Economic nationalism has been a mantra among our industrialists and local manufacturers for a long, long time. During the early days of the Republic, budding Filipino capitalists were already insisting on some kind of preferential treatment not only from the government but from our very own consumers; the principle being that Filipino consumers have the duty, as Filipino citizens, to patronize local products and thus help build local, Filipino-owned industries.
Due to the colonial mentality deeply ingrained by our Spanish and American colonizers, the appreciation for Filipino products did not come naturally. The home court advantage had to be painstakingly pushed.
In 1903, Ang Bagong Katipunan promoted economic nationalism and self-sufficiency as a reaction to American colonialism. The Chamber of Commerce of the Philippine Islands promoted local consumption in the 1920s via a manifesto titled “Ours First, Yours Later.”
The movement attained greater consolidation with the founding of the National Economic Protectionism Association (NEPA) in 1934. But it was in the 50s and 60s that Philippine industry achieved its golden era. The Filipino First policy of the Garcia administration, with its attendant policies of import substitution, protectionism and foreign exchange controls, spurred rapid industrial growth. The Philippines became second only to Japan in terms of economic development.
But somewhere along the way, protectionism was tainted by corruption and cronyism while economic nationalism was drowned by free market globalization.
By the mid-1980s, our industrial and agricultural sectors had become increasingly undermined by neoliberal economic policies imposed by a series of acquiescent regimes held hostage by the International Monetary Fund, World Bank, Asian Development Bank and GATT-WTO.
Trade liberalization subjected our local producers to greater competition from their foreign counterparts who had benefited from decades of government support and subsidies. Meanwhile, investment liberalization “leveled the playing field” for foreign capital at the expense of local capital. Combined with government’s “hands off” policy on the economy and the deregulation of strategic industries especially oil and power, Filipino producers were practically left to fend for themselves.
The result? Manufacturing’s share in the Philippine economy and in employment have consequently fallen to their lowest since the 1950s while food production has failed to meet even the most basic levels of self-sufficiency.
So what is to be done?
Perhaps its time to turn to our own people for help. With a 90 million population, the local market can save the day if consumers – starting with the government as the single biggest consumer – deliberately choose to buy Fililino-made products.
But more than this, greater government support and protection for local industry is necessary to achieve any significant level of industrial development. Such is the case with countries as economically and politically diverse as the United States, Japan, the United Kingdom, Germany, France, China, Russia, South Korea, Thailand and Taiwan.
So much more can be achieved for the economy if Filipino enterprises are given the wide range of potential support that our people, the state and its institutions can and must provide. This includes greater and cheaper access to funding, appropriate technology, power, raw materials and infrastructure. The domestic market should be oriented towards giving greater opportunities for Filipino industry even as foreign markets are actively sought. The government should also cut bureaucratic red tape, develop tax benefits and other incentives for local producers and generally make it easier for Filipinos to do business. There should be an overhaul of reckless trade and investment liberalization policies that have worked against local industry and agriculture.
At the same time the corruption that undermines focused industrial support and breeds debilitating cronyism must be confronted head on. The push for industrial development must proceed apace with the struggle for transparency, accountability and good governance.
Finally, widespread poverty constricts the local market. A genuinely Filipino industrial program should decisively confront the problem of mass poverty and the structural imbalances that undermine any effort at development. Thus, measures such as genuine agrarian reform, environmental protection, equitable wage adjustments and massive social spending in education, health and housing are crucial.
With the neoliberal globalization model clearly in tatters, perhaps its time to reassert the importance of the basics – buying local, achieving food self-sufficiency, national industrialization, agrarian reform, good governance, social justice – as the real building blocks of modernization and sustainable development.
The way I see it, economic nationalism seems to be making sense again.#
*This article came out in my ‘Man in the Mirror’ column in the June 20 issue of the Good Morning Philippines newspaper.