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Aug 12th
Home Columns Dissenting Opinion RP Is a Land of Elusive Opportunities
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Columns - Dissenting Opinion
Wednesday, 07 January 2009 15:38

The Philippines Is a Land of Elusive Opportunities: A Discussion of the Cause or Consequence of the Country's Weak Economy


F irst is the immediate cause: We lost our competitiveness when unions invaded our economic zones and free ports. Then there was widespread petty graft perpetrated by administrators who kept on changing the rules of engagement within the zones. As a result of tentativeness, the factories have long left (and relocated to other eco-zones in neighboring countries in Asia).


We have to serious on whether we want to compete globally or not. In our dogmatism about minimum wages, jobs have disappeared. People cannot even choose to be underemployed rather than unemployed because the jobs are gone.


We can compete even with China and India if we rationalize our wage and incentive systems. We can have lower wage standards and more attractive holidays inside export processing zones and free ports. Other things remaining equal, we are preferred by the Westerners because we speak better English and our work ethics are good. 


Second is the untapped treasure: As consultant to Cito Lorenzo, former aggie secretary from 2002 to 2004, I witnessed how and when we unleashed the great potential of Filipinos at science and technology and applied it to farming, fisheries and livestock, we could at least feed our people with less need to import and exhaust the country’s foreign reserves just to make the rich richer.


My classic example is the tilapia anecdote. With the price of galunggong soaring, it no longer was the poor man's fish. Tilapia was sought to replace it. Costa Rica lorded the world market because of its specie that was could grow into palm size and thus harvestable for table consumption three times a year. When harvested every 8 months instead of four, the specie grows into pla-pla whose fillet is exportable internationally.


When Secretary Lorenzo raised the green flag for the many Ph. Ds in the Philippine aggie world, the wizards of Central Luzon University in Munoz, Nueva Ecija, were the first to get excited. In a couple of months, they confided to the secretary that they have broken the impasse with their development of the get-excel variety, a specie of tilapia that could be harvested not thrice but four times a year. That means in six – not eight – months, pla-pla fillet has the potential of being developed for the world market.


But as Ado Paglinawan always said, “Phooey the Pinoy. He has a problem for every solution.”

The plan was presented to President Arroyo and she approved Secretary Lorenzo’s proposal for the establishment of one regional hatchery per region in twelve months. Well everyone got excited and to make the story short, 12 hatcheries were delivered by the department in six months or half the time. The price of tilapia sank to P35 per kilo, supply was everywhere.


At the end of two years, we were 98% sufficient in rice, and almost 80% sufficient in corn, thanks to the hybrid varieties. There were cases of rice hectarages producing 300 to 400 cavans (per hectare), three to four times the record of Marcos' Masagana 99. Our agricultural technicians and extension workers were quick to adapt Chinese technology.


I could enumerate more and even wander off to other fields than aggie, but you must have gotten the drift by now.   


Imagine if the 2.8-billion pesos lost in fertilizers that never were delivered, 3.1-million (more pesos) that flew away on the way to better irrigation and another 5-billion (pesos) gone before hogs could be dispersed. If all these public funds all went to the countryside instead of serving as Gloria Arroyo's petty cash to buy congressional votes, we could have been a net exporting country by now in the midst of the world’s food crisis.


But as I always say, phooey the Pinoy. He has a problem for every solution. # # #


Editor’s Note: The preceding article carried Mr. Paglinawan’s comments about an article posted online in several e-forums. The article was entitled, “Physicist outlines UP's role toward a national industrial policy.”

Physicist outlines UP's role toward a national industrial policy.

It was written by Jo. Florendo B. Lontoc and was posted originally in the University of the Philippines Newsletter, as per this hyperlink:
http://www.up. ter.php?i= 773&
Prof. Jose A. Magpantay, former director of the UP National Institute for Physics, pushed for a national industrial policy even as he tried answering the question he posed in his UP Centennial lecture "Is UP a Cause or Consequence of the Country's Weak Industry?" on November 28, 2008, at the NISMED auditorium, UP Diliman (Campus).

According to Magpantay, the question has bothered him since he was a Physics major in the University during the Diliman Commune. At that time, he was taught ideological explanations for the ills of the country while in a program where no research was being done, and no research laboratory was in operation.

There is an obvious link between the University's development and the country's development. Without a developed industry sector to give it wealth, the state is constrained to fund the state university and research. But the growth of industry in developed countries has been propelled by "third-wave" technologies, which are products of university research. UP has not become a research university and is, therefore, unable to contribute significantly to industrial growth. On the other hand, in failing to develop industry, the state gives no reason for universities to produce scientists and engineers with advanced research training.

A  ccording to Magpantay, beginning with the Filipino-First Policy under President Carlos P. Garcia in the early 1950s to the second attempt under President Ferdinand E. Marcos, and until the early 1990s, the pattern of the country's industrialization was following that of
Taiwan and South Korea. Their development took a giant leap, however, when they deliberately built on higher, third-wave technology industries. In contrast, the Philippine economy was left dominated by the service sector and not founded on strong industry.

The University, in the 21st century, is just in the early stages of becoming a research university. At their peak in 2005, UP's ISI publications only averaged 0.18% per PhD faculty, much smaller than the 2.53% of such universities as National University of Singapore.

UP only began beefing up its Ph.D programs in science and engineering in the 1980s. For most part of the 19th century, the University's science and technology languished in a derelict state, Magpantay said.

Why UP failed to become a research university?

Salaries in the University have been perennially low; the teaching load heavy; and recruitment, tenure, and promotions requirements light on research and publications components. Research incentives came late, starting in the 1990s.

Colonial history can help explain the fact that the country and the University did not prioritize research. Spanish education did not encourage scholarship. Filipinos viewed American's vision for a world-class university in UP as part of a neo-imperialist agenda.

In the 1960s and 1970s, in the midst of political turmoil, scholarship was seen as an ivory-tower type of engagement as opposed to activism. Because of the country's problems, those interested in research packed up and went abroad. University experts who stayed focused on teaching, consultancy, and finding employment in the dictatorship's massive infrastructure projects.

Why the
Philippines failed to make industry leap forward?

After granting the Philippines independence in 1946, US policy outlined the Philippines' role as its supplier of raw materials, and thus, continued America's partnership with the country's landed elite. President Garcia, who was the proponent of the Filipino-First Policy, lost to Diosdado Macapagal, who took the more liberal-economic approach.

When Marcos took over, he embarked on an industrialization program, which was, however, given a reality check by the global economic crisis and the country's tight debt situation. Subsequent administrations took the opposite path toward liberalization, privatization, and deregulation—the prescribed path of the World Bank. Saying that this would attract foreign investments and consequently encourage industrialization, the government followed through on the policy. What the country attracted though were mostly portfolio investors. And while growth has been noted in semiconductor exports, raw materials for these are imported.

Post-EDSA, the state continued the policy of automatic debt servicing, which constituted money lost to building industries. The state mothballed the Bataan Nuclear Power Plant, which ultimately resulted in a reliance on independent power producers, whose very-high power rates were another disincentive to industry.

At present, economic policies remain biased in favor of import substitution and local markets rather than global competitiveness. At the same time, the country still practices techno-liberalism, which means getting only technologies that the market demands. The country's number of high-technology scientists and engineers has not reached the critical mass necessary to attract established industrial partners from which high-technologies can be sourced.

Did UP contribute to lack of development in industry?

UP did nothing to help the country formulate an industrial policy. Magpantay criticized the neo-liberal policy that was pushed for by the UP School of Economics (UPSE), and which has held sway since the collapse of the
USSR. Many of the brains of the National Economic and Development Authority (NEDA) have in fact come from the UPSE.

Magpantay clarified that the US practices industrial policy, although he described it as "backdoor" and disguised by the label "strategic economic planning." The fierce adherence of UPSE to neo-liberalism is matched by the failure of technology managers to make a convincing case before the country's policy makers.

Magpantay gave UP the next 10 years to work doubly hard to become a research university and contribute more significantly to the development of industry while persuading government to adopt industrial policy, Magpantay said.

More particularly, he recommended an industrial policy that focuses on alternatives to fossil fuels—a sector where the Philippines can have an advantage in the global arena. Founded on science, an industrial policy on energy will harness the sun and the nucleus for electricity, to augment what the Philippines harnesses from the wind, water, and the earth's natural heat. These could be made more efficient by "third-wave" control systems, storage systems, and the development of a grid where energy production is decentralized.

Industrial policy is needed because the private sector cannot be relied upon to take risks on something in its infancy stage.

Government and the academe must, therefore, work hand in hand to develop this industry. Magpantay looked in particular to the UPSE, the College of Business Administration, the National College for Public Administration and Governance, and the Technology Management Center to draft an industrial policy and convince (the) government to adopt it. The College of Science and the College of Engineering will work on the "supply-push" aspect.

He said that once the industry has taken off, government can let go. A 25-year enforcement has been found sufficient for an industry to make a mark in the world.

This government-university cooperation must be undertaken if the country wishes to break away from the failures of its past industrialization attempts, Magpantay concluded.

His was the penultimate lecture in the 29-lecture series which is the centerpiece activity of the UP Centennial celebrations. Webcast and beamed live to all constituent universities, the lecture belonged to the set of "Views from Inside UP."  Magpantay specializes in High-Energy Physics and social sector technology policies. # # #

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Last Updated on Wednesday, 07 January 2009 15:45

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