Tuesday, 10 November 2009

The ‘experts’ are bashing RP again

John Mangun
Outside the Box
Business Mirror

Economists are a part of the only profession in the world where forecasts and projections do not have to be accurate as long as they can (or try to) justify the analysis.

Eric LeBornge, senior economist for the World Bank’s Philippine office in Manila, wrote this on April 7, 2009. From the worldbank.org: “We have revised our estimate downward for the dollar growth rate of remittances to the Philippines to minus 4 percent.” This is after he writes earlier that, “Empirical research finds that, on the whole, remittances have been countercyclical in the Philippines.” That is economist-speak for “The Philippines does not follow the predictions. But this time, I guarantee, remittances will drop.”

Jump ahead to November 2009, and the WB reports: “The remarkable resiliency of remittance flows to the Philippines has been surprising but welcome.” And these people are the economic “experts.” Imagine if your doctor tells you this past April you have terminal cancer. Then seven months later, “Oops, remember that cancer thing? Surprise! I was wrong. I hope you didn’t make any decisions based on my faulty diagnosis.”

But this is the Philippines we are talking about, and that means even when the experts are wrong, they are still right. There is always something negative you can say about the Philippines.

Yesterday the BusinessMirror headline read “BPO boom masks failure” that quoted more of Mr. Le-Bornge’s fantastic economic analysis and quoted the WB’s latest “East Asia and Pacific Update.”

Of course, absolutely every “analysis” on the Philippines must include comments about how the Philippines lags the rest of the region in building its manufacturing base. “The Philippines was the most developed country in developing Asia in the 1950s, but subpar rates of growth, coupled with policies protecting inefficient manufacturing....” One time I asked one of the experts what goods he thought the Philippines should be manufacturing for export. I am still waiting for the answer.

We tried that manufacturing-for-export thing once: sports shoes. You probably remember the factories in Laguna making “rubber shoes.” That worked well. Within five years the Chinese had taken all that business because they did not have to put up with annoying little things like labor laws and labor unions. China has proven one economic truth in the last decade. If a country does not care about free speech, free assembly, free travel, basic worker rights, minimum-wage laws, they can become an economic miracle.

But back to LeBornge’s put-down of the Philippine outsourcing business. I can say honestly that a good portion of his and the WB’s analysis contains some of the worst, most ignorant and intellectually deficient material I have had the displeasure of reading.

The WB begins by saying, “Business-process outsourcing [BPO] focuses only on employing educated and skilled individuals.” That is typical of the elitist, socialist propaganda that comes from organizations like the WB. Their statement implies there is something wrong with providing employment to the educated. Yet these same people also complain when our best and brightest look abroad for employment.

You cannot have it both ways, and this analysis is dishonest. It serves only to bash the Philippines.

The article continues, “LeBorgne said employees in the BPO sector belong to families who cannot be considered poor or even near-poor.” LeBorgne is an ignorant donkey, to be polite. I challenge him to make and justify that statement to the tens of thousands of employees in this industry whose higher BPO salaries pay for basic necessities and the education of siblings which would otherwise go lacking. Shame on you for your ignorance, Mr. LeBorgne.

It is astounding to me that economists seem to lose reason when speaking of the Philippines. LeBornge also says that “employees of the BPO sector only contribute to poverty reduction indirectly through tax collection.” A basic tenet when examining the economic consequences of employment is to look at the multiplier effect of that employment. LeBornge would have us believe that no other jobs are created by directly employing 500,000 as agents in the outsourcing industry. This is completely false.

Take a call-center site that employs 800 agents. Those 800 are supported by 20 or more security personnel. Likewise 20 or more maintenance people also have jobs. There are also food-service people, drivers and other less-skilled individuals that benefit. And because these call-center agents are more highly educated and skilled, most came from other jobs in banks, hotels, you name it. And when they came to BPO, they left a job opening that could be filled by someone else.

Every job creates positive ripples throughout the economy. And the fact is that higher skills and, therefore, higher-paying jobs have a greater positive impact on the economy than low-skilled employment.

I know that you have heard this same argument from me many times. And I am going to continue to repeat it because someone must counter the foolishness that is constantly said about the Philippines.

There is a real danger listening to the ridiculous analysis of people like LeBornge. It is comparable to the computer axiom of “garbage in; garbage out.” Decisions based on faulty reasoning and analyses are faulty decisions. We see it in many other areas of the economy and in our policymaking.

Rational, reasonable and critical preservation of the environment has been replaced by climate-change hysteria based on false, manipulated and, at times, fraudulent information. Consequently, genuine action to protect the environment is substituted by meaningless, wasteful stupidity.

Is there a conspiracy to keep the Philippines down? Maybe. If the Philippines was not a poorer country, the “experts” might not have a job because perhaps no one else would listen to their nonsense.

PSE stock-market information and technical-analysis tools were provided by CitisecOnline.com Inc. E-mail comments to mangun@email.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it .

No comments:

Post a Comment