Sunday, September 26, 2010

‘The breadwinner is a fisherman’

How can we all be demanding what’s on our wish lists as though we’re the kids of a tycoon? From justices to cause-oriented groups, it appears we Filipinos need to grow up? And until we do we risk being an ‘adolescent-economy’ – i.e., ‘there are times that try our souls’, and ‘biting the bullet’ is the option? (Disclosure: the writer had humble beginnings.)The writer continues to get education on the reality of an inclusive economy from his Eastern European friends – while recalling their socialist past.

Over late breakfast, after oversleeping following the mountain hike the day before, by the foot of a ski trail with friends and spouses (savoring the lush greenery and the tail end of summer) the writer commented that the scenery could be mistaken for Vermont or California or Nevada. And like many times before, they would talk about their prior life: ‘Ours is a town of 100,000, not a major city but not a small town either by our standards. The biggest employment was provided by our truck manufacturer (supplying Soviet Russia and satellite countries) that employed 10,000. And we also had an aluminum factory with a couple of thousand workers. The central planners typically would ascertain the industries a town would have – part of the promise of an inclusive economy. Today the truck manufacturer is down to 300 employees and is confined to axle production – after privatization that is the only product they reckoned they could be competitive in a globalized economy. (The writer chimed in that in Virginia given US military spending cuts over 6,000 jobs would disappear on top of 200 senior military and executive positions.) The aluminum factory was a mystery because we’re not near a raw material source. Fortunately, after privatization and our EU membership, it’s benefiting from the EU’s industry support – better access to raw materials; and as importantly, the larger EU market where they’ve demonstrated the ability to compete for foils, used in car insulation and food packaging – thus the business is thriving.’

And the writer contributed: His family lives in the suburbs with the same population size as theirs. It is locally known as a bedroom community of New York (one of several within commuting distance from Manhattan) and thus has developed an altogether different economy. Because these New York companies move employees in and out of the city, the housing market is an active component of the economy. And since some of the decision-makers live in the area, it is not surprising that a handful of Fortune 500 companies have moved their headquarters to the town – of course, justified by the high-cost of doing business in New York. And two European banks established trading floors, mirroring Wall Street. Financial, consulting and other service-related businesses have added to the local economy. The state university established a branch and is gaining from their strong partnerships with Fortune 500 companies. And a world-class university erected an extension hospital and created a healthcare industry. (In the case of the Philippines, the economic parameters are more like the town in Eastern Europe? If we are to pursue a competitive service-driven economy, the operative word is competitive: a service-driven economy must be designed to be globally competitive?)

And the friends continued: ‘We have two special high schools, one for math and the other for languages; and a university that is strong in chemistry, also an agriculture institute. In the past we had a military school. In a market economy we recognize that only those attaining competitive advantage would thrive. For example, given our farming capability, a big agribusiness investor put up a large-scale farm, with funding coming from the West. (It’s not quite like the 24,000 hectares they have in Brazil, the new agribusiness powerhouse; but not small-scale like we talk in the Philippines?) Also, because of our mountain lake we have an outstanding water source that spawned a beer brewery over a century ago. And today we are delighted that a Danish company has bought the brewery, producing popular global brands while upgrading the local brand and local brewing. And the impact on the economy is far greater – for example, today the beer company has a well-developed commercial capability and can compete with other global players. As you are aware newer businesses have also arrived – like food and beverage, dairy, alternative energy, among others’.

Clearly they have a totally different perspective of what an inclusive economy means – to them competitive advantage is the nirvana . . . despite the pinch they feel from the global recession. And even Fidel Castro would agree with them – ‘The Cuban model doesn't even work for us anymore?’

No comments:

Post a Comment