Economic nationalism during Covid-19 | Sunday Observer

Economic nationalism during Covid-19

26 September, 2021

We have seen much hyped conversation and debate on the control of  imports on several goods including some luxury items. It’s obvious the intention of the Government is to curb the outflow of dollars. But can’t we see the silver lining in the clouds to take this opportunity to encourage local brands?

The belief of economic nationalism or economic patriotism is that the economy should serve nationalistic goals, where it favours domestic control of the economy, labour and capita formation.

We are boasting about a national economy and finding our own formula for economic development and so on and now debating over the constraint of imports.

Government sanctions on these products could be a stopgap measure, but this should be a long-standing national policy to encourage local production and entrepreneurship. But it doesn’t mean de-globalisation, which is not possible within the context of capitalism. 

Let’s take the most contested topic of locally made underwear. We produce underwear for top designer brands and then import it back to the country paying dollars. But as a trade balance we export goods to the value of USD 5,600 million (2020) and imports are a mere fraction of that. Along these export markets why can’t we encourage the local producers. There are brands such as Amante backed by apparel industry giants and many local brands trying to establish themselves in the market, but yet struggling over competition from imports.

These types of restrictions will help them to come up with their own strategy to expand and establish. In this way we might be able to groom our own local brands where we can compete in the international market.

Why only European luxury brands?

One of the main reasons that the most successful luxury brands (including new ones) tend to be European is because of historical lock-in of consumer perceptions that those countries produce quality luxury goods with precision and craftsmanship. Success of brands such as Chanel in France, Prada in Italy, Rolex in Switzerland, convince consumers that other brands produced in the same geographical area drawing on the same talent pool and expertise, deliver products of comparable quality.

The same goes with the engineering excellence of Germany (Siemens) and the reputation of innovation in consumer electronics in Japan (Sony).

As a nation we should use the reputation we have towards the production of apparel to make a “Halo Effect” on local brands. In South East Asia, we have observed this in Singapore with brands such as Charles  and Keith, tiger, TWG tea and Creative Labs.

Covid -19  and local brands

Following the Covid-19 pandemic, analysts have noted a global rise of nationalism as countries have engaged in a number of nationalist moves in response to the pandemic (Sue & Shen, 2021). But the individual level response and the support towards this is unclear even in Sri Lanka followed by many mixed responses.

Many studies reveal that during the pandemic consumers have realised the importance of hygienic products, environment-friendly products, regional (local) products, and satisfaction beyond shopping. Consumers think that buying local products will help local society and the economy at large as it helps to  reduce dependency on imports. Uncertainty has created a mindset of converting to a minimalistic lifestyle in many societies, where they debate on  life and the purpose of living.

However, it is possible that the increase in nationalism might prove to be a temporary government response to the pandemic, rather than reflect actual changes in the underlying attitudes or sentiments shared by people.

To put it differently, the implication of policy changes at the individual-level remains unclear: do people support those nationalist government responses? Did people become more nationalistic following the pandemic?


Su, R., Shen, W. Is Nationalism Rising in Times of the Covid-19 Pandemic? Individual-Level Evidence from the United States. J OF Chin Polit Sci 26, 169–187 (2021).

Sheth, Jagdish. “Impact of Covid-19 on consumer behavior: Will the old habits return or die?.” Journal of business research 117 (2020): 280-283.

The writer, an engineer, is reading for his doctorate at the University of Kelaniya.