Promote National Industrialization for National Development

June 30, 2016

by IBON Foundation

IBON- NI (for peoples summit), Jun 16 v.2

Tens of millions of Filipinos suffer crushing poverty while a handful of foreign investors and domestic oligarchs prosper from the country’s natural resources and labor power. The situation has worsened after almost four decades of neoliberal globalization policies, including those under the outgoing Aquino administration. A clean break from chronic poverty, widening inequality and underdevelopment is possible if the incoming Duterte government will take the side of the majority of Filipinos over foreign and domestic elites.

The Philippines has rich potential for development with its 103 million population and vast natural resources. Yet we are in our worst crisis of joblessness in our entire history. There are now more Filipinos that are unemployed, engaged in poor quality work, or forced abroad than there has ever been. This includes 28.7 million unemployed, non-regular, agency-hired, informal sector, and unpaid family workers in the country. On top of this are as much as 12 million overseas Filipino workers (OFWs) and their families. Incomes also remain extremely low with some 80% of the population struggling to live off Php120 or even much less per day; over one-fourth (26%) of Filipinos live in extreme poverty.

While the outgoing Aquino administration boasts a fast-growing economy it has actually created less new jobs per year during its term than in the previous decade. Only an average of 692,000 new jobs were created annually in the period 2011-2015 which is much lower than the 858,000 over 2001-2010. Worsening domestic job creation drives Filipinos abroad with almost three times as many Filipinos forced to work abroad than able to find work here at home, with some 5,000 OFWs deployed daily compared to less than 1,800 new jobs created in the country.

Philippine industrial backwardness is among the biggest strategic reasons for these and many other dismal features of underdevelopment. The country is among the most mineral-rich in the world and ranks 3rd in gold, 4th in copper, 5th in nickel, and 6th in chromite. We have many of the basic minerals needed for industrial development. There are also vast agriculture, forestry, aquatic and energy resources. Our population, which is the 12th largest in the world, is a huge prospective domestic market and productive labor force.

Yet our economy remains backward, agricultural, and with an insignificant industrial sector. The agricultural sector has fallen to its smallest share of the national economy in history. Manufacturing is down to what it was in the 1950s with, for instance, some 73,000 manufacturing firms shutting down in the last decade alone. The economy has become a shallow service and trading economy rather than a producing economy since the 1990s.

Philippine resources and possibilities are immense yet the domestic economy is more than ever unable to produce the goods and services needed by the people, relying instead on foreign producers and technologies. Ironically, many of the foreign goods and services we buy are actually produced using Filipino resources and labour power. There is also massive denationalization of manufacturing with foreign transnational corporations accounting for two-thirds (65%) of manufacturing output.

Our industrial backwardness has huge adverse implications. It results in massive domestic joblessness. Buying imported goods supports jobs abroad rather than in the country. Exporting our raw minerals and agricultural resources for processing in other countries creates jobs in those countries rather than here. Our people are thus forced into uncertain informal jobs or to work overseas. The absence of a robust, integrated Filipino industrial sector keeps our science and technology backward, keeps us dependent on foreign goods and services, and prevents us from benefiting from our natural resources. The domestic economy does not generate as much economic surplus as it could which keeps incomes low aside from giving foreign capital undue leverage over national economic policy.

The Filipino people deserve and demand an industrial economy that imiproves the standard of living of the majority and that strengthens the country’s national independence and self-reliance. We need to transform the Philippine economy from its current backwardness into an industrial power. The incoming Duterte administration can choose to start the country on a path of national industrialization and national development. These are our proposals to move forward…