Philippine Authoritarianism and the International Economy

In 1972 Ferdinand Marcos imposed martial law in the Philippines, instituting an authoritarian regime and toppling what was thought to be the most stable democratic government in Southeast Asia. How significant was the role of Philippine ties with the international environment in the advent of authoritarianism? The Philippine position in the world economy has been intimately related to its domestic politics since independence. Similarities between events there and the pattern of political change emerging in other countries that have initiated aggressive programs of capitalist development appear too consistent to be coincidental or to be ignored.' The postwar evolution leading to martial law can best be understood as a series of three stages, each shaped by an attempt to create a formula for economic development. First, the immediate postwar period was characterized by the erection of trade barriers and the growth of protected national industry. Second, industrial stagnation during the late 1950s led to repeated attempts to redirect the Philippine economy, each ending in impasse as the policies dictated by domestic political concerns came into conflict with constraints imposed by the international economy. Finally, the forces that coalesced around Ferdinand Marcos in 1972 broke the preceding cycle of frustrated efforts, imposing an authoritarian solution that resolved the development debate on terms most suitable to themselves. The evolution of these events in the Philippines will be explored following Guillermo O'Donnell's analysis of foreign economic relations in the transition to authoritarianism. In his work on Latin America O'Donnell has provided a succinct explanation of the relationship between the international economy and the abandonment of political pluralism, suggesting a link between authoritarianism and the end of easy-phase import substitution.2 According to the model, import substitution, while it does not necessarily correspond with political democracy, is at least compatible with it. During the easy phase of import substitution the manufacturing sector, protected from the vicissitudes of the world economy, expands rapidly as it fills the domestic market. Industrialists will tolerate higher wages and social welfare provisions by the government because these increase the internal market for goods and services and because they enjoy protection from foreign competition. They are, at this stage, willing to enter into political coalitions with the working class in order to counter traditional landed interests. While such interclass alliances have not always led to democracy, they at least did not exclude the possibility. All too soon, however, structural bottlenecks appear. These reduce the pace of growth and limit the possibilities for further industrialization along the same course. As a result some among the industrialists and planners begin working for industrial deepening, that is, the shift to production of intermediate and capital goods.