Buy local as red herring

BusinessWorld reports on local industries pushing for their own Buy local program:

"A business group is pressing a campaign urging consumers, companies and the state to patronize locally made goods, yesterday announcing plans for a 'Buy Pinoy, Buy Local' trade fair and a list of preferred products. These efforts, the Federation of Philippine Industries (FPI) said, will ensure that the Filipino behind the production of a sack of flour, steel bar, ceramic tile and whatnot will keep his job despite the crisis."

Frankly, while such a private non-governmental program is most likely legal under WTO rules, really, however, such is essentially useless considering the minimal size of the domestic market. As well as the moral hazard of helping industries that just complacently allowed themselves to be less than competitive. The Philippines just fell to 43 out of 57 countries in terms of competitiveness, with business efficiency ranking a lowly 32 out of 57, according to the World Competitivenes Yearbook. Blame is not solely government: productivity and efficiency we rank 53, with our R&D or scientific infrastructure down to 56. The Philippines now lags behind Indonesia for the first time since 1997 and we are now in the bottom among the same group of countries with population greater than 20 million (18th) and also in those whose GDP per capita are less than $20,000 (17th).

Interestingly, "FPI President Jesus L. Arranza, however, said 'We cannot expect other countries to patronize our products. We have to depend on ourselves ... to make this country prosperous. [Our aim is] to save and create jobs.'" Which is really precisely the point. Rather than laying the responsibility on the Filipino consumer, who already has enough problems making ends meet trying to find cheap but better quality goods, the local industries should have spent their time and energy developing the export market, making their products more competitive, and placing more funding for training and research. Which obviously they did not do.

The Filipino consumer already has to struggle with the low income or salary he is getting from these companies. It must be emphasized that these industry leaders, company owners and managers are being paid to do just one thing: to make their companies and industries competitive. If they can't do this, after all the years of being urged to be more competitive, efficient, open-minded, and forward looking, I don't see why the ordinary Filipino, who is doing his job, should help these rich guys out.

Somehow, the words of Philippe Legrain in his classic Open World rings true today:

Many of the losers of globalization do not deserve our sympathy at all. They are the cosseted ‘national champions’ that are incapable of being world beaters, the fat cats that have gorged themselves at our expense: loss making national airlines, hopeless nationalized industries, favored companies run by cronies that have politicians’ ears (and pad out their bank accounts). By all means, help the people who work for these companies. But don’t protect the companies themselves."