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The Economy of the Philippines: Elites, Inequalities and Economic Restructuring (review)

The Economy of the Philippines: Elites, Inequalities and Economic Restructuring. By Peter Krinks. London: Routledge, 2002. Pp. 262. Like the quiet intensity of its subject matter, The Economy of the Philippines: Elites, Inequalities and Economic Restructuring offers a simple yet convincing analysis of poverty and inequality in the Philippines. Over the last twenty years poverty reduction in the country has been disappointing. The proportion of households below the official poverty line had not changed much. In 1994 poverty incidence stood at 40.6 per cent; by 2000 the poverty ratio still remained at 40 per cent. Much worse, the income inequality continued to widen, as evident in an increase in Gini concentration ratio to 0.48 in 1997 from 0.44 in 1988. Reinforced by conflicting poverty bias against agriculture, an industrialization strategy that favoured capital over labour, and increasing pressures of globalization on domestic employment, economic growth has actually narrowed the options for the poor and accentuated, rather than removed economic inequality. Despite the economic recovery in the 1990s, the number of poor people increased to 26 million in 1997 from 25 million in 1988. To be sure, one major problem is the country's uneven development. The book illustrates how distorted economic policies and structures could reinforce various dimensions of inequality associated with economic restructuring, spatial distribution of industries, and class relations in a developing country. It is systematically laid out to explore the sources of uneven development, which Krinks attributes to the process of accumulation by the capitalists as well as the state. As he argues in Chapter 1, the local elite who usually own the factors of production (particularly land), have become instrumental in propagating their wealth through rent-seeking and patronage. The government has also allowed itself to be manipulated by the particularist demands of the elite, by implementing policies that are flawed and bereft of concerns for the country's long-run development. Throughout the book, Krinks shows that this pattern of accumulation of wealth and capital was not accidental. It was a result of major shifts in "relations between capital, labour and the state" over the centuries--a deliberate struggle for economic dominance (as explicitly discussed in Chapter 2). Up to the eighteenth century, land was the dominant form of accumulation by wealthy Filipinos. By the twentieth century, diversification became the rule as the landed elite shifted and invested their profits and wealth in urban businesses, resulting in the emergence of new entrepreneurial class. In the words of Krinks: "(the) new entrepreneurs could establish themselves and, with skill, luck or political favour, accumulate and diversify enough to join the upper levels of the economic elite." Since then, the elite had assumed a powerful role in the economy and state, influencing major economic restructuring efforts from primary to services sectors over the last twenty years (see Chapters 3 to 5 for details). Needless to say, the outcome was not generally favourable to the poor. The central theme of uneven development is perhaps as old as the problem of poverty itself. But the author succeeds in going beyond the obvious. Rather than simply presenting the adverse social and economic situations, Hinks examines the policies that shaped them--and explores how the same policies have failed to address structural problems in the country. For example, in his discussion of restructuring in the agriculture sector (Chapter 4), Hinks manages to carefully show, using case studies of specific sub-industries, how various policies in the 1960s and 1970s have perpetuated the increase in poverty in those industries, due to low priority given to agriculture and outright discrimination against labour. …