Monday, August 4, 2008

The Economist hates the Philippines

The widely read and respected British newspaper, "The Economist" seems to hate the Philippines. Although the newspaper, more of a magazine by American standards, rarely has articles devoted to the country, when it does cover the Philippines, the articles usually contain undue criticism of the Southeast Asian nation. While the Philippines most definitely deserves plenty of criticism, "The Economist" goes too far in its obviously low opinion of Asia's oldest democratic state.

The Philippines is not completely pathetic.

For instance, "The Economist" seems to believe that the Philippines is "perennially unstable", and wracked by frequent coups.

Now, while there's some validity to the general feel of that statement, the statement is actually inaccurate. The Philippines is not politically unstable. The state apparatus has not been overthrown. As for coups, while there have been several attempted coups, there have only been two 'successes,' which ousted Presidents Marcos and Estrada. In contrast, Thailand, which "The Economist" seems to generally respect, has almost cyclically gone from military coup, to democracy, to military coup, the most recent being last year.

There is a similar story for corruption. The Philippine government and economy is hugely ridden with corruption. And polls have shown that the Philippines is perceived as the most corrupt major country in all East Asia. Yet in reality, the Philippines' neighbor, Vietnam, is also saddled by corruption, but that is not a deterrent to investors, and Vietnam is not perceived to be nearly as corrupt as the Philippines.

In the same vein, for the last few years, Vietnam and the Philippines have both posted roughly equal GDP growth. Yet while Vietnam's advance is hailed as an economic miracle, and Vietnam is commonly touted as the up-and-coming Asian state for foreign investment, the Philippines is still looked upon as a failure, and an FDI risk.
"The Economist" opinion:
[Thailand] "risks becoming one of those perennially unstable, tragi-comic countries, such as the Philippines, which the outside world overlooks".

-The Economist, May 31, 2008.

But more specifically to "The Economist."

"The Economist" believes that the Philippines has high unemployment. While higher than the United States, "" reports that the Philippine unemployment rate is around 7%, bad but not downright disastrous, especially for a developing country.

Even when reporting something the Philippines has going for it, such as 2007's GDP growth rate of over 7%, "The Economist" has to (unnecessarily) add something to demonstrate the scorn the weekly has for the country, as the article, "Credibility deficit" shows.

That article could also hold some clues as to the reason for "The Economist's" contempt and ire for the Philippines. Firstly, the Philippines used to be the second largest economy in East Asia, excluding the USSR, after Japan. However, soon after Marcos took office, the Philippine economic growth almost stopped, and now the Philippines is one of the poorest countries in Asia. (Note: Marcos wasn't solely to blame; the Philippines had developmental disaster coming based on groundwork laid during the Spanish colonial era, when the Filipino aristocracy and clergy were put in charge of vast land holdings.)

The second reason could have to do with Filipinos directly. As the title of the article intimates, too many Filipinos seem to exhibit a "credibility deficit." That is to type, they are dishonest--not necessarily intentional, but they end up that way. Such is largely the case because there is also the tendency for Filipinos (at least on the Internet) to overly romanticize, sensationalize, and be melodramatic about things. A quick look at many of the Philippines related entries on Wikipedia would speedily show that that is the case. Having to sift out what is real about the Philippines is difficult, not dissimilar to how Afrocentrists shoot themselves in the feet by topping off some facts with loads of fantasies. In contrast to "The Economist," people on Wikipedia make out the Philippines to be far greater than the nation actually is, and therefore throw into doubt some factual and impressive things about the Philippines. A few bad apples spoil the barrel.

The Philippines has a lot going badly. The Philippines is a poor country, even by Southeast Asian standards. Too much land is in the hands of the de facto aristocracy, and there is far too little of the land redistribution which is so necessary if the Philippines is to become a developed country within the next century. The same aristocracy is in charge of the government which is so incompetent and corrupt that economic growth is retarded. The Philippines needs new roads, railways, ports, power plants, sewers, etc. Filipinos protest and demonstrate too much, and that puts off investors, as does the excessively high minimum wage which practically drives them to much cheaper neighbors, China and Vietnam. (Which is why Philippine industry is comparably so small and heavily concentrated in the more expensive fields of electronics and semiconductors--which pay more, but offer fewer jobs than, say, the garment or toy manufacturing industries.) The Philippines is screwed up in so many ways, and is in an extremely cruddy position, especially given the fact that the republic used to be one of the wealthiest in the continent. That is not up for debate at all (except for some of those deluded 'sensationalist' Filipinos such as those Wikipedians).

What is being contested is that "The Economist" is being unduly unfair to the Philippines, reporting on the country of some 90 million people (more than Germany, with more people and a larger economy than Vietnam) so infrequently, and when mentioned, the nation gets at most a half a page of criticism. (For comparison, Palestine gets an article almost every other week.) The Philippine economy does have some things going for it. "The Economist" should consider mentioning those once and a while.

This article does not fully illustrate the blatant prejudice "The Economist" has against the Philippines (and, interestingly, India). This post isn't exactly of the highest quality. Therefore, for interested readers, you should look at this archived list of Philippines' related articles. You don't have to read much to see the rather antagonist trend.

Although "The Economist" no longer is heavily based on economics--the newspaper has more of a geography/ethicist flavor nowadays--and most economists and investors worth their salt would not invest solely based on the opinions expressed, "The Economist" is still a respected publication, and is still used by some investors to make investment decisions. As such, their contempt and dismissal of the Philippines could prevent some people who would otherwise invest in the island nation.

If you agree that "The Economist" ought to not overlook the Philippines--as "The Economist" erroneously believes the world does--then here's a suggestion: You can send a message to "The Economist" and ask (or demand) that they report more often and in greater length on the Philippines, and include the good with the bad, along with actually making some constructive suggestions on how the Philippines can speed up economic development. The link is the last in the LINKS list, the one in red. If enough people send messages, "The Economist" could be pressured to alter its opinions about the Philippines.

[UPDATE]: Readers should now be able to send a message to "The Economist." Stupidly guessed at the proper HTML necessary.

Another thing is security, with "The Economist" giving the Philippines extremely low scores for security due to the violence in Mindanao. Yet what about great China, with not only separatism in Xinjiang, but also frequent riots due to local corruption and oppression? What about southern Thailand, or Indonesia? Or even Brazil, which has plenty of violent crime? And Mindanao is on an island. Xinjiang, southern Thailand, etc. are on the mainland. Investors can invest in Luzon or the Visayas, two other regions of the Philippines located on separate islands from Mindanao, without too much security risk. Crossing water is usually more difficult than crossing land. The Philippines should not have a score of 'E', at least if those other countries do not also have similar rankings. The Philippines is just a bit more vocal and expressive in displaying unrest than those others, a downside of free democracy.

And on their 'country briefing' webpage, the map is inaccurate, showing Sabah as being Indonesia. Trying to push the Philippines even further out into the ocean?

On a sidenote, at least the Philippines seems to be trading more with other East Asian countries, especially China, rather than with the United States and Europe. Transporting products across continents costs more money than shipping to neighbors, after all (although arguably the developed West would be willing to pay more....). The Philippines' recent economic growth is tied to growth in trade and investment by and into the country's fellow East Asian states.

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Found this article interesting? Check out:
History: The Roadmap to the Future.
History: The Roadmap to the Future--Africa.
History: The Roadmap to the Future--Asia.
History: The Roadmap to the Future--Europe.
History: The Roadmap to the Future--Latin America.

The Science Fiction Channel + Technorium.
The Vegetarian Diaries + Biologeel.

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