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.
The Paper
The subject is economic nationalism and internationalism in the context of Constitutional reform. My approach delves briefly into historical perspective.
At the outset, it is better to be clear. The version of economic nationalism that has often shaped thinking about economic policy in our country has emphasized the fear of exploitation by foreigners. Our leaders over a long span of more than half century have erected a system of laws, beginning with the Constitution, reserving to the state the role of providing cover and protection for the Filipino, defining his exclusive rights over others. Many of the laws defining economic action have helped to constrict the degrees of freedom with which we can solve the main challenges of the times. Although we have achieved some progress, that progress has been so uneven that we are gripped by the poverty of a large segment of our people. If our nation continues to face an ever increasing task to overcome the poverty of our poor, the blame for the severity of the challenge is not on foreigners but on our leaders and us.
My version of economic nationalism is a positive one that rests on the strength and capacity of the Filipino. It is a belief that, given circumstances that are fair and openly competitive, our country men can achieve as much as others nationals of great nations to help them become great and prosperous…
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