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BELOW, slightly edited, is part of a letter I
e-mailed to Mr. Sa Kit Tan before The Times published (on March 28
Friday) his letter about “Let’s resurrect our basic
industries.”
Actually, I had a heavy heart
writing that column. Some of the economists responsible for our
economic policy since the late 60s to the present are close friends
of mine. I even wrote an article defending them when a guru of
economic nationalism, Alejandro Lichauco, wrote that they should be
charged with treason.
My point is not to blame the
Americans, the Chinese businessmen, etc. But to blame
ourselves—and our leaders—and to campaign for a reversal of our
anti-industrialization policy.
All of us, Malay-Filipinos,
Chinese-Filipinos, Spanish-Filipinos, Fil-Americans,
Indian-Filipinos, Christians, Muslims, Lumad, together, must realize
the fact that every time in our history that a patriotic economic
policy (boosting both our industrial and rural development) was
launched, our national leaders agreed to foreign demands to dilute
the policy with measures to weaken—and finally destroy—our
industrialization.
That happened in 1945 and 1946
when we were going to become independent from the USA and needed aid
to rebuild our country from the devastation of WW II. America’s
officials made war damage payments conditional. Our Republic first
had to agree that we would continue the colonial terms of free
trade. So our pharma, food processing and other industries could not
fully develop. We became mere packagers for US principals.
Later, when in the 50s to the 60s
we finally had a policy to develop import-substitution
industrialization, our growth became fantastic. We became second
only to Japan. Our high growth rates of the 50s and 60s have not
been surpassed up to now.
But in the second decade of our
import-substitution industrial policy President Macapagal needed to
borrow $300 million from the International Monetary Fund. This was
because we had large foreign debts. We had debts partly because of
our industrialization: we imported a lot of machinery, machine
parts, oil and some raw materials from the USA and other countries.
We would not have to import so much if we had developed our steel
industry and machine-making skills and capabilities. After all, we
were one of the world’s largest suppliers of iron, copper, nickel
etc.
Another reason for the foreign
debts was that our upper classes loved importing foreign luxury
products. The locally-made soaps and mirrors were not good enough
for them. Theirs had to come from Europe and America!
The IMF would only give President
Macapagal the $300 million loan if he devalued the peso. It was then
very strong—P2 to $1. IMF wanted to weaken the peso to P3.50 to
$1. That way we were supposed to make more money by selling more of
our cheaper exports. Macapagal agreed and the result was a big mess.
From then on we had to be paying
more for our machinery and raw material imports. But we got less
money for our cheaper raw-material and mining exports to the USA,
Japan and other rich countries. Yes, we sold a little bit more of
our manufactured product exports but we earned less all around. The
promise that we would earn more by devaluing the peso did not
happen.
Macapagal, to solve the mess,
took a step that made our economic policies more irrational,
incoherent, desperate, confused and self-destructive: he imposed
currency controls.
Since then the mess has stayed
with us. When we moved to a policy of export-oriented
industrialization and then labor-intensive export industrialization,
we continued to face external debt problems. (That would probably
not have been too bad if Macapagal had not devalued the peso. Rich
people all over the world would be hoarding our peso.).
Then, every time we had to be
rescued by the IMF, more and more of our industries died because we
implemented more and more of the measures demanded from us that
sapped our strength and our wealth. (Of course, corrupt officials
then as now were also sucking our blood.)
Meanwhile, the other countries in
our region became richer—with their governments adopting the
correct economic policies that stressed manufacturing for export and
increasing their farming sector productivity. Their masses of poor
people became a little bit more prosperous year by year than their
Filipino counterparts.
It is wrong for our economic
policy makers to take the liberalization and anti-patriotic economic
ideology more seriously than the USA. Even the USA protects its
industries—I see nothing wrong with that. But we also should
nurture ours.
Our policy up to now is to be
open and liberal even to those countries that do not match our
generosity. Our tariff regime for the whole world is the same as the
generous one that we have our fellow Asean members. We in Asean are
building a common market and hoping to form an economic union. So
it’s okay to have a generous tariff policy among ourselves within
Asean. But why grant those same concessions to everybody—even to
those who don’t give us reciprocal considerations? The answer is
that we are always desperately in need pleasing the whole world in
hopes of getting something in return—that we never get.
rq_bas@yahoo.com
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