Land reform a factor? Did PI retain the Spanish model?
They don’t have a model at all. Land ownership there is murky, to say the least.
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Several economists have made the point that all wealth ultimately flows from the land itself. If land isn’t being used sensibly, poverty is inevitable.
But how to use land sensibly is a hard-to-answer question.
The biggest difference is very likely the land reform enacted in Taiwan around 1952 or so. It was a phenomenally successful policy and very much at the root of the prosperous country we see today.
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Here’s my take. Taiwan’s boom in the 70s to the 90s is a direct result of Japanese Hydraulic engineering and industrial efforts.
When the US began pumping money into Taiwan during the Korean war, most of the aids went to the military. It wasn’t until the mid 60s that the US realized they also need to prop up Taiwan’s economy.
While that money was important, like @Whatevah said, it wasn’t the main reason for Taiwan’s boom. During most of the 50s and the 60s, Taiwan relied mostly on agricultural exports to make money. Taiwan was global leader in many agricultural products at the time. Unfortunately, the KMT actually went and sabotaged many Taiwanese agriculture products for their own political gain, a prime example would be the banana industry.
It was when things were getting expensive to make in Japan, and Japanese company started looking overseas to cut costs that Taiwan became an obvious choice.
Similar to Japanese hydraulic engineering enabled Taiwanese agriculture, the efforts to industrialize Taiwan for WW2 also meant that they were able to find were lots of Taiwanese factory owners who can speak Japanese and were technologically capable of manufacturing cheap parts in the 60s and the 70s.
It isn’t unlike how the Taiwanese company looked to China to find workers who they can easily communicate with in the early 90s.
Perhaps if Japanese businesses and factories had an easier time communicating with the people in the Philippines, they would have skipped over Taiwan.
In the 90s, when Taiwan began to phase out Japanese speaking people from the workforce, that’s when Taiwan began competing directly with Japan in high tech industries.
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A very simplistic explanation:
The Spanish basically pushed the latifundio, large to humongous plots of single owned land, which has one lazy bum receiving the benefits from slave and later low salary labor. These people later allied themselves to multinational corporations and are the basic links to the chains of the export driven economies we suffer from.
As you see, no need to innovate or entrepreneurship or any effort on their parts, aside from invetsing in keeping thinsg the way they are and have been for centuries. They have no other qualifications to be rich other than their names.
When attempts to have small producers -or at least, anything less than latifundios- many things have happened, none nice. Small producers are regularly stripped of their land through loans, intermediaries, etc which again are controlled by latifundio elites who also own banking and finance and exporting institutions.
One wonders why there are no foreign banks allowed, mmm.
So now it has reached the point, at least in teh old country, where money is not safe in the bansk, can dissappear any minute. Land records can be “changed” even in our computerized times. No need to produce anymore as latifundios elites benefit from money laundry. Masses are a necessary annoyance as servants until robots replace them.
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Marcos held the PI back like Suharto did to Indonesia. KEPT THEM LIKE THE Cubas of Asia
yeah, very similar in the Philippines, except those large land holdings are extrajudicial. Or more accurately, all land holdings are extrajudicial (there is no effective titling system), but some more so than others.
When land is granted to the plebs via ‘agricultural reform’, one of three things happens:
- The have no idea what to do with it, so they sell it to some rich guy, who thereby accumulates thousands of hectares.
- They don’t pay the taxes on it, don’t do anything with it, and it gets repossessed and handed out to someone else. And so it goes on, until eventually (1) happens.
- They just sit there producing vast numbers of kids and grandkids, splitting their land into ever-smaller sections, until all that’s left is a huge swath of loosely-related people using their land for nothing more productive than slum housing.
Virtually none of “the poor” who are granted lands do anything productive with it.
I think the decades of Japanese instilled work ethics may have played a part in the difference in the generation that set up many factories .
Have a look at where those factories are still mainly located. Farmland.
Now one reason is because it’s cheaper and piss poor planning laws.
But you will find many of those factory owners, their families started out as farmers or had a small plot of land and off they went starting up home enterprises back into the 50s, 60s and 70s.
And that land that they owned gave them a source of capital and also collateral for loans.
Also Taiwan farmers were protected until WTO so they could actually earn a reasonable living from the land by growing rice .
When the population grew rapidly they could obtain loans to buy the housing being built in the cities and towns, again probably collateralized from their plots of land and homestead.
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I doubt that was a factor. If anything it probably retarded development. The Philippines “protects” its farmers to the max, and therefore farmers have no incentive to innovate (eg., by growing more profitable crops, or with value-added processing).
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Well I take it from the horses mouth. They still speak with horror about when rice flooded in from Thailand and destroyed their income. They had emergency village meetings . Imagine if suddenly public school teachers or civil servants were treated in the same manner? Are farmers less important or they should not have an iron rice bowl too ?
Even then of course many were also labourers in factories, govt workers and running other businesses . They look back at the 80s and 90s as good times.
Also the land reform was responsible for my in-laws relative prosperity, their grandfather was given rights to purchase the land that he had rented and maintained previously as a tenant farmer. That land was then split through the next generation who all have their own homes on separate plots. During the industrial boom a couple of them ran small enterprises such as pottery and doll making. None of them remain in manufacturing in Taiwan (one moved his factory to China) and mostly they went back to farming or retired . Now they mainly grow taro or trees. Without that inherited land many would be in a bad way I think.
Now if the local city wasn’t so shit they would all be rich as f#+k because of the land they inherited. Now they are just kind of getting along doing bits and pieces.
I contrast the situation in Taiwan with what I observed in parts of the Philippines. I noticed few homesteads outside Dumaguete city , it was clear that a massive plot of prime land just North of the city was owned by a corporation for sugar cane farming. No houses visible on the land . That’s prosperity transferred to the few.
I think that was a big part of it, but it was a continuation of inefficient development made much worse. The Philippine governing powers always concentrated too much on development in Luzon. The Philippines has a terrible transportation and logistics problem due to its geography. Development in many of the smaller islands was ignored.
Combine that with Communist rebels in several regions and Islamic insurgents in the south and it stifles development. Taiwan didn’t have those issues.
Culture does play a role. For Filipinos, it isn’t a shame to be poor in the same way as it is for people of Chinese extraction. I think many Filipinos, at least those of the southern regions, have a burst worker mentality. They work hard, but long periods of inactivity. I could be wrong about that though, that’s just impressions of the people I’ve known.
After the US-Moro war, the second largest island, Mindanao, was opened up to development. One thing Marcos tried to do right was to open it up for agricultural development, but that didn’t turn out well for many. When land costs almost nothing, it’s worth almost nothing. I’m told people were trading hectares for donkeys and one plot for another in worse and worse deals until they ended up with hardly anything.
Many are pretty closely related, at least in Mindanao, and all that’s been in about two generations. Until recently, many were down to subsistence farming, but the infrastructure has been improving and there’s more development in the region.
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Nobody should have an iron rice bowl. What sort of economic policy is that, where failure is rewarded over and over again?
A farmer who relies on ONE crop, one source of income, while fully understanding the vagaries of the weather, is an idiot. He deserves to go bankrupt. At least then he can go and get another job for which he’s (hopefully) more suited, and someone else who knows what they’re doing can buy his farmland. It’s a win for the buyer, a win for society, and a win (eventually) for the bankrupt farmer, even though it might not seem like it at the time.
The people who were in the right place at the right time benefited enormously from those land reforms. The people who weren’t … didn’t. Such is life.
Yup.
The tragedy there is that sugar cane (like rice) is a zero-profit crop. God only knows why they bother growing it. I can only assume it’s like the situation with wheat in the American Midwest - they only make $100 per acre, but they’ve got a lot of acres.
Even worse that that, after they’ve completely ruined the land, they just leave it standing empty. I’ve seen vast tracts in Luzon which are virtually desert. The owners are holding onto them, I assume, with the view that eventually someone will come along and build cities on them.
Inequality does tend to breed inefficiency.
Who’s John Galt?
Not a big fan of Ayn Rand. I’m just pointing out that farming is a business like any other. If you’re no good at it, go and do something else. Society doesn’t owe you anything just because you want to play at being a farmer.
That’s fine, it was just a very Rand-ish argument. I’m sure you understand most farmers in the Philippines are subsistence farmers and only have means to plant one crop and if they have no support, failure could mean death, not bankruptcy. Seems to have been true here, from what older Taiwanese have told me, before the economy improved. Not everyone has a second option.
It’s OK, I got the joke (although I had to google it) 
But Rand’s capitalism is Capitalism as produced by Warner Brothers, all slapstick and hyperbole.
Planting multiple crops is no more expensive than planting one crop. In fact you can plant (say) 100 gmelina trees around the outside of your farm for virtually no cost at all, with minimal loss of useful land area. In 10 years you’d have P150,000 worth of trees (or 3x that if you make the effort to cut it and season it).
They plant rice, rice and more rice because they’re idiots. We’re Filipinos. Filipinos grow rice. QED.
mmm … not exactly. Filipinos seem to survive with no visible means of support. A single OFW can keep 5-6 boneidle Filipinos in the lifestyle to which they’ve become accustomed.
Anyway, the main problem is this. Farmers who have been given a land grant aren’t allowed to sell it for 10 years. If they don’t pay their taxes (which they never do) they are never actually given title - so they only own the land de facto, and their only hope of holding onto it is to squat on it and plead poverty (which often works). “Their” land is dangled tantalizingly in front of their faces, just within reach but not quite attainable. They’re in the same position as the proverbial monkey holding a caged banana, unwilling to let the banana go (which would give him freedom).
In fact they could work around their predicament by (unofficially) leasing it out, but most subsistence farmers are as ignorant of commercial procedure as they are of farming. They’re trapped in their own victim-mentality box.
But let’s assume they are in fear of their lives. Well: people who are in fear of death, and don’t have the brains to extricate themselves from it, or the money to pay for education, are easily manipulated. Oppressive governments, therefore, do everything they can to keep subsistence farmers from moving out of a subsistence position. And they do that with carrots, not sticks, eg., illogical and ultimately damaging promises of “protection”.
If you’re living knee-deep in mud, why would you want your lifestyle “protected” so that you can still be living knee-deep in mud next year? Wouldn’t you rather be working in an office earning three times as much money, with less of a mud-based experience?
Think of it this way: let’s say a factory boss goes cap-in-hand to the government, with this story:
“I’ve been making the same shitty product for 30 years, and we always made enough to stay afloat. But this year I had a fire in the warehouse and by the time we got back into production again, all our customers were buying a different product from our competitors. How about you shut down our competitors and give us some money, so that people have no choice but to buy our shitty product, and we can carry on making a miniscule profit?”
Yes, I know the US gov’t did something just like that for the car companies not so long ago, but normally when you do that sort of thing, you get the USSR. Or Cuba. Or … um, the Philippines.
Nobody has a right to sit there trashing the nation’s farmland just because they’re poor. We don’t accept multinationals doing it, so why is it OK when a million individuals are doing the same thing? Land is an incredibly valuable resource. Those subsistence farmers are not just harming themselves, they’re harming the ecology, and the national economy.
I’m suggesting that the economy improved because the subsidies were removed. People were faced with three choices: sit around moaning (and starving), sell up, or get smart. If I understood correctly, the land reform policy in Taiwan was quite draconian: if you’re not doing something useful with your land, the government will confiscate it.
Walking away from your career isn’t fun, but the unpleasantness is mitigated by having a few million NT$ in your pocket. I know plenty of ex-farmers who now run factories and drive around in Mercedeseses … even though they’re not very good at running a factory, either.
Some of them, of course, decided to learn how to farm properly, thereby securing the nation’s food supply.
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