‘Made in PH’: We need to industrialize (1)
Marawi/Bukidnon—“A society that mocks virtue prepares its own collapse.” That’s how Socrates’ politically immortal wisdom is usually summarized. Unquestionably, ours is a divided nation, and ”virtue”—as understood by ancient Greeks—is sorely missing among our leaders. Worse, we, as Filipinos, can’t even agree on what kinds of “virtue” we seek among our leaders. I got a taste of this historic divide during a recent trip to Mindanao, where I had the privilege of exchanging views with a wide range of thinkers, policymakers, and civil society leaders.
Thanks to Vice Governor Mohammad Khalid Adiong of Lanao del Sur, Salma Jayne Tamano, Lanao del Sur provincial information officer, and a whole host of immensely generous friends from Marawi, I had the indescribable privilege of speaking before and to as many as a thousand students and budding journalists from both Gen Z and Gen Alpha backgrounds. The Ranaw Campus Journalism, organized by the Provincial Information Office, and held at the provincial gymnasium in the new capitol complex, allowed me to not only share my own struggles and little triumphs in my field of work but also gave me the chance to hear about the hopes and dreams of the younger generation in the region.
Over the succeeding days, I had the privilege of hosting special “Deep Dive” podcast series with academics, most notably, Dr. Bryan Lee D. Celeste of Central Mindanao University as well as professor Almahdi Alonto, Dr. Acram Latiph, and Dr. Aliah Cali-Pascan of Mindanao State University. (And, yes, we also discussed Human Development Index differentials, even if my brief CNN International comment on the issue was viciously weaponized and twisted by pro-Duterte trolls.)
For the purpose of this succinct piece, let me just share my main takeaway: Mindanao is extremely diverse, far from monolithic, and both unique and familiar in its own way. In some ways, there is also a new identity politics shaping political preferences and perceptions with immense implications for our national politics.
The best way to address the seeming chasm between the so-called “imperial Manila” and Mindanao is arguably a new “national development bargain”: a progressive social contract among key stakeholders to ensure inclusive development for the entire Philippines. This is doubly important to accelerate the peace process in Mindanao and reverse the ongoing ”stagflation lite” crisis in Luzon amid a slumping services sector, rising energy costs, and collapsed public investment.
And this is precisely why we need to adopt a proactive set of economic policies that spur manufacturing, agricultural productivity, and high-value-added services in the Philippines. So, is ”industrial policy” the way forward? Luckily, I had the opportunity to discuss this issue with some of the leading development economists earlier this year.
“The difficulty is getting out of it because the temptation for the [supported] firms is to cower behind it, invest in political connections with [corrupt] politicians,” my economics professor at Oxford, Sir Paul Collier, told me earlier this year in an interview when I asked him about the history of industrial policy. “The trick is to guard against that [tendency], and for that the state has got to be prepared to act tough and see that its interest is actually in long-term prosperity rather than in the easy money [and] short-term patronage politics.”
Of course, there are varieties of industrial policy, with some of our neighbors pursuing a more ”vertical” approach targeted toward strategic sectors, while others are more focused on a ”horizontal” focus on creating foundations for ”national champions.”
“It’s incredibly hard to do it well … it needs to be time-bound, performance-related, and … the government needs to be ruthless in stopping it when it doesn’t work [even if it could hurt certain favored firms and industries],” professor Stefan Dercon, who previously oversaw Britain’s development aid, told me. Industrial policy, he argued, could be understood in more generic terms: “It’s not just about manufacturing, it’s actually thinking carefully about how [a nation] can get upgrading across sectors where there’s [an upward] productivity ladder.”
Aside from domestic political imperatives, a major source of potential economic boost for the Philippines is, ironically, geopolitics: the West’s need for diversifying away from China. Will discuss this crucial factor, and how to best pursue a “Made in the Philippines” agenda, in my next column.
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