Corruption and Neoliberalism in the Philippines

Topics: World Bank, Macroeconomics, Political corruption Pages: 9 (2915 words) Published: December 6, 2013
International Development
SIS 637-002
International Development Paper #2
November 17, 2013

Despite this year’s onslaught of devastating earthquakes, factional rebel sieges, and most recently, record breaking typhoons, the Philippines is doing surprisingly well for itself. In fact, The Economist Intelligence Unit reports that though the wreckage caused by last week’s Supertyphoon Haiyan will likely slow GDP somewhat, economic damage will not be significant, the Eastern Visayas region accounting for only two per cent of the country’s GDP. Economically, at least, the Philippines has had a good year: the first half of 2013 saw GDP growth at 7.3 percent, the highest growth rate in Asia; it saw seen record foreign direct investment levels; moved itself from low-income to middle-income country in the World Bank country database; and for the first time, became a creditor rather than debtor to the International Monetary Fund (IMF) (Desierto, The Economist).

Nevertheless, the poverty rate remains at 27.9 percent with little movement in the past five years, unemployment is at seven percent, and underemployment continues to hover around twenty percent (The Economist Intelligence Unit). Despite record growth levels in the Philippines, large numbers of Filipinos still struggle to find employment and meet their basic needs. Foreign Policy and Fund for Peace have named the Philippines as one of their top 60 failed states in the 2013 Failed States Report. Ranking 59 out of 178 countries, the Philippines scored a slightly improved but critical 82.8 (“Failed States”). Five of its worst scores occurred in: security apparatus, including issues like riots and fatalities from rebel activity; factionalized elites, including power struggles and flawed elections; group grievance, including violence between groups; state legitimacy, including corruption, level of government effectiveness, and illicit economies; and demographic pressures, including population growth, natural disasters, and disease (“The Indicators”). The aftermath of recent disasters and rebel conflict are likely to raise these rates for the coming report, bringing the Philippines closer to the brink of failure.

Why, in the midst of unprecedented economic growth, is the country faring so poorly in terms of development indicators like poverty and political stability? Mainstream development discourse assures that rapid economic growth leads to development and poverty reduction, but this has yet to be the case for Filipinos. In a previous paper I discuss the issue of the accuracy, reliability, and focus of poverty measurements and the development discourse itself, but there are larger factors at play as well. In this paper, I discuss how the history of corruption and neoliberalism, two contested but highly influential issues, have negatively impacted development as a whole in the Philippines and perpetuated the poverty of its population.

According to a recent poll by the online periodical The Philippine Star, an overwhelming majority of the Filipino online public viewed corruption as the single largest cause of poverty in the Philippines. Revisiting Transparency International’s statistics in the Corruption Perceptions Index, Filipinos scored their country a 34 on a scale of 0-100, with 0 being highly corrupt and 100 being very clean (2012). Personal experience recalls an overt general mistrust in government officials having the people’s interests at heart, and a series of news reports detailing impeachments and scandals related to graft and corruption within both government and nongovernmental organizations from 2010 to 2012. Despite being an independent democracy since the late 1940s (the Marcos regime’s dictatorial break notwithstanding), the Philippines has suffered corrupt government officials in almost every presidency, most notably those of Marcos, Estrada and Arroyo (The Economist Intelligence Unit). According to Dr. Diane Desierto in an op-ed calling out to...

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