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Why has the Philippines failed to Industrialize? (Rivera used Marxist lens in analyzing the failure to industrialization in the Philippines. Basically its about the elite domination that has impede Industrial Growth in the country.)
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Class, Family, and State in Philippine Manufacturing
Landlords and Capitalists
“…presents a systematic interpretation of the social and political basis for the failure of Philippine industrialization”
“Why has the process of industrialization been such a protracted and
problematic one for the Philippines when the country seemed to have enjoyed and
initial edge in this route to modernity compared with most of its Asian neighbors in
the postwar years?” (p. Preface book)
During the decade right after World War II, the Philippines
had the most promising record of economic growth in
Southeast Asia. More than four
decades later, the country has
become the laggard in a
growth region, “a deviant case” to the newly industrializing economies (NIEs) of
Asia.
From 1950 to 1962 the state nurtured a
number of Import-Substitution Industrialization (ISI) industries
that contributed to industrial growth.
What went
wrong?
Import substitution industrialization (ISI) is a trade and economic policy
that advocates replacing foreign imports with domestic production. ISI is based on the premise that a
country should attempt to reduce its foreign dependency through the local production of industrialized products.
What is ISI?
ISI policies were enacted by countries in the Global South with the intention of
producing development and self-sufficiency through the creation of an
internal market. ISI works by
having the state lead economic development
through nationalization, subsidization of vital industries
(including agriculture, power generation, etc.), increased
taxation, and highly protectionist trade
policies
Import substitution industrialization (ISI)
Why has the Philippines FAILED to Industrialize?
• Landed Capitalists-more on the foreign connections (Zobels, Ayala)
• Non-Landed Landed-the cronies (Durano, Enrile)
• Chinese Filipino Capitalists-Chinese -traders who do not remit tax (Lim)
EMERGENCE OF LOCAL MANUFACTURING ELITES
Weak captive stateContradictory interest of the
bourgeoisieISI dependent on foreign inputs
Absence of strong state.
Elite domination
Reasons of the Failure to Industrialization
“enjoying little autonomy from dominant social classes and entrenched particularistic groups, the
state is captured by … competing societal interests.”
The ISI bourgeoisie was dominated by major landed elite families and merchant capitalists who diversified into manufacturing during the 1950s and 1960s. However, their diversification into import-substituting manufacturing did not result in a class transformation strong enough to drive industrial growth and development.
Weak Captive State
Consequently, the domination of the manufacturing sector by the landed
classes, in conjunction with a weak captive state, reflected a structural constrain that made it difficult to sustain industrial
growth in the country. In the long run, the domination of the ISI manufacturers by the landed capitalists further foreclosed one option for the deepening of industrial
growth that started with the ISI program.
The persistence of a weak Philippine state has made it difficult
for its various apparatuses to formulate and
implement policies independently of the powerful vested
interest groups in society. With the preservation of the economic power of the landlord class,
the state, in effect, allowed the persistence of a class structure that
proved inimical to industrial growth and development.
Moreover, with the continuing capture by powerful elites of various sites of formal
governmental power, the state was in no position to nurture an effective social coalition that could underpin
sustainable industrial growth and development.
The landed ‘oligarchy’ and the ‘progressive’ national bourgeoisie’
constitute separate and contending classes and that national and foreign capital are structurally
autonomous; that the relationship between them is ‘external’
and their concrete interests contradictory; and that, in
consequence they are driven into conflict over the nation’s development”
As the dominant segment of the ISI bourgeoisie, the
landed-capitalist families confronted an inherently self-contradiction set of interests forced upon them in their situation as both landlords and
capitalists.
Contradictory Interest of the Bourgeoisie
The ISI industries developed into an
oligopolized sector heavily
dependent on foreign inputs with little dynamism for growth and innovation and
engaged in pervasive rent-seeking activities. The pervasiveness of foreign linkages with
leading domestic-oriented manufacturing firms nurtured an ISI
constituency strong enough to resist the state’s indecisive efforts toward greater export
orientation.
ISI dependent of Foreign Inputs
The forging of extensive and varied linkages
with foreign investors by the leading ISI manufacturers during the era of
protectionism perpetuated a domestic
orientation by oligopolistic firms that
made the later shift to more export-orientation a particularly difficult and contested process.
Considering the failure of land reform and the absence of manifestations of an ideal relatively independent developmental
state, there was also the absence of a dominating institution that could rationally
manage and prudentially direct the transformation of land-based wealth into
industrial capital.
Absence of strong state
The ISI bourgeoisie was dominated by
major landed elite families and merchant capitalists who diversified into manufacturing during the 1950s and 1960s. However, their diversification into import-substituting manufacturing did not
result in a class transformation strong enough to drive industrial growth and development.
ELITE DOMINATION
The domination of the manufacturing sector by the landed classes, in conjunction
with a weak captive state, reflected a
structural constraint that made it difficult to sustain industrial growth in the country.
In understanding the reality of economic and political power in
the country and the practices that
reproduce these relationships, elite families and “kinship
networks” continue to play major roles.
Hence,
It is for this reason that much of class and state power in the
Philippines are better understood
and mediated through the reality of dominant families, clans and
kinship networks.