Mexico still on shaky ground with bank debt

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debt payments. Pascoe stated that the PRT is "the only party in the parliament that has come out with a position for the annulment of the debt."

"It is a curious phenomenon," Pascoe said, "because at the Latin American Conference Against the Debt held last July in Cuba, the Mexican Communist Party [the PSUM or Unified Socialist Party of Mexico] was insisting on the idea of a moratorium. But the PRT happened to agree with Fidel Castro's idea of annul -ment."

The Reagan administration recently put forth its own proposal to ensure that Mex -ico and other Latin American governments keep making interest payments. The new turn in policy is an acknowledgement that WHAT EXCUSE WILL THEY COME UP WITH Now?

TOC TOC DEBT IMF without some moderation of the debt crisis, there is a "risk of setting fire to the powder keg that threatens the whole continent," in the words of Brazil's President Jose Sarney.

U.S. Treasury Secretary James A. Baker advanced the government's plan in October at a joint meeting of the IMF and the World Bank. He suggested that their policy toward the debtor countries be changed from one that demands austerity to one that would supposedly foster industrial growth.

Baker said that the U.S. government would pressure commercial banks to step up their loans to Latin America in order to help service on-going payments on the debts as well as to foster new foreign in -vestment. The commercial banks would offer $20 billion over a three-year span, and the World Bank would kick in another billion.

The Latin American countries, in return, would be expected to institute "sound eco -nomic policies," including lowering taxes on big business, allowing the market to set foreign exchange rates, and returning nationalized or state-regulated industry to the control of private investors.

Business Week magazine reports that the large U.S. commercial banks "have expressed support for the plan in theory. But they wonder how debtor nations can be forced to live up to their side of the bargain."

For their part, Mexican government officials express dismay at the amount of money to be made available under the Baker plan. Baker's entire $29 billion offer equals the amount that Mexico and Brazil will pay this year alone in interest on their debts.

If the Baker plan were implemented, the Latin American countries would only mount up new debts-thus postponing and worsening the crisis. But the Mexican government refuses to call for the only step that can solve the crisis-a complete annulment of the debt.

This is not surprising. The ruling capitalists throughout Latin America-even the so-called progressives who rule Mexico-long ago demonstrated their ina -bility to sever ties with imperialism and chart a course in the interests of the op -pressed masses.

Nevertheless, mass pressure forced the government to approve a series of public debates on the debt—a proposal that the PRT had put forth in the legislature. At the first debate-last month in Tijua -na-representatives of trade unions and peasant organizations were included among those who shared the floor with govern -ment officials. The debate was televised to the general public.

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"Marcos is now persona non grata to all but Rev. Falwell, who calls the Philippines a paradise. Perhaps rivaled only by S. Africa?"

SOCIALIST ACTION DECEMBER 1985 (continued from page 1: “Marcos calls elections in futile effort to save Philippine regime”) praised by Vice President George Bush for his "adherence to democratic principles and to the democratic process" and in 1982 was welcomed to the White House with open arms.

Social cost of dictatorship Washington's about-face is not a belated reaction to the social cost of the Marcos dictatorship.

Since martial law was declared in 1972, 100,000 have been killed by the army and 65,000 detained. The 53 million Filipinos are burdened by a $26 billion foreign debt and over 20-percent inflation.

Unemployment stands at 30 percent, and 700,000 youth enter the job market each year. Seventy percent live below the gov -ernment's poverty line. From 1972 to 1980 alone, workers' wages went down by 36 percent.

Dispossessed peasants have made Manila a city of over 10 million, 40 percent of whom are squatters. The government ad -mits that 30 percent of the Filipino people suffer from malnutrition. In Manila, infant mortality now stands at 13 percent.

U.S. interests

Washington's primary concern is not even the $3 billion in direct U.S. investment. Rather, with the reemergence of the Cold War, the United States seeks to ensure the security of Clark Air Force Base and Subic Bay Naval Base, its two largest military installations outside of North America.

Since the liberation of Vietnam and the tall of the Shah of Iran, these bases have become the forward springboard for de -fending imperialist interests throughout Asia, the Western Pacific, and the Indian Ocean.

The United States is paying some $900 million rent for these bases, and will spend another $1.3 billion to renovate them. Not surprisingly, a recent high-level conference at the U.S. Armed Forces War College reiterated the importance of defending them, and of ensuring the existence of a pro-U.S. regime in Manila.

Unfortunately for the United States, the Marcos regime has, in the aftermath of the Aquino assassination, been transformed from the best bulwark of North American interests in the region, to a millstone which threatens to drag the country into the abyss of revolution. And since the United States is likely to intervene to protect the bases, the Philippine struggle takes on special importance for U.S. antiwar activists.

The threat of revolution is reflected by the rise of the Communist Party of the Philippines (CPP) and its New People's Army (NPA).

The CPP emerged in 1968 as a Maoist formation recruited from the nationalist student movement and dedicated to carrying out a peasant-based People's War. It was the only component of the current opp -osition to advocate the overthrow of the neocolonial state before martial law, and its relationship to Maoist China was severed after that country recognized the Marcos regime.

The NPA was launched in 1968. Today, the CIA estimates that it numbers 16,500 regular troops in 59 of the 73 provinces of the country.

Peasant war has historically played a crucial role in undermining semi-colonial bourgeois states. But solely relying on peasant war does not guarantee ultimate victory. The weakness of the strategy of People's War lies in its discounting of the urban struggle, in particular that of the urban workers.

Nonetheless, while the CPP's primary emphasis continues to be rural guerrilla war, it has recognized that the extension of market relations have undermined the peas -ant economy, transforming the working class from 15 percent of the population in 1968, to some 37 percent today.

The party's reevaluation of and partial turn toward work in the cities is reflected by the rising acceptance in the left wing of the mass movement of demands put forward by the New Democratic Front [the broad political coalition associated with the CCP]. This is particularly the case among unions and slum-dweller organizations in the umbrella coalition BAYAN.

In addition to the NPA, the Marcos regime continues its war with the Muslim Moros of Mindanao. Some 60 percent of the Philippine army is fighting the Moro National Liberation Front and the NPA in the southern provinces.

So the Philippine revolution combines many struggles—that of peasants for land; of Moros for self-determination; of the great majority against U.S. imperialism and dictatorship; and finally, of the workers and peasants against a capitalist system incapable of meeting their basic necessities of life.

It is important to underscore this last point and to dig below the surface of a struggle which at first glance appears to be simply one between democracy and dictatorship.

Marcos and his regime are the product of calculated choices made by a section of the Filipino bourgeoisie in the early 1970s. Formal independence for this former U.S. colony did not alter North American domination of the Philippines. From independence to the present day, its primary exports-sugar, coconuts, copper-have been at the mercy of Western commodity markets, and many of its factories, plan -tations, and mines are owned by U.S., Japanese, and multinational capital.

Following independence, a moderate nationalist current of thought gained accept -ance within the Philippine bourgeoisie which espoused a strategy of "import substitution industrialization" to loosen the imperialist grip. The strategy aimed at creating a national-industrial base that would manufacture many of the formerly imported products consumed by the Filipino people.

Unfortunately for its proponents, this scheme foundered due to the inadequate markets of this poor agricultural country. Industrial production stagnated throughout the 1960s, aggravating unemployment at the same time that more and more displaced peasants migrated to the towns.

By the late 1960s, the economy's failure to meet the demands of the population had sparked labor and student upsurges. Des -pite this record, the import-substitution strategy continues to be put forward by the moderate anti-Marcos opposition.

Export-oriented industrialization In the late 1960s, Ferdinand Marcos represented a segment of the capitalist class that sought to revive the stagnant economy by reorienting it toward export, copying the "capitalist miracle" of South Korea and Taiwan.

These capitalists aimed to attract foreign investors, using the incentive of low wages combined with tariff and duty-free "export platforms." These economic zones would manufacture garments or electrical com -ponents for sale in the industrial West.

Martial law was imposed in 1972, not simply to extend Marcos' hold on power, but also to facilitate the reorientation of the Philippine economy, an aim encouraged by the multinational corporations and the World Bank.

Restructuring the economy resulted in the bankruptcy or relative impoverishment of a section of Philippine capital. This resulted from successive devaluations of the peso and the end to protectionism, both concessions made to attract foreign capital.

This fact-and general unease over the drift of the economy in recent years-ex -plains the present rift within the Filipino

South

Chína Sea subic laval MALAYSIA bourgeoisie between the moderate oppo sition and the Marcos wing.

Jealousy is another factor. Not surpris -ingly, the restructuring of the economy under conditions of dictatorship helped en -rich Marcos and his cronies, who soon had monopolies over the export of coconuts and sugar, and many industries. The Marcos coterie rapidly became the richest layer in the country.

Reorienting the economy also required crushing the mass movement-hence the need for martial law, the banning of strikes, and mass detention. The need to maintain this dictatorship against rising resistance led to the four-fold expansion of the armed forces to 250,000, and an invitation to the officer corps to share in the spoils.

So the army has garnered more and more economic and political power, and has become closely bound to Marcos' personal regime. The formal end of martial law in 1981 changed nothing.

Export-oriented industrialization led to an initial growth spurt, and industrial exports rose from 16 percent of the economy in 1972 to 32 percent by 1980. But this stra -tegy depends on the growth of foreign markets, which began to contract with the 1974-75 international capitalist recession and the erection of trade barriers in the industrialized countries.

Meanwhile, the price of Philippine sugar, coconuts, and copper plummeted on the world market, while those of oil and manufactured imports continued to rise.

In the epoch of imperialism, the import of foreign capital has always been a key source of funds necessary for even one-sided development in the semi-colonial world Since the 1970s, however, foreign capital has taken on a more openly parasitic role. The banks now dispense loans to pay off past loans, all of which are now guaranteed by the semi-colonial state.

To cover the trade shortfall and stave off the bankruptcy of his cronies, Marcos was forced to mortgage the country. The for -eign debt, $2.2 billion in 1972, rose to $11 billion in 1980 and $26.5 billion by 1984. A $925 million loan package in 1985 earmarked $730 million for payment of the interest on earlier loans.

The road to revolt This is a debt borne by the masses. If in 1972 the upper 10 percent of the popu -lation extracted 30 percent of the national income, in 1982, this share had risen to 42 percent. In the same period, the earnings of the lower 70 percent fell from 48 percent to 31 percent.

In the countryside, the trend toward a plantation economy geared for export has destroyed the tenancy system inherited from the Spanish. Today, fully 50 percent of the non-tenant landless peasantry are plantation workers. Millions more have been forced into the cities. It was the accumulating social dynamite from these processes which finally exploded with the assassination of Benigno Aquino in 1983.

In Part Two of this article, which will appear in our January issue, the author will examine the political response of the antiMarcos opposition to the challenge posed by the economic, political, and social disintegration of the Philippines.

Philippine Sea Luzon Clark Air Base ** Manila Base PHILIPPINES Samar -Ley Gu Palawan as Mindanao

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