Philippine Underdevelopment in the Light of Dependency Theory

UNIVERSITY OF SAN CARLOS School of Business and Economics Department of Economics

An Institutional Analysis on:

PHILIPPINE UNDERDEVELOPMENT IN THE LIGHT OF DEPENDENCY THEORY

Submitted to the Faculty Member of the Department of Economics Mr. Jan Alegado

Name of the Reviewer Vilpa P. Villabas

Number of Words: 1, 680

The paper seeks to understand the fundamental reasons of Philippine underdevelopment. Specifically, it will use Dependency Theory as its theoretical framework. It assumes that the Filipino people, with its weak institutional—political and economic setup, continue to suffer the effects of a defective bureaucracy and that the widening population is greatly affected by poverty. Hence, Filipinos suffer the ill effects of underdevelopment. The paper adapts the concept of Amartya Sen with regards to development, which lies on seeing it as a process of expanding real freedoms that people enjoy (Sen, 1999, Pp. 3). This focus on human freedom breaks away from a view of development in its narrow sense—the growth of Gross Domestic Product (GDP), an increase in income and revenue, and with industrialization. As argued by Amartya Sen, although these economic factors are important as means of expanding freedom of the members of the society, they are not sufficient because freedom depends on other determinants—social and economic arrangements and civil and political rights. This paper would show that within the Philippine context, underdevelopment includes not only the problem of inclusive growth but also the increasing problem of lack of grassroots participation among the agents (Filipinos) for honest and strong institutions. Philippines is among those Asian countries which has a dynamic yet repressive history of colonization. Starting from the Spanish regime, then the Americans, followed by the Japanese, one can see the constant struggle among Filipinos for independence—in our elementary and high school years, we were taught to understand this idea. As I started my college years, I realized that independence per se is fought not only because of the nationalism and patriotism 2


that our Philippine heroes have courageously shown those times, it is also because our Filipino forefathers have understood, at a point in time, that independence is the tool for them to utilize and nurture their own natural resources, necessary for them to improve their living conditions, and thus, be free of colonial and tyrannical rule. This forms the backbone of Dependency Theory as a way of understanding Philippine underdevelopment. Colonialism, as argued by a Muslim author Salah Jubair and other political theorists, is the mother of culprits. As a unitary and highly centralized state (Rocamora and Hutchcroft, 2003) which historically, was an “arbitrary creation of the succession of colonial powers that invaded this country” (Jubair, 1999), Philippines has been characterized by natives who were ruled on a kind of political system that they themselves were not knowledgeable. When colonizers came, they built up institutions, set the rules of the game, leaving the majority of the population ignorant about it. There remains only one choice: deal with the institutions, even if you do not know the rules of the game. The tragedy in this context comes from the Filipinos’ lack of control over our own natural resources that is rightfully ours at the start of civilization. With the impact of colonialism, the foreign invaders are the ones who till the lands of our forefathers, and later on, slowly passed this authority to few landed elites, at the expense of the greater population. Trade systems were organized, starting with a barter system which later evolved into a more comprehensive money system, with the increase participation of the market in sustaining the needs of the population. But then again, only few people have the means to participate productively in this process of improving one’s living conditions. As societies developed, there was an 3


increased division of labor but it was also marked by problems of exploitation and alienation. At this point, some dependency theorists relate their discussions to the Marxist ideology (Sunkel, 1969; Santos, 1971; Frank, 1972). Considering that there is a struggle among classes, those who have the means of production (landed elites, local natives with access to economic power) can maximize ownership of property and gain large profits out from it while those who have been alienated and exploited of one’s labor (the common laborers) continue to live in a deprived society with no means of improving themselves. On the other hand, the institutional problem in terms of the economic setup becomes even problematic in relation to politics—where the same landed elites have the means to access political power. This has become a viable tool to even improve themselves in both economic and political sphere, at the expense of the others. As argued by Hutchcroft and Rocamora (2003), patronage politics granted immense benefits to political leaders with strong economic influence which started from the organization of the first political party shaped by the American colonial system, coated with the colonizer’s idea of making an “independent Philippines through expanding government positions to local Filipino politicians”. This only intensified the problem since political participation is limited to only few people— the same individuals who have access to economic resources. We knew for a fact that economics is the study of scarce resources and it can be considered that with constant deprivation among individuals who belong to the “have nots”, the scarce resources seem to be exclusive only to those who belong to the “haves”. One might not look at it but dependency theory, which encapsulated the 4


struggle for increase ownership and control of resources among different relations, remains to influence the state of Philippine underdevelopment. Andre Gunder Frank, one of the earliest dependency theorists has argued that “historical research shows that contemporary underdevelopment is the historical product of past and continuing economic and other relations between the satellite underdeveloped and the now developed metropolitan countries” (Frank, 1972, p. 3). This is true for the Philippines. With our historical colonial past, Filipinos were dependent of the colonizers for survival’s sake (they were forced to play the rules of the game, without prior knowledge). With Filipinos’ dependency to foreign invaders and with our rich natural resources, we have become a dependent state that supplies cheap materials, agricultural commodities, and cheap labor to the developed states. Our country, in the words of Ferraro on 1996, “served as the repositories of surplus capital, obsolescent technologies, and manufactured goods“. As a gain out from the bargain, money, goods, and services do flow into the dependent states such as the Philippines, but the allocation of these resources are determined by the economic interests of the dominant and the developed states. Hence, we continue to face the problem of underdevelopment. In the field of politics, the unequal distribution of wealth and economic power resulted to political institutions that pursue personalistic rather than programmatic policies—administered by political leaders that rely on pork and spoils from the central government. Implementing as well supporting institutions face the problem of accountability, transparency, and responsiveness among different government personnel. Based on the recent Transparency International’s 5


Corruption Perception Index, Philippines got a score of 2.4, a worse level of transparency as indicated by the low number. New Zealand and Denmark had a CPI score of 9.4 and 9.3, respectively. The new era showed the same problem of weak institutions as shaped by Dependency Theory for Filipinos continue to emerge in a failed bureaucracy characterized by legislative institutions that are dominated by the same old politicians, termed by Hutchcroft and Rocamora as “trapos”, with policies that are driven by pork and patronage (Hutchcroft and Rocamora, 2003: 285). To conclude, using Amartya Sen’s concept of development, there is still an absence of the capacity of Filipinos to enjoy freedoms that they reason to value. With the problems of underdevelopment, both economic and political, Filipino cannot be able to start off a new era of development, considering that institutions continue to reflect the ruins of colonialism. The actions of the state to pursue inclusive growth are limited due to the problem of inefficient allocation of scarce resources. Vested interests of government agents have deprived the equal sharing of resources to the rest of the population. Dependency Theory, in this regard has helped to perceive the problem in clarity, with a consideration of the economic and political relations among groups—from the “haves” and the “have nots”, to dependent and dominant states, to underdeveloped and developed countries. As a recommendation, it is important to consider history and its relevant undertakings to understand the evolution of economic and political institutions. With this, we can trace properly the root of the problem. Furthermore, it is necessary to look into the effects of colonialism in dealing with our daily 6


experiences as Filipinos. There lies a problem as the result of seeing economic growth and development as initiated by the Western countries. And this becomes the problem faced by the people of the past and the present generation. We see things as important ones based on a Western kind of thinking. From the words of Rodriguez, a contemporary Filipino political theorist, “Ever since our hearts and minds were conquered by the West, we have always marked our progress as a people by how fare in comparison with them, more specifically the US…We mark our wisdom by how much we are accepted by their journals and their conferences”. It appears that we can’t have our own identity outside the shadows of the West. But this dilemma goes beyond the problem of establishing our own selves, an important aspect is the way it affects our economic and political systems. People from the past suffer this dilemma as they aimed for a good life yet they were “deprived of the ability to flourish as human beings” (Rodriguez, 2005). The natives were being marginalized and no matter how they escape from this situation, they would end up “enlisting themselves into the alien system because the land and waters from which they drew life is no longer theirs to draw from” (Rodriguez, 2005). A new system was being imposed by the West; and they have to deal with it in order to survive. If only we have been given the chance to be able to set the standard for ourselves and indeed see the world in line with our means, we can build a civilization worthy of everyone’s respect. The only way to change the connotations given to us by the West is to strive hard with a projected sense of good life, by measuring development as our ability to function not just the level of consumption that benefits us the most. 7

Philippine Underdevelopment in the Light of Dependency Theory

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