Confronting a decrepit imperialist monster

Talk at the International Conference for Human Rights and Peace in the Philippines

By ANTONIO TUJAN JR.
Director, IBON International

PANEL 1. Economic, political and social crisis globally and in the Philippines, and implications on peace and human rights in the Philippines

Quezon City, Philippines
19 July 2013

Three years since the declaration by international economic institutions such as the IMF and the OECD that global recession in 2008 has ended in 2010, the absence of recovery has befuddled imperialist apologists and economists alike. So-called “post-recession” recovery by industrialized countries like US, UK and Japan remains very weak, seemingly teetering on the brink of another recession despite spending hundreds of billions of dollars to bail out banking and other financial institutions and various efforts at pump priming to fund recovery.

The creeping effect of this “non-recession” has now spread further to the economic heartland of Europe, as countries like France and Germany now face the threat of recession. On the other hand, many Eurozone countries such as Greece and Spain continue to bear the brunt of depression, as their sovereign debts crises remain unsolved and now threaten to infect even major industrial powers like Italy.

The so-called rise of emerging economies is imperialist hype to cover up the sorry state of developed countries reeling from crisis with the illusion of a “rebalancing” world economy. It also feeds into the strategy of monopoly capital to intensify the extraction of superprofits from the developing countries through various means, including through financial speculation riding on the so-called emerging economies.

This crisis is akin to the Great Depression of the 1930’s in its intensity but unlike it altogether. First, the scale of trade and financial integration through the policy of neoliberal globalization both feeds on and intensifies the crisis. Second, the possibility accorded by financial liberalization for further multiplying super-profit taking through financial speculation has created a new phenomenon of intensifying the effects of the crisis on the real economy. Third, the overweening power of the financial oligarchy over capital, both public and private, allows it to engineer autonomous opportunities for financial and commodity market growth, with its own speculative busts.

This is another depression, a lingering protracted depression, is fed by financial speculation seeking its end but also exacerbating it.

Continuing factors for depression, threats of new bubble bursting

This creeping, protracted depression affecting world monopoly capital has not seen its end.

Ghost recovery, continuing features of depression

The so-called economic recovery since 2011 remains sluggish and unclear. A growing number of countries have fallen back into double-dip recession, while US recovery has been feeble. There has been no recovery in productive sectors such as manufacturing and other industries. The jobs that were lost from 2008 onwards have not been recovered, and unemployment remains severe—thus the term “jobless growth.” Financial crashes remain continual phenomena.

By end-2012, the UN World Economic Situation and Prospects 2013 report had already presented dire economic forecasts about the risk of what it called “synchronized economic downturn” across many developed and developing countries.

The UN WESP 2013 report said that based on a set of assumptions in the UN baseline forecast, growth of world gross product (WGP) is expected to reach 2.2% in 2012 and is forecast to remain well below potential at 2.4% in 2013 and 3.2% in 2014. (See chart below) “At this moderate pace, many economies will continue to operate below potential and will not recover the jobs lost during the Great Recession.” ¹

Six months later, this risk of “synchronized economic downturn” remains. In the latest World Economic Outlook (WEO) update dated 9 July 2013, the IMF acknowledged that global growth is “projected to remain subdued” at 3.1% in 2013, about the same as in 2012 and less than the 3.3% forecast in April 2013 WEO.² The chart below, taken from the IMF WEO for July 2013, shows global GDP growth (projected figures on gray background) up to Q3 2013.

At this point (end-June 2013), the Eurozone is now in its longest recession since the end of World War II, with economic activity across its 17 countries falling for the seventh quarter in a row from Q4 2011 to Q2 2013. The economies of France, Spain, Italy and the Netherlands have generally shrunk. The growth in Germany, the region’s strongest economy, just eked out a 0.1% growth on a quarterly basis, but also shrunk by 0.2% year-on-year. Ten-year data on year-on-year GDP growth of Europe’s biggest economies—Germany, France, and Italy—are graphically shown below, superimposed on equivalent data for the whole Eurozone.³

While a slight improvement shown in Q2 2013 led Eurozone officials to expect some sort of uptick in the second half of 2013, other economists remain guarded since no real growth drivers have clearly emerged.⁴

The U.S. economy appeared to fare better compared to Europe (see graph below)⁵, but in fact its own recovery remains ephemeral. The reason is that the U.S. economy is being turbo-propped by an unsustainable printing of dollars, with the Federal Reserve issuing $85 billion every month. The irony is that, instead of stimulating the real economy, more than 80% of the Fed’s excess reserves remain idle in private banks. These idle reserves have turned into yet another form of financial speculation, likened by some economists to a ticking time bomb. Outside of the US, other Central Banks have adopted similar “quantitative easing” remedies to open investment markets.⁶

The IMF has also recently acknowledged that the so-called emerging economies are growing more slowly than previously projected. The factors for this includes reduced US and European demand for exports from Brazil and Russia; China readjusting its priorities towards domestic consumer spending; and other emerging markets weakened by the pullout of foreign direct investments. A recent ILO report also showed that the new recession conditions in Europe have been spilling over globally.⁷

New bubbles threatening to burst amid threats of default, bailouts

As many economists have noted, indicators of economic recovery merely show the same old up-and-down economic and financial cycles in transitory periods of uptick. They are now warning of new bubbles threatening to burst. [See note]

[Start of note]

Global strategist Kit Juckes of Société Générale is actually calling the post-2008 signs of recovery as “the bubble with no name (yet)”. See his explanation below, describing the pattern behind “three significant financial bubbles of the last 30 years” with an accompanying graph showing a correlation between nominal GDP and Fed policy in generating bubbles.

Source: http://www.businessinsider.com/most-important-charts-in-the-world-2013-6#kit-juckes-socit-gnrale-we-dont-know-what-this-bubble-will-be-called-yet-24

[End of note]

Europe seemed to stabilize after ECB vowed “to do whatever it takes to preserve the euro,” but there is a big worry that the recent indicators of recovering growth is mostly a bubble that will burst sooner or later.⁸

As of April 2013, 41 different countries have active debt arrangements with the IMF; some are outright bailouts.⁹ Most of these loans come with very stringent conditions, which in the past the IMF imposed only on poor countries. But now more and more rich nations, such as Greece, Portugal, and Ireland are getting bailed out with IMF help, and agreeing to harsh austerity measures in exchange.

But the IMF’s funding depends on five largest creditors: the U.S., Japan, Germany, France, and the U.K.—countries that are in deep debt themselves. Thus these bailouts are increasingly unsustainable.

Thus, while the bailouts may have gained some breathing space for selected businesses and banks that are deemed “too big to fail,” the economies reel from one bailout crisis to the next as they fail to generate enough jobs and consumer demand. On top of this, the accompanying austerity measures have hit the poorest sectors of the population in developed and developing countries alike.

Unemployment, loss of income

Although the epicenter of the continuing global crisis in recent years has been in the most developed economies, its social impact has been truly global. As an ILO 2013 special report said, the advanced economies may have accounted for half of the total increase in unemployment of 28 million since 2008, but the crisis has had “significant spillovers into the labour markets of developing economies as well.”

An accumulated total of 197 million people were without a job in 2012. Significantly, 3 out of 4 newly unemployed in 2012 came from outside the advanced economies, with marked increases in East Asia, South Asia, and Sub-Saharan Africa. Globally, some 39 million dropped out of the labor market, while the global jobs gap since 2007 has risen to 67 million.

Despite the prospects of growth in 2013-14, the number of unemployed worldwide is expected to rise by 5.1 million in 2013 (bringing the total to 202 million), and by another 3 million in 2014.

The report explicitly acknowledged the direct role of fiscal austerity programs in employment and wage cutbacks, and that macro imbalances have been passed on to the labour market and weakened it to significant degrees.¹⁰

The other key messages of the ILO 2013 report include the following:

• Policy incoherence has led to heightened uncertainty, preventing stronger investment and faster job creation

• The continuing nature of the crisis has worsened extended unemployment spells and labour market mismatches, intensifying downside labour market risks.

• Job creation rates are particularly low, as typically happens after a financial crisis

• The jobs crisis pushes more and more women and men out of the labour market

• Youth remain particularly affected by the crisis

Among the advanced economies, joblessness has particularly worsened in Europe, with some countries hitting record highs in recent months. (Italy’s unemployment rose to 12% in end-May 2013—the worst since 1977.) In the US, the latest Job Report is optimistic only because “new jobs” are being created but the unemployment rate remains, because full-time jobs are giving way to part-time jobs.¹¹

Growing unemployment, wage and benefit cutbacks, and loss of livelihood opportunities are all contributing to a generalized loss of income for big sections of the population in most countries. Despite claims by the IMF and World Bank that MDG 1 on reducing poverty (in terms of halving the number of people living on $1.25 daily) had been achieved globally, the truth is that multidimensional poverty remains a severe global problem.

For example, in the most recent Multidimensional Poverty Index (MPI) released just this March 2013, the Oxford Poverty and Human Development Initiative (OPHI) reported that a total of 1.6 billion people continue to live in multidimensional poverty. This is more than 30% of the combined population of the 104 countries covered by the study. The report also said that at the present rate, the best-performing countries may be able to halve their MPI “in less than 10 years and eradicate it within 20”—certainly a very slow rate.¹²

Food crisis, losses from natural calamities

In recent years, high food prices have become the “new normal.” Despite lower demand and a slight decline in cereal prices due to stagnant economies, food prices remained high or volatile. This is mostly the result of financial speculation in agricultural commodities, which has become an increasing arena of neoliberal globalization—as a series of UNCTAD papers as well as the UN Special Rapporteur on the Right to Food have officially asserted. The speculation has spilled over to not just commodities but to farmland and irrigation water sources.¹³

In addition, losses from the more unpredictable natural calamities due to climate change are contributing to the price and supply volatility. For example, the US drought in 2012 (the worst in 50 years, and which has persisted in nearly 20% of the country up to 2013) drove up maize prices to record levels, while heavy rains in Argentina and Russia affected wheat supply and prices. In October 2012, the UN warned that failing harvests in the US, Ukraine and elsewhere “have eroded [world grain] reserves to their lowest level since 1974,” and that extreme weather events this year could trigger another major food crisis.¹⁴

Strategic economic approaches to address crisis in the context of neoliberal globalization

Monopoly capitalist states in the US and elsewhere in the West, in their aim to stave off recessionary crisis and later ensure quick recovery, have responded in a two-stage way: First, through bail-outs of ailing banks, other financial institutions, and selected giant corporations considered “too big to fail”. And second, when the immense public deficits turned into huge sovereign debts, by imposing austerity measures and related efforts in their attempt to defuse the debt crisis.

Meanwhile, these powerful states assiduously defend the same basic economic and financial policies of neoliberalism that caused or aggravated the recessionary crisis in the first place. They pursued only those paltry reforms in secondary fiscal and financial issues, which in effect constituted a mere slap on the hand and only affecting a few criminal speculators—intended to keep financial speculation within manageable bounds but not to impose real regulation. Such reforms included cursory responses to issues dear to the hearts of most investors themselves, such as tax havens and capital flight.

A growing popular clamor led by social movements against neoliberal globalization, periodically exploding into massive protests, have been met with deceptive and defensive propaganda if not outright fascist attacks by police and intelligence agencies. Even proposals from mainstream economists for return to a modicum of economic regulation and protection remain unheeded.

Instead, the US and its imperialist allies have been adopting new strategic approaches to cope with the multiple crises while continuing to seek and pursue all avenues of gradual recovery.

Buying into the new green

Some of these strategic approaches have been filtered into UN processes such as the UNFCCC and post-2015 (along with the parallel process of SDGs), carefully packaged to project a broad international consensus and to rebuild the framework of multilateralism. But lurking behind these processes are efforts by the imperialist powers to ensure the continuing dominance of monopoly capital and neoliberal globalization.

Green economy is not a simple PR ploy by big business and OECD governments; neither is it a simple response to the challenge for sustainability because of climate change. Monopoly capital sees the green initiative as a combination of two related strategies: on one hand, harness the role of innovation and high-tech to spur recovery of industry; and on the other hand, develop a new process or movement of neo-colonial exploitation funded through public-private investment in the guise of climate change funding.

Strategic role of Greater East Asia

As the protracted depression continues to linger, the big Asian economies are taking on a more strategic role of spurring the global economy. This role is being played by China, South Korea, and first-tier South East Asian countries (and to a certain degree India and Australia), which are relatively better off economically. Even Japan, stagnant for decades now, still has substantial economic clout. These countries are able to stimulate sluggish consumer spending and international trade, and to support the large appetites of foreign investments and even of speculative financial markets. A modicum of prosperity and consumer capacity also supports a degree of middle class growth, which in turn tends to dampen class conflicts and strengthens perceptions of democracy and political stability.

This strategic role of East Asia is increasingly reflected in the competing efforts of the US and EU to craft various bilateral and plurilateral pacts in East Asia, such as the Free Trade Agreements (FTAs) being negotiated by EU with India and the ASEAN. Russia is also aggressively elbowing into the region to strike its own deals and expand its own economic sphere of influence.

This strategic role of East Asia, now clearly appreciated by the US and its allies, is at the core of what is being hyped as the “Asian Century”—a catchword that is partly economic truth, partly investment hype, but in any case represents a geopolitical shift of focus. It is also reflected in heightened US-EU interest in regional structures of governance such as the APEC and East Asia Summit. On the other hand, the strategic refocusing is hindered, in the case of the US, by its deep involvements in the Middle East, and by economic troubles in the case of EU.

The TPPA as the new US “can opener”

Closely related to the strategic shift to East Asia is the Trans-Pacific Partnership Agreement (TPPA), a comprehensive trade deal being cooked up by the US. The countries involved in the TPP negotiations are Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and even Japan. The deal is so shrouded in secrecy that even the US Congress remains in the dark, while representatives of US multinationals are “being consulted and made privy to the details of the agreement.”¹⁵

If signed into law, the TPPA would empower MNCs to bypass national laws and courts and urge its own supra-national courts (supervised by the World Bank and UN) to impose neoliberal policies and standards—even US laws—in a wide range of trade questions, including medicine, agriculture, intellectual copyright, and so on. The US hopes for the TPPA to gain momentum until it becomes a fait accompli and pries open all remaining trade restrictions by Asia-Pacific states.

Reconfiguring imperialist “multilateralism” through the G20

With the 2008 economic collapse, the G7 imperialist powers lost much credibility to dictate economic policy on the whole world, while giving no quarters to developing countries led by the G77 and China bloc. Increasing conflicts between the imperialist bloc and the G77-China bloc have resulted in repeated deadlocks on critical global issues, including those being tackled in the climate change (UNFCCC) talks and in the WTO Doha Round. This intensifying dissent by developing countries within the UN and other multilateral bodies is often branded as the so-called “failure of multilateralism.”

In this light, the formation of the G20 is yet another strategy to forge a new imperialist consensus. The idea behind the G20 is to bring the “emerging economies” (such as the BRICS and other large developing countries) into its fold, as a bit of window dressing to rebuild the façade of international consensus around its overall policy of neoliberal globalization. This way, liberal and progressive initiatives that find their way into the system, such as proposals to reform the system of development finance, are sidelined, while G7 (with G20) policies are defended.

New WTO approach in Bali

The Doha Development Round under the WTO was a deal breaker, considering both the impact of implementing WTO and the implications of further liberalization under the new proposed provisions. The failure to conclude the Doha Round is symptomatic of the crisis—the intensity of protests and public opinion against it, the tenacity of developing-country positions, and the hardline US-EU demands and positions. Despite the efforts of the G7 and the G20—and the UN itself—to sell it, the Doha Round’s demise has been finally accepted by the WTO.

In its stead, a new Ministerial is scheduled in December 2013, which will attempt to pick up the pieces of the different failed efforts to expand the WTO since the first Ministerial in Singapore in 1996. Many issues arising from Singapore through Cancun and Doha are being considered again for debate and possible negotiation. While people’s movements persistently call for an end to the WTO as one of the emblematic symbols of neoliberal globalization, here come the imperialists redoubling their efforts to revive and re-gear the WTO for further expansion.

Section III. Rising factors for people’s resistance, armed conflicts

Mass protests

By end-June 2013, as The Economist itself noted, a wave of anger rose up and began “sweeping the cities of the world.” The otherwise staid publication even compared 2013 to the 1848 revolutions that swept Europe and to the 1968 and 1989 rebellions. Comparing the 2013 mass upsurge with the 2011 Occupy protests, which were high profile but did not mobilize millions, the magazine noted that this time “the protests are fed by deep discontent.”¹⁶

A distinctive trend in the first six months of 2013 is that the most dramatic mass upsurges have broken out in what are considered emerging economies, in addition to the Eurozone countries that have been battered by austerity programs and debt crises.

In Brazil, the massive demonstrations (which reached more than 1 million people on June 20) started as a mass protest against bus fares. It soon broadened into a much wider range of issues that reflected the Brazilian government’s anti-people policies, including corruption, poor public services, high cost of living, and profligate spending such as on the World Cup sports event.¹⁷

In India, big protest actions have risen to the forefront earlier in 2011, fuelled by working-class strikes and middle-class frustrations with corruption, on top of a growing Maoist armed revolution in the countryside. At the end of 2012, big protests verging on riots in reaction to the gang rape of a young woman were actually addressing the lack of state protection vs women and their rights.

Massive protests have also broken out in Egypt in response to the failure of the Morsi regime to respond to public demand for reforms in the face of the economic crisis. The protests have led to a military take-over of government. Elsewhere in the Middle East and North Africa, mass protests continue to simmer. Similar mass protests are hounding governments in Turkey and Bulgaria, with specific issues sparking mass actions that rapidly grew into much wider protest movements.

In Europe, sustained mass resistance including workers’ strikes continues to build up over gradually tightening austerity measures and worsening unemployment amid recurrent sovereign debt crises. The protests are particularly intense in Mediterranean countries such as Greece, Spain, and Italy. Violent riots also occurred in Sweden in May 2013 and earlier in the U.K. in 2011, as the youth and other unemployed spontaneously sought varied channels of mass discontent. ¹⁸

Armed conflicts

Amid multiple crises and mass discontent, global peace remained as elusive as ever. According to the 2013 Global Peace Index of the Institute for Economics and Peace, the peace situation has deteriorated in 110 out of 162 countries since 2008 due to political instability, internal armed conflicts, and boundary disputes.¹⁹

In the most severe cases, the US and its imperialist allies are deeply involved—either through direct foreign military intervention (as in Iraq, Afghanistan, Somalia, and recently in Mali), or through client states (as in the Israeli-Palestine conflict), or through proxy “rebel groups”, as is the case of the Free Syrian Army in Syria and an assortment of NATO-backed armed groups that overthrew the Qaddafi regime in Libya.

Section IV. Increasing fascism and militarism

Rising trend of fascism

The trend of fascism continues to rise worldwide, and its worst features are becoming more evident than ever even in the supposed bulwarks of Western democracy, namely the US and UK. With the recent NSA espionage exposés divulged by Edward Snowden, it is now evident more than ever that the US has become a national security state, closely followed by the U.K.

Alarmingly, various US legislation—the PATRIOT Act, the Protect America Act, the Military Commissions Act, and the FISA Amendments Act—have expanded the legally allowable state actions (on top of secret and illegal operations) that restrict basic civil liberties and human rights in the guise of counter-terrorism.

The NSA spying scandal (and previous similar exposés) reveal not merely massive violations of US citizens’ privacy rights, but other countries’ national security as well as their citizens’ rights. Surveillance is increasingly serving as prelude to actual attacks on people and their rights—especially now that drone technology is applied both for surveillance and actual kill operations.

Even worse, the scale of secret US operations divulged by a whole series of whistle-blowers shows an immensely huge potential for its monopoly capitalist class to extremely centralize the key machineries of state power in the hands of a neo-conservative, militarist, and fascist clique.

Human rights violations by the “national security” state

The US, which in the past prided itself as the global champion of human rights, has been showing more of its fangs not just overseas but within its homeland. It has a fast-growing record of domestic human rights violations, on top of its bloody international record of launching interventionist wars, supporting fascist dictatorships, and serving as principal arms supplier in other countries.

Within the US homeland, abuse of ordinary citizens by police, FBI, and Homeland Security operatives, are on the rise, on top of increasing cases of violent dispersal of protest rallies. Racial discrimination, hate crimes, and abusive treatment of immigrants are as prevalent as ever. The notorious record of US federal prisons as well as increasingly privatized state prisons is already well known. The US is among the world’s most heavily armed populations, with more than 100,000 people gunned down yearly. Yet increasing crime is made a reason to expand the forces and functions of the national security state.

Incredible as it may seem, but up to now, the U.S. has not participated in or ratified a series of core UN conventions on human rights, such as the International Covenant on Economic, Social and Cultural Rights, the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination against Women, and the Convention on the Rights of Persons with Disabilities.²⁰

A similar trend of rising fascism can also be seen in other developed countries, in emerging economies, as well as in developing countries (especially those long ruled by fascist dictatorships and military regimes supported by the US and its allies).

Rising trend of militarism

There has always been a direct connection between economic downturns and the trend for increased militarism and military spending. Armed conflicts between countries, as well as large-scale domestic violence, have long tended to flare up in times of intense economic and social crises.

More to the point, a number of huge business conglomerates have direct interests in the growth of defense-related industries. Thus, while the rest of the global economy suffered from doldrums in recent years, military spending has continued to bloat up.

The whole world’s military expenditures in 2012 are estimated to have reached $1.756 trillion, corresponding to 2.5% of world GDP. A handful of military powers are spending the largest sums. In 2012, for example, the 15 countries with the highest military spending accounted for over 81% of the total. The US is responsible for 39% of the world total; China is a poor second at 9.5%; China, Russia, UK, and Japan combined (the next biggest spenders after US) spent only 21.6%.

Indeed, another SIPRI report in 2004 presented the irony of a yawning gap between the world’s total military expenditures and funding to alleviate poverty and promote development.²¹ In fact, the entire budget of the United Nations and all its agencies and funds pale in comparison to the world’s total military expenditures.²²

The US military pivot to East Asia

At present, the US remains as the foremost promoter of militarism. At the same time, the imperialist shift of focus to East Asia (in economic terms) is backed by a US strategic military pivot plus political and diplomatic policy.

According to a top Chinese expert on Middle East affairs (as cited by Russia Today), there is a consensus among US think-thanks that the Asia pivot intends to attain three objectives:

1. To protect present US dominance over the shipping lanes from the Indian Ocean to the South China Sea;

2. To “defend the chokepoints” in case they are closed by hostile states (e.g. Iran for the Strait of Hormuz); and

3. To prevent other powers (presumably China, to some extent India or even Russia) from becoming a real threat to US dominance

Despite the U.S. military’s down-sized budget, it plans to implement a long-term strategic transfer of forces to Asia-Pacific destinations from 2011 to 2020. These include air power (tactical aircraft, bombers); US Army troops and US Marines; and high-tech weaponry. The US has implemented a rotating scheme, which will eventually involve some 2,500 US Marines. By 2020, the US Navy intends to increase the deployment of its naval assets in Asia Pacific to 60% (from the current 50%).

This pivot also includes strengthening the US military presence based in Japan (especially its strategic missile force) and supporting Japan vs China in their dispute over the strategic Diaoyu islands. The US already has strategic joint operations with Australia, and is eyeing wider U.S. ship access to Vietnam’s Cam Ranh Bay facilities.²³

On the diplomatic front, Washington is also fast-tracking its strengthening of military ties with ASEAN countries, including former enemy Vietnam and former villain Myanmar. It is planning to host its first meeting with ASEAN defense minister in Hawaii in 2014. It is also pushing for redefined VFAs or basing arrangements with countries such as the Philippines.

China’s response

China’s response so far has been to forcefully signal that it will oppose the US rebalancing act. It has continued its own diplomatic crusade to neutralize ASEAN hostility vs its South China Sea claims.

At the same time, China appears to be giving a bigger weight to the Middle East as a strategic theater for economic, political, diplomatic, and military competition with the US. It has further stepped up its diplomatic campaign in all global regions, giving special attention to Africa and Latin America, on top of its efforts to lead the G77 bloc in UN processes and debates.

Intensification of US-China cyber war

The recent years have seen a scaling up of capabilities as well as operations in cyber warfare among the world’s military powers, with the U.S. and China engaging in a high-profile battle of wits and accusations and counter-accusations of cyber espionage. The EU and other countries are trying to catch up with their own cyberwar capabilities, if only to strengthen their own defenses vs cyber-attacks. This concern has worsened recently, with the EU openly complaining that it was itself a target of NSA operations (as per Snowden revelations).

Some implications of these international trends on the Philippines

1. Mixed economic impacts amidst deep and unresolved social crisis

The seeming immunity of some East Asian economies to the worst effects of the global crises due to certain transient factors, including the role of China, makes these countries a temporary beneficiary of incoming FDI flows on top of overseas remittances. Thus, the Philippines can still boast of investment and credit rating upgrades from the likes of Fitch Ratings and Standard & Poor. At the same time, the country’s economic fundamentals in the various sectors of production and trade remain unstable, while the OFW situation is gradually being affected by political instabilities in other parts of the world.

The Philippine state under the Aquino presidency remains as one of Asia’s holdout fanatic followers of the anti-poor neoliberal policy dictates, as can be seen in its dogged pursuit of privatization (in the form of PPPs and support for previously privatized utilities) and liberalization. These have resulted in relentless increases in the cost of living, opening up the country’s natural resources to further plunder, and generally increased attacks vs rights of labor, peasantry, indigenous peoples, homeless, and student-youth.

2. Increasing US presence and bullying

The US pivot to Asia, its rivalries with China, and its potential involvement in domestic armed conflicts and inter-country disputes (including the South China Sea boundary disputes), all point to the trend of a bigger US diplomatic and military presence in the Philippines.

According to a Chicago Tribune news item in November 2012: As of October 2012, “70 U.S. Navy ships had passed through Subic, more than the 55 in 2011 and the 51 in 2010. The Pentagon says more than 100 U.S. planes stop over each month at Clark…” In 2012, South Korea’s Hanjin Heavy Industries, a big investor in the Subic shipyards, agreed to set up a maintenance and logistics hub to serve U.S. warships jointly with Pentagon contractor Huntington Ingalls Industries,

The news item also cited an editor of IHS Jane’s Defense Weekly as saying: “It’s like leasing a car as opposed to buying it—all the advantages of ownership with a reduced risk.” Looking at Subic, the defense editor said, “the U.S. will be leveraging Philippine bases and assets, privately owned assets, and all at a fraction of the monetary and political price of taking back ownership of the base. It gives the U.S. the same strategic reach that basing would have done but without all the hassle.”

Furthermore, recent irritants that worsened the China-Philippine dispute over the Spratleys and a few other islands in the South China Sea are being used both by the US and Philippine governments to justify the expanded US military presence in the country. These are on top of previous other alibis, such as to assist in the modernization and training of the AFP, to help boost the local economy, and to support the campaign vs terrorism. The US is also seeking access to an even wider range of ports and airports in the country.

3. Implications on peace and human rights advocacy

With increased US support for the Aquino regime as a whole, and for its armed services (AFP and PNP) in particular, we can expect a more complex situation and bigger challenges, with international, regional, and domestic factors entangled, in the area of peace-building and human rights advocacy.

We are starting to see in the country the impact of the “national security state” doctrine and practice in the Aquino government’s pursuit of laws versus cybercrime and in support of NSA-type surveillance, as well as in the current civic-action, psy-war, intelligence, and combat components of the counter-insurgency program Oplan Bayanihan. At the same time, we are seeing the various pressure factors that are undermining the GPH-MILF and GPH-NDFP peace processes.

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