Pitfalls and traps to PH modernization

I WAS recently invited to speak at the “Think Asia” global forum entitled ‘A dialogue amongst leading think tanks in Asia for the 21st century 2022: Asia in a Complex World’ held last November 2, 2022.

The forum seeks to affect policy development and public discourse through dialogue among leading Asian think tanks. It was jointly organized by the China Forum (CF) of Tsinghua University, Academy of Contemporary China and World Studies (ACCWS) from China, and East Asian Institute (EAI) of National University of Singapore (NUS).

The briefer explained, “Since the turn of the century, Asia has seen some of the most dynamic economies and the strongest growth in the world.

“In an increasingly volatile world, Asia’s regional security and pace of development has remained generally stable; however, sustained global instability and regional divisions remain significant challenges.

“How can Asia navigate this situation, maintaining peace while pursuing prosperity? Think tanks have a critical role to play in developing new ideas to support decision makers, as they face new challenges.”

It was my privilege to speak alongside world renowned diplomatic and economic-geopolitical scholars like Kishor Mahbubani and Dr. Eric Li. My presentation:

The Philippine Case: Asia’s challenges on the path to modernization

In the 1950s the Philippines was favored with advanced economic development from its special relationship with the United States of America, its former colonizer. As Filipinos loved to exclaim then, “the Philippines is second only to Japan”.

Today one discovers that the Philippines is lagging among the top five ASEAN nations with sizeable populations. A recent Southeast Asia Economic Forecast in 2036 (CEBR*) reports that the Philippines GDP at that time would be behind Vietnam and Thailand, which have smaller populations.

Between the 1970s and early 1980s the Philippines was forging ahead of most ASEAN nations in modernization despite strong geopolitical and geoeconomic headwinds. The 621MW Bataan Nuclear Power Plant (BNPP) construction showcased this. Its cancellation by the succeeding governments caused the plague of energy crises that afflict the Philippines to this day.

Today, there is a clamor to revive the BNPP due to extremely high electricity cost and shortages. Over thirty years of privatization of the energy sector has not delivered on promised low prices and sufficient supply.

High power cost is the main culprit in the country’s continuing investment shortage, foreign and domestic.

The Philippines’ energy debacle can be traced to the issue of sovereignty, particularly economic sovereignty.

The late President Ferdinand Edralin Marcos, Sr. started asserting sovereignty in all aspects of society, but this was reversed after the 1986 color revolution. President Rodrigo R. Duterte restarted sovereign governance in 2016 and engage China in cooperation for his “Build, Build, Build” program.

Power cost in the Philippines today is double that of China and Vietnam, and just about 30% higher than Thailand; the Philippines continues to suffer power shortages.

This unsolved crux of the economic problem is due to the US-client oligarchy in the Philippines blocking progress and profiteering from regulatory capture of energy policy and shortages.

Another basic utility privatized during the 30-years span of what Filipinos call the “Yellow Era” is the water utilities. After 30 years of privatization of water, shortages continue to plague the flood-prone country, in particular Metro-Manila with its 21.3-million residents. A project called Kaliwa Dam to supply additional 600/MLD to the metropolis has been planned since the 1970s.

The Kaliwa Dam project was revived and implemented under the Duterte administration with China’s loan assistance of $ 800-million.

The project went through 6-years of obstacles put up by US-backed and funded politicians, environmental and anti-sovereign government groups in color Yellow, or Leftist groups and indigenous tribes. The project finally broke ground in June 2021 and construction set to begin.

Then the 2022 elections transpired and new senators were elected, one of whom was elected on the strength of a television talk show (in a TV network owned by a US-client electricity oligarch).

The neophyte senator stopped the Kaliwa Dam project again digging up indigenous mountain peoples’ issues already resolved and interspersed it with anti-China diatribes.

Finally, the Philippines is the last hold-out on the ratification of the Regional Comprehensive Economic Partnership (RCEP) which another anti-China senator is blocking.

It is a momentary but again a serious blow to the Philippines’ economic development and modernization.

Although the passage of all these projects will eventually succeed we can see why the Philippines’ path to modernization is delayed in many aspects and is seriously impaired.

The persistence of vintage, domestic Cold War politics continues to plague the Philippines. We still need to stamp out the last vestiges of Western neo-colonialism to clear the path to Philippine modernization side-by-side with other Asian nations.