Friday, March 03, 2006

Romanticizing Globalization

Seeing Globalization for what it really is,
Renato Constantino

WHAT WE FILIPINOS SHOULD KNOW: I remember back in the mid-1970s when I first read about global enterprises (aka multinational or transnational corporations now) on a pamphlet made of cheap, newsprint paper; it was written by Professor Renato Constantino and was an eye-opener for me. I was at the UP MBA Program at the time and I realized that much of what I(we) learn, especially with regard to Developmental or Political Economy, was bullshit. (But I still finished the Program, hehe)

Many of us so-called educated do not seem to realize so. We go on with our merry ways. We learned to read, write, speak English and use mostly American books, so we automatically think American and also, consciously or unconsciously, come to think that what is good according to American books is good for us Filipinos and the Philippines. Our Americanized minds conditioned us to measure and work on everything according to how Americans do and what American interests are.

Reminds one of the early 1950s, when in a U.S. congressional hearing then GM Chairman Charles Wilson stated his mindset: "What is good for America is good for GM and vice versa." The vice versa was parroted thus: "Whatever is good for GM is good for America." It worked for the Americans and America then. (Interestingly nowadays: with GM losing almost $5 billion, laying off 20% of total workforce or 30,000+ and closing 12 plants, it looks like "Whatever is bad for GM is bad for Americans and America.")

But no matter how much and how long we ape America, our Americanized minds did not and will not work for us, or for our homeland. We have been doing it for the last 60 years, not counting our colonized years. Our colonization, both by the Spaniards and the Americans, has distorted our Filipino Mind, we the so-called educated, let alone the uneducated poor, are messed up. We Filipinos, as seen and described in 1987 by James Fallows has a society with a "damaged culture." We heard that before and got pissed, and we continue to ignore, not remedy.

Thanks to our "best and brightest" in the international financial institutions IMF/WB/ADB, business, NGOs and government, to our native technocrats, we are in deep shit, in an economic quicksand. And amazingly we intend to continue and not change the course. I suppose it profits these native, Americanized technocrats in their fancy offices, with their tunnel vision and fancy economic statistics. They do not see that the impoverishment is greatly due to them; of course in cahoots with the politicians they "advise," or maybe the devious guiding the crooked blind.

Here's a short essay by the late Professor Constantino on our enthusiastic and unquestioning embrace of the WTO ( cultural globalization + economic liberalism = neocolonialism).

See also:
http://thefilipinomind.blogspot.com/2005/12/persistently-damaged-culture-by.html
http://thefilipinomind.blogspot.com/2006/02/economic-hit-man.html ,
http://thefilipinomind.blogspot.com/2006/01/economic-growth-versus-economic.html ,
http://thefilipinomind.blogspot.com/2005/12/adam-smiths-soft-side-by-sherrod-brown.html ,
http://thefilipinomind.blogspot.com/2005/11/multinational-corporations-corrupt.html ,
http://thefilipinomind.blogspot.com/2005/11/wto-five-years-of-reasons-to-resist.html ,
http://thefilipinomind.blogspot.com/2005/11/development-conflict-philippine.html ,
http://thefilipinomind.blogspot.com/2005/10/terror-of-corporate-globalization-aziz.html ,
http://thefilipinomind.blogspot.com/2005/10/telling-truth-about-imperialism.html ,
http://thefilipinomind.blogspot.com/2005/10/top-ten-reasons-to-oppose-imf.html
***************************************
Seeing Globalization for what it really is,
Renato Constantino

In the romantic view of neo-classical economists who swear by the virtues of the 'free market', globalisation is perhaps the best thing that ever happened on this planet. According to their abstract models which are conveniently devoid of real people, the end result of globalisation -efficiently produced goods made widely available at the cheapest price - is worth more than its momentary pain. Eventually, globalisation will even out the playing field with the most efficient 'world-class' producers winning the game,to the ultimate benefit of consumers.

Anyone who has experienced real life knows that this romantic notion exists only in the heads of economists in love with their own flawless projections. The shaky peso, high interest rates, increasing inflation, massive layoffs, and near starvation in some areas of the country have constituted a rude awakening even for those who wanted to give the prophets of boom the benefit of the doubt.

It is back to reality, and it is obvious that there are huge holes in the sails of the ship Philippines 2000 as it navigates the treacherous seas of 'global competitiveness'.The fact is that the odds are stacked against countries like ours in a highly uneven playing field designed to make winners win even more. And because of the mounting losses suffered by the losers which happen to be the usual ones - the former colonies located in Asia, Africa, Latin America, Caribbean and the Pacific - it is now fairly easy to recognise globalisation for what it really is.

It is the rule of the Bretton Woods Twins and the WTO which regulate and intervene in the affairs of the South. It is the means by which the South will not be allowed to threaten the gains of the North under colonialism and neocolonialism. Rules and regulations for countries of the South need not apply to countries of the North which flout the rules that they want others to follow.

For example, protectionism is a no-no practised by Southern governments. But when the United States arbitrarily imposes restrictions on the entry of specific goods from particular countries, or when European states continue to heavily subsidise their agricultural products in order to dump them in Southern markets, these are perfectly all right.

Transnational corporations (TNCs) based in the North, notorious for their unfair trading practices and other misdemeanors,cannot be reined in by a code of conduct. Efforts to come up with such a code have recently been aborted.

Far from ensuring free trade, globalisation in reality provides a framework for intervention by the strong in the affairs of the weak. The United States as the lone superpower has become the guarantor of 'order'. It has mandated itself to interpret events and policies in the light of its own interests. It has assumed the task of policing the world by projecting its military power. This is the privilege of the hegemony.

As leader and protector of international capital, the United States tries to be a supranational state that can define the relations between the South and the advanced countries of the North. The chief concern is that there be no threat to the dominance of international capital. What is important is the institutionalisation of formal and informal structures that predetermine decision-making of the developing country so that they are consistently favourable to the collective interests of the superpower and its allies.

This is quite obvious in the ways that the East Asian financial crisis is playing itself out. The IMF is playing God, virtually dictating the way the most seriously affected countries will be run. And the chief of state of the lone superpower through a phone call makes it plain to those affected that they have no other choice but to obey.





Neocolonialism - The dominance of strong nations over weak nations, not by direct political control (as in traditional colonialism), but by economic and cultural influence.

“The true Filipino is a decolonized Filipino.” – Renato Constantino

"If the people are not completely free and happy, the fault will be entirely their own." - George Washington, shortly after the end of the American Revolution

"What luck for rulers that men do not think" - Adolf Hitler


***********************************************
About the writer: Philippine nationalist historian RenatoConstantino was cited as one of the 100 Most Outstanding Filipinos of the last century in art and culture by the Cultural Center of the Philippines. He was a distinguished writer, social critic and lecturer, and secretary of the Philippine mission to the United Nations during 1946-49 and counsellor at the Department of Foreign Affairs from 1945 to 1951. He died on 15 September 1999 at the age of 80.

The above article, which first appeared in the Manila Bulletin (3 May 1998, 'The real score'), is reprinted here as a tribute to Renato Constantino. Third World Network is also accessible







13 comments :

Anonymous said...

Hi Bert:

It is not true that globalization is an American invention or was it the creation of the rich nations. Globalization is an international phenomenon and many economists, both in the rich and poor nations alike fall to the logic propounded by free trade economists that free trade will increase the prosperity of the world -- especially poor nations.

The fact is that the claims of free trade economists cannot be substantiated by the historical facts. Before the United States became independent, Great Britain forced the US to practise free trade. Since free trade was not helping the American economy, the first thing that the independent US did when she declared her independence was institute tariff laws against British and other nations' imports.

If free trade was making the Americans richer as claimed by the free trade economists, the Americans would have never severed her free trade relations with Great Britain. Why should they -- when they were killing the goose that lay the golden egg! The fact was the free trade was hampering American economic growth that is why when the Americans gain her independence from Great Britain, she immediately stop their free trade relations with their mother country to redress this economic imbalance in trade relations.

Inspite of all the evidence to the contrary, free trade economists keep on insisting that free trade will hasten the economic growth of nations' practising this economic doctrine.

That is why many economists in developing countries have fallen to the logic of free trade economists without ever bothering to check the facts. This is the main argument of the opposition to free trade, that all the claims of free trade are merely based on fantasy and not on facts.

The opposition to free trade is not only strong in industrial nations but also in developing nations. Free trade economists may have their way now, but they cannot maintain their program of free trade for long because free trade economists are only good in promising but never in delivering results.

Very truly yours,

RAMON A. DEL GALLEGO

Anonymous said...

Hi! Bert

I have yet to come across a study correlating economic failure in this country with colonial mentality. But studies on the economy point to three main reasons for its failure: untimely shift of focus from agriculture to industry, booty capitalism and widespread corruption.

Sometime in the past, policy makers have mistakenly thought that they could jump-start industrialization by focusing public investments into the industrial sector and providing it with a host of incentives and protection. The agriculture sector, where most of the population secure their livelihood, has been neglected paving the way for widespread poverty in this country. With most of the population impoverished, the industrial sector that has emerged couldn't benefit from a viable domestic market to cover fixed cost and be competitive in the export market. Today we continue to have an industrial sector merely surviving on government incentives and protection and by paying low wages to workers. It's also unable to absorb the one million plus Filipinos entering the job market annually. Jump-starting agricultural development first would've created a vibrant domestic market for industry to subsequently thrive and be globally competitive.

The economic elite in this country has a curious way of doing business. They use their influence on policy makers to protect their business and prevent others from competing with them. Thus almost every major industry in this country (banking, sugar, retailing, cement, telecommunication, airline, steel, shipping, etc...) has been at one time or another a monopoly or oligopoly. There has been a time in this country that the economy was controlled by a mere 46 families. The consequence of this booty capitalism, bureaucrat capitalism or crony capitalism has been a low investment rate, inefficient industries and limited opportunities for employment and wealth creation. It's no accident that the principals of these monopolies and oligopolies are also the most generous in making political contributions during elections.

There has been a time when corruption has been generally accepted as a tolerable cost of doing business in this country. Not anymore. The extent of corruption is now such that it has become a major impediment to investment, a critical variable in economic development. Moreover, corruption deprives government of resources to develop the human capital of the country and to pump prime the economy with meaningful overhead capital investment. In his work Development as Freedom, 1999 Nobel laureate in Economics Dr. Amartya Sen has established a clear connection between economic development and the development of human capital.

By the way, it's interesting to note that Renato Constantino, father of my friend RC, had nothing to say against free trade. He has merely criticized the unfair manner by which the WTO is implementing a free trade regime in the global marketplace. I fully agree with his criticism. The WTO is a lutong makaw. I also believe that underdeveloped and developing economies must be allowed sufficient time for adjustment to avoid the social costs of losing out in the market. After all economic development must serve humanity and not the other way around.

In a ten-year study of the competitive advantage of nations, economist Dr. Michael E. Porter has pointed out that the most competitive nations in the world also have the most economic freedom. Internal competition enables local industries to acquire the competitive skills necessary to take on the global market more successfully. With booty capitalism still very much prevalent in this country, we have no chance at all whatsoever even with a fair WTO.

Gico Dayanghirang
Davao City / Davao Oriental

Bert M. Drona said...

Hello ramon,

As you correctly state, all the so-called developed/rich nations used protectionism via tariffs, if not outright prohibition of,imports.

The same rich countries led by the USA have been preaching free trade/economic globatization via WTO and supported by IMF/WB/ADB pressure poor countries, i.e. Philippines, to practice it.

The Americans imposed it on us during colonization and as a condition to granting of political independence.

Our post-WW2 governments have been practicing/maintaining free trade to a certain degree (except during the protective years of mid-1950s to early 1960s under "Filipino First")until Diosdado Macapagal dismantled most of it.

The Marcos regime religiously followed the IMF/WB dictates to implement economic liberalization and continued increasingly by his successors and topped with becoming a signatory to the WTO.

All these actions rationalized by our native,American-trained technocrats who are subservient to US economic interests/TNCs (their sponsors.)

jemy said...

i have to say that i disagree with the general views expressed in the entry. most of those who have been particularly following or observing developments in international trade come to either an explicit or implicit agreement that free trade is indeed beneficial, particularly for the poor. the question or differences in opinion boil down to the manner of implementation, particularly with regard to the question of subsidies and tariff barriers imposed by developed countries. logically, the solution is not a regression with regard to globalization and freer trade but more of it.

some of my other views on this are in http://paseoblur.blogspot.com/2006/03/rock-against-wto.html

the thing that has to happen is to move away from the protectionist "nationalist" argumentation vis-a-vis the absolute and internationalist free trade position. it simply narrows down the options, unreflective of the nature of trade policy and history, and is not helpful.

in any event, if one takes a step back, most of the problems of the developing countries can either be traced to internal structural or socio-political factors rather than through policies instigated by multilateral organizations. nevertheless, effects coursed through actions of the imf and wb should be differentiated with regard to agreements constituted (first under the gatt) under the wto. commentary on the effectiveness or lack of it as far as the wto is concerned should be done by viewing its history and organization, separating what is fact and what are mere common misconceptions. first off that must be discarded is are notions on how the wto operates, the myth regarding "green rooms", and its difference vis-a-vis the imf or wb. by doing so, one would note the high degree of latitude that is afforded to all countries, particularly with regard to its national commitments and individual tariff policy, as well as the ponderous decision making process due to the "consensus" manner of voting, highly democratic contrary to what most critics say.

if there is an alternative to the wto, other than a resort to bilateral power negotiations conducted without multilateral monitoring, that would be great to know.

many thanks.

Anonymous said...

Hi Bert:

What I wrote is the result of my researchers which took me 4 months to dig through. I wrote an article for the World Bank and I had to be sure that I have the facts because they will question my thesis.

This is what I found out: that free trade was practised widely during the 18th century and Great Britain imposed free trade on all her colonies. Furthermore, all European nations that engaged in empire building during the 19th century imposed free trade on all her colonies. Also, the Americans who colonized Guam, Puerto Rico and the Philippines imposed free trade on all her colonies. It wasn't long before the nations that were former colonies of Great Britain, former colonies of European empires and the former colonies of the United States soon dismantled free trade and resorted to protectionists methods to spur the economic growth of their nations.

There is plenty of political opposition to NAFTA and CAFTA and there is plenty of political opposition to the European brand of free trade. Since free trade economists cannot deliver on results, this experiment on free trade is not going to last long.

Thank you very much for allowing me to contribute to your blog.

Bert M. Drona said...

Ramon,

Thanks for your comment.

Yes. re the Brits.

Later, Federalist Alexander Hamilton, a Founding Father, was a strong proponent of protectionism,i.e. tariffs; a first revenue bill was adopted in 1789 though not as completely as he wanted though gradually increased later.

The Republicans in the early 19th century adopted such a comprehensive tariff bill which would have made him happiest if he were alive.

There was a continuing debate between the Southern planters and the Northern (like new England states) shippers engaged in the import and export trade.

And what shall we call protectionism as practiced by them all: nationalism - to work for their interests, their own people,within their borders, the national(American) interests.

These nations,England and US would not be rich and so-called advanced if they did not practice protectionism during their early developmental years and declared and demanded free trade when they already were strong and dominant.

Of course, free trade or laissez faire is all right within their borders, compete among themselves since theoretically and in reality in brings out the creativeness but the logic of capitalism -based on maximumized profitability- will and did end up in less competition: monopoly and oligolopy in the long-run. That's where we are now.

Global monopolies and oligopolies of the rich nations in the globalized world kill the unprepared,disunited and poor countries such as ours. That's reality and not theory.

Bert M. Drona said...

Gico,

Thanks for your response.

I venture to say that there may be none (I have not looked for one though) since colonial mentality refers more to psychology, i.e. attitude/behaviour, or to a way of thinking (mindset) that prefers that of the former colonial master. In terms of its impact on economics, i.e. economic policy, such can lead to unquestioning preference of economic ideas and practices of the former master -as we do and have been doing.

I think there was really neither untimely shift nor any shift from agriculture into industrialization. In the first place, our nascent industrialization were mainly light or import-substitution on primarily consumer goods that we were importing, mainly from US due to habits developed during colonial times, of course. many of the investors were not engaged in agriculture.

In fact, some of the production facilities were/are owned by the same foreigners who were exporting to us: e.g. P&G, Unilever, etc. There was some moves for encouraging industrialization in chemicals, cement, textile, etc. during the "Filipino First" period under Pres. Garcia (dismantled thereafter by Macapagal).

I was an engineer in one, among a few, native enterprises -technologically innovative, adaptive and progressively managed-engaged in chemical manufacturing encouraged by the 1950s "Filipino First" policy. Sadly today, due to globalization and flood of cheaper chemicals from China, the company has started shutting down several of its facilities, including the one I was involved in design and construction back in the mid-70s. It had so many bright Filipino engineers in its personnnel. It really saddens me when I think of what we Filipinos can do and be.

To go back to your issues:theoretically, agriculture has to be developed well, that is, modernize to improve its productivity so we can move to industrialization (Rostow's Stages of Growth). But that theory is too simplistic and obsolete, given that in present times, no country wanting to develop exist in a vacuum. External factors and influences, i.e. rich nations work against attempts to economically take-off because they have vested interest in the status quo, i.e. the poor nation like ours being kept as primary supplier of raw materials and other commodities.

In addition, the landed aristocracy are not risk-takers, they are content with their agri-products, regardless of their inefficient production, especially those under quota agreements at the time; and excess earnings are not used for investing further but for consumer and other nonproductive imports. Thus , they did not want to invest in industry or on anything else. Nowadays, they are into parcelling their lands into residential projects, shopping malls and golf courses, etc all non-productive ventures except for their own greedy pursuit of more wealth.

As you alluded to, economic power gave these economic elite much leverage in gaining political power; and wielding the latter to increase the former. Today, we practically have no industry thanks to WTO and the influx of unlimited, cheap, legal and illegal, importations of all kinds of products: agricultural and non agricultural.

Of course, Gico, any thinking Filipino knows that the WTO was designed, is controlled and operated by the rich nations; and as you correctly said, it's "lutong makaw." And they can impose it on us; but not on them as present realities are. The G7 countries practice protectionism in certain sectors of their economy. G7 may appear polite in their annual talks at Davos or wherever but that's all, talk of fairness and "level" playing fields. And what are the realities that we sitness around us, in the owlrd and in particular, in our homeland?

It is only the political activism of many ordinary people from various countries who protest against the WTO and economic globalization that are stalling and hopefully reverse the wave of complete and absolute control by rich nations. Note the proliferation of bilateral economic agreements which indicates the difficulties G7 nations are meeting nowadays (except in our homeland!).

As to competition, we have lost so many and so much "one-time" windows of opportunities, i.e. one-time because competition nowadays is so hot that they beat us to it and thus any comparative advantage we have had are negated. When we had our chances, we did not grab it. Whether it was our educated, resources, capital, etc. Now what are our competitive advantages?

I think any nationalist leadership with support by a nationalist majority, if we ever have one in the future (hopefully in our lifetime, though remote) should concentrate first on basic human needs -we have to go back to basics since we really regressed so much- of adequate food, clothing, housing and self-sufficiency for the majority. Coupled with adequate services especially education, mass education for people to understand what is going on and for bolstering national unity. Easier said than done, since attaining nationalism will be vehemently opposed by those currently benefitting the status quo, natives and foreigners.

Of course, many of us so-called educated, in the middle class and above, will not welcome it since nationalism will require imposition of protective tariffs, banning importation of unnecessary items (luxuries). Else, they may be better off to leave the homeland. Which may be good because we will always have bright minds among the majority developed through a nationalist outlook, open to negotiations with all countries, establishing agreements especially with other Asians,other foreigners/businesses but not subservient; and progressive education.

As I agree with you on this: economic development implies human betterment and human dignity: satisfaction of the hierarchy of human needs. And that means betterment of our impoverished majority; sounds rhetorical but that's what life should be all about.

Thus, the imperative for mass education to appreciate what is going on, the need for changes in our thinking and national decisions, and allow nationalist implementation; nationalist implementation not limited to a limited, selfish natives entrepreneurs as happened in the past.

Bottomline, whatever system, be it in economic or political, nationalism is imperative. With nationalism, the drive is for looking out for our homeland, our people, our main priority.

An immediate task too is how to regain control of our educational system -now influenced and planned under the auspices of the IMF/WB dictates. It again calls for nationalist and radical changes, not an easy nor short struggle given present realities.

Bert M. Drona said...

Blur,

Thanks for your feedback. it's all right to disagree.

I think my replies above touch on most of your essential points.

Given our weaknesses (much of our strenghts have gone)we can not cope and compete with the big boys.

You cited the problem of implementations, I agree. However, it is not merely an issue though of management, it is more basic, it's our collective mindset, our culture, our lack of unity and thus direction of our efforts.

What is the end purpose of economics, of efficient allocation of resources, of government, of society? It is only when we agree after honest reflections, as to our responses to these few basic questions can we then plan and work towards their achievement.

As to the issue of an alternative (after mass nationalism is attained),I say: bilateral or multilateral agreements with other nations. But not to a blanket agreement as the WTO demands of us and to which our past and present governments embrance.

The results of our ready and absolute embrace stare at us, we see clearly in the perennial and deeper sufferings -maybe not by you or me- of the majority of our people in our present society.

(Remember communism is great in much of its theory but bad in implementation; similarly with uncontrolled capitalism, with its own logic of maximized and short-term profitability concerns and the consequent,long-term adverse effects on real people and society.)

That's our reality, despite the attractive and convincing beauty of the laissez faire theory we like or believe in.

Regards.

Tabuena art central said...

Great insight...cheers

Anonymous said...

Hi! Bert

As an economist formerly working with the state economic planning agency, former professional manager and now businessman and farmer, I've since learned to prefer dwelling on facts before making conclusions. I'm curious. What specific economic policy coming from our former colonial master have we unquestioningly adopted in this country that has caused the slow growth of the economy?

It is a fact that at in the sixties, government has made a conscious decision to re-shape policy and re-channel resources favoring rapid industrialization. You're right, it was an import substitution strategy. Investments in the manufacture of products that would substitute for imports have been given incentives and protection. Overhead capital investments have been focused on areas, mostly in and around Metro Manila, regarded as ideal sites for manufacturing facilities.

The strategy has deprived agriculture, where most of the population derive their livelihood, of overhead capital investments necessary for development. This has caused widespread poverty in the countryside. With most of the people poor and unable to buy hardly anything including food, the industries that have emerged couldn't sell their products.

Neither could they export. With no domestic market to cover fixed costs, they couldn't price their products competitively. The end-result of this import substitution strategy has been a sluggish economy with both the industrial and agricultural sectors performing badly. You can verify this fact with any government or non-government economic research institution.

In his ten-year study of the competitive advantage of nations, Dr. Michael E. Porter has observed that highly competitive nations have anchored their competitiveness on the development of their internal factor endowments. This means developing the human and natural resources available in their countries. He has also observed that these countries also have a dynamic domestic market for having developed the sector of their economy where most of the population derive income. The conclusion that the Philippines should've developed agriculture first as the path to industrialization is based on this factual study and not on Rostow's theory. Neither have I said that developing agriculture first is the only path to development.

South Korea, Thailand and Vietnam, with rich agricultural resources like the Philippines, have developed agriculture first before moving on to industrialization. In the process, these countries have increased the purchasing power of the majority of their population deriving income from agriculture. With a viable domestic market firmly in place, these countries are now well on their way to rapid industrialization and export competitiveness.

Singapore, with hardly any agricultural resource of note, has capitalized on its human capital and strategic location. It has invested in education and invited foreign manufacturers to locate their production plants in the country. It has also invested in transportation and communication to support the needs of their guest manufacturers and thus making the country a major regional trading center as well. Now with a highly educated and wealthy population, its focusing on developing world class high technology industries while importing most of its food and other agricultural products.

The Philippines has lagged behind because it has chosen to put the proverbial cart ahead of the carabao. It has chosen to build industries without building a market to sustain them. Until now, the country is unable to re-channel resources to agriculture because of the influence that industry has on policy making. GMA's present national budget, for instance, has a huge allocation for the Calabarzon triangle where a miniscule percentage of the labor force is employed.

As you can see, Singapore, South Korea, Thailand and Vietnam are all following the same winning development strategy that Dr. Porter has observed to be successful. They've developed their internal factor endowments first, whatever this may be, and in the process developed a dynamic domestic market before moving on to conquer the world. The Philippines is confused until now.

By the way, I've decided against giving a long discourse on the dynamics of global trade. Instead, I'm narrating to you my own personal experience and that of another entrepreneur that I've had the privilege to come to know. It tells the story just the same.

Before deciding to go on my own, I've managed an upstart pineapple processing company selling to the domestic and international markets. Within six months from start of commercial operations, my hardworking crew has dislodged international companies del Monte and Dole as market leaders in Davao City. Capitalizing on strong local sales, we could outprice any country in the world and sell at will to the international market as well.

Perhaps you've come across a Good Morning face towel. It's an icon in the country. Anticipating the lowering of tariffs on garments including face towels, the lady entrepreneur who owns the business has traveled abroad to see what's coming to the Philippines. She has observed that face towels abroad were made in various colors, thickness and sizes.

Even before competing foreign products could come into the country, the highly innovative lady has started producing and selling face towels in various colors, thickness and sizes. Capitalizing on the robust sales of her classic Good Morning white face towel, she could price her other lines more competitively than the incoming imports.

Not content with maintaining her number one position in the country despite foreign competition, she has decided to counterattack! She's now exporting abroad. In a business conference on AFTA and WTO that I've attended in Manila, she has shamed all the whining macho industrialists in the country complaining about AFTA and WTO with an account of her winning strategy.

I don't share your pessimism about a global trade conspiracy. Just choose your product-market mix well and do things right. You can beat anyone local or global. Your chemical company is the wrong business to put up in this country. Your raw materials are imported form the U.S. or Europe and are expensive. You simply can't compete. Continuing to protect your company is an unfair imposition on consumers and downstream industries who, otherwise, can buy chemicals from China at lower cost. Moreover, downstream industries have more added value and a higher multiplier effect on the economy. If a business is uncompetitive, it has to go. Otherwise, the entire economy suffers.

Tell your former employer to invest in a mango processing plant instead. The investment requirement is much lower than a chemical plant. Our local carabao mango has been found to be the best tasting in the world. Nowhere else can it be grown but here in the Philippines. It can be grown at any elevation and even on mountainous terrain.

This is a tremendous competitive advantage. You have low production cost because of abundant supply of raw material and a highly sought after finished product. Moreover, a business that utilizes local raw material, like a mango processing plant, has a deep multiplier effect on the economy, particularly, the agriculture sector where it is most needed. See what I mean?

Gico Dayanghirang

Bert M. Drona said...

Hello Gico,

Thanks again for your informative response.

There are several specific, developmental economic policies in our recent past which our government has pursued as "encouraged (conditionalities" for foreign loans) by the US-controlled IMF/WB. The most distinctive has been the concentration on the agricultural sector, i.e. Green Revolution during the Marcos Dictatorship.

Unknown to many of us, even back in the early post-WW2, American foreign policy was to keep us agricultural and as a supplier of raw materials, not industrialized, i.e. basic and heavy industries. I have a posting on this: http://thefilipinomind.blogspot.com/2005/09/why-our-homeland-did-not-industrialize.html

You see yourself and aother as success stories. Good for you! I beleive and think that with the proper/right and adequate resources: knowledge and capital, entrepreneurs -individuals or groups- can find niches, however small, in the globalized world,i.e. packaging of agricultural products, towels, shirts, etc. But as of today, the majority or a significant number of our countrymen are not like you or her in terms of capability and having the requisite material resources.

Re my former boss who is pretty smart as I expected/knew him to be. In fact, he was into diversified business enterprise even during the Marcos times. Now with the demise of some of his chemical products, he has actually purchased into other related chemical product lines AND into the commercial real estate: warehousing/malls,etc. I respect and understand his desire to survive in business AND in effect carrying over his employees.

You mentioned about other Asian nations who have surpassed us. I agree with you since these nations were unified, that is, nationalistic by strengthening their internal resources such as human- via mass education. A nationalistic populace will provide and demand similarly nationalistic leadership and work together for their common good. And with a common cause, i.e. economic development (not same as economic growth), they have worked towards a goal that served their majority.


There are many ways to skin a cat, as the saying goes, and I believe and think that if we, as a people, were conditioned to think with nationalism in mind, then be it capitalism, or a mixed economy or socialism (not same as communism) can work for us out of our present predicament.

We have continually failed economically and politically then and now since we are not united as a people, we are not because we are NOT EDUCATED to appreciate national dignity, national unity and sovereignty; plus subtle miseducation and other cultural influences, etc.

These may all sound rhetorical, but that's our past and present realities. And so far, we as a whole have not really tried being nationalistic in our attitudes and behaviours.

Anonymous said...

Globalisation is perhaps the best thing that ever happened on this planet. Globalisation will even out the playing field with the most efficient 'world-class' producers winning the game,to the ultimate benefit of consumers.

- Roberto Coronel

Bert M. Drona said...

Roberto,

Thanks for the forwarded mail.

Economic globalization works well for the consumer who has money. You have a US address, where consumer goods are relatively cheaper vis-a-vis many other countries, even developed ones. And thus can afford these goods.

In the homeland if you have money (not just for bare existence) then one will also be doing materially fine. Anyone with or earn dollars, even from a fixed U.S. Social Security check would live like a king back home. Because practically everything will be so cheap: housing, food, entertainment, etc.

We are the second largest source of OFWs because there are no dollars, no decent pay, at home; so many want out to earn some dollars and be able afford the same. Thus, Roberto whenever you visit the homeland, you can afford practically anything.

But what if one does not have money, as the case for the majority of Filipinos in the Philippines? Any average worker/employee/professional/college graduate if lucky to have a job can barely survive -have to borrow or have to get an "advance," if he has access to it, each month or time just to cover regular expenses -and more so in case of emergency, sickness,surgery,etc-then what?

Globilization has brought only mass unemployment due to plant closures, loss of land, ad nauseam, etc.

Any informed and seriously concerned Filipino who thinks in terms of the overall effects/results (reality) of economic globalization in the homeland will know that it did not help but deepened the poverty and misery of the Filipino majority.

For an individual person, globalization (or any issue) is good depending on where one is standing, so to speak. If you are monied, it's great in what it can offer: opportunities and goods; else, it's a graver, higher misery index.

Bert