KASAMA Vol. 15 No. 4 / October-November-December 2001 / Solidarity Philippines Australia Network


ISSUE # 39 DECEMBER 28, 2001

It is written that the image-obsessed-world only remembers the last snapshot of one's life, no matter how greatly or badly that life has been led. And that is the way with history, at least this year's. Because of the sheer magnitude and vividness of two planes crashing into and subsequently bringing down two towers, nothing else of the year 2001 has managed to stay in the memories of people. A sad fact that we hope to reverse, even at least for a few, by summing up events both before and after September 11.

By Walden Bello

How can one even begin to sum up such a momentous year?  We'll try anyway.


In the first half of the year, the Philippines lived through two mass uprisings. The first, which threw out one of the most corrupt men ever to preside over the country, was led by the traditional factions of the elite, based on the middle class, and supported by the left. The second was unsuccessful, but it was equally remarkable: masking itself as an effort to restore Joseph Estrada to power, the May 1st Uprising was, in essence, a case of the poor striking out in fury against a political and economic establishment that was long on the rhetoric of democracy but severely wanting when it came to allowing real social reform.

The two events marked what some considered an advance for Philippine democracy, others a retreat. For much of the western press, EDSA II was "mob rule," and it was not surprising that EDSA I begot EDSA III. For many Filipinos, EDSA II in particular consolidated the role of the parliament of the streets as the ultimate arbiter of power in this country, a mechanism of direct democracy that kicked into motion once the constitutional, representative democracy failed to function - as it did in early January when a majority of senators derailed the impeachment proceedings when they voted not to open the notorious sealed envelope.

Still, both factions of the elite, traditional and nouveau-riche, shrank back from another confrontation in the streets and returned to the ballot box to resolve the question of power less than three weeks after the May 1st Uprising. The results were indecisive: the new president's people won most of the seats being contested in the Senate, but the Estrada coalition performed respectably, with Loi Ejercito, the former First Lady, making it to the winners' circle.


What was essentially an electoral standoff has produced the political stasis or de facto compromise that has reigned since then, underneath the daily fare of screaming headlines proclaiming one scandal after another. Though Erap and son Jinggoy remain in custody, the prosecution grinds exceedingly slow in their case - and not at all in the case of many of their cronies. Meanwhile, pro-Erap people have refrained from more extra-constitutional efforts to destabilize President Gloria Macapagal-Arroyo.

What we have, in effect, is a regime that is likely to refrain from significant moves at political and social reform, whose ambition is largely limited to surviving till 2004, then winning an electoral mandate for a full six-year presidential term.


While Filipinos were transfixed on the political drama at home, equally momentous developments were taking place outside the country. In the center of the empire, a president who won a minority of the popular vote in a country that was described as being in a state of "cultural civil war," assumed power. George W. Bush proceeded to install a cabinet of figures with eight figure incomes, seemingly determined to prove the contention of many critics that American democracy was being transformed into a plutocracy.

In its foreign policy, the new American administration lurched sharply into a series of moves that were widely criticized as unilateralist: backing out of the Kyoto Accord on Climate Change, threatening to withdraw from the Anti-Ballistic Missile Treaty, and freezing the movement toward reconciliation in the Korean Peninsula.

Plutocratic rule and unilateralism were not the only alarming developments to issue out of the United States. Perhaps more momentous was Wall Street's spectacular crash late in 2000 and early 2001, when investor wealth worth $4.6 trillion - or the equivalent of one-half the US Gross Domestic Product - was wiped out. Not only did this put an end to all talk about the US graduating into a "New Economy"; it also ushered in a global recession that promised to be deeper and longer than previous ones. The "New Economy," people discovered, was very much subject to the laws of the "Old": a 10-year boom leading to massive overcapacity or overproduction, leading to efforts to shore up profitability by limiting competition in industry and channeling investment to financial speculation, leading to a spectacular crash as the illusion between real value and skyrocketing stock values could no longer be sustained.

The moves of the new regime in Washington were a boost to the anti-corporate globalization movement, which had had gone from strength to strength with massive demonstrations in Seattle, Washington, DC, Chiang Mai, and Prague. In the biggest show of force yet, 300,000 marched against the Group of Eight annual meeting in Genoa in the third week of July. In the aftermath of street confrontations made violent by a police riot and the acts of provocateurs, the leaders of the North wondered aloud if they could ever meet again in a country where there was a functioning democracy.

That was before September 11.


When Osama Bin Laden's suicide squads hijacked and crashed passenger jets into the World Trade Center towers in New York and the Pentagon in Washington, DC, on September 11, they provided a perfect opportunity for a global power structure that was in crisis to recapture a vanishing legitimacy and regain the initiative against its critics and foes.

Over three months after September 11:

- The US has devastated Afghanistan, overthrowing its Taliban government, in what it claimed as the pursuit of justice;

- Washington has triumphantly consolidated a new doctrine of successful military interventionism resting on the application of massive, precision-guided airpower, with little commitment of US ground troops;

- The Bush administration has become the most powerful US presidency in recent times, with its job approval rating standing at 86 per cent.

Partisans of a more liberal, democratic future for America have been dealt a severe blow, while globally, the anti-corporate globalization movement, which had been steadily gaining international grassroots support prior to September 11, has been desperately trying to regain its momentum. Security forces, on the defensive after the police riot in Genoa in July, are manifesting a new aggressive mood globally.


President Arroyo may be faulted for many things, but she cannot be criticized for not sensing a great opportunity to consolidate her fragile presidency. Arroyo was one of the first world leaders to declare all-out support for the military campaign against terrorism, opening the former American bases to US military traffic to and from the Arabian Sea and the Middle East as Washington prepared for war. She also offered Philippine troops for combat in Afghanistan - though the administration was quick to qualify that this was dependent on approval by Congress.

Arroyo desperately needed external assistance in dealing with the Abu Sayyaf terrorists, who had dramatically resurfaced in June with a daring raid on the Doss Palmas resort in Palawan that bagged three American citizens, one of whom was soon beheaded. Armed Forces of the Philippine units sent to Basilan to liberate the hostages bumbled their way across the island in the next few months - deliberately, said some critics, who accused the Southwestern Command of allowing the kidnappers to slip out of a closing ring in Lamitan in return for millions of pesos.

US military support, which soon came in the form of an advance team of US advisers surveying the scene, was but one of the positive spinoffs for the administration. Equally important, her unqualified support for the US consolidated President Arroyo's status as an indispensable ally in the eyes of Washington. This gave any would-be plotters in the Estrada camp or the military second thoughts before staging a coup or fomenting another uprising.

What Gloria wanted most of all, however, was the sort of total aid packages then being assembled by the US for strategic countries like Pakistan, which had big economic components like an increase in bilateral and multilateral aid, looser IMF conditionalities, and reductions in debt service payments. During a state visit to Washington in the third week of November, the president got the commitments she wanted: a $2 billion aid package that included PL-480 food aid, agricultural export guarantees, poverty alleviation support, investment guarantees, and a debt-for-nature swap. "It's $4.6 billion and counting," she crowed at the end of her visit, factoring in $2.6 billion in promised investments from US corporations.

The price was, of course, high - to national sovereignty. The Arroyo policy represented the completion of a U-turn in the Philippine Government's policy stance toward the United States military that began when her predecessor pushed through the Visiting Forces Agreement in 1998. The Estrada-Arroyo approach reversed a tentative nationalistic course that had begun with the closing down of the US bases in 1991-92. The U-turn elicited relatively little protest, with the middle class obsessed with the battle against corruption, Christians worried about Muslim extremists, the poor caught up in economic survival, and the progressive movement continuing to be fragmented.


The administration could not, however, talk its way out of the worsening economic picture - part of it brought on by the global recession, but a great deal of it traceable to the continuing structural crisis of an economy with a restricted domestic market owing to high rates of poverty and a rate of income distribution that is one of the worst in Asia. In the second half of the year, export earnings plummeted, bad loans reached over 18 per cent of total bank loans, firms closed in great numbers. Cries of desperation from the vast marginalized sectors were to be expected, but the government began to really worry when the confidence of the business sector in it began to erode. By late November, polls showed business dissatisfaction with the government at its highest level since President Arroyo came to power in January.

The response of the government was to call for a "National Economic Summit." Held on December 10, the meeting drew up the "National Socioeconomic Pact of 2001" - a document filled with details but devoid of ideas, bereft of a decisive program to stimulate and transform the economy. This was not surprising, for the main strategy to keep the economy afloat consisted simply of snagging larger and larger amounts of US aid through shrill adherence to Washington's anti-terrorist military campaign.

The US will, of course, demand more than a closer military alliance to get the money to really flow. But the accelerated trade and investment liberalization that the Americans want is one that the president and her top technocrats have been doctrinally committed to anyway - though what liberalization has to do with development and growth is increasingly a mystery.


As 2001 comes to a close, the Arroyo administration enjoys a degree of stability stemming from people's weariness with political strife and from a close relationship with the United States. As for the US, it is again, like Clint Eastwood, standing tall, the one spoiler of its successful effort to overthrow the Taliban and destroy Al Qaeda's Afghanistan bases being its failure to capture Bin Laden.

Washington is now rife with talk about extending the war against terror to Yemen, Somalia, Sudan, Iraq, and - you guessed it - the Philippines.

These are, however, highly uncertain times, and many factors, including a deep welling of anger throughout the Arab and Muslim world and an accelerating descent into a deep and prolonged global economic stagnation, may yet bring about a reversal of fortunes, both for the Arroyo government and the Bush administration in 2002.

About the author: Walden Bello is professor of sociology and public administration at the University of the Philippines and executive director of the Bangkok-based analysis and advocacy institute Focus on the Global South. He can be reached at

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