“Would you tell me, please, which way I ought to go from here?” asked Alice.
“That depends a great deal on where you want to get to,” said the Cat.
“I don’t much care where,” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
- Lewis Carroll, Alice in Wonderland.
One of the unresolved policy debates in the tussle between DENR Secretary Gina Lopez and the Philippine Chamber of Mines revolves around the contribution of the mining industry in the economic growth and development of the country.
Past DENR documents under various administrations tell us that mineral development does not only bring in dollars for the country; the industry also helps hasten industrial development, for the minerals themselves constitute the raw materials for industrialization. However, records show that from the time the Spaniards found gold in the country in the 16th century up to the present, very little higher-value processing of the minerals (gold, copper, iron, nickel, etc.) has developed in the country. Philippine mining is essentially an extract-and-export industry. Dig the ores, refine them a bit (meaning remove the impurities in the ores), and then ship out everything raw to China and other countries. After a while, some of the exported ores come back to us in finished but more expensive forms, as imported industrial products.
The unequal outcome from this production-trading arrangement is amply demonstrated in the history of copper mining. In the 1960s-1970s, the Philippines became Asia’s biggest copper ore producer. And yet, in these decades, Japan, utilizing imported Philippine copper, also became the world’s biggest exporter of copper-based products.
Latin American economists have a word for this pattern of mineral exploitation and development: “extravism” or the overwhelming focus of the State on the extraction of resources for export (as imposed on the continent by the Spanish and Portuguese colonizers during the 17th-19th centuries). Today, they describe the policy pattern as one of “neo-extravism”, defined as follows:
“…activities which remove large quantities of natural resources that are not processed (or processed only to a limited degree) for export. Extravism is not limited to minerals or oil. Extravism is also present in farming, forestry and even fishing.” (Alberto Acosta, “Extravism and neo-extravism: two sides of the same curse”, in Beyond Development: Alternative Visions for Latin America, 2013).
But why have the former colonies, upon acquisition of political independence, failed to graduate beyond resource extraction and exportation, that is, create more wealth by transforming what nature has given them into higher-value, higher-technology finished products?
One answer is political – the elite leaders, especially the greedy and those with authoritarian tendency, easily succumb to the temptation of getting quick money through the “abundance of resources”. This “resource curse”, also called the “Dutch disease”, is often blamed by some analysts as the reason why the Philippines and other developing countries have failed to industrialize. These countries have remained producers of cheap primary products and importers-consumers of expensive finished industrial goods.
However, the curse does not only lead to industrial stagnation. It can also become a dark plague, as illustrated in the way Philippine forests disappeared. Greedy politicians and their business partners harvested the Philippine forests from the 1950s to the turn of the 21st century as if there is no tomorrow. Armed with logging and timber export licenses, these politicians and businessmen succeeded in reducing the country’s forested lands at breakneck speed, from 50 percent of the country’s forested total (15 million hectares) as of the 1940s to roughly six percent (two million hectares) by 2000s, per a 2009 study by the Ateneo’s Environmental Science for Social Change.
Another explanation for the failure to get out of the extravist development framework and to shift policy focus to higher industrialization is the predominance of neo-liberal economic thinking among economic planners and policy makers. This thinking frowns on the State fast-tracking industrial development at a higher level. The economic technocrats formulate economic programs and measures based mainly on the imagined “comparative advantage” of a labor-surplus developing country such as the production of labor-intensive but low-technology products, for example, sewing garments or assembling rubber shoes for export.
Part of the neo-liberal economic thinking is the assumption that growth can only come about with the liberalization of the investment regime for foreign capital. The explanation here is that government economic interventionist role is now reduced in a deregulated economic environment while capital for mega-projects can only come from mega corporations or transnationals. Hence, large foreign investors are encouraged to come in to undertake the large-scale exploration of minerals in the name of economic growth and development. How many times have we been warned about the outflow of foreign capital if the country becomes too strict about mining rules?
So can the Philippines get out of extravism? Obviously, the answer shall be determined by the nation’s readiness to embrace a new model of economic development. As one author puts it, the resource curse is not a fatal destiny but a policy choice, made mainly by either greedy political leaders or ill-informed economic technocrats. The challenge is how to transform natural and human resources into a blessing for the benefit of all.
In Indonesia, the policy answer came in the form of resource nationalism, translated into specific policies of no exportation of raw mineral ore and no license given to mining investors with no industrial and community development program. However, in other countries, the policy challenge is seen in a much broader way. For example, Bolivia and Ecuador link the task of achieving a leap in industrialization using natural resources with the implementation of two other primordial tasks – caring for the environment and meeting the needs of the people in an inclusive and sustainable manner. The overall goal is to insure “buen vivir” or living well for all.
Now, under the Duterte Administration, can the government develop its own version of “buen vivir” for the Filipino people?