Government Focus, Our People Abroad, Our BPO Workers, Tourism, and Agriculture
March 5, 2017
Enrique Aboitiz Mendieta
Disclaimer:
These are the thoughts of many that I have read. I am just the assembler for your easy reading. I never claim that any analysis I make is 100% correct. I am sure it is not.
For some reason or another, governments worldwide do not focus on their main job and that is to create an atmosphere where more and better jobs are made available. We and the Philippine economy have been major beneficiaries of globalization. We could have been a greater beneficiary if we were governed by people who actually thought of the benefit of their constituents once in a while instead of almost never. Their main concern is the role they play in the telenovela called Philippine Politics.
The inherent economic strength of the Philippines is, without doubt, our people. We have three qualities that have benefited from the lower levels of globalization.
- We speak decent English as a benefit from American occupation.
- We have a decent basic education; also a benefit of having been an American colony.
- We are naturally friendly and have a service-oriented mindset coming from our culture of hospitality and our Christian backgrounds.
As a result, in a world where labor freely moves across national boundaries, Filipinos can be found almost everywhere. We have truck drivers in Iraq. We have household helps in China. We have doctors in America. We have engineers in the Middle East. We control the airports of San Francisco, Los Angeles and Dubai. Because of our qualities, our people are the first to be hired and are last to be fired. We man 30% of the world’s shipping fleet. That comes to about 11 million that belong to the Philippine Diaspora.
These workers are sending in at least USD30 billion a year through formal and informal channels. This amounts to approximately a tenth of our economy. These funds drive the purchase of everything from houses to smart phones. They improve the lives of many people across the country. These funds go directly to the families of our people, and they drive much of our economy systemwide. They also drive informal education. They come back with stories of what they see in other countries from all over the world and how things are done in those countries, which help widen our general perspectives.
Low cost airlines and low cost telecommunications, Skype, text messaging, among other things, made this much easier so our people could remain in touch with their families and come back and forth regularly at affordable costs.
This first pillar has been followed by a second pillar of our economy – the BPO – ICT sector, which started in 2001. This sector is approaching the value of the Overseas Worker flows, employing over a million people. We have taken over the Call Center Business because the voice of a sweet Filipina trumps an Indian always. Why? Because of the level of our English, the quality of our education, and our natural friendliness. For this to succeed, we need infrastructure – higher speed fiber optic lines & office buildings. This will mean another 10 or so percent of GDP and millions of jobs. Not all the inflow of cash goes to people directly as much what goes to real estate and technology, but in each of these there are multiplier effects.
For the first two, very little government help was necessary, and that is why they succeeded. The private sector did most of the work. Little would have happened if the telecommunication and airline sectors had not been opened up.
Now we have a third pillar that we are building at a rate slower than we should and that is Tourism. What does that require for success? Decent education, English, and our natural friendliness. Thailand brings in almost 30 million tourists a year. We are just scratching six million. The mindset of our government should be to do its job for more and better employment, to create the educational base, and to develop infrastructure to make tourism easier, and that means airports, roads, bridges and vocational schools. Tourism feeds everyone. Instead, our government continues with the Philippine telenovela of stupidities.
The PAGCOR Entertainment City has proven to be a success. This drives government revenues and employment. It needs a better first class in Metro Manila. A new airport for the southern part of Metro Manila and Southern Luzon would allow us to turn the present 600 or so hectares of NAIA into a Central Park with entertainment and leisure areas for about 30 million people in what I am calling Contiguous Manila, i.e. the people who live between Angeles City and Batangas City. They will all be connected by Expressways. Let’s give Contiguous Manila a nice set of lungs.
No decision has been made on a new Airport to serve the south of Metro Manila. The privatization of airports in the South has been further delayed. The building of a proper terminal at Clark to serve as the northern airport has not been finalized. The decision for a train to Clark sits on some desk.
Permits for new airlines that would bring in tourists have not been issued. We are told that it takes 45 flights a day for every new million tourists. Encouraging tourism through airports outside of Manila could help people stay in the south and drive the economies of the southern Philippines, diversifying development throughout the country.
This third leg needs government badly because it needs infrastructure, but we just do not get it and neither do they. Our officials are focused on rivalries and stupidities, investigation and non-cooperation instead of the real important activities. Tourists need airline seats and hotel rooms with roads to reach them.
Tourism is a low lying fruit: it hires and it maximizes our talents. China closed its doors to us because we mishandled the Hong Kong tourist bus incident and we mishandled our relationship with them in the last administration when we chose the U.S. over China. Now we are choosing China over America. Talking of policy consistency? When we can be friends with both, which is our nature – hospitality.
In the memory of a potential foreign investor, the last administration had a President who claimed everyone but him was a crook, a Secretary of Energy who told everyone we would be short of power, and a Secretary of Transportation who could not fix the bottleneck at the ports. Today, we just curse at everyone who disagrees with us. Will that bring us foreign investment? This could be a small fourth pillar to help with our Current Account Surplus, which is narrowing very rapidly.
Incidentally, there are some idiots out there who blame our high electricity prices for our lack of manufacturing. This is unfounded. Singapore has higher electricity prices than us and they don’t have problems with manufacturing The reason why other countries have lower electricity prices is because their governments subsidize the cost. Subsidies hit you in your deficit, and that means higher taxes. We do not get manufacturing and foreign investment because our level of Rule of Law, which is most important to business, is still weak.
Manufacturing could be a fifth pillar. Our location is not ideal, but we could get some of the China spilloff.
Agriculture, too, could change the lives of so many people. We insist on agrarian reform, which has ruined the coconut industry and damaged the sugar industry. We talk of a lack of inclusion.
What has hampered the inclusion of the agricultural sector in the progress our economy has enjoyed over the past 15 years as we have tripled our GDP? Agrarian reform and NFA at a cost of a few hundred billion pesos that could have been saved or used for farm-to-market roads, irrigation and general modernization. Land that is untitled, but under tax declaration, could be titled by law immediately. It is so for residential, but not for agricultural land because many do not trust the farmers and their capacity for making a decision. Its incredible how some government officials can even think their competence to make a decision is anywhere as smart as the crowd. In this case, the agricultural community crowd.
If anything is a national security issue, let’s remove it from government hands. If anything needs protection for the public good, remove it from the ruinous hand of government. No one can make a better mess than a government official even if he or she comes from the private sector. The moment they switch to political mode, they change over to functionaries almost invariably. Fly over sugarlands anywhere: the sugar grown by landowners is tall and green. Sugar planted by one who has received the land as a result of land reform is shot and yellow. Is this picture not enough? Does it not speak its 1000 words?
The lack of inclusiveness that exists in our economy is almost totally in the hands of the government to solve.
The decent education we have today served us well in the past. It will not serve us well in the future as everything accelerates. Artificial Intelligence threatens our call centers and it may even threaten some of our overseas workers. Diversifying our economy, modernizing our agriculture, and removing our subsidies will protect us in the future.
Now nothing is more important than accountable leaders who spend a little more time on their people and less on their own interests, whatever they may be. They were not elected to advance their interests. They were elected to advocate for ours.