Enfranchising Exports: The Political Puzzle of a Labour-Exporting State

Shi Cheng Lim – Singapore

acheter orlistat additional resources Emerging from the rubble of World War II, the Four Tigers of Asia (Hong Kong, Singapore, Taiwan and South Korea) achieved extraordinarily high growth rates and became some of the world’s most developed nations by the 1990s. Having found the developmental sweet spot between authoritarian politics and neoliberal economics, these four previously third-world nations catapulted themselves to global relevance at unprecedented rates, largely by aggressively pursuing export-led growth. The Philippines, Southeast Asia’s second-most populous nation, began pursuing a similar line of development under the nation’s sixth President since independence: Mr. Ferdinand Marcos. While the Four Tigers before him exported competitively-priced technological equipment and machinery, Marcos placed his main export focus on labour.

Today, Overseas Filipino Workers (OFWs) make up a massive proportion of the nation’s workforce and the remittances they send home are a key pillar of the Filipino economy. This demographic and economic power would suggest that OFW’s could provide a fantastic political repository for aspiring Filipino politicians—but in campaigns for the upcoming Philippine General Election of 2016, rhetoric appealing to the Philippines’ migrant masses are peripheral. The Philippine economy depends on an export whose enfranchisement is not being properly accommodated by the state, and whose political participation could be the key to releasing the nation from its dependence on alien money and socially stratifying employment.

Longest-ruling President and one of the most controversial figures in Philippine history, Marcos was in office for more than 20 years from 1965 to 1986. In 1972 he imposed martial law across the nation to better pursue his developmental agenda (while of course simultaneously consolidating his kleptocratic administration). Marcos’ developmental scheme aimed to encourage foreign investment and business growth, which in turn harmed the interests of the Philippine working masses—a political legacy that remains to this day. Depressed wages and weak labour regulations were implemented both to accelerate the development of the private sector, and push ‘surplus labour’ outside the nation’s borders. Thus, stripped of union and striking rights and facing extremely low pay, Filipino workers looked elsewhere for work, and the government supported this migratory endeavour.

The Philippines’ Labour Code of 1974, produced under Marcos’ auspices, set up a number of organisations that today come under a body called the ‘Philippines Overseas Employment Administration’ (POEA)—whose fundamental aim is “to promote the overseas employment of Filipino workers” when labour is “in excess of domestic needs” (see the full Philippine Labor Code here). This code also mandates that some portion of every OFW’s income must be remitted back home. As a result of these state apparatuses, a quarter of the Philippines’ labour force is working abroad. Today that amounts to 10 million Filipinos living around the globe: all of whom are touted by the state as ‘heroes’. Studies show that one in five—and counting—Filipinos desire to work abroad, and 60% of OFW’s children express aspirations to work abroad as well. A whopping 15% of the nation’s GDP depends on remittances, making the Philippines the ninth most remittance-dependant country in the world.

This developmental strategy poses some acute problems for the future of Philippine growth and equality. Remittances are a key injection into the nation’s economy and help the growth of the nation, but are, in many ways, artificial. They inflate household expenditure without increasing domestic capital investment, savings, and productivity, and are therefore not a long-term solution to the Philippines’ growing poverty and inequality issues. Remittances are simply not enough to spur the productive capacity of the domestic economy and have just not been able to create enough jobs: the underemployment rate is over 20% this year, with millions of Filipinos in low-quality jobs that either do not do justice to their qualifications or don’t provide guaranteed incomes. Small and Medium Enterprises (SMEs), a crucial set of producers  for any industrialising economy, are also not being allowed to flourish because there just simply isn’t enough investment in the system. With a quarter of the income-earning population having none of its income taxed (OFWs do not pay any taxes to the government by law), public sector financing and investment is lacking.

This obviously creates a vicious cycle—one in which weak employment opportunities push workers to foreign lands, yet the increase in the export of labour in turn has negative effects on the domestic state’s ability to then provide additional jobs for the economy. The government is, however, increasing spending on industrial sectors and has managed to grow employment and investment in factory-building and business-outsourcing. Industrial manufacture and employment and growth is all happening—but simply not fast enough to keep up with the nation’s growing population.

The political dislocation of the millions of Filipinos working abroad is arguably a powerful contributor to this problem. In the 2010 election, today’s incumbent President Benigno Aquino III promised voters that he would create more jobs at home, “so that there will be no need to look for employment abroad.” However, during his tenure, OFW deployment has been the highest since the initial outflow of migrants in the 1970s (precipitated by the hike in oil prices which attracted scores of migrant workers to the middle east looking for high wages from rich Arabs). Under his watch, labour export has intensified and remittances have increased—which help fill his administration’s pockets and the pockets of households across the nation, but do not help the development of the nation in the long-term. In particular, this intensification deepens wounds created by the acute social costs of migration. Millions of migrant workers more often than not are ripped away from their families, are mistreated, and are underpaid relative to their counterparts in their host nation. Migrant workers in the Philippines are known for their strong sense of country, and want to come home. These desires, however, are not being appropriately represented—despite them making up 25% of the labour force, they made up less than 5% of all voters in the last election. Out of all the almost one million registered OFW voters, just over 16% actually placed their vote due to inconvenient voting locations and bureaucratic processes.

If these workers are given more political agency, their preferences will need to be considered by the state with more gravity and are more likely to be addressed in the long-run. Democracy and increased political participation does not always guarantee that the preferences of the electorate will result in a positive outcome for the rest of the nation, but in this case, protecting the interests of seamen, domestic workers, and other unskilled migrants (all of whom make up more than half of all OFWs) will work towards fulfilling the desires of the Philippines’ domestic employment and growth-minded populace. It is in the interests of migrants that better job opportunities and employment are created back home, and it is in the long-term interests of the nation as a whole. In countries around the world, individuals and corporations that deploy goods and services abroad and fuel export earnings wield great political power, thus often ensuring the development of their businesses and the growth of the economy. Unlike ASOS computer components and Mitsubishi cars, the main stakeholders in the Philippines’ export apparatus are the resources that are being exported themselves: the mothers, fathers, and children that are leaving their families and communities to work. Their political power is undermined by an asymmetric voting structure that legislates the participation of foreign workers but does not enforce and ensure their actual enfranchisement. Devolving power to the Philippines’ key resource—labour itself—is likely the key to bringing money, savings, and investment back to the nation. The nation’s 10 million strong ‘heroes’ and their empowerment is one of the best resources the Philippines has—in economic terms, and beyond.