EXTERNAL CAUSATION PERSPECTIVE TO THE CLASSIC MILK TRAP OF PHILIPPINES& BRIEF VIEW OF EXTERNAL CAUSATION THROUGH CYCLE OF EXHAUSTION

Instructor: Dr R. R. Barthawal

ECO332

Submitted by: Nitish Sinha (Y7267) Third Year Undergraduate M.Sc. Economics IIT Kanpur

Contents
Abstract ............................................................................................................................................... 3 Philippines (country profile) ................................................................................................................. 3 Breastfeeding ...................................................................................................................................... 3 Timeline............................................................................................................................................... 5 Policies ................................................................................................................................................ 8 Cycle of Exhaustion: An External Causation Perspective ....................................................................... 9 Stage 1: ........................................................................................................................................ 9 Stage 2: ........................................................................................................................................ 9 Stage 3: ...................................................................................................................................... 10 Stage 4: ...................................................................................................................................... 10 Statistics for Mongolia 1989-1998. ..................................................................................................... 11 Mongolia: Output of Selected Industrial Commodities, 1989-1998. ................................................... 11 Citations: ........................................................................................................................................... 12 Milk Trap of Phillipines ...................................................................................................................... 12 References ......................................................................................................................................... 13

Abstract
The neoliberal march in the last century especially the 2nd half has greatly affected the individual across the world by commoditization of every tangible or intangible product or services one can consume. Promotion of formula milk over breastfed in Philippines is one of the representative examples showing extremities. The paper examines the issue in perspective of external causation.

Philippines (country profile)

Philippines is an archipelago in Southeastern Asia between the Philippine Sea and the South China Sea, east of Vietnam in East Asia. The Philippine Islands became a Spanish colony during the 16th century; they were ceded to the US in 1898 following the Spanish-American War. In 1935 the Philippines became a self-governing commonwealth. Manuel QUEZON was elected president and was tasked with preparing the country for independence after a 10-year transition. In 1942 the islands fell under Japanese occupation during World War II, and US forces and Filipinos fought together during 1944-45 to regain control. On 4 July 1946 the Republic of the Philippines attained its independence. The 20-year rule of Ferdinand MARCOS ended in 1986, when a "people power" movement in Manila ("EDSA 1") forced him into exile and installed Corazon AQUINO as president. Her presidency was hampered by several coup attempts, which prevented a return to full political stability and economic development. Fidel RAMOS was elected president in 1992 and his administration was marked by greater stability and progress on economic reforms. In 1992, the US closed its last military bases on the islands. Joseph ESTRADA was elected president in 1998, but was succeeded by his vice-president, Gloria MACAPAGAL-ARROYO, in January 2001 after ESTRADA's stormy impeachment trial on corruption charges broke down and another "people power" movement ("EDSA 2") demanded his resignation. MACAPAGAL-ARROYO was elected to a sixyear term as president in May 2004. The Philippine Government faces threats from three terrorist groups on the US Government's Foreign Terrorist Organization list, but in 2006 and 2007 scored some major successes in capturing or killing key wanted terrorists. Decades of Muslim insurgency in the southern Philippines have led to a peace accord with one group and on-again/off-again peace talks with another. [1]

Breastfeeding
Breastfeeding is the only most vital source of nutrition for an infant. It is a natural design for all mammals. The history of human progress is the history of attempts of taming nature and we feel proud after every such attempt towards determinism. Most of our attempts result into unsustainable practices which directly or indirectly affect us as well as other species. Substituting breastfed with formula milk is one of them. It was introduced by Wyeth Corporation in Philippines in 1987[2] though first invented in 1867 by Justus Von Liebig (Germany)[3] Philippines is a developing country like India. It has been deculturalized (and enculturalized) subsequently by Spain and USA at different times. It has been following neoliberal policies since 1962. [4]

Breastfeeding was popular among Filipino mothers till beginning of 1980s. Medical anthropologist and health activist Michael Tan has worked out following trends in breastfeeding [5]: Year 1963 1982 Average period of Breastfeeding (months) 14.5 12.1

This period includes the weaning period where other foods are introduced to the baby, and not exclusive breastfeeding. Exclusive breastfeeding means breast milk is the only food and drink given to the infant; not even water is given. The international standard for how long this should last is six months [6] In Philippines, exclusive breastfeeding was around only 0.8 months in 2003. Following is the extract of a UNICEF + WHO report based on National Demographic Health Survey of Philippines.

The other findings of the report were:

13 percent of infants were never breastfed, making the Philippines the lowest in ever breastfed rates among 56 countries that have conducted a DHS in the past ten years; 39 percent of infants are using infant formula in their first 12 months of life; Half stopped exclusively breastfeeding by the third week of life; Infants delivered in a health facility or by a health professional are less likely to breastfeed; In 1998, quarter of children was exclusively breastfed for first 4-5 months so the decrease from that to 16.1% was very steep. Formula feeding has resulted into malnutrition and further deaths of children under the age of 5.

As per WHO estimates (2004), 20% of the reported 82,000 under 5 death could have been prevented if there had been exclusive breastfeeding in the first hour, exclusive breastfeeding in first 6 months and continued breastfeeding and appropriate complementary feeding in at least 2 years. In the National Nutrition Survey conducted by the Food and Nutrition Research Institute (FNRI) in 2003, it was found that 27.6 percent of Filipino children below the age of five were underweight and 30.4 percent were stunted. UNICEF has enumerated the costs of inappropriate infant feeding practices:

1.2 million more illness episodes; 10 million more days ill; 450,000 more health facility visits; 36,000 more infants hospitalized.

Economically, this translates to:

P320 million in funeral expenses; P1 billion in lost wages caring for sick infants; P100 million on out of pocket expenditure for health facility visits and basic drugs; P50 million out of pocket for hospitalizing their infants; P230 million government expenditure on hospitalization; P21.3 billion to purchase formula.

Timeline
The Executive Order 51 popular as Milk Code has undergone several steps during enactment and reversal (RIRR: Revised Implementing Rules and Regulations).

The story according to dates is as follows: 1981 Prof. Esteban Bautista of the UP Law Center drafted the Philippine National Code to regulate the marketing of breast milk substitutes, breast milk supplements and related products.

19811985

NGOs led by the National Coalition for the Promotion of Breastfeeding (NCPB), later named BUNSO, lobbied for the passage of the Philippine Code to the Batasan Pambansa lawmakers.

1983

UNICEF supported the formation of the National Movement for the Promotion of Breastfeeding (NMPB), a conglomerate of government, NGOs and medical societies.

1986

BUNSO staged a street march of breastfeeding mothers and babies together with community leaders and doctors, lawyers and church representatives, in front of the offices of four milk companies: Nestle, Mead Johnson, Wyeth-Suaco, and Abbott-Ross. Breastfeeding mothers and babies joined the final drafting of the Philippine National Code popularly known as the Milk Code, along with the Department of Health and Malacaang legal team. In October, President Corazon Aquino, joined by Executive Secretary Joker Arroyo, signed Executive Order 51 or the Milk Code. The ceremony was led by Health Secretary Alran Bengzon. It was graced by breastfeeding mothers and babies representing BUNSO and NMPB.

1987

EO 51 took effect; Wyeth introduced follow-on formulas for six-month-old babies. When the Milk Code was still being drafted, follow-on formula was not yet invented.

1990s

Improvements on the Milk Codes IRR were made with the addition of a ban on followon formula that undermined breastfeeding as guided by World Health Assembly (WHA) Resolutions that stated: follow-on or follow-up formulas are unnecessary because after six months, the baby starts to take complementary foods together with sustained breastfeeding.

1992

The Senate passed Republic Act 7600 or the Rooming-In/Breastfeeding Act. Breastfeeding mothers and their babies filed a petition and attended the public hearings. RA 7600 cited that breastfeeding could save the country valuable foreign exchange that would otherwise be used for milk importation.

1993

The Mother and Baby Friendly Hospital Initiative was launched.

1994

Task Force Milk Code was formed.

1995

Task Force Milk Code actively proposed stringent implementation of the Milk Code.

2000

Task Force Milk Codes resolutions were overturned by an Administrative Order issued by then secretary of Health Alberto Romualdez. The Milk Codes IRR were revised, allowing milk manufacturers to be engaged in all forms of breastfeeding activities such as education, production and development of breastfeeding materials.

2004

The Secretary of Health, Manuel Dayrit, signed the National Plan of Action 20052010 on Infant and Young Child Feeding. Task Force Milk Code began discussion and debate on the first draft of the revised IRR. Nestle represented the milk companies.

2005

The 11th and 12th drafts of the revised IRR were discussed in public hearings led by BFADDOH. Simultaneously, the Senate, House of Representatives and Malacaang had public hearing inquiries on Milk Code.

2006

The Pharmaceutical and Healthcare Association of the Philippines (PHAP) filed a suit against the Secretary of Health and all the undersecretaries and assistant secretaries who signed the revised IRR. PHAP petitioned for a temporary restraining order on its implementation. The Supreme Court denied PHAPs petition. On August 11, Thomas Donahue, President and Chief Executive Officer of the United States Chamber of Commerce, wrote to the President Gloria MAcapagal-Arroyo. The letter said that the RIRR would have unintended negative consequences for investors confidence in the predictability of business law in the Philippines. On August 15, the Supreme Court overturned its previous decision and imposed a TRO on the RIRR. Representing PHAP was Atty. Felicitas Aquino-Arroyo, the wife of Senator Joker Arroyo, who was the executive secretary who signed the Milk Code in 1986. In November, the office of the Solicitor General petitioned the Supreme Court to lift the TRO.

2007

On June 19, the Department of Health and Pharmaceutical and Healthcare Association of the Philippines (PHAP) presented oral arguments before the Supreme Court. On October 7, Supreme Court lifted ban on RIRR with some exceptions including complete ban on advertisement of infant milk.

Source: United Nations Population Fund

Policies
EO 51 (Executive Order 51, popular as Milk Code) has a number of policy loopholes. Also Wyeth (a formula milk giant working in all parts of the world except Africa and South Asia) has introduced infant formula milk in 1987, exactly one year after acceptation of Milk Code in 1986. If we try to explain this in perspective of External Causation then formula milk firms have pressed govt. of Philippines to make such policies; once such neoliberal policies formed, they entered the market. But the then government was a populist Govt.; so the picture is unclear. It is worth mentioning that formula milk products are together the largest revenue generating commodity in Philippines (P21.3 billion!). And when Health Ministry introduced RIRR, Thomas J Donahue, President and CEO of US Chamber of Commerce warned President Macapagal Arroyo of Philippines for bad consequences. His words were: It has been brought to my attention that recent regulatory decision brought by an agency of your government would have unintended negative consequences for investors confidence in the predictability of the business law in Philippines. In particular, we are concerned about the effects this decision will have on the pharmaceutical industry.[8] One can easily understand that US Chamber of commerce was not interested in health of children, rather interested in business of its firms and so threatening a democratically elected government.

Below is the comparison of the two policies (EO 51 and RIRR). EO 51 Applied to 0-12 months only Formula may be a proper and possible substitute Health professionals can be given donations, give aways, sample products, research scholarships; research foundations can be created to support formula milk; legal and business organizations can be made for this cause Very less regulations on adds, labeling No sanctions allowed, only legislative by a law can make sanctions RIRR Applied to all young children Formula is never a substitute Health professionals cant be given donations, give aways, sample products, scholarships; no legal organization can be entertained supporting formula milk Absolute ban on adds, promotions, sponsorships, additional labeling Allows sanctions and repelling of laws in favor of health

One can find that the policies in EO 51 have created a lot of scope for neoliberal practices. The then president was not a liberal one (Corazon Aquino) even then such a big policy mishap is really complex to understand. There may be a case that formula milk firms have devised methods which were still within the law and benefitted them. So, there are different perspectives of the problem but entrance of President and CEO of US Chamber of Commerce creates an External Causation picture.

Cycle of Exhaustion: An External Causation Perspective

It is a cycle/catch in which most of the 3rd world countries are trapped, which has led to severe problems ranging from political instabilities in most of the African countries to poor HDI in south Asian countries. First I want to give a brief introduction of the whole idea and then will try to relate it with many of the existing global problems:

Stage 1:
Starting point: (a 3rd world economy) Independent and independent in policy formation and resource control Poor material strength, moderate trade and all the attributes of a nation after 2nd world war

Stage 2:
Now for most of the cases, imperialist powers who once have been colonizers, want to have resource control in the target 3rd world country. For this, they follow three paths: Direct/indirect invasion: Iraq, Afghanistan, Creation of dummy governments: Somalia, Arabian countries, Pakistan, many countries in Eastern Europe, most of the African countries and until very recent past most of the Latin American countries.

Crippling down the economy to follow Bretton Woods system (World Bank, IMF: representatives of modern capitalism which has given birth to unsustainable development (consumption-led development), terrorism, global warming, chronic Africa and a lot of seen and unseen global problems) like we had in India in 1991 economic reforms.

Here resource control doesnt mean direct control but control in policy formation and decision-making. In 2nd stage the overall target is to achieve this control by any means.

Stage 3:
Exclusive investment patterns: By exclusive investment patterns we mean Capital intensive investments which leads to more investment but less employment generation or wealth creation in actual terms. For example, in India, we have IT sector. It can absorb only computer literates and English speaking youths which comprise less than 10% of the youth population. Neglect of traditional or age-old industries like Kanpur had been a major industrial centre in north India but could not receive required investments so it is gradually dooming. Agriculture is the best example. Contracted growth circle: At this stage, growth is enjoyed by a very small section of the economy so that most of the people are non-participants in the process. Also, there are a very large number of people forming the periphery and a larger no. of people is outside the periphery of the growth circle. All 3rd world countries are victim of this phenomenon that income gap between different sections of society is increasing at an uncontrollable rate. Neglect of pro-people policies which leads to deprivation of masses from basic necessities of survival. Neglect of health care facilities, abolition of different subsidies, absence of check in spread of genetically modified seeds, promotion of cash-crops at the cost of cereal crops (one cash-crop economies of Africa are the best examples). There are a lot many dimensions in which it can be traced.

Stage 4:
Bust 4th stage can be said as bust as in this stage: Social, health and economic indicators go down leading to increase in poverty, unemployment, decrease in purchasing power, worsening health conditions, social instability and a lot more. Global warming (which is an eventual outcome of this tendency to exploit world at cost of everything) is a good way to hide the cunning policies!

An example of Mongolia (after policy changes in 1989):

Statistics for Mongolia 1989-1998. Mongolia: Output of Selected Industrial Commodities, 1989-1998.
1989 Sawn wood, thous.m Leather jacket, thous.pieces Skin coats, thous.pieces Canned meat, tons Salt, tons Publications, mln. pages Porcelain, thous. pieces Carpet, thous.m3 Felt boots, thous. pairs Suits, thous. Pairs Sheep skin, thous m2 Leather boots, thous. pairs 553.1 212.8 180.2 1682.3 4818.8 376.6 3747.3 2128.1 592.3 182.6 1151.1 4140.0 1990 509.0 264.5 138.1 1108.5 3811.9 312.8 3138.3 1971.2 588.5 201.8 1510.5 4222.5 1995 61.2 18.9 16.8 431.7 497.3 50.9 688.5 595.7 79.0 1.2 193.5 245.5 1996 70.2 6.5 14.9 339.2 429.3 36.5 150.6 667.0 57.6 1.0 22.4 86.6 1997 36.5 1.0 2.6 650.8 240.4 38.7 49.3 643.6 48.0 1.2 5.2 41.7 1998 35.5 0.6 0.5 322.0 201.6 79.1 24.2 587.7 47.9 1.6 33.1

Source: Mongolian Statistical Yearbook, 1998. It shows how different economic indicators have worsened due to certain policy changes and exclusive investments. Similar data for many sectors can be generated for most of the 3rd world countries.

Returning back of investments: Being dependent economies, returning back of investments is obvious. Though not exact but, recent returning of FIIs from Indian market after recession fears in west shows how fast the investments will return (Sensex in India came down from 20000 to 8000). Political instability, rise in extremism like insurgency, terrorism etc. Most of south Asia and Africa is facing it. Latin America has overcome it.

Thus the economy again becomes an exhausted economy. We are back to stage one.

Citations:
Latin America has started its 1st cycle in 1920s and ended in 1980s and some parts of 1990s. They have restarted with 2nd cycle and are now at 3rd stage. This time they are more conscious to prevent duplication. China, India and many of the similar countries are at 3rd stage and are facing huge problems in getting out of it. With the help of extensive knowledge substitution, creation and dissemination systems, China, some SE Asian countries, some countries of Eastern Europe have greatly managed to come out of the cycle. India needs long way to go!! African countries are in permanent exhaustion. Many of them are at 2nd stage and some like South Africa has come to 3rd stage. Recent denial of cheap AIDS medicine to its people shows the condition. Milk-trap of Philippines is also another example. Similarly there are many-many examples to support this pattern.

Milk Trap of Philippines

The Milk-Trap of Philippines can be described as a consequence of Policy Changes. Its designer Esteban Bautista was a Law faculty at University of Philippines. Not much information is available regarding his political affiliations, so nothing can be predicted about him. But as we know that the country is following neoliberalism since 1962 and there is a strong US presence there, so external causation cant be denied. Philippines is still struggling at her social level to eliminate the presence of formula milk. The recent Chinese mishap of Shanlu formula (2008) has attracted international attraction towards the problem and hence, some strict measures are being taken across the globe. But still, freedom to advertise products and weaker check measures in developing countries come out to be safe heavens. Also, creating incentives for health workers, midwives and doctors for promoting formula milk is a structural inhibitor of breastfeeding, so these practices must be strictly regulated. Promotion and propagation of capital and energy intensive practices by US is there at the core of her political economy as she has been the greatest source of both since World War I. So, if neoliberalism has to be eliminated then we should minimize all capital and energy intensive practices. In this context, Philippines should strive for a larger number of breastfeeding.

References
CIA Factbook 2009 Philippines Center for Investigate Journalism, June 20, 2007 by Lala Ordenes-Cascolan Wikipedia Global Economic Crisis, Neoliberal Solutions and the Philippines, Monthly Review, Dec 1999, by Kim Scipes Philippines Center for Investigate Journalism, 5 September 2006, a special report by VINIA M. DATINGUINOO International Baby Food Action Network World Health Statistics 2006 US Chamber of Commerce, 11 Aug, 2006 UNICEF WHO United Nations Population Fund National Nutrition Survey conducted by the Food and Nutrition Research Institute (FNRI) 2003 Ministry of Health, Philippines Mongolian Statistical Yearbook, 1998 (taken from an article by E S Reinert, Norsk Investorforum and SUM Centre for Development and The Environment, University of Oslo named Globalisation in the Periphery as a Morgenthau Plan; The Underdevelopment of Mongolia in the 1990s) BBC News The Hindu Global Political Economy: Evolution and Dynamics by Robert O Brien and Marc Williams