Malea Martin CMC '19 interviewed Andrew Small on January 31, 2019.
What are the implications of the Philippines Defense Secretary’s recent statement that the Philippines should keep control over their largest shipyard for fear of Chinese companies taking over? Does the Philippine government have valid reasons to be concerned over Chinese investments in general, and this investment in particular?
The Philippines has had a very close relationship with the U.S. military since the 1950s. For this reason, the Philippines Defense Secretary said the country should keep control of the shipyard in honor of this long friendship. Another reason is economic: Subic Bay was once the largest naval bases outside of the United States, and a place where American and Filipino soldiers regularly were involved in joint military training. When the United States left in the 1990s, it left some of the facilities intact, so Subic Bay became a port where ships would come for repairs and eventually ship-building. It is also strategic because it has become the de facto base of the Philippine navy. A third reason is also economic: Subic Bay now is one of the largest and profitable export zones of the country. Export zones are areas where foreign corporations can set up their factories or which they can use as hubs for the global operations. The Philippines gives them a lot of economic incentives if they base themselves in the zones, especially on taxes and the freedom to send their profits back to their home countries. If the Chinese control the base, then the Chinese could essentially outwit competitors and control who can go in and out of it. The fourth reason is pressure from the Americans. The American military is worried about Chinese expansion in the South China Sea. Chinese expansion into the bay for both military and commercial reasons is something the U.S. can only tolerate so much.
How much progress have China and the Philippines made in striking a bilateral deal over the disputed areas in the South China Sea? There were talks of joint exploration. Have such talks led to anything?
Whatever discussion the Chinese and the Philippines have had so far, it has favored the Chinese. The Philippines has basically given up any attempt to assert its sovereignty in the South China Sea/West Philippine Sea. The Chinese are building bases all over the area, and the Philippines government’s response is to say, ‘Well, we can’t do anything about it.’ Besides this, the Philippines’s President is very anti-American. The Chinese are trying to take advantage of this, offering loans and market access for the Philippine’s goods.
President Duterte has been courting Chinese investments. Does this decision mean a reversal of his policy of seeking Chinese investments?
President Duterte is trying to get the Chinese to invest in his infrastructure programs. He has promised to build more roads and improve the infrastructure of the country, including a railway line to a province in the south. He turned to the Chinese to ask for help, and they promised to extend loans for this program. But so far nothing substantial has come of this promise. There is resistance among Filipinos over the fact that if the Chinese extend aid, dependency can occur. The Chinese have historically extended aid to Bangladesh or Malaysia, often through loans with high interest rates. When countries are unable to pay, the Chinese end up taking over the projects that the recipient countries are trying to implement. Filipinos are left asking, if the Japanese or the Americans are offering aid to the Philippines with a very low interest rate, then why would the Philippines go to the Chinese with a high interest rate? President Duterte still thinks that what the Chinese are offering is good.
How would you evaluate President Duterte’s overall leadership since he came to power two and half years ago? In particular, what is his record in improving the Philippines’ economic performance?
The issue with the Philippines’s presidents since 1986 is that they don’t have to do anything to improve the economic situation, because there are two easy ways that allow this naturally. One is allowing Filipinos to go abroad and find work. They leave the country, find work, and then send money back. The second is the customer service positions that Filipinos often hold. Filipinos and Indians control the call center and customer service businesses that serve many American and Western companies. Filipinos either work abroad or work in these service companies and bring the country billions of dollars. The government doesn’t have to do anything about it. President Duterte has made attempts at tax reform, which includes a uniform income tax for everybody. This has hurt a lot of poor Filipinos, because it is of course more difficult for them to pay taxes than it is for rich Filipinos. The rich Filipinos actually end up paying less. The reform also involves indirect taxes, so taxes on gasoline and other consumer goods. This almost always impacts the poor harder, because these taxes are easier for the rich to cover than for a person who is not paid well. There’s some grumbling over the ways in which the tax reforms have been biased against the middle class and the poor.
We’ve seen many anti-Duterte protests in light of his war on drugs, and the death toll from the war on drugs, mostly due to brutal police violence. How effective has Duterte’s violent crackdown been? Does he still enjoy widespread support for his war on drugs?
He still has widespread support and this becomes especially apparent if you look at things on a more local level. The big picture shows people protesting against him. But at the local level, there is hardly any resistance to Duterte.
The way Duterte is approaching it, though, is by promising to take care of small neighborhoods and local drug dealers. For Filipinos, and for any community for that matter, if you have a problem like drugs in your local neighborhood, that’s something that hits close to home for people. People tend to say, ‘Sure, do it,’ so that the local drug dealer gets eliminated. This way the community feels safer on the local level. If you look at it on the national level, then people can say there are multiple bases for protests: the human rights violations, the many killings, absence of the rule of law since people are killed before they go to court, and the list goes on. This is why there are many protests. But at the local level, say for someone in their hometown in southern Philippines, people would be happy if the local drug dealer is eliminated, because it means their children can go to school and they feel safer. That’s why it is popular. You have to understand how it is impacting people on a local level, even though we also can understand the larger picture in which these events are certainly human rights violations.
Voters in the Philippines just voted Friday for a Muslim-led region in the south of the nation. How will Duterte handle this development? Has Duterte handled the unrest in this region better than his predecessors?
For a couple of reasons, he has not handled it better. First of all, the reputation of Duterte’s predecessors was destroyed because of their inability to curtail terrorism in the country. This nurtured the idea amongst Filipinos that Muslims in the country need to be eliminated. The majority of Muslim groups simply say, ‘We want autonomy.’ So, with this recent vote, this autonomy was approved, and that’s very good. Even with doing this, though, the issue of terrorism is not eliminated. Mindanao, where I come from, is a place that is easy to get in and out of: smuggled goods are very common. Mindanao is a wonderful place, actually. But this ease of access does allow for Islamic fundamentalist terrorist groups to go in and out, though they are a small percentage of the Muslim population in the Philippines. If this referendum gets approved, the new Muslim government of this new autonomous body would hopefully be able to work with the national government to stop the flow of terrorist groups going through the South. This is easier said than done, as these groups have seized power before. A second thing that must be considered is that Mindanao is a place where there is the illegal trade of drugs and guns. There is a large prevalence of guns and almost everyone owns one. It has become an issue of stability. That is, if you want stability, what do you do with all those guns? It is also one of the largest places for the production of methamphetamine. A third problem is that some local politicians are very much involved in this drug trade. In the city where I grew up, the mayor was killed last year. He used to run the drug operations, bringing heroin down from Hong Kong to the south of the Philippines. That’s how they win elections—a large portion of their budgets when they are running for office comes from smugglers and drug dealers. It’s a very interesting place.
What should we learn from Duterte’s populist political strategy and its impact on the Philippines?
If you want to understand Philippines politics, you have to go outside the capital. You have to listen to how politicians speak in small, local communities. They speak differently to people there than they would in the capital. People like Duterte, they will act ‘macho’ in the communities, and this switch is very effective. They try to be relatable. That’s the success of his strategy. Duterte is not interested in the national media. He’s not interested in how people in the big cities look at him. When he talks, he is interested in the ordinary man or woman from a small village or small town, and he shows how he can speak their language. That’s the scary thing about him.
President Rodrigo Duterte, via Wikimedia Commons