The world heaved a collective sigh of relief when Teheran elected to avoid an all-out force-by-force response to Trump’s brazen decision to kill Iran’s General Qassem Soleimani through a powerful air strike.
Nonetheless, it is still a VUCA world – vulnerable, uncertain, complex and ambiguous. The global consensus is that the US-Iran war will continue in various forms, e.g., proxy wars in Yemen, drone attacks on oil tankers, violent demonstrations against US bases, etc. The oil market remains volatile and unpredictable. The Middle East will increasingly become an inhospitable place for work to around three million OFWs, documented and undocumented.
The US-China trade war also remains unresolved despite an initial “Phase One” agreement this January, with Trump’s supporters declaring “victory”. America First is now reverberating around the world in various ways – as Boris Johnson’s Brexit, as Putin’s Russian Transformation, as China’s land and maritime Silk Roads, and so on. The WTO’s design for global multilateral trade arrangements is being ignored. Contrary to the naïve belief of the neo-liberal economists, governments, especially those of the developed countries, are not prepared to liberalize fully their respective economies, particularly home industries deemed “too big to fail” or critical in their own development.
Meanwhile, trade wars are evolving into cyber wars, with big corporations and big governments mobilizing an army of hackers and cyber troopers to gain control over mountains of data from competitors, politicians and ordinary citizens. Part of the US-China trade war is the US accusation that China is not only acquiring US technology sans license but is also actively spying on US trade and military operations. The US has banned Huawei because the latter is accused of being at the center of China’s cyber espionage network; Huawei also represents a major threat to US technology superiority, with Huawei managing to forge ahead in the development of the 5G technology. The cyber warfare is likely to become a full-blown technology warfare as the Fourth Industrial Revolution is now being re-numbered by some pundits as the Fifth Industrial Revolution because of the continuous flow of new innovations and scientific gadgets for use in various fields of human existence.
Finally, there is war against climate change. But sadly and as a reflection of a divided world, there is lack of progress in the climate change talks. Australia’s bushfires, burning over six million hectares of forests, are a dramatic reminder that the earth’s temperature is nearing apocalyptic level. And yet, developed countries, increasingly mindful of their national budgets, have remained hesitant to make substantial contributions and commitments in the global effort to contain the risks of rising global temperature.
Against the foregoing background, what should the Philippine policy makers do? Is this not a good time for Neda to review and re-assess PDP 2017-2022, which is based on a highly optimistic forecast of sustained growth via more exports, more foreign exchange earnings, more infrastructures to be built, and so on? Is this not a good time to do some re-balancing, especially if OFW return migration from the Middle East turns into a massive return diaspora?
Along this line, there are sound ideas coming from the executive and legislative branches that are worth citing here.
One major proposal comes from Senator Francis Tolentino, who seeks the institutionalization of “Filipino First” in government procurement of goods and services. Said he: “Our procurement law does not contain provisions helping Filipino products… it is only proper to give chance to Filipino manufacturers…so that our products will be promoted.” Under Tolentino’s Senate Bill No. 1102, a government institution or agency can procure products and services from foreign suppliers only after securing a certification or clearance that there is no existing domestic and Filipino supplier who can supply and satisfy the needed products or services.
Tolentino’s “Filipino First” proposal is a timely reminder that only Filipinos can take care of the Filipinos. It is consistent with the provision of the Philippine Constitution, which mandates the State to give preference to Philippine industry and labor. Buying from domestic producers is also a normal practice by governments around the world, precisely because this is one way of promoting a country’s industrial and agricultural development. Thus, Japanese government agencies (and corporations) will buy first from Japanese producers before seeking products from foreign suppliers. Same with Chinese, Korean, Malaysian and Indian public agencies. In the United States, government procurement is also used to weed out “scalawag” suppliers, such as those who violate labor and environmental standards.
Incidentally, “Filipino First” was the battlecry of Filipino nationalists in the late 1950s. Senator Claro M. Recto, Senator Gil Puyat and President Carlos P. Garcia issued the call for deeper and faster Philippine industrialization, dubbed then as “Filipino First”. This was opposed by the American business community, which was resentful of their inability to remit profits under the “foreign exchange” controls institutionalized by Central Bank Governor Miguel Cuaderno. This was also opposed by the IMF and the World Bank, which became loan partners and policy advisers of the Philippines beginning in 1962 during the Diosdado Macapagal Administration. The Filipino First policy was also criticized by a group of Western-trained Filipino economists who got entrenched in the IMF-WB-supported Program Implementation Agency (PIA) in Malacanang.
However, the campaign for Filipino First policy never ceased. In 1968, Congress, under the leadership of Speaker Jose Laurel, passed House Joint Resolution No 2, known as the “Magna Carta of Social Justice and Economic Freedom”. The lead authors of the Magna Carta were Emmanuel Yap and Alejandro Lichauco of the Congressional Economic Planning Office (CEPO). The gist of the Magna Carta is that the Philippine economy then could not be truly self-reliant and move forward if remained stuck at the low-level assembly of imported industrial raw materials and machinery. Like Japan, the Philippines should be able to develop not only light processing industries but also basic and mid-stream industries for the rounded or all-around development of the economy.
President Ferdinand Marcos did not pay attention to the Magna Carta and listen to the proponents of Filipino First. When martial law was declared in 1972, the PIA economists became ascendant and formed the National Economic and Development Authority (Neda). The Neda economists totally ignored the Magna Carta. Instead, they pushed for a new IMF-WB-supported development strategy called “labor-intensive export-oriented industrial strategy” (LIEO), which was later shortened to “export-oriented industrial” (EOI) strategy. But five decades after the adoption of the LIEO/EOI program, the Philippines has remained an industrial laggard in Asia.
Hopefully, the Filipino First policy proposal of Senator Tolentino can lead to an honest-to-goodness re-thinking of the appropriate industrial and agricultural development program for the country. Given the technological changes that have occurred in the last five decades, the idea of an all-around self-sufficient industrial development, as articulated by the Filipino First senators in the 1950s-1960s, may not be practical today. However, the idea of building a strong nation with a strong industrial and agricultural base remains relevant, especially in an unpredictable VUCA world that we are living in.