Economic Nationalism

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UNIVERSITY OF THE PHILIPPINES

SCHOOL OF ECONOMICS

Discussion Paper No. 0201

January 2002

Philippine Economic Nationalism by Gerardo P. Sicat*

*Professor Emeritus, School of Economics University of the Philippines

Note: UPSE Discussion Papers are preliminary versions circulated privately to elicit critical comments. They are protected by the Copyright Law (PD No. 49) and not for quotation or reprinting without prior approval.

Philippine Economic Nationalism
By Gerardo P. Sicat
Abstract

Not seeing that the power of taxation of the state is the true expression of national patrimony in economic matters, the framers of the 1935 Constitution introduced provisions on the use and disposition of land and natural resources vesting exclusive rights of exploitation to citizens. This also meant restricting foreign investments in public utilities. The provisions were not revised but even elaborated in subsequent revisions of the Constitution. These provisions set a train of restrictive economic policies that helped to compound the mistakes of early industrialization policies. By tying the hands of future generations of Filipinos to deal with specific economic issues in their own time, the Constitutional provisions provided barriers against solving economic problems with realism as called for by changing times and exigency. Judged as the most likely to succeed in the early years after independence among many East Asian economies, the Philippines became the economic laggard among a group of highly performing economies during the second half of the last century. The brand of economic nationalism that was fostered was exploitative and heavily protectionist in character. It built an economic and political framework that discouraged competition, enhanced monopolies and inefficiencies by nationals, inhibited the growth of international trade and hence postponed by a large margin of time the growth of economic specialization based on comparative advantage. A new kind of nationalism based on principles of competition and comparative advantage is needed. This will be helped greatly by the removal of stringent Constitutional provisions that affect foreign investments. An enlarged regional free trade within ASEAN and accession to the World Trade Organization are factors that will help to sustain this new ethos which will strengthen economic and national aspirations. Subjects: Economics and law; economic nationalism; trade and industry; Philippines; and economic development.

Philippine Economic Nationalism
By Gerardo P. Sicat

Contents Main Paper, pages 1-24 Annexes A. B. C. D. E. F. G. H. Poverty Is Our Main Problem: Don't Blame Others For It, p. 25 Constitutional Provisions on the Economy and Social Justice, p. 26 The Cost of Protection, p. 29 Philippines vs. Thailand: Or, Harry Stonehill vs. Jim Thompson, p. 31 The Plight of Overseas Contract Workers, p. 32 Bob Hope's Wisecrack, Or Philippine Opportunities Lost in the US Market, p. 33 Those Balikbayan Boxes and Consumer Welfare, p. 35 Efficiency Ethos in the Philippine Work Place: Texas Instruments, Intel, and Fedex in R.P., p. 37

Philippine Economic Nationalism By Gerardo P. Sicat∗
The reforms that come from above are nullified in the lower spheres owing to the vices of everyone; for example, the avidity to get rich quick and the ignorance of the people that acquiesces in everything. Noli me tangere, 1886 The most commercial and industrious countries have been the freest countries. France, England, and the United States prove this. Hongkong, which is not worth the most insignificant island of the Philippines, has more commercial activity than all of our islands put together, because it is free and is well governed. “The Indolence of the Filipinos,” La Solidaridad, August 31, 1890. Jose Rizal

The subject is economic nationalism and internationalism in the context of Constitutional reform. My approach delves briefly into historical perspective. At the...
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