You are on page 1of 3

The truth about the economy

under the Marcos regime


11.7K

812

Google +15

Posted on November 16, 2015

20

Introspectiv
e
Emmanuel S.
de Dios

Nearly three decades after it ended, still no proper account has


been written of the economy under authoritarian rule, which is a big reason that
Millennials have only an inkling of what transpired during those years. It is also
why one now hears the mind-blowing judgement that Marcos was the best
president the country ever had. And if you ask Millennials today who in their mind
was the countrys worst president, their likely answer is Gloria Arroyo. (Sigh.)

This is obviously no place to write an economic history (hanc columnis exiguitas non caperet). But
there may be enough room to correct a few bad habits when thinking about the Marcos period.
A common foible is selectivity: Marcos-admirers wax nostalgic about the earlier years of martial law
but forget its later consequences. Ah, yes... remember when order and discipline seemed to reign,
grand industrial and infrastructure plans were in the works, governance was discharged by a simple
snappy salute, newspapers carried no muckraking reports about corruption, spanking new hotels were
on the rise, a glittery cultural scene was on display, and foreign celebrities, bankers, and business
people regularly came in and out -- not to mention the beauty pageants! What was not to love?
The customary counterpoint to this has been to cite the gloomy human rights record: arbitrary
arrests, disappearances, suppression of dissent and civil rights, and the brutal war on Muslim rebels in
the south. But all this is typically swept aside by the regimes lovers as being the necessary cost of
all that economic progress -- and in any case, it is argued, these were just the concern of a few Leftist
activists and some collateral victims.
That argument might hold some plausibility if the economic record was brilliant to begin with. But it
was not. And here one needs to underscore the importance of assessing the entire period of
authoritarian rule, from late 1972 to early 1986.

Take gross domestic product (GDP) for instance: the average GDP growth rate from 1972 to 1985
(Marcoss last full year) was all of 3.4% per annum. Per-capita GDP grew annually at less than 1%
average over the period -- more precisely 0.82%. Hardly a roaring-tiger performance. At that rate it
would have taken 85 years for per capita income just to double.
For comparison, the average GDP growth from 2003 to 2014 -- even under a bumbling and
quarrelsome democracy -- has been 5.4% per annum -- with a rising trend. On a per capita basis,
GDP today is rising 3.5% annually, more than four times the growth rate under the dictatorship.
The reason for the dismal performance under martial law is well understood. The economy suffered its
worst post-war recession under the Marcos regime because of the huge debt hole it had dug, from
which it could not get out. In fact, all of the good times the admirers of the regime fondly remember
were built on a flimsy sand-mountain of debt that began to erode from around 1982, collapsing
completely in 1984-1985 when the country could no longer pay its obligations, precipitating a debt
crisis, loss of livelihood, extreme poverty, and ushering in two lost decades of development.
The economys record under Marcos is identical to that of a person who lives it up on credit briefly,
becomes bankrupt, and then descends into extreme hardship indefinitely. It would then be foolish to
say that person managed his affairs marvelously, citing as evidence the opulent lifestyle he enjoyed
before the bankruptcy. But that is exactly what admirers of the Marcos regime are wont to do.
It is instructive that neither Thailand, Indonesia, Malaysia, nor any major Asian country
catastrophically experienced negative growth in the early 1980s. The Philippines was the exception,
following instead the example of protectionist and over-borrowed Latin American countries. This
suggests that there was nothing unavoidable about the crisis the Philippines suffered, and that it was
the result instead of failed policies. In 1977 the Philippines total debt was all of $8.2 billion. Only five
years later, in 1982, this had risen to $24.4 billion. Thailands debt in 1982 was still only half that
amount. Thailand and other countries of the region thus avoided a debt crisis and ultimately went on
to attract foreign direct investments in export-oriented industries in the now-familiar East Asian
pattern. But no such thing happened under Ferdinand E. Marcos, notwithstanding the arguments and
exhortations of people like Gerardo P. Sicat (who would cease to be active in the regime by 1980). By
the early 1980s, the pattern would be set where foreign direct investments in neighboring countries
regularly outstripped those in the Philippines. (The intermittent coups detat post-Marcos did us no
favors either.)
All this should correct the common misconception that the countrys troubles stemmed entirely from
conjunctural political factors, notably that it was caused by ex-Senator Benigno Ninoy S. Aquino,
Jr.s assassination. One might not even entirely blame the mere fact of authoritarianism itself -- after
all Thailand, Indonesia, and Malaysia at the time were also ruled by despots of some sort or other, yet
suffered no crisis. Rather the Philippine debacle was linked to the misguided policies that were
structurally linked and specific to Marcos-style authoritarianism. For all its technocratic rhetoric and
rationale, the Marcos regime never took economic reform, liberalization, and export-oriented
industrialization seriously; it remained a heavily protectionist and preferential regime (think the
cronies and the failed major industrial projects). The availability of easy loans was well suited to the
priorities of a regime that thought it could stoke growth without deep reform and slake the greed of
Marcos and his cronies at the same time. In the end a corrupt regime fell victim to its own hubris.
In three decades more, the whole Marcos episode will probably be regarded as no more than an
avoidable nightmare; a wasted opportunity; a bump on the road on the countrys ultimate march to
development.
But this narrative, for different reasons, is unpalatable to many of the regimes lovers.
Indeed, one of the alternative truths propounded by some otherwise respectable people is that the
fatal flaw of the Marcos period was really just the fact that Marcos failed to provide for a proper
succession -- as if the regimes logic of patronage would have allowed it to behave otherwise.
A more pedestrian version of it, however, simply says Marcos gave Imelda too much power. The story

runs as follows.
There were really two Marcoses: Marcos B.C. and Marcos A.D., i.e. before concubinage and after
Dovie (kids, you can ask your grandparents what this refers to).
Marcos B.C. was a statesman, out for greatness for himself, brooking no deviation from his vision of
the nations future.
But Marcos A.D. was a weakling hostage to his vengeful wife, who exacted inordinate power as the
price of the discovery of her husbands indiscretion. It was she and her obscene taste for extravagant
projects that caused the country to run huge debts; she and her ambition and greed that skewed
policy making and ruined the chances of an orderly political succession. Imelda in short was the real
villainess; Marcos by contrast was little more than a hapless victim of spousal politics, a tragic hero
ruined by guilt, having falling victim to that all-too human weakness -- the need for love! Its an
almost Shakespearean story (think Antonius and Cleopatra) of an entire nations fate being
determined by human passions and foibles.
For some, this alternative truth will continue to be more riveting than any dry economic history
based on real facts and hard economics. (Sigh.)
Emmanuel S. de Dios is an Oscar M. Lopez professor at the University of the Philippines School of
Economics and a fellow of Institute for Development and Econometric Analysis (IDEA).
ededios@gmail.com
www.idea.org.ph

You might also like