs (Trade Related Investment Measures). USAID became responsible for restricting technological diffusion through the passage and implementation of intellectual property rights protection such as Intellectual Property Code (RA 8293) and the Electronic Commerce Act (RA 8792) which made the Philippines WTO-consistent. On the other hand, USTR became the dominant influence for eliminating trade policy as a mechanism for industrialization which would mean the removal of TRIMs. Doing so, two industries were immediately affected: auto industry, and the soap and detergent industry. It paved way to opening the market to TNCs (Transnational Corporations), thus unleveling the playing field between local industries and TNCs. Also presented in this book are the controversial privatization issues that occurred in the country in the past administrations. Privatization is the
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act of transferring of control of a public property to the private sector (p. 189). In the Philippine context, the issue on privatization entails both a pro and a con. In the side of the government, privatization of some of its properties can lessen the burden of the government in the subsidy that it gives to these properties. But on the other hand, on the side of the small and ordinary individuals, the shift from the public sector to the private sector of the government properties, namely the water and power supply can be equated to a higher fee or payment in order to avail of these necessities. This entails additional burden for the poor Filipino families considering that more than half of our countrys population is below the poverty line and is only earning enough to feed their grumbling stomachs. Alongside the motion for privatization of public services is the deregulation and trade liberalization. Also highlighted in this chapter are the consequences of the privatization that happened in the country when MWSS and Maynilad, two of the countrys major water suppliers. The same goes with the story of the National Power Corporation (Napocor). In that part of history, the country experienced backslides with the private sectors bidding for the control of these services. This later proved that the privatization of these services will not prosper in our country considering the financial capacity of its constituents. This will also show the great disparity between the haves and the have-nots in the society. Access to basic services for the Filipinos must be equal, not that only those who can afford can avail. Yes, the private sectors did a great job in delivering quality services to the people, yet in exchange, people pay a higher price. The problem with privatization is that it passes the cost burden to the consumers through price hike.
[It] is development that meets the needs of present generation without compromising the ability of the future generation to meet their own needs (Brundtland, 1987).

That is sustainable development.

Continuation of ecological degradation up until the present is showcased in the sixth chapter entitled Unsustainable Development, and the relation with it to the neo-liberal points entered by the Philippine Government. Historically speaking, from the ill-case of ecological balance during the Marcos Regime, we have experienced a worse case during the Aquino Administration. Administration after another, despite the formulation and passage of an impressive array of laws and regulations appearing to evince greater political sensitivity to environmental problems, the Philippine Government has consistently corroded these efforts by signing up for Structural Adjustment Programs (SAPs) with foreign monetary institutions such as World Bank and International Monetary Fund which demanded neoliberal prescriptions (Ibid, 218-220). Such prescriptions opened the Philippines to foreign investors, without or less regulation from the state, to use the natural resources of the country, thus making the archipelago a market for raw materials of the private sector. Ironically, the Philippine Government even showers incentives to potential investors even to the extent of sidelined interest of the indigenous communities, the workers, and the environment. Such policies even put the commons in the hands of local and multinational corporations who demanded the liberalization and deregulation of the market which would then maximize MNCs profits. This neo-liberal approach in development cannot be reconciled with the thought of sustainable development, thus showing that legal and bureaucratic reforms undertake does not take the country to such development. In the last chapter of the book, the authors talked about crony capitalism which is practiced by the privileged elites that dominate the market industries. These cronies were very rampant and dominant during the Estrada administration where the president himself was at the background of the underground transactions of these businessmen. Being the man behind these elites in the society, these big businessmen were able
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to protect their businesses from the hands of the law. These people are even the countrys top tax evaders yet the tooth of the law is never sharp and the cases against these people often get dismissed and these people are never punished. Also stated in this part of the book is the issue on corruption alongside with crony capitalism which most people believe that is the main cause of the why the Philippines is not progressing and is still stuck in the Third World economic bracket. It is in this chapter where the authors put the blame on the ruling elites on why the Philippines is still poor because these elites control most of the modes of production and the market processes and that these elites enjoy their control because it serves best their interests. And thats what makes the state seem powerless because of the rule of these elites. This chapter strongly suggests that the state must be firm in imposing its rules in order to become resistant and end corruption. It is based on the peoples view of the state whether it serves the interest of the ruling elites in the society or it remains to become a neutral and fair arena that will only exist in order to solve the conflicts in the society. And that the people must empower the state in order for it to retain its power over the ruling elites that is dominating the society. Behind this problematic system of Philippine Society, the authors still view that there is a way out of this economic stagnation. The concluding part of the book, Is There a Way Out of the National Impasse? shows a different view of addressing this socio-economic regression. The authors gave scenarios of how to attain Political change and have recommended developmental strategies in order to attain more genuine democratic governance and a system responsive to development which is to attain a developmental state such that of Newly industrialized Countries (NICs). Example of which are South Korea and Taiwan.

Conversely, the whole concluding part attempts to give rise to the thinking of state empowerment and state interventionism in the world of free market.

III.REACTION AND POLITICAL SOCIOLOGY ANALYSIS The book showed many points on why any attempt on socio-economic change has gone to failure. It showed a thorough discussion in every aspect which concerns the underlying regress of the Philippine state- from structural and economic undertakings of the Philippine Society, to the problematic system of Agrarian Reform, and most of all, to the prioritization of foreign debt by the Philippine Government which showed the intrusion of neoliberal approach in policy making, thus hindering progress and sustainable development of our country. Moreover, the book firmly shows the anti-developmental policies and actions the Philippine state is experiencing up to the present. We firmly affirm the sentiments and provisions of the book that truly, the Philippine state and society is continuing the system of feudalism, and the control of imperialist design of the United States which is backed up by the bureaucratcapitalist in the government which is shown in the book Philippine Society and Revolution by Amado Guerrero. With respect to the Marxist perspective, Bello has well shown the class conflict within the Philippine society and even the large discrepancy of those of the ruling class and the common people. Despite that the state, according to Hegel, is a neutral political entity; it is different when it comes to the Philippine society where the state is used by the ruling class in order to meet their interest even to the extent of the general welfare of the constituency. The landed class has used the state as means of oppression. Rendering the effects, feudalism still comes to the picture and truly CARP is nothing but
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a Compromised Agrarian Reform Program hastily established during the term of the Aquino administration. Amidst the notion that the president after the Marcos dictatorship heads a revolutionary government, she blatantly left the issue on land redistribution to her landed class-majority congress which in turn leads the compromised agreement on agrarian reform. She, herself became a picture of a ruling-landed class whom which will never agree on distributing the lands acquired by her clan. This is a very controversial action of a person raised into power by the constituency in the midst of the call for social transformation. Truly, the picture says it that the state is a tool of oppression by the ruling class. On the aspect of governance, truly the civil society (NGOs, POs, etc.) and private sector proved a large contribution on the assertion of policymaking and governing. However, the state does not heed most of the call of these groups and would tend to go away from the concept of democratic governance. The Philippine government failed on pursuing social justice while prioritizing the interest of potential investors (TNCs, MNCs. etc.) and succumbing to the demands of international monetary institutions (World Bank, IMF, etc.). According to Peter Evans, the state has an innate and embedded autonomy which means that there is a certain bureaucracy that is attached in the governmental structure. Through this embedded autonomy of the state, it has to exercise autonomy against any political power and influences from the private sector. Therefore, the state must act independently and must secure that it would not be shaken by outside forces that would try to steal its power and authority over its people. In her book, The Developmental State, Meredith Woo Cumings wrote that a state must also be a Janus-faced state. By this she meant that the state can achieve its goal by manipulating the financial structure of the
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country. By becoming Janus-faced, it meant that the state must also exercise control in the financial economy and not just leave it in the hands of the businessmen and the private sector. This intervention of the state is done in order to save the economy. If we take into consideration the Ramos presidency and the issue of the Asian financial crisis way back 1997, the Philippine economy really drowned because of too much trade liberalization that the government was not able to check on the economy which made it vulnerable to the effects of the crisis in the Asian region. The developmental state does not want an event such as this to happen. That is why, the state must have the right to intervene with the affairs of the market and not just leave it to the hands of the private sector. Relating the contents of the book to other current issues in the society today, our country is also experiencing the threat of privatization. It is regarding the issue on the governments plan on passing on the control of the public transportation that is very popular in Metro Manila the Light rail Transit or the famous LRT. The government is planning on letting it be controlled by the private institution since the government is spending too much on the subsidy that it gives to the public transportation. The government argues that by transferring the ownership to the private sector, the quality of service that it can deliver to the public will become better. But large numbers of the commuting public are complaining since the privatization of this public transport would mean an increase in fare that would mean another burden for the public. The issues of liberalization, privatization, and deregulation are not only dominant in the transport sector, but also to other government owned and controlled institutions. Such act is dominant in the social services sector such us Education. Our State Universities and Colleges came to these very rampant phase of the government. Slowly, they are neglecting their responsibility to give accessible and quality education to all, thus leaving the responsibility to give such education to the private sector. In making so,
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education becomes a fictitious commodity and a source of profit for capitalistic intentions of the private sector or even that of foreign design. Such issues would be answered by Bellos conclusion that there is a need of making the Philippines a Developmental State by means of empowering the state, making strategic policies which would lead to strengthening the domestic market as the driver of growth- from taking sustainable development seriously, cooperation with neighboring countries, to transformation of Global Economic System. Such strategy would be attained if and only if there is a unified means for political change in our society. Nevertheless, itll crumble and into complete oblivion. Bellos scenarios in changing the political system are by means of: 1) Constitutional Convention; 2) Military Coup; 3) Communist Revolution; 4) the insurrectionary side of EDSA People Power. But perhaps, a change in political system should be deemed radical. It is not only that the political system be changed, but an overhauling of the whole system of the Philippine societyfrom the economic system as base to the political and cultural systems as superstructures. His aim to create a developmental state will only be just a process upon a bigger picture of equality among the constituency. A scenario of which needs a Marxist approach in changing the current systems in the Philippine Society. Due to the difference of political ideology of the authors, we firmly believe that there is a need of a bloody revolution in order to create a new Philippine Society. Changing or reforming the political system alone does not answer the problem of economic stagnation. It is the whole state which should be changed, i.e. the economic system vis--vis the political and cultural system.

IV.

CONCLUSION

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Despite the differences of political thought, after reading and analyzing the contents of the book, we were able to get the gist and the main point that the authors really wanted to relay to its readers. Being the reader, we can personally say that the book was able to present clear arguments and ideas regarding the anti-development state. The book was successful enough in providing information that would be very useful for its readers in fully understanding the concept of the anti-development state and how its policies affect the country and its people. Although in the last part, the authors did conclude that there must be greater state intervention in the market affairs, our ultimate judgment is that it was able to show a fair and unbiased analysis on whether or not the state must intervene with the market economy or not. We must agree with the authors that the state must still be given the power to intervene with the affairs of the market economy. It is for the reason that whatever happens to the market economy, its effects would affect the whole country and still, it is the responsibility of the state to secure that there would be economic stability in the country. Because whatever happens to the market economy of the country would directly affect its people thus, reflecting to the image of the country which would be a shame for the state if its economy is down and its just there, doing nothing. As for the purpose of the book, its main purpose is basically to relay and make its readers understand that its not just purely corruption that drowns our country in the quagmire of poverty as most people believes and that there are actually a lot of reasons behind the stagnant situation of the Philippines in terms of progress. Yes, the authors of the book were able to successfully lay the major culprits of poverty on the table and not solely put the blame on corruption and the corrupt officials sitting in the government. Being able to present that it is the rule of the elites in the society and their control of the market economy, business establishments and many others, the authors are successful in explaining why these elites are the cause of the still poverty that our country is experiencing. And because of the rule of
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these elites in almost all aspects in the market economy of the Philippines, the disparity between eh rich and the poor in the country continues to grow larger and become evident. After reading all the chapters in the book, and weighing both sides that the author presented, we would say that the authors were able to persuade us to side the conclusion that they have reached which is great and more state intervention for the Philippines, not less. We can say the conclusion of the authors is fair enough because they were also able to present situations where the intervention of the state would really be necessary in order to save the economy of the country from the total command of the ruling elites. Personally, we can say that the book is a very informative book. By the title of the book, you would really say that the book contains lots of information that common people would not know. And by reading this book, you will become aware of the different issues in the society and where these issues rooted. This book has challenged us intellectually by erasing the misconception we had in mind. Aside from that, this book also presented and showed data containing valuable inputs that would make the readers understand the situation of the country even more and not just complain about how lame the government is in addressing the problems in the society. Somehow, this book answered some of my questions but at the same time, it created another set of questions that needs to be answered yet. We would really recommend the book to a lot more readers because aside from being informative, it allows the readers a better understanding on the Philippine economy and the situation that our country is going through right now. After reading the book, we concluded that it is not just enough that a person knows bits of information about a certain issue but it is really important to understand it fully. If youre a socially and politically active person, or just an ordinary person with lots of questions in mind about our society, read this book. It is a must read book for Filipinos.
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References: Bello, W. et.al. (2004), The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines, Department of Sociology College of Social Sciences and Philosophy, CORASIA Inc. Cumings, M. W. (1999), The Developmental State, Cornell University Press Guerrero, A. (2005), Philippine Society and Revolution, Aklat ng Bayn Inc., Philippines Weiss, L. (1998), The Myth of the Powerless State, Cornell University Press

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