Bulatlat: The Arroyo government said remittances increase supply of foreign exchange. How does this benefit Filipinos?
Africa: The biggest beneficiaries from the foreign exchange supplied by OFWs are foreign creditors who get paid, transnational corporations (TNCs) who repatriate their profits, big foreign financial speculators, and TNCs in export enclaves. These account for the overwhelmingly largest portion of foreign payments that the country makes.
While it can be said that peasants also benefit because they use imported fertilizer, the deeper question is why they have to rely on imported fertilizer to begin with. While it can be said that workers also benefit because they cannot but consume imported products, the truth is that they do not really have that much income to spend.
Bulatlat: The government said remittances are harnessed for investments in human resource capital through education and health care for beneficiaries. The BSP said beneficiaries could go to private schools and hospitals instead of government-owned schools and hospitals. Please react to this.
Africa: The most basic point is that Filipinos have a right to decent public health and education services and should not have to buy these from privatized or profit-oriented institutions. Health and education should be available to all and not depend on whether or not a family can afford these.
The government is abdicating its responsibility and passing the burden on to OFWs. And it can also be asked who in the end will benefit most from these so-called “investments in human capital”. If these Filipinos are likewise forced to go abroad then it is foreigners and foreign economies that will be the greatest beneficiaries.
Bulatlat: Remittances also go to physical capital investments through acquisition of real property including land purchases and home construction, said the BSP. Is this true?
Africa: Because Filipinos are so poor the largest part of OFW remittances goes to immediate and urgent consumption. And even if there are many OFWs able to buy real estate these are personal investments and not really investments in the productive capacity of the economy.
Bulatlat: Are remittances also used as capital? Do OFW beneficiaries also invest in business ventures such as in small and micro enterprises?
Africa: Small and micro enterprises do not just need capital, although this is certainly urgent, but also a supportive trade and investment environment. They should not just be provided with capital but also be allowed to grow under a protected trade regime and within a supportive investment environment. Thus, even if some part of OFW remittances are diverted to them, at the expense of families’ immediate consumption, they will still not prosper if there are no radical economic reforms.
Bulatlat: Do remittances create savings?
Africa: There will never be enough OFW savings to compensate for potential capital lost due to stunted domestic industry and agriculture, and for the hostile domestic economic environment for Filipinos due to reckless trade and investment liberalization.
Bulatlat: Can remittances be a tool for development?
Africa: Remittances can only be tool for development within the context of strategic and far-reaching policies of true agrarian reform and national industrialization. In the absence of these, the “remittances as a tool for development” mantra will just be hype to cover up the government’s severe economic failures. (Bulatlat)
