The Philippine Republic started the new year, its twentieth as a sovereign nation, with a new President, a partly new and re-shuffled legislature, and something of an innovation in presidential inaugural addresses. "The Filipino," declared President Ferdinand Marcos to his startled listeners, including foreign dignitaries attending the inaugural, "has lost his soul and his courage. . . . We have ceased to value order. Justice and security are as myths. Our government is gripped in the iron hand of venality, its treasury is barren, its resources are wasted, its civil service is slothful and indifferent, its armed forces demoralized, and its councils sterile."

Some felt that the assessment was overly harsh and gloomy, but many agreed that there was sufficient truth in the charges to justify President Marcos' anger; most trusted his judgment as to the intensity of shock treatment required to arrest the national decline and spur his people toward their neglected goals.

The foreign observer is tempted to take this assessment, substantiate it with confirmatory interviews and statistics, summarize it in the conceptual shorthand of modern journalism (under the lash of deadlines and a hundred crises), and probably conclude sadly that the Philippines is just another young, developing nation crumbling under the burdens and pressures of the times, soon to slide over the brink and be lost to the Free World.

What must be borne in mind is that Mr. Marcos' view is that of a Filipino aware of his nation's aspirations and potential, impatient with its shortfalls, and charged with the leadership function of galvanizing his people into action. His is the personally involved, close-up view, accurate within this frame of reference, and probably effectively expressed for the purpose intended.

The interested foreign observer, particularly the American, wants and needs quite a different perspective-one which views the nation in its several dimensions and relates it to place and time. He seeks trends revealed by the past to illumine prospects for the future. In a brief article we can attempt merely to organize what is readily perceptible as a guide to more searching study and analysis.

II

How has the Philippine nation-building effort fared during its first two decades? Politically, quite well. Subject to authoritarian rule, political and military coups, and armed insurrection, the Philippines has demonstrated remarkable political stability. Recovering from the demoralization of a devastating war, grappling with the economic problems of building a new economy and replenishing an empty treasury, beset by a Communist-led armed insurrection and subsequently harassed by subversion, the Philippines nevertheless has maintained an unbroken record of constitutional representative government. Campaigns have been turbulent and elections at times marred by personal violence, but the principle of transfer of political power by popular franchise has been respected at all levels, and its official results have been challenged only by legal recourse.

The mechanics of the democratic process have shown steady improvement. In fact, the diversified pattern of selection in the last election shows intriguing evidence that Western forms of the democratic process are being ingeniously adapted by the Filipino to accommodate the intricate interplay of his traditional society's family and group-centered power structure. Also, and atypically in Asia, the Filipino military have remained strictly subordinate to the civilian sector.

On the negative side, however, must be noted the heavy cost of this accomplishment. Politics, as a game, has become a national preoccupation to the point of obsession. Political campaigning is literally continuous, all- pervasive and flamboyant. The public follows the show gleefully, ignoring the need for more sober national dialogue regarding social and economic problems.

In this highly personalized society, the political victor feels almost duty- bound to discard the works, good or bad, of his predecessor. The private sector must therefore plan and operate cautiously in a climate of uncertainty. Patronage has overloaded government with costly ineffectuals, diminishing the efficiency of even the most dedicated civil servant. The "pork barrel" principle has fragmented public-works expenditures, wasted scarce funds, left essential economic infrastructure such as roads, bridges, irrigation projects in the blueprint stages.

Which brings us to the economy. How has it performed? What is its potential? What are its prospects?

Here, too, the record of the past two decades is basically promising. The period saw a scramble to satisfy consumer hungers whetted by three years of war and enemy occupation during which there were no imports, inventories were requisitioned or looted by the enemy, and domestic production paralyzed. Foreign reserves sagged dangerously under the pressure, bringing on import and exchange controls, the circumvention of which imparted new skills of corruption to the society. Tax evasion and the urge to restore personal fortunes virtually emptied the treasury.

Independence was a heady new experience, its responsibilities not yet fully realized. Back pay, war-damage compensation, a multitude of other public debates of more personal than public concern conspired with the political game to distract government from its housekeeping chores. Yet, for all the neglect, adverse conditions and influences, the economy has registered a steady-though slow and admittedly inadequate-upward curve. Runaway inflation has been avoided. The peso, even after decontrol, has demonstrated a remarkable stability on the free market.

Nevertheless, it must be emphasized that responsible economic observers regard the level of economic activity achieved merely as testimony to the economy's innate vitality and resiliency and to the private sector's enterprise and initiative. Of all government agencies, the Central Bank alone, relatively sheltered from political pressure by successive administrations and staffed by competent professionals, is credited with avoidance of major economic crisis by its management of the currency.

What is the economy's present potential? The many expert and detailed studies available show a favorable consensus: low in population density (though a birth rate estimated at above 3.5 percent sounds a warning); rich in natural resources such as arable land, forests, fisheries, mineral deposits; rich in manpower resources, including a high rate of literacy, a skilled and semiskilled labor pool superior to that of most developing countries; an existing agricultural and extractive industry capable, with modernization, of sharply increased productivity; a rapidly expanding industrial base; a small but highly competent body of planners and managers at the top level of the private economic sector; and a cultural predisposition toward private enterprise.

On the negative side are listed low per capita agricultural income, affecting 75 percent of the population; a high rate of unemployment and underemployment; inadequate government infrastructure; inadequate domestic and foreign investment incentives; a poor climate of public order. Of the latter three deficiencies, President Marcos shows complete awareness, and the electorate has expressed confidence in his qualities of aggressive leadership to overcome them. The first two will respond rapidly to accelerated economic activity

For the expansion contemplated, ample foreign credits are available from American government and private sources, as well as from international financing bodies, Japan and Western Europe. They await only the submission of sound, detailed project proposals. A major economic asset is the recently emerged and rapidly growing young entrepreneurial class, topped by a stratum of executive and managerial specialists who combine the best of Western education and training with scholarly understanding of the problems posed by their own culture.

The crucial question, of course, is what are the prospects that these impressive assets will be brought into play in an aggressive program of economic growth and development. Though past experience suggests caution as to the capacity of "new broom" pace-setters to endure, there is some basis for optimism. Most of Mr. Marcos' cabinet selections have met with prompt and general public approval. The priority legislative program now before the Congress is considered practical, feasible and effective and has been promised bipartisan support except for minor revisions. Forecasts are that passage might be effected before mid-session. The atmosphere of renewed confidence which every new administration imparts to the Philippine scene appears to be somewhat more action-minded and forward-looking than usual.

Most promising, perhaps, is the new kind and extent of interest that responsible elements of the private economic sector are taking in the government. It is not the familiar pattern of seeking influence and special privilege. It reflects an awareness that the safety and growth of their already considerable investment is moving into a competitive phase of reduced profit margins demanding elimination of at least those cost factors associated with inefficient and venal government. One manifestation has been the willingness of several top executives to assist President Marcos in policy planning on a volunteer basis. Another is the recent organization of a Council for Economic Development by the heads of the nation's largest Filipino enterprises. In composition and approach, it favors neither the public nor the private sector; its declared purpose is to maintain a continuing study of the economy, issuing policy recommendations as appropriate.

III

Can these promising factors in time begin to manifest themselves in terms of individual and national well-being? Does peasant unrest foretell revolution? Is Communism still a real threat?

High priority for rural development is probable in the short run, more as a requirement of economic growth than as an answer to the Communist menace. It is in this agricultural sector that even modest per capita increases in income would generate the growth of domestic markets so desperately needed by existing local industries, which have not yet reached levels of efficiency required for export competition. A greater increase of purchasing power in this sector is essential to the industrial expansion that is contemplated.

As a reliable indicator of revolutionary upheaval, the Philippine peasantry is given a somewhat modest rating. The prosperous peasant is conservative and resists change; and for the poverty stricken, survival is too easy in the benign tropical environment to generate strong political dynamism. But while politically inert, the impoverished peasant-as was demonstrated by past history and the Huk rebellion-may be easily recruited by a persuasive spokesman for any cause. Having little significant stake in the society-and that easily replaced-he is readily enlisted in any adventure promising personal satisfactions. Thus, if not an immediate source of trouble, the peasant cannot be discounted as the potential instrument of whatever dynamic element may rise to challenge the existing "establishment." And it cannot be ignored that remnants of the defeated Communist Huks still roam the mountains of Luzon, retaining a capability to recruit and direct an armed peasant force once again.

There is reason to believe, however, that the Communist hard core still operating underground in the Philippines respects the sobering lessons learned in the fifties when it suffered heavy reverses in orthodox "armed struggle." The Communists' continued activity in the more remote areas of Luzon is believed to be a feint to divert attention from the more intensive and admittedly more successful prosecution of "parliamentary struggle."

This phase must be viewed as the more dangerous because it is less readily detected. For one thing, there is a broad tolerance for the "radical" deriving from the Filipino's relatively recent revolutionary tradition. Except for the professionals of the security agencies, few Filipinos make the distinction between a revolutionary reformer and the conspirator of international Communism. This simplifies the task of the subversive apparat. Such sectors of the society as education, the press and even the business community are readily enlisted, under whatever banner best suits their personality, in the overall program of fostering discord and disunity, both within the community and between the nation and its external allies. This effort, which has registered significant gains, could bring about the classic "revolutionary situation" within the country, and isolate the nation from its Western allies, without a single Communist slogan being uttered. In this kind of subversive program, economic stagnation plays a major role by helping to provide intelligent and effective, though possibly unwitting, manpower. The area of discontent which should give the Philippines greatest cause for concern is the community of young citizens educated for far better jobs than the country is now providing.

There is need in the Philippines today for a vigorous and articulate nationalism, one which will subject the total society to expert scrutiny, determine its deficiencies and chart the course by which the people of this open society can most speedily and painlessly effect the transition from semi-feudalism to progressive nationhood. The need is for something more than a dilettantish commitment of the Filipino intellectual to his nation's growth and development. It calls for a wide-ranging public discussion of traditional values and behavior patterns which retard or inhibit the development of institutions-social, political and economic-essential to a modern, industralized democracy. Out of such public discussion should come the new values, the clearly defined directions and acceptable goals of the Filipino people.

A primary objective of such nationalism would be to strengthen the very concept of nationhood. No one questions the Filipino's patriotism, his devotion and loyalty to kind and place of origin, but his idea of "kind" is still too centered on family and kinship, his idea of "place" too narrowly confined to the province or region of his birth. He has yet to yield full commitment to the concept of the nation and the broadened responsibilities and obligations it entails. Stirrings in the academic world, and an increased flow of writing on these topics appearing in the more popular media, suggest that such a movement is in the making.

The banners of nationalism have been raised, but while their emotional content is high, their appeal is either too vague or too detached from the realities of the environment to develop any broad base of support. One school seeks to relive the glories and victories of the revolution, but fails to establish practical and specific relevance to current needs. Another couches its message in the familiar clichés of Marxism, ranging from Mao, through Khrushchev, to the respectability of Norman Thomas. It holds some attraction among students, at least until they begin to understand the incompatibility between subordination of the individual to the state and deeply rooted Filipino individualism. Both schools, of course, offer America as the villain of the piece, but both overdraw the caricature so crudely as to destroy credibility. The Marxist group, however, is reported to have developed the organizational capability and financing for instant demonstrations at a reasonable price per head.

A prominent Filipino educator deplores the more fashionable and current nationalist idiom because it distracts the youth by giving them a scapegoat, a comforting evasion of their own responsibilities of hard work and dedication.

The more intelligent young Filipinos are coming to realize that some of the voices that concentrate so exclusively on attacking the United States or attacking the West are only diverting the attention of their compatriots from the hard job that has to be done and can be done only by the Filipinos themselves. It is not parity or bases or policy in Vietnam which are the fundamental problems facing young Filipinos; it is roads and railways, irrigation and food production, honest administration and tax collection, the raising of national income which will consume a growing national industrial production.

The Filipino for the most part has been too preoccupied with his domestic problems to give more than limited attention to his status and role on the regional and world stage. What is more, he labors under something of a sense of diffidence and inhibition deriving from the ill-advised effort to "shame" him into an aggressively nationalistic mood. Betraying a singular lack of familiarity with modern mechanics of motivation, this school of crusader has sought to wean the Filipino from his friendship with the United States by portraying him as the object of contempt and the spiritual inferior of his Asian and African counterparts. He was made to believe that somehow there was a stigma attached to having achieved sovereignty by wit and eloquence rather than blood and steel

Such self-deprecation, of course, is wholly unwarranted. The Filipino technician and professional has been sought and gratefully employed not only in Laos and Viet Nam but as far afield as Africa. The Philippine educational system for all its flaws and shortcomings has been sufficiently attractive to fellow Asians to bring thousands of students from neighboring countries for enrollment in Philippine universities. And most recently the relative stability and sophistication of metropolitan Manila made it the choice of the new Asian Development Bank in competition with Japan.

Fundamentally, the Philippines shows every evidence of continuing to seek closer Asian ties within the community of common ideology and open society. Even the effort to ignore the leftist drift of Indonesia and court its friendship was motivated by a desire to open broader channels to the Asian world. In some circles, the search for a national identity has led toward such "enveloping" concepts as "Malayan" or "Afro-Asian." Others, especially those who have had first-hand experience with such groups as currently constituted, argue that this would merely submerge Filipino identity. They opt for a more independent course of national development which they hope will make the "Filipino" unique and respected. In any event, the present administration appears to be firmly oriented toward a closer association of non-Communist states, whether or not their policies embrace collective security.

IV

A phenomenon causing concern on both sides of the Pacific is the increased volume and intensity of hostility toward the United States carried by the local press and other information media. To be understood, these manifestations of hostility must be broken down into their diversity of sources and motivations. There is, of course, the honest critic holding either a real or fancied grievance, or the conviction that the interests of the two nations are in conflict. Another source is the otherwise well- disposed individual or group believing that tail-twisting or shin-kicking attract attention and create a climate for negotiation favorable to the kicker. A third source is the less energetic entrepreneur who reasons that a hostile environment here may put profitable, established American enterprises on the market at distress prices. Yet another source is the likewise impersonal member of the landed gentry who recognizes the ultimate need to transfer his base of economic and political power from the feudal agrarian to the modern industrial sector and would like to see promising areas of economic activity kept open for his future exploitation. There are others. But, finally, and most significant, there is the Communist "control," the source carrying out the Communists' publicly declared mission of isolating developing countries from the West. It is this last source, least representative of Filipino public opinion, which covertly stimulates, manipulates and orchestrates the other voices into a loud and self-feeding chorus.

Stemming from the foregoing are the questions: What has happened to the Philippine reservoir of good will and friendship toward Americans? What has happened to the special relationship between our two countries? Who is at fault? Unfortunately, there is no single culprit, no instant remedy. Though the terminology itself has taken on the somewhat irritant quality of the cliché, the "friendship" and "special relationship" were and are realities. They are simply less pertinent to the problems of today.

The early years of the Philippine-American relationship posed few complex problems. Once the scars of war had healed and America's good intentions had gained credence, the American official took stock of Filipino needs and aspirations and tried to meet them. Filipinos wanted education and it was given them. They wanted self-rule and were given training and broad areas of autonomy as fast as they were ready to staff them. They wanted independence and were able to negotiate it. Despite heated exchanges at top policy levels, the mass of Filipinos were able to relate the realization of their personal hopes and aspirations to a benign American presence. The private American fared equally well while he opened new job opportunities, paid the best wages and provided the best working conditions.

Through this period, occasional policy blunders were more than offset by impressive tangible contributions to Filipino well-being and development. The investment paid off in gratitude and friendship, the reservoir upon which we draw to this day. The problem is that we continue to draw upon it with too little conscious effort to keep it replenished.

The Filipino who has reached maturity since World War II has personally experienced little if any of the benign American presence. He may be the young Filipino who watched forlornly, once the euphoria of liberation and memories of hunger had dimmed, as an American G.L-irresistible with jeep, PX goods and accumulated combat pay-drove off with his girl friend. He grew up amid the din of debate on the Trade Act and "parity," veterans' benefits and guerrilla recognition, war damage payments and military bases disputes- all emotionally supercharged and too complex for any but the experts to grasp. His awareness of the relationship is mainly one of contest in which, he is told, the Filipino has been bested.

America has spent millions in the Philippines since the war. Some benefits have been immediate, some long-range. But all have been necessarily institutional and bureaucratic, without the warmth of the personal relationship so essential to the Filipino temperament.

The solution? The past cannot be recaptured. To the Filipino who is now mature in his independence, the official American cannot play foster- father, source of personal benefit and guidance. The commercial American, though still benign employer, is also potential competitor. Perhaps the new American presence and personal bond will be found in the realm of ideas, an intellectual exchange of equals, rather than that of mentor-student.

In foreseeing what lies ahead for the Philippine-American relationship, the great imponderable, of course, is the state of the world in which it develops. Given roughly the present external and internal climate, there appears to be no reason why it should not operate as effectively at the new and more mature level as it did in its earlier stages, provided both sides accept the need for deeper understanding and improved communication. In all major respects the policy objectives of both nations are parallel and complementary. Both can benefit by a strong, stable, politically independent Philippines that can stand the most suspicious foreign scrutiny. Whether as an example of a small developing nation achieving economic strength and growth in association and cooperation with America, or as a potential customer, a prosperous Philippines is a common goal. And just as the United States sees a collective security system in Asia as diminishing dangers of war or contributing to victory, so the Philippines, standing in the shadow of overwhelmingly powerful neighbors, benefits from the American protection without having to shoulder the enormous burden of maintaining a defense force equal even to that of smaller neighbors. In brief, mutuality of national interest is a practical reality rather than a sentimental cliché. True, there are short-range conflicts of interest between nationals of both countries, but these appear to be well within the scope of Philippine courts, the negotiating table or the solvent of enlightened national self- interest on both sides of the Pacific.

Perhaps most important, to begin with, is that the American shall forget the superficial similarities between himself and his Filipino associate-the command of English and adoption of other American manners and mores-and become familiar with the important operative differences between the cultures. Each has its own set of values and behavior patterns. Whether one is superior to the other is irrelevant. What is important is that the differences not be permitted to impair accurate communication. The Filipino, for his part, will find it even more useful perhaps to make a similar effort. As his range and role on the world scene expands, for example, he will find it necessary to develop a tolerance for the cold, crisp, efficient approach which his traditional social norms find obnoxious, but which are the vernacular of the modern technological society.

The Filipinos aspire to develop a politically and economically independent nation, an open democratic society of high living standards and ample opportunity for its people to develop their indigenous culture to its maximum potential. The American stake in the achievement of this goal is obvious. The possibility of a small Asian nation accomplishing such full flowering of its personality in coöperation with the American friend and ally holds long-range policy significance for the United States which far outweighs any possible short-range economic or political considerations. Once this fact of life is established, most of the suspicion and distrust in the relationship should be dissipated.

Nevertheless, it is predictable that American officials in Manila will not find their task simple or easy. They will be operating in an atmosphere beset by a variety of thorny negotiations common to the conduct of two sovereign states in today's complex world, and complicated by the blurred dimensions of the cold war, enemy propaganda and predictable conflicts of interest between individual Americans and individual Filipinos. Each government frequently will be faced with a difficult choice between the national interest and the interest of its nationals. The best of good will and good minds will be required of both.

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