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| Labor Pains By Antonio C. Abaya Written May 01, 2006 For the Standard Today, May 02 issue One of the most viewed articles in my website is Why Are We Poor? (Dec. 04 2004), which purports to show How to Become a Poor Country in Six Easy Lessons. I discussed these Six Easy Lessons when I was guest speaker before the Philippine Finland Association last April 19, and when I was interviewed by Gemma Cruz-Araneta on her radio program last April 28. This being May Day or Labor Day, those Six Easy Lessons bear repeating. We are constantly reminded that until the late 1960s the Philippines enjoyed the second highest standard of living in Asia, second only to Japan�s. What happened? One. In my analysis, our problems began when Congress enacted the Minimum Wage Law in 1957 or thereabouts, fixing the minimum wage at P7 a day, which was then worth US$3.50. When US companies started moving their manufacturing facilities to the Far East in the 1960s, most of them chose to locate in Taiwan or Hong Kong; relatively few chose to locate in the Philippines. This despite the facts that a) most Filipino workers spoke some English while most HK Chinese and Taiwanese workers did not, and b) Filipino managers were already familiar with American business practices; most HK Chinese and Taiwanese managers were not. So why did most US manufacturers locate in Taiwan and Hong Kong, instead of the Philippines? Simple. Wages there, believe it or not, were lower than here, and � more important � there was no minimum wage law in Hong Kong and Taiwan. Two. In the 1970s, Taiwan, Hong Kong, Singapore and South Korea deliberately geared their economies to the export of manufactured goods; the Philippines did not, satisfied as it was manufacturing for the domestic market. In the 1980s, Malaysia, Thailand and Indonesia followed the lead of the four original Asian Tigers and likewise geared their economies to the export of manufactured goods; the Philippines did not. In 1965, when Asian countries were exporting commodities, the resource-rich Philippines exported a total of $769 million worth, compared to only $175 million and $446 million from resource-poor South Korea and Taiwan, respectively. In 2004, after almost 40 years of pursuing their respective economic strategies, the Philippines� exports totaled only $38.6 billion, compared to $250.6 billion for South Korea and $170.5 billion for Taiwan. Three. Having missed the export bus in the 1970s and 1980s, the Philippines also missed the tourism bus in the 1990s to the present. In 1991, the Philippines and Indonesia drew in the same number of foreign tourists: one million. In 2005, the Philippines drew in only 2.6 million, Indonesia six million, despite the Bali bombing of 2002. Malaysia attracted 15 million tourists, Thailand 13 million. Four. Having failed to develop a wide manufacturing base during the export boom of the 1970s and 1980s, the Philippines under President Ramos (influenced by Jesus Estanislao and Bernardo Villegas) foolishly embraced free trade and globalization even ahead of, and more enthusiastically than, much more developed South Korea and Taiwan. We naively opened our economy to the manufactured products of more aggressive countries, thus forcing the closure or retrenchment of many domestic producers and the loss of jobs of countless Filipino workers, forcing many of them to seek employment abroad. Five. Similarly committed to free trade and globalization, President Arroyo has a clear bias against industrialization, preferring to concentrate on agriculture, telecom and tourism in her economic program. She seems to have accepted as immutable the de facto scratching of the Philippines as an industrial, manufacturing country and our destiny as a mere exporter of labor. Six. Even as the economy failed to generate sufficient jobs in the past 45 years, for the reasons outlined above, the Roman Catholic Church continues to actively oppose any and all artificial methods of birth control, stubbornly oblivious to the negative connection between a weak economy and a galloping population growth rate. In the 1960s, Thailand and the Philippines had more or less the same population. In 2006, there are 84 million Filipinos but only 64 million Thais. Commonsense says that, all things being equal, it is easier to feed, clothe, educate and find jobs for 64 million people than for 84 million. What do these Six Easy Lessons mean for the Filipino worker? In 1957, the minimum wage was 7 pesos a day, which was then worth US $3.50. In 2006, the minimum wage in Metro Manila is P325, which at an exchange rate of P52 to $1 is worth only US $6.25. So the minimum wage here, in US dollar terms, has increased by only US $2.75 in 49 years, or an average of only 5.6 US cents every year. (The peso-dollar exchange rate has continually deteriorated because the Philippines has imported more than it has exported almost every year since 1946, another effect of the failure to build an export-oriented economy. In their infinite wisdom, communist and pro-communist intellectuals have always opposed an export-oriented economy. See my article Why Are We Poor?) The negligible increase over 49 years in the minimum wage in US dollar terms is not a sign of avarice and greed on the part of Filipino employers. It is a sign of weak economic activity brought about by wrong choices in economic strategies by national leaders, going all the way back to President Marcos. Principally the failure to ride the export boom in the 1970s and 1980s, and the failure to ride the tourism boom in the 1990s to the present, aided by the obstinate refusal of the Roman Catholic Church to accept a reduction of the population growth rate through artificial means. Wages rise without the aid of a minimum wage law as the pool of unemployed and underemployed shrinks due to the increase and growth of enterprises encouraged by the right economic strategies chosen by the political leadership .Pushed by their own self-interest, entrepreneurs will bid higher and higher for the workers and employees that they need for their enterprises, as the labor pool shrinks. This has been amply proven in South Korea, Taiwan, Hong Kong, Singapore, Malaysia and Thailand, and even in communist but now �stinking capitalist� Vietnam and China. Wages stay depressed, even with a minimum wage law, if the pool of unemployed and underemployed remains large due to weak economic activity brought about by poor choices in economic strategies by the political leadership, and aided negatively by a runaway population growth rate. The Philippines is the most shining example of this Corruption has little to do with it. China and Vietnam are adjudged two of the most corrupt countries in Asia, yet they have enjoyed the fastest economic growth rates in the region in the past ten years. Economists tell us that every billion dollars in exports can be translated into 200,000 jobs. This means that if the Philippine� exports were $123.5 billion (like Malaysia�s in 2004), instead of only $38.6 billion, the extra $84.9 billion would have meant 17 million additional jobs for Filipinos. The Department of Tourism also tells us that in 2005, the 2.6 million tourists who came here generated 750,000 jobs. This means that if our tourist arrivals were 15 million (like Malaysia�s), instead of only 2.6 million, the extra 12.4 million tourists would have meant 4.3 million additional jobs for Filipinos.. Those 21.3 million additional jobs, in exports and tourism alone, would have mopped up the pool of unemployed and underemployed and would have pushed wages up several times the current rates, without any need for a minimum wage law. They would have stabilized the peso-dollar exchange rate at 4-to-1 or 7-to-1 (depending on when the correct economic policies were adopted); would have made the search for jobs overseas unnecessary; would have allowed us to keep our best teachers, our best nurses, our best doctors, etc; would have preserved the integrity of the Filipino family; would have spawned a broad-based economic prosperity; and would have rendered Joma Sison and his silly Maoist revolution totally irrelevant. Thoughts to ponder this Labor Day. ***** Reactions to [email protected]. Other articles since 2002 in www.tapatt.org. Current articles also in tonyabaya.multiply.com. NEW ARTICLES IN www.tapatt.org. We have received several articles on the Da Vinci Code and the Gospel of Judas from several sources, both pro and con. These articles can be accessed in the Reference Material section of the website. ***** OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO |
| Reactions to �Labor Pains� Dear Mr. Abaya, What you say about why our country is poor makes a lot of sense. Wrong policy choices really did our country in, and it began even before Ferdinand Marcos came into the picture. There was the unrealistic obsession of postwar administrations to peg the Philippine currency at P2 to a U.S. dollar, which made our exports unattractive and imports so cheap. Because of that disastrous policy, we developed our legendary fetish for imported goods and our disdain for locally-made items. This stunted the development of our local industry. Then there was the protectionist "Filipino first" policies of Pres. Carlos P. Garcia which encouraged Filipino companies to be complacent and less competitive. But, because he ruled for so long and was in a position to do so much for our country, the lion's share of the blame should correctly be laid on Ferdinand Marcos. In the '60's and '70's, while Malaysia's Mahathir relentlessly encouraged the expansion of palm oil, rubber and cocoa plantations in order to raise incomes in the countryside, Marcos levied taxes on coconuts and ruined the sugar industry. While Malaysia and Thailand's rural poor were becoming gentrified, the Philippine rural gentry was being pauperized. The first line of defense against the Communist insurrection was decimated. Not by the rebels. But by the government. This was the primary cause for the dramatic rise of rebel movements, Communist, religious and ethnic, during the Marcos years. Most of the rebel leaders came from the rural middle-class whom Marcos exploited and abused. I do not know if we will ever learn from our mistakes. But you do us all a great service by continually reminding us of our shortcomings, especially with regard to our disastrous government policies. Hopefully, someday, somebody out there will take note of what you say and try to rectify the policy blunders we have made over the course of our brief political history. Our missteps cannot be remedied over a short span of time. But a few steps in the right direction will always be a few steps forward, which can give us the momentum to continue moving on the path towards progress. Carl Cid S.M. Inting, [email protected] Cebu City, May 02, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Yes, you are correct on the "Six Easy Lessons" and they should have been solved years ago by a poll of "smart" trade and tourism secretaries and analysts. Almost 4 decades of mistakes and lack of initiative or lack of focus on these issues are unacceptable! Now, we have another chance to do more in tourism because it will take years to rebuild our neighbors' beaches and resorts due the devastations and damages of the tsunami. This is our "once in a lifetime" chance to claim Philippines as the future tropical paradise in Asia. These more than 7,000 islands can definitely cater or welcome tourists more than any other Asian nation, if not, the world. not mentioning that we speak and understand "English" better than our neighbors and cheaper destination (additional advantages). So, there should be massive improvements on tourist spots, beaches and resorts. (I think, they're working on it) and massive advertisement internationally focusing on the rich nations like Europe and USA! High-cost advertisements will pay off later on. and you can see why Cancun in Mexico, Puerto Rico and Bahamas beaches were among the top "vacation" destinations in the world. Their advertisements are all over the place in the U.S. and Europe T.V., magazines, newspapers and college campuses. Why can't we do that? If they can increase their "porky barrel", why can they put budget on that! Advertisement really works! Big companies trying to grab "expensive" 3-minute advertisement spots during "sports finals" for a reason! "Super Bowl" alone grabs more than 60 million viewers. Having at least 1% to 10% of those viewers can do a lot for the Philippines in terms of revenue and job-creation. But in order to grab foreigners' attention, Philippines should have a strong "undivided" military and improved national security to protect its citizens as well as the tourists. Kidnapping groups, illegal and criminal activities should be squashed! India and China tests of military technologies and power bring in investors because they feel protected. Aruba was one of the top vacation destinations but when an American was killed and missing while the Aruba government failed to expedite to solve the case, the entire USA boycott Aruba. Now, Aruba is in deep sh*t knowing that its only big time revenue is tourism aside from being one of the world's drug haven! So, Great policing, military and security are big deal especially when we do tourism business. If NPA is for national prosperity which means poverty reduction, then they should not touch or attack foreigners/tourists. If Muslims in Mindanao promotes peace, then, this is their chance to show the world that peace is in action in Mindanao. There's so much to improve in Mindanao if we unite as Filipinos for the good of the country, for prosperity and job-creation. In export, we have a lot to offer in crafts, sea-weed (plantation), tropical fruits and etc. "Quality control" and "food safety" should be imposed so foreigner will take our products seriously. You said, corruption has nothing to do with it. I say, yes, corruption has something to do with it. (I wrote that �corruption has little to do with it.� ACA) Other countries have corrupt officials too but once the culprits were caught, their governments or ombudsmen really prosecute them. Culprits are not being recycled (unlike in the Philippines) but other nations put culprits in recycle bin:) Unlike in the Philippines, bribery of judges and officials can easily let these a**holes go free and do more damage. That's the difference:) Here are some things to focus: 1. "Population control" ASAP - the main problem right now! The Philippine Church, Velarde, Villanueva and other "top-prized" Christian speakers should stop politicking but should help the government warn and educated people about it. High-prized - meaning.. For Velarde, with P5 donation each week from his 5 million members, that's P25 million/week (tax-free, folks). For Villanueva, with P5 for 2 million members, that's P10 million/week. It's a holy jueteng style:) These CEOs are ultimate money-machines:) Well, if they help others especially the poorest Filipinos than feeding their lifestyle and to cater their political interest, then, hope the Lord will forgive me. Remember, population expands in millions but NOT JOBS!!! 2. Agriculture - Geographically, our strength are agriculture and fishing. We have the best agriculture scientists in Asia, if not, the world. Then, we need import of rice and corn? C'mon! Improvise the irrigation system. If Agapito Flores invented something priceless, how much more our high-tech "very educated" engineers and scientists. 3. Tourism - more than 7,000 islands can't be ignored. Don't focus on Boracay and Dakak alone! Remember, there are more than 7,000 islands to improve. That way, there's no tourists' bottlenecks/problems. 4. Export - we have a lot to offer to the world market. 5. Mining - If we are one of the top 10 nations in mineral deposits, then, what are we waiting for? If others do careful mining, why can't we. China is a legit buyer and others. There are other things to consider also but these 5 points can make great things happen for our economy! Plus, if that PCGG and the Marcos deal will push through. Provided there's no hidden self-interest agenda, all just to save the country from enormous debts, not mentioning that as reported or quoted by Imelda Marcos that these "treasure/wealth" is enough to pay our national debt"... (Couldn't find time to edit this... Smart readers can auto proof-read this... Thanks! Mabuhay Pilipinas!) LF, [email protected] May 03, 2006 MY REPLY. Next time, proof-read your own article before submitting it, and attach your full name to your piece. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Antonio, I saw a JAICA study circa 1998 of Zambales and Pampanga that showed nearly 4% population growth. Do your compound interest numbers. Robin Moyer, [email protected] May 03, 2006 MY REPLY. �Nearly 4%� population growth rate for Zambales and Pampanga in 1998 is not credible. Both provinces suffered economic decline after Subic and Clark bases were closed in 1991. National average in 1998 was around 2.6%. I do not understand your question or statement about interest numbers. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Dear Mr. Abaya, Your article entitled "Labor Pains" is vintage Abaya! You are truly perspicacious, lucid in your style, and thoroughly understandable. May I make a minor comment, however? You wrote that we are poor because of poor choices. That statement begs the question, to wit: How do we know that we are about to make a poor or harmful choice? I think we must examine and define poverty. After all, what we are all trying to do is to alleviate the grinding poverty that now affects a great percentage of our people. I submit that "poverty is a negative condition marked by an absence of wealth." The only way to uplift the standard of living of the present day Filipino is to adopt choices and policies that will create wealth. Every choice our government makes, every policy that it enunciates must first be tested by this standard. Some may say that to do so is to resort to simplistic solutions. We Filipinos, unfortunately, love complicated solutions when simple ones can solve that problem facing us. All the six reasons you mentioned can be tested even before they are implemented by the simple question "Will such a choice create wealth for our people?" If not, then desist. If it will create wealth, then full steam ahead. Your ardent fan! James Litton, [email protected] May 04, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Dear Tony, I am impressed by the analysis. Indeed it is the government's policies that hindered forward movement viz- a - viz its Asian neighbors. I used to be an executive at Johnson and Johnson Philippines in the early 70 and mid 80's. I have seen not only the decline in the volume of tourists but also of foreign students. I remember the years where the country teaches others on rice research. In the end, the country became a rice importer than a rice exporter. But this is not the end for the motherland, the country can still tap its human resource that grows in the richness of its womb. Dr. Nestor P. Baylan, [email protected] New York City, May 03, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Mr Abaya, What a brilliant analysis! Thank you for including me in your mailing list. Regarding your Point # 6, it has been pointed out to me that many "1st World" countries have declining or negative population growth. But Japan has partially solved this by getting Filipina sex workers pregnant. At the present rate, Japinoys may eventually dominate that country the way the Japanese have created the Greater Asia Co-Prosperity Sphere after losing the war. Truly a "global" approach. I would suggest that the Philippines concentrate henceforth on the export of professional sex workers, both male and female, to countries like Sweden, the UK, etc. Catholicism could be rejuvenated in France which will otherwise be an Islamic nation within a few decades. Just send a bunch of devout condom-less Pinoy studs over there. Sorry, I seem to be rambling on..... Keep up the excellent work, sir. David de Padua, [email protected] May 03, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww In this article you mentioned that corruption has little to do with the Philippines being poor. I hope this statement is out of context, for indeed the kind of corruption practised in the Philippines is equally at fault in making the country poor. Indeed there is "good" corruption and there is "bad" corruption: 1.If a government official accepts bribes in order to prevent a competing enterprise to be given a license, this is bad corruption because it hinders economic activity as well as competition that leads to better products and services.; 2. If a bribe is accepted in order to more efficiently process a license without cutting corners, then this is good corruption because it hastens economic activity and creates efficiency in government service. 3. If corruption funds are reinvested in Philippine industries, then this creates employment and is good corruption, while if the money is invested abroad instead, then it has a double whammy because it takes out jobs and funds from the Philippines and creates jobs instead in another country, hence widening the gap between the Philippines and that particular country. 4. If corruption funds are derived from the sale of promises of questionable deals or even of legitimate deals that are forever unable to take off because money is made out of the process itself instead of completed projects, then this is bad corruption. 5. If corruption is moderated to, say, 10% of the real project cost (instead of over 100% to as high as 1000% as practised in the Philippines), then this is good corruption because the project goes through at a cost that is more or less competitive. In the Philippnes, the rates of corruption in effect builds only one bridge instead of 1000 bridges. While China and Vietnam have corruption too as do other countries, they practise corruption of the good kind that translates into actual projects being completed within their country at competitive costs. Therefore we are poor not just because of wrong economic policies, wrong education, wrong policies on birth control, but also because of the wrong kind of corruption that we practise. Jose Luis Yulo, Jr. [email protected] May 03, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Rejoinder to Tony Abaya I DISAGREE with your Point 4: More than anything else it was the protectionist policy that made the Philippines kulelat.It fostered import substitution industries that were costly and MISALLOCATED resources. (Precisely, I wrote that we should have pursued a policy of manufacturing for export, like our successful neighbors, instead of manufacturing solely for the domestic market. But it is necessary to go through a protectionist phase before opening up your market to other countries� products. Japan, South Korea, Taiwan, Malaysia, Thailand, Indonesia, even China and Vietnam, all went through protectionism before embracing free trade. So did the US and Europe. The US followed a protectionist policy from 1787 all the way to the 1930s. ACA) When Lone Star Cement wanted to locate manufacturing (Yes, not repaCKING, My dear nationalists) in the Philippines the nationalist-compradors said No No No. We had to contend with their costly cement. The culmination of all of these is the "Nationalist" constitution of 1987. Fortunately belatedly the Supreme Court came to their sense and realized you cannot extract minerals nor explore them using IDEOLOGY. AS TO THE MINIMUM WAGE ISSUE, I demand RIGOROUS proof, not just the say-so of a Concepcion. (Rigorous proof from whom and about what? Concepcion had nothing to do with this article. ACA) Unless you are a stupid catolico you cannot skip the Population Bomb. (I am not a stupid catolico, and I never skip the Population Bomb. ACA) I say again and again and again until the last syllable of recorded time that were the population of the Philippines just 25 million we would be enjoying better living for all. (And I wrote in that article that �Commonsense says that, all things being equal, it is easier to feed, clothe, educate and find jobs for 64 million people than for 84 million.� So what�s your problem? ACA) Ross Tipon, [email protected] Baguio City, May 03, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Dear Mr. Abaya, As a retiree in my 70's, I can say I witnessed, with great sadness, those SIX FOOLISH MISTAKES OF OUR LEADERS which you enumerate, the mistake of legislating the minimum wage, the mistake of not addressing the export market, the mistake of missing the tourism boom, the mistake of embracing free trade (how I rued that day, when, working as an executive eyeing possible export markets, Mr. Ramos slammed the door on our plans), the mistake of setting an agricultural rather than an industrial national direction, and the mistake of encouraging population growth. Now I dread that Gloria is leading us into a SEVENTH FOOLISH MISTAKE, in her insistence on changing our sacred Constitution. Why, oh why, doesn't she or other government officials or opinion makers see the folly of our historical see-sawing between a presidential and parliamentary form of government? Marcos was the first to change our system from the presidential to the parliamentary. Then we returned to the presidential, and now we claim that a parliamentary will be better after all? C'mon! (Obviously, Mrs. Arroyo wants to stay in power beyond 2010, and the only legal and constitutional way she can do that is to shift to a parliamentary system, so that she can aspire for prime minister. ACA) I marvel at the utter lack of wisdom of our leaders, political as well as spiritual. Again I inquire why no one seems to ask the obvious: If the economy is the accountability of our political leaders, shouldn't our immorality as the second most corrupt nation in Asia be the accountability of our spiritual leaders? Why haven't any of them recognized this, humbly accepted it, and led the nation into a sustained, national, vigorous effort to correct our moral values? Am hoping you will be discussing these issues in forthcoming articles. Rene Valdes, [email protected] May 04, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Good summary, thanks, Tony! Lydia B. Echauz, [email protected] President, Far Eastern University May 04, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Tony- I thought you would be interested in this account of Vietnam's economy (and politics), if nothing else, for comparative purposes. All best, David Szanton, [email protected] Berkeley, California, May 04, 2006 PS. I really liked your six easy lessons. A seventh I would add, though, at least as I saw it in the Visayas, was the rapaciousness of Marcos and his cronies. No one there dared invest in anything that might expand the economy or increase employment for (legitimate) fear that Marcos or Benedicto or one of the others would simply appropriate it. The sense was if the Lopez family could not resist, how could anyone else? In that context, the only investment that made sense was English language professional and technical education for one's kids - so they could leave the Philippines and find good jobs elsewhere in the world. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Dear Tony: I must congratulate you for your highly informative, sharp and analytical article on how to become a poor country in six easy lessons. Well done. Way to go, Tony Frank Chavez, [email protected] Former Solicitor General May 04, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Dear Mr. Abaya: Just a few corrections on your article a few days ago, if you will. In 1957, the pesos was at P2:US$1. It was in 1961 that Pres. Diosdado Macapagal, upon the advise of two young graduates from a prestigious school of economics in the Northeastern United States,that the peso was devalued. Second, the United States poured in billions of US dollars to both Hong Kong and Taiwan because they feared both would be swallowed by Mao's China. In 1965,he almost succeeded in getting Hong Kong. Both failed to prosper as the exiled two families ruling the Kuomintang squirreled every single dollar it could back into US and Swiss banks. Only when Chiang and his minions lost power in Taiwan did it start to flourish. That was when the US recognized China as the "true" China. So, too, did Hong Kong, when the UK allowed limited democracy into its colony. You are correct in saying that one of the single biggest reasons why we failed to become a developing economy is our galloping population growth. You should continue harping on it and challenge those who insist on "no controls" to feed the hungry now, not when they are dead and in heaven. Please continue to enlighten your readers as many do not remember anything before 1986, about 25 million adults born between 1972 to 1986. I wish to remain anonymous, but to you. Oh yes, thanks for those many years of EREWHON. Name and email address withheld on request. May 05, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Forwarded by Roger L. Madrigal, [email protected], From: "Maneesh Sharma" <[email protected]> Some interesting points made. But I feel not correct on the whole 1. The minimum wage law was enacted to protect the rights of the workers so they would not be exploited as in the rest of Asia. (You don�t think I know that? During college, I belonged to an organization that lobbied for the passage of that law. ACA) In hindsight it seems like a bad Idea. but you have to understand the conditions and the demands of the people that time. (I was writing about the unforeseen and unintended consequence, that it made the Philippines less competitive with Taiwan and Hong Kong in the 1960s. ACA) 2.More then wage issue, what's keeping the people poor is the lifestyle which most Filipinos seem to lead. Almost everyone I've met from the middle class and the lower class seems to live beyond their means. People seem to live from wage to wage with little regard for savings and appear to rely too much on the "Utang" system. It might seem strange to you but considering that I come from India, (yes 5-6 bumboy India). for us to get into personal debt is considered a very shameful act. A person would rather live on rice and onions only, rather then take a loan from someone and live it up for a few days. The 5-6ers thrive here, so do the big Chinese and Indian moneylenders, but would you believe even in the province(state) that those guys come from back home, there is no such thing as money lending of this sort, let alone the rest of India. Every where I have traveled to in the past five years, Thailand, Malaysia, even Sri lanka, people live a simple life. In all these countries there were Indian and Chinese 5-6ers since the 19th century but it's only in the Philippines they have survived. Of course if you can afford it, you are entitled the good things. No one is denying that. But to be earning 8000 pesos a month and buying a 20,000 peso cell phone is just crazy. But how prevalent is that? All my maids and drivers own cell phones that cost only P3,000 or less. ACA) 3. The reason that Philippines never became a major exporter is a policy long in the making and the US is one of the major factors in it. Even after the independence of the Philippines, it remained a heavy business partner of the US with the balance tilted towards the US. The Philippines and the Filipinos were encouraged to spend and buy more goods as this benefited the American companies who were deeply entrenched here. It would not do well for those companies to have a low domestic consumption here and a drive for export. In most Asian countries including India, ideas of simple living and hard work were propagated. Here it seems the opposite happened. Even now Gloria tries to induce people to go more and more to the malls and buy goods and increase domestic consumption. This is not a bad idea as it increases the economic numbers of the country, but since the money mostly seems to be coming from OSWs , there is little incentive for the people to produce anything here to buy their goods. In China, India and other emerging economies the domestic consumption is nothing compared to the exports. Why, because the government and the people know it's better that way.(at least for now) 4. As for tourism , the Philippines has so much potential, including the ability to converse in English it's a shame that they seem to get so few tourists. But let me start by an example, while my wife (she's a Filipino citizen) and I were travelling in Thailand, she forgot her purse in a temple complex and half an hour later when we went to look for it, it was still there. She commented that even though we pride ourselves on being a Christian nation and having Christian values , the purse would have been gone in for five minutes if left in any Manila church. (Stealing happens all over the world. My mother lost her purse in the train on the way to the Lourdes Shrine in Catholic France about 25 years ago. My children had their movie camera, passports, etc stolen from their train compartment while the train was still at the station in Milan in Catholic Italy less than two years ago. Just the other day, May 6, the BBC website reported that 35% of the electricity generated in Delhi, India, is stolen. Etc. ACA) The other tourists I talked to said they felt more comfortable and safe being in Bangkok then in Manila. More secure in the fact that they would not be taken advantage of by someone or be robbed. The WOW campaign and the land of smiles are very good but appear shallow when the tourists face so many difficulties. Although in this regard I can't say that my country does any better, If the purse would be gone in five minutes in Manila it would be gone in two minutes in India. 5. Gloria has the right Idea but wrong things to invest in. The Philippines cannot compete with China or Vietnam in general export. As Abaya said the wages here are too high and the talented Filipinos leave as soon as they can, you can't set up Export houses here. What the Philippines should do is what India has done, Concentrate in one or two key things and expand from there. (60 to 65% of Philippine exports are in electronic components and parts, 10% in garments. But India is not an ideal exemplar of an export economy. With a population of 1.1 billion, India�s exports totaled only $69.2 billion in 2004. Compare that with $69.9 bn for Indonesia (pop 242m), $87.9 bn for Thailand (pop 64.4m), $123.5 bn for Malaysia (pop 24m), $170.5 bn for Taiwan (pop 23m), $174.0 bn for Singapore (pop 4.4m), $250.6 bn for South Korea (pop 48.6m), and $583.0 bn for China (pop 1.3b). India started with IT software, then moved to medical drugs and Bio technology and now even hardware as Intel, Samsung and other companies open their plants there. Agriculture is not a bad Idea either. In the 70's 80's a lot of Indian scientists came here to study at the IRRI as we faced chronic famine( come on 1 billion stomachs). but now we export food to Other Asian countries and also to Africa and until recently to Philippines. From the knowledge gained from IRRI they moved to BIOTECH and other fields. The Philippines should target it's strong points and go after them with heavy investments and R and D 6. the population problem is not of the church's making which is just following Catholic Dogma. it is of the govt. the philippines growth rate is 2.7% each year as compared to China 1.2% and India 1.8%. (In 2004, the Philippines� pop growth rate was 1.9%. ACA) Although China has a somewhat strict family planning policy , In India the govt achieved it by heavy propaganda in the 60's and 70's without any force. The govt should make the church leaders sit down with them and come up with a unified policy. But for the most part I agree with Abaya that the Philippines , with so much potential, is really going down the shitter unless things are done to correct them. final thought in 1995 the Indian rupee to the Peso was 1: 0.62 meaning 1 rupee was worth 0.62 pesos Now it's 1 rupee equal to 1.2 pesos approx. I hope things do well here, I've lived in the Philippines for almost 6 years on and off and fallen in love with it(and fallen in love with someone in it ;-). It's also the reason I feel so sad that Philippines doesn't seem to make use of it's full potential. > let's hope for the best & pray god gives us the wisdom to do best. maneesh NOTE: All my stats above come from the 2006 World Almanac and Book of Facts. ACA. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Our country can't progress from the pumping of foriegn dollars through our low paid workers. They are just gonna strip our natural resources. Even if we have tons of investments in our country, the investors still have several years of TAX HOLIDAYS. Look what propped our economy and saved PGMA, it is the OVERSEAS REMITTANCES which is at the level of WESTERN LABOR RATES. What makes a country rich and miltary capable? Try this.......... 1. a FOUR SEASON Climate (Winter. Spring, Summer, Fall). Look at the G8 countries (USA, Canada, UK, Japan, Germany, France, Italy, and Russia). They have standards of living and armed forces that we adore and envy. Why? All their economic products, military hardware, and government services are WINTER oriented. Tough, Durable, Dependable and Long Lasting. All the surplus goods shipped to us can't work in their harsh winter environment. Here in the Philipines? Our soldiers equipped with faded and torn BDUs, holed combat boots, jamming M16, meal of sardines & instant noodles are just enough for Tropical Climates. Try bringing it during winter warfare. Even our citizens can survive in very poor conditions for fifty years without complaining. Because we don't die easily during the wet (rainy) season. Look at the US, you can't buy their votes and get away with corruption easily for the citizens are afraid that the government consequently will steal funds and abandon them during winter season. Surely you will have governments overthrown every spring time. This is the reason why the US wants to secure the oil in the Middle East. What will fuel their oil burners in heating their homes during winter? 2. a free market society and an exporting economy. What defeated Russia is that they don't have quality CONSUMER GOODS that can beat the Western goods. Their economy failed because their inferior products can't lift their country's winter conditions. Why make new inventions and innovations when the state takes it away from you? 3. an invading neighbor country or you don't want to go back to your poor "mainland" country. Israel has enemies all around it. All Arab states.Hong Kong tasted the benefits of capitalism. Why go back toMainland Communist economy?Singapore is proud of its independence from the Malay peninsula.Australia, New Zealand, South Africa have leaders that don't want to go back to UK, so they made themselves a new home for themselves in these new found worlds. 4. OIL MONEY. OPEC countries. Need to explain? Venezuela (socialism) is improving on its social obligations because of oil discoveries. Malaysia has rich oil fields. No wonder they have money to spend on new military hardware.Brunei.An economist, Philip Parker, in his book PHYSIOECONOMICS, calls it the "EQUATORIAL PARADOX"We don't have a sense of time and need to rush things.Our tropical climate breeds these Filipino Traits. Juan Tamad, Ningas Cogon, Pinoy Time, Crab Mentality, and Singing Christmas Carols in September !!! I still remember during Elementary days in my Social Studies class."......Class..... The Philippines has a beautiful tropical climate better than the United States. We have plenty of natural resources. Get a seed. Plant it anywhere and it will bear fruit. Our market never runs out of vegetable, meat and poultry products. We have food all year round. We lucky to live in a country like the Philippines...." I think it works the other way around for us.... Francis Garcia, [email protected] May 06, 2006 OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO |