Current State of the Philippines

MANILA - Smoky Mountain, in the Tondo neighborhood across Manila harbor, is a Dantesque vision from hell turned postcard of global poverty. Smoky Mountain is a 40-year-old mountain of garbage. The locals literally live off it - they search it, burn it, separate it in plastic bags, recycle it, sell it to junk shops, even eat some of the remains.

Eighty percent of the children of the estimated 30,000 people living in the area don't go to school - although there are a kindergarten and an elementary school in the surroundings. Some of the locals set up food stalls at the harbor, some are cargadores (porters), some are pedicab drivers, but most live off the garbage. Under a bridge by the Pasig River rattled by the non-stop traffic of container trucks, stuck under the pollution, haze and that unbearable smell, a teenager beams: "It's good to make money here. Three hundred pesos a day [a little more than US$5] if you work hard." In the May presidential election, he voted for action star Fernando Poe Jr, a close friend of ousted-in-disgrace former president Joseph Estrada (Poe won in Manila but lost overall to incumbent Gloria Macapagal-Arroyo). He believes the elections were stolen, as do 55% of Filipinos. And he wouldn't leave Smoky Mountain for anything. "There are no jobs out there," he says, pointing toward Metro Manila.

The notoriously corrupt Metro Manila Development Authority (MMDA) - which also indulges in a quirky form of performance art, tagging colored walls around town with its acronym - keeps a sinister top-10 list of the dirtiest barangays (districts) in town. Just for the record, Smoky Mountain is not even close to No 1; that honor belongs to Barangay 145, Zone 16 in Pasay City - notified 225 times (and counting) as having mountains of uncollected garbage. 

Why us?
It didn't have to be this way. Filipinos, rich and poor alike, often look in awe at the so-called newly industrialized countries (NICs) ofNortheast Asia and ask themselves: Why haven't we accomplished anything similar? The main reason may be the absence of a real agrarian reform  an absolute precondition for the economic miracle in Taiwan and South Korea. Land reform created an egalitarian distribution of income, ignited domestic demand, and the whole thing drove an industrialization drive in the 1950s and '60s.

Meanwhile, in the Philippines, few were paying attention: after all, the country was growing at rates from 6-10% a year, fueled by its own brand of import-substitution industrialization. But in the late 1960s, the turbo-jeepney came to a halt, because of a structural problem still not solved in 2004: the Philippines was and remains a small market, chiefly because of its tremendous income inequality.

With no land reform and anemic exports, the dictatorship of Ferdinand Marcos came up with what might have been a great coup: exporting the country's labor force. Economists in Manila say this was supposed to be a temporary measure. It turned out to be the ultimate lifeline to the Philippine economy - with remittances even helping to prevent the peso from spiraling into total disaster after the 1997 Asian financial crisis. No wonder: when the internal market remains small and jobs are scarce, the only way, if you don't want to recycle garbage, is out - often by a one-way ticket departing from the ghastly Ninoy Aquino International Airport in Manila. According to labor-export specialist Jorge Tigno, almost 10% of the country's population are now OFWs (Overseas Filipino Workers). In Metro Manila, at least one in every three households has a member who was or still is an OFW.