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Filipinos Renew Mideast Job Ties

FOR months, even before the Gulf war erupted, Philippine laborer Haji Younis had been waiting for work in the Middle East. Now, he says, the war could finally land him a job. "Because of the destruction and the need for workers, the opportunities are good," he says.

After one of the toughest years ever, a hint of optimism is creeping into the battered Philippine economy. Heavily dependent on imported oil, the Philippines was among the worst hit economically when Iraq invaded Kuwait.

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Fuel prices jumped sharply. Crucial remittances from about 40,000 Filipino workers in Iraq and Kuwait dried up. A major earthquake, the worst typhoon in years, and a six-month drought ground down the economy. The government of President Corazon Aquino, who has survived seven coup attempts, again seemed to be tottering.

However, the Philippine economy is coming up for air, analysts say. An end to the Gulf fighting brought down oil prices and averted fears of political unrest, guerrilla attacks, or a fresh coup attempt against Mrs. Aquino.

Cornered by a cash crunch, the president struck a deal with international lenders, trading a commitment to economic reforms for new funds. That eased the budget deficit and inflation.

Government officials also are banking on thousands of expected new Middle East jobs to reward Aquino's strong support for the United States-led alliance against Iraq. Those jobs could boost badly needed foreign exchange and help tide over a difficult economic transition, Philippine observers say.

"The doom and gloom predictions didn't happen," says a Western diplomat in Manila. "Now that the war is over, they're banking that the major players will remember them and deliver a postwar bonanza."

For years, overseas employment has been a foreign-exchange mainstay and a safety valve for high unemployment and underemployment in a work force of 23 million people.

In 1989, more than 500,000 contract workers in the Middle East remitted more than $2 billion, over 10 percent of Philippine export earnings.

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After the invasion of Kuwait, many Filipinos stayed on, particularly in Saudi Arabia, and even replaced Iraqi, Jordanian, Yemeni, and Palestinian workers expelled by the kingdom. Still, foreign-exchange reserves plummeted in the Philippines.

Government officials estimate that Filipinos could gain up to 100,000 additional jobs, including those lost before the war, in the postwar period. Saudi Arabia and Kuwait have said Filipino engineers, technicians, and some construction workers will get high priority for reconstruction work.

Abdullah Blo, a young machine operator in Saudi Arabia, left his job in Riyadh last November because of the war threat, but has been recalled.

"I have seven sisters and two brothers and need to support my family," he says. "So when my boss said, 'Come back, it's a normal situation,' I decided to go."

"This employment has a big impact and helps defuse social tensions," says Amando Doronila, a Manila political commentator.

However, observers say needs far outpace the availability. In recent weeks, employment agencies have been flooded with applicants, and the Philippine Overseas Employment Administration estimates there are four applicants for every expected job.

Waiting in line outside one employment office, Eddie Velasquez, a Manila taxi driver, said he was ready to take a job anywhere in the Middle East. "I've been driving a taxi for 10 years. What do I have to show for it?" he said. "I might as well try."

To turn around the economy, Aquino still has to grapple with reducing the country's $28 billion foreign debt. In February, the International Monetary Fund released $375 million in standby credit after the government pledged to cut the budget deficit and liberalize trade.

The US, Japan, Germany, and other major aid donors then stepped up pressure for economic reforms by pledging more than $3 billion in additional aid.

Insisting she will not run for reelection next year, Aquino has to push the reforms through a reticent Philippines Congress. The government is under pressure not only to roll back fuel prices but to seek a debt-forgiveness scheme similar to that granted to Poland last month. The US and other industrial countries agreed to write off 50 percent of Poland's official debt.

The reforms will be closely watched by international banks and investors who only now are beginning to return after the political turmoil in recent years.

"Opening up to foreign investment is the key," says Bernardo Villegas, chief economist at the Center for Research and Communication, a Manila think tank. "The December 1989 coup frightened away a lot of investors. But now we're beginning to see a lot of revival."

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