How Bad Are The Economies Of The Developing World, Like the Philippines, In The Wake Of The World Financial Crisis?
By Kevin Stoda, just back from Manila
This last July 2009, IMPACT magazine in the Philippines published an article by Charles Avila. The article was entitled, "How bad really is the Philippine Economy?" Avila began his piece by reviewing the results of the high level U.N. summit in London June 2009.
http://www.brettonwoodsproject.org/art-564772
In short, that hyped-up summit was considered by many to be a failure. "The first major conference on the financial and economic crisis to involve all countries ended with rich countries blocking substantive reforms demanded by developing countries. The UN conference did however push key issues up the international agenda, such as the need for a better system of international reserves, and for genuine policy space for developing countries."
http://www.impactmagazine.net/pdf/vol43_no07.pdf
Avila notes, "The aim [of the UN summit] was to identify both emergency and long-term responses to mitigate the impact of the crisis--increasingly perceived to be the worst global economic downturn since the Great Depression--especially on vulnerable populations. The hope thereafter was to initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all countries of the world."
Avila's overall assessment for developing countries around the globe, and Philippines in particular, today is: "Prospects for an early recovery have faded, forcing countries to prepare for a prolonged downturn in trade, investment and employment." This is quite in contrast to the claims by some economists around the globe that China and other countries were not all that badly affected by the global economic crises.
http://www.asianews.it/index.php?l=en&art=16115
Avila charges, "The stark reality is that the situation in the world's developing countries--which contributed least to the crisis and yet are the ones most severely affected--has led some economists to warn of "lost decades for development' which could have catastrophic consequences for rich and poor countries alike. It seems to be bad news all around."
In his report, Avila turns for evidence on labor and quality of life in the Philippines (and in other developing lands) to the "ILO, the United Nations' International Labor Office" which points out that "global unemployment in 2009 could increase over 2008 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate. Giving a report it called "realistic, not alarmist' the ILO said that last scenario of 50 million unemployed would easily mean some 200 million workers, mostly in developing economies, could be pushed into extreme poverty. The number of working poor--people who are unable to earn enough to lift themselves and their families above the US$2 per person, per day, poverty line, may rise up to 1.4 billion, or 45% of all the world's employed."
The ILO report for this year states clearly that "the proportion of people in vulnerable employment--either contributing family workers or own-account workers who are less likely to benefit from safety nets that guard against loss of incomes during economic hardship--could rise considerably in the worst case scenario to reach a level of 53 % of the employed population . . . ."
The bottom line for Filipino readers of that particular IMPACT magazine is that "in the Philippines, in its latest survey, the Social Weather Stations (SWS) reported last May that unemployment among Filipinos has risen to a record high of 34.2 percent. This would translate into 14 million Filipinos who had no jobs during the first three months of the year. Of that number, some 2.9 million had lost their jobs within the previous three months. Of these 2.9 million, 13 percent voluntarily left their old jobs, while 12 percent were retrenched--9 percent were laid off and 3 percent had unrenewed previous contracts."
OVERSEAS FOREIGN WORKERS
Like many Asian nations, a large number of Filipinos go abroad each year to earn money.
In both the United States and in the Middle East, Filipinos often stay for generations and annually subsidize development in the Philippines to a great extent. As of 2008, the Philippine Overseas Employment Administration (POEA) stated that "the number of Filipinos deployed abroad grew by 25.9 percent to 1.005 million last year compared with 798,731 the year before. And last year they sent home $14.4 billion, equivalent to 10 percent of gross domestic product. This year Manila is projecting remittances to exceed $16.4 billion, despite the crisis which could make the figure difficult to achieve."
