Beyond Particularistic Interests: Economic Nationalism as a Platform for Development

The author is the coordinator of the Philippine Programme of Focus

on the Global South. She can be reached at j.chavez@focusweb.org.

In recent history, nationalism has taken on new meanings. Some may say
we are in fact witnessing a resurrection of the more reactionary
notions of nationalism. Religious fundamentalism and ethnic communalism
can be said to be akin to racist nationalism, as colonialism for the
glory of the great empire is parallel to the domination of today’s
economic powers in the global order. The notion of nationalism as a
tool by which a community develops an identity and by which it reacts
to domination of an external entity, or more basically as a means by
which community itself is made coherent, therefore becomes necessary to
be reclaimed.

In the Philippine context, different sides will claim nationalism, be
the expression dictatorship or be it liberal democracy. The question
is: does either represent the nationalism we mean or want? Every
interested group will define its own nationalism and put this
nationalism in practice. Do we really have one fixed idea of what our
nationalism is, and if we do not, how should we invent this nationalism?

The swiftness by which the tariff reform program was implemented, the
foreign investment regime liberalized, and key economic sectors
deregulated in the late 1980s – something that a beleaguered dictator
never came close to consolidating – resulted in the almost
indiscriminate opening up of the Philippine economy. As a result,
targeted government intervention in the economy was minimized, and our
national planning body emasculated.

The leadership ignored the lessons of successful industrial latecomers
– our Asian tiger neighbors – that utilized strategic planning to the
hilt. They replaced strategic economic planning with an almost
fanatical rally to free up the market to direct economic activity. More
proactive industrial and trade policies were dropped.

While many look at this market-friendliness as anti-nationalist, this
strategy has in fact been claimed by its supporters as a true
expression of nationalism. The strategy is supposed to highlight what
is good and world-class in the Filipino, and gives the Filipino a
chance to prove his worth and shine at par with his global counterpart.

But as experience has shown, the strategy has failed in many respects.

One, it has been unable to significantly lift the mass majority of
Filipino labor from marginal employment; has failed to radically
improve the country’s industrial capacity; and has not substantially
improved local technology and its use.

Two, it has failed to strengthen the country’s position in the highly
skewed global balance of power. Multilateralism, or the agreement to
take on commonly agreed rules, is essential whatever the ecosystem is.
But given the power configuration, as noted activist-scholar Walden
Bello would say, multilateralism is just one facet of unilateralism
(that is, exhorted only when it suits one’s interest). The promise of a
more democratic and level playing field in the global trading system is
betrayed by the hypocrisy of the rich countries. If an open trade
system really works for the benefit of all, then it makes sense for
rich industrial countries to break down all the barriers to their
markets, particularly agricultural markets. But this has proven so much
more difficult to do in practice and has been the cause for so many
frustrations among developing country governments, and increased
resistance from anti-globalization activists. The breakdown of the
Seattle Ministerial of the World Trade Organization was not just about
the protests on the streets. It was primarily about the breakdown of
meetings within the WTO itself. Developing countries demanded that the
developed countries deliver on their own promises of liberalization,
which up till now is very slow in coming.

Three, the market strategy promised a move away from narrow
particularistic interests. The aversion to planning is due in part to
skepticism that the government, which represents the most economically
powerful segments of Philippine society, can transcend class to
implement strategic plans beneficial to all. Ironically, experience
also shows that particularistic interests have found a way to be
consistent with liberalization. Take for instance the recent example of
the electric power industry, where the privatization agenda was used by
entrenched private interests to further consolidate market power. In
the face of unrelenting interlocking political and economic interests,
the absence of a clearly defined strategic plan further weakens the
chance of order and predictability. This is the case because the
liberalization program is not grounded on political economy, in the
same manner that a program for protection can neglect political economy.
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It is time to re-imagine nationalism and to make it a viable platform
for development. Following are some elements that can make nationalism
a good platform for development strategy.

One, it should mean a strategy that moves away from elitism. Marcos’
eleven industrial projects and the country’s participation in the
Association of Southeast Asian Nations (ASEAN) as a platform for
international competitiveness suffer a basic flaw. Both did not have
the participation of the broad productive forces of society as a
priority. They focused instead on the areas where national elites have
had
historical affinity to, and did not necessarily have the broad support of the population.

Two, it should be based on strong integration, particularly backward
integration, and the use of our most abundant resources. If support and
protection is to be given, let it be given with the end of expanding
the market for, and giving higher value to, the primary products of
say, rural households. Protectionism expressed in a plan or policy
implies a social justice (distributive/re-distributive) judgment. It
can be used to facilitate a certain wealth (re-)distribution bias, with
efficiency as a trade-off. Still, the distribution aspect of the policy
can be designed such that it is also productivity enhancing.

Three, it also aims for competitiveness for three reasons: (1) to earn
foreign exchange for the goods that we still need to import, like
petroleum; (2) to protect our consumers and to mitigate loss in
consumer surplus; and (3) as a source of economic growth. On this
point, there is growing evidence that simply protection or
liberalization will not be sufficient to create competitiveness. There
should be a
specific industrial design – like an industrial promotion strategy to ensure this.

Finally, there should be great importance placed on developing internal
markets even as the country strives to capture outside markets. The
challenge is in absorbing, developing and converting our erstwhile
immobile and marginalized labor into markets, so that our production
system will look to the local market as a primary market. The steep
competition we face in industries where we supposedly enjoy absolute
advantage (by virtue of abundance, say of land and labor), and the
encroachment of rich countries into these sectors, is indicative of the
limits of the export market.

In all this, let the major lesson of history, and of the deep disparity
and exclusion experienced by the mass of our population, be the prime
motivation: No project, whether local, national or regional, whether
economic nationalist or market-friendly, will be successful unless it
is democratized. Indian economist Amit Bhaduri talks of the “harmony
between public and private interests” which gave rise to conservative
policies that highlighted the liberalism of the 19th century.
Neo-liberalism, in the late nineteenth century, is punctuated by what
he calls as the “harmony between public and corporate interests”, and
resulted in the contraction of the nation state’s sphere even as the
transnational corporation expands its reach. Both failed to take
account of the huge gap between those inside and those outside of the
system. The practice of history has been one where the system bent to
whosoever had more pressure in the community.

It is now time for new imaginations – for a strategy that expands the
meaning of economic nationalism from its inclination to cater to
particularistic interests, or to unnecessarily surrender rights and
possibilities to an unseeing market, and towards one that promotes
inclusion as an imperative for the building of a national community.

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