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Making Money out of Misery: Typhoon Haiyan/Yolanda and Disaster Capitalism in The Philippines

Updated on January 30, 2016
High waves triggered by powerful winds of Supertyphoon “Yolanda” pound the sea wall of Legazpi City on Friday. AFP
High waves triggered by powerful winds of Supertyphoon “Yolanda” pound the sea wall of Legazpi City on Friday. AFP | Source

The 8th of November 2014 left a scar in the center of the Philippine archipelago. With sustained winds of 250 kilometers per hour (160 mph), super typhoon Yolanda (international name Haiyan) almost wiped parts of Eastern Visayas off the map.

Hours before Yolanda hit landfall, an article, published on Inquirer, quoted Aquino in a televised speech saying that the “PH is ready to face Yolanda.” The news item mentioned various preparations – such as placing C130 aircrafts capable to respond to those in need, 32 airplanes, and various relief goods strategically pre-positioned in areas expected to be hit, among others – supposedly done by the government to ensure the safety of the would-be victims of typhoon Yolanda. However, despite these “preparations”, six whole days after November 8, the government is still unseen in disaster-affected areas. Reports also stated that several foreign and private entities came first before the national government did.

This clear incompetence by the Aquino administration in the Yolanda tragedy has contributed to the situation’s vulnerability to be used by private and foreign associations as an opportunity to extend their market forces in affected areas. Klein (2007) defined disaster capitalism as “orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities” (p.26). Disaster capitalism is the doctrine where private entities grab the opportunity to make a market and profit in areas hit by tragedies.

Disaster capitalism was established by Noemi Klein in her book, The Shock Doctrine: The Rise of Disaster Capitalism. The first observed case was that of New Orleans, one of the places gravely affected by Hurricane Katrina. The state was left almost completely ruined, with little infrastructure and people left, much like the case of Tacloban in the Philippines. Economists at the time, most notably Milton Friedman, saw the devastated state as an opportunity to promote neoliberal policies, in this case that on education. To quote Friedman, “This is a tragedy. It is also an opportunity to radically reform the educational system” (Klein, 2007, p.22). Before Katrina, the state ran 123 public schools, two years later it ran just 4. There was also an increase in the number of charter schools (publicly funded institutions run by private entities according to their own rules): from 7 to 31. Friedman’s vision of a radical change of the state’s educational system was quickly realized. The private sector now leads in providing education to citizens of New Orleans.

Another example of disaster capitalism at work is the case of the 2010 earthquake in Haiti. The earthquake destroyed houses and infrastructures leaving thousands of Haitians homeless. A series of confidential diplomatic cables revealed the negotiations between the US government, US corporations and the Haitian domestic elite to make a profit on the condition of the tragedy-forsaken country. It was revealed that every relief or rehabilitation effort had the US government working behind charity bodies such as USAID and ensuring that contracts for rebuilding damaged infrastructures were given to US-backed private entities. The result would be increased corporate profits and the strengthening of the US’ neocolonial control over Haiti (Green Left Weekly, 2013).

The Philippines was already subject to US intervention and partnerships with the private sector even before Yolanda struck, making it more vulnerable to being used as an opportunity for disaster capitalism to flourish. The country was colonized by Spain for 333 years, by Japan for 3years and by the US for 48 years. Even after gaining formal independence in 1946, the Philippines was still under US control through proxy means (such as puppet presidents). A clear manifestation of this indirect control is the continued presence of unequal laws such as the Visiting Forces Agreement where US troops regularly conduct military exercises in the country with the justification of providing training to the Philippine troops. Aside from this semi-colonial control, the Philippines is also a poor nation in terms of its debt. The country has a debt to various international and local institutions amounting to about 90% of its own gross domestic product. Today, more than 60% of 107 million Filipinos live in poverty (Green Left Weekly, 2013).

When Yolanda hit Eastern Visayas, it left the country in a state of shock. About 6,201 people were killed, 101,527 persons still on evacuation centers two months after the tragedy and a total of 16 million people individuals affected. The typhoon was reported to have cost approximately P36.6 billion in damages (Salarda & Sinapit, 2014). Considering the damage brought upon by typhoon Yolanda and the current economic state of the Philippines, it can be implied that the country has no machinery to fully recover from the damages by itself. The national government of course knew this. In effect, former senator Panfilo Lacson was appointed as the official rehabilitation officer.

However, the action of the newly-appointed cabinet member is a cause for alarm. Panfilo Lacson, dubbed the rehabilitation czar, receives attention after his first public announcement as a cabinet official that the government will tap the private sector in financing rehabilitation work. This is despite the 41 billion-peso budget provided by the national government. Lacson insists on targeting the private sector and foreign donors in order to prevent bureaucratic red tape (Militante, 2014). He stated that his first concern as rehab czar is the mission to attract foreign investors to invest in damaged land. This is not far from what Klein wrote in her book, the strategy of capitalists of waiting for a disaster to strike, then selling off pieces of land to private sectors while the people are still busy grieving over their loss property and loved ones (Klein, 2007).

This is enforced by the “no-build zone” policy in heavily-affected areas, such as that of Tacloban. The rationale of this policy is to prohibit the residents of affected towns to build houses, or even use certain areas (highly vulnerable areas, such as near oceans or seas) for livelihood in order to prevent another catastrophe (Parrocha, 2014). This no-build zone policy, together with Lacson’s mandate to look for private investors to help in Yolanda rehabilitation, dictates the future of Tacloban and other affected areas – a series of land grabs leading to the construction of resorts, hotels, and other market opportunities for the private sector. All these are going to happen to the Philippines under the shock doctrine or disaster capitalism.


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    • billybuc profile image

      Bill Holland 2 years ago from Olympia, WA

      True here in the States. Whenever disaster strikes you can count on prices rising and scams being designed to steal money from those who cannot afford to lose any. Keep raising awareness about these is what we writers can do.

    • Jonas Rodrigo profile image

      Jonas Rodrigo 2 years ago

      I'm very humbled, Charito. Thanks for reading my hubs.

    • Charito1962 profile image

      Charito Maranan-Montecillo 2 years ago from Manila, Philippines

      What an enlightening piece, kabayan! It's sad that disaster capitalism exists. I just hope that nations will be more sincere and sympathetic - without expecting any returns! - in granting aid to areas badly affected by calamities.

      Good report!