As I take a momentary breather from MITHI, I reflect on factoids gathered from books, media and the Internet this week. They might be nothing but I might as well document them.
PH’s Growing Economy and Unemployment Rate
It is quite mind-boggling how the government can claim positive economic growth while there is a 12.1M employment deficit. According to Okun’s law, “a one point increase in the cyclical unemployment rate is associated with two percent age points of negative growth in real GDP.” Therefore, the relationship between GDP and employment is directly proportional: positive economic growth means more jobs, vice-versa. Thus the current domestic economy-to-employment ratio is anything but logical.
In a morning news show, Ted Failon and an Industry Leader (IL) (*failed to note his name), elucidate the matter. According to IL, the discrepancy is explained by the Philippine’s (PH) lack of solid manufacturing industries. He shares that as opposed to our Asian neighbors who trained their energies to manufacturing after the two world wars, our country skipped to services outsourcing. Since industry is a major source of employment, the “shortcut” has created the economy-employment imbalance: No industry means no jobs.
The PH’s positive economic growth is fueled by foreign interests, such as the Business Processes Outsourcing (BPO) a.k.a “Call Center Industry,” that is considered fickle at best. They provide employment but are heavily dependent on inflation, labor costs, and political stability. These investments, just like the Intel factory in the Laguna TechnoPark and other foreign manufacturing plants, that employs thousands, can be pulled out anytime. Thus, the positive economic growth is an artificial one.
In the same news show, the IL laments our government’s lack of interest in local manufacturing industries. He cites the death of the Philippine Steel Corporation, that not only provided products locally and internationally, but also jobs. Moreover, he shares that our textile industry is at the brink of death – Vietnam and Cambodia are now the powerhouses in textile production. Furthermore, he adds that in Asia, the PH is the only country without a flagship car.
In my opinion, we have no one else to blame but ourselves. We are so in-love with short term glories that we fail to plan ahead – thus suffer in the end. Just like in Mathew 7:13-14 that says, “Enter ye in at the strait gate: for wide is the gate, and broad is the way, that leadeth to destruction,” history shows us that shortcuts and easy passes always lead to disaster. Further, as the poem erroneously attributed to Rizal says, “Whoever knows not how to love his native tongue; Is worse than any beast or foul smelling fish.” Like language, we should love and support our own products and industries. After all, who else can help us but ourselves.
It is not too late, we can still do something about it. Let us learn from history and move-on.
In a related note, I didn’t realize until this morning that I am riding “Samurai Technology” to work. As some of you may know, I drive an old Mitshubishi Lancer to work everyday. In an article I stumbled on the Internet, I learned that it was founded by a real Samurai! In 1870, roughly two decades before our independence from Spain, Yatarō Iwasaki, a Meiji Restoration Samurai, established the company.
In an equally serendipitous encounter, I landed on History Channel’s the ‘Story of Mankind.’ It recounted Iwasaki’s life and how he founded the company. According to the documentary, Mitsubishi was officially born when Iwasaki had his top-knot cut off at a barbershop. For any samurai, this was a badge of shame, but for him, it was an act of literally and figuratively severing ties with the past – a step into the future.
Look at Mitsubishi now. It is one of the biggest companies in the world. Look at Japan now.
To progress, do we need to cut something off? I wonder what.