Thursday, May 13, 2010

GOOD OR BAD? LABOR EXPORT AS A SPECIALIZATION - THE CASE OF THE PHILIPPINES

LABOR EXPORT AS SPECIALIZATION
Internet newspaper the Huffington Post posted the attached report and accompanying video. It shows how the Philippines - known for its huge numbers of migrant workers that leave the country to work elsewhere - is no...w also at the government level officially accepting this ''specialization''. Domestic servants - who are looking for jobs in the Middle East, America or Europe - are prepared for their jobs through real training.

Normally one would consider this type of ''education'' a waste of money, because those workers will by definition leave the country. However, in the Philippine case this specialization has become so important that the migrated workers are now sending amounts of money home that make up 12% of the country's GDP!

What to think of this kind of ''specialization''? The local economy in the Philippines has stagnated for ages. The country, once a clear top 5 in Asia, has been passed by many Asian countries and is now among the poorer nations at the continent. Employment possibilities aren't too good and the country's good track record in anti-discrimination with relatively large amounts of women flocking both the political and business ranks at home on the one hand and the army of migrant workers on the other is not born out of active social policy. It is more the result of labor market potential and necessities.

Corruption has been a big problem. Even after dictator Ferdinand Marcos was removed in the 1980s, the country's leaders and mid- and even lower-level bureaucrats did nothing to follow the good example of countries like Singapore. It is therefore no surprise that Benigno and Corey Aquino's son Benigno Noynoy Aquino is now becoming a big force in politics with an agenda that has made anti-corruption policy a key issue.

Noynoy Aquino:
Force to reckon with in Philippine politics?


EVALUATION
But LMG Emerge is not sure yet that things will improve quickly. The stimulus given to migrating workers through educational initiatives like the one at hand may look strange, but in-and-of-itself there is nothing wrong with seeing labor as an export product. Aren't we seeing this everywhere in Emerging countries in sports? With the World Championships Football (taking place in South Africa next month) getting nearer and coaches presenting their lists of players, we see that most Emerging countries play with squads consisting of 80-90 percent players that are exported workers earning their money in European football leagues.

Only difference: the Philippines is not exporting stars but lower level workers that understand that they make far more money abroad than what they could make as office worker in Manila. Only to the extent that institutionalizing this might stimulate higher level workers, could it be worrisome. The last thing that the country needs at the moment is a 'brain drain'.

For the time being many hospitals in the Middle East couldn't operate the way they do without doctors from India and nurses from the Philippines. But the bulk of the export is still domestic workers.

Philippine Export Product?
Here a group of workers that went to Canada

Until the Philippine leadership will - finally - get its economy back on track and corruption down to acceptable levels, this type of export will remain a reality in the South-East Asian country. Sadly so, because we believe that with its entrepreneurial population (migrants are adventurous and responsible business people that take care of family taken with them and the ones staying at home!) and potential, the country does have potential. But for international investors the Manila Stock Exchange seems to be relatively unimportant with maybe international brewery giant San Miguel as an exception.

For the time being maybe one of the few regular export products that can compare to the success of its migrant workers: brewery giant San Miguel


DISCUSSION THEME
LMG would like to hear your feelings about this issue, and we therefore add it as a discussion theme.

DISCUSSION THEME: 
IS LABOR EXPORT 'THE PHILIPPINE WAY' HEALTHY FOR AN ECONOMY? AND SHOULD THE GOVERNMENT SUPPORT IT THROUGH EDUCATIONAL INITIATIVES LIKE THE ONE AT HAND?
 

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