M/3CL COLLERA, DARSHAN N.

Africa Section

BREAKTHROUGH

The issue on whether globalization is ultimately beneficial or harmful to the average citizen of the
world is clearly still a much publicly debated issue. The historical champions of open markets –
United States and United Kingdom – are now increasingly hotbeds for proponents of
protectionism. On the other hand, China which used to be a highly protected economy is now
championing globalization.

The rise in extreme global income inequality has been attributed to globalization. Trump’s
presidential victory and the Brexit win in the UK have also been traced to popular
disenchantment with globalization; and a perception that it has benefited only the very wealthy
few. The DHL Global Connectedness Index – which tracks international trade, capital,
information and people flow – shows that globalization slowed down in 2015 but did not go into
reverse. Updated data for 2016 for trade and investment suggests a continued slowdown but still
no reversal.

However, the media perception of globalization has become increasingly more negative.
According to the Harvard Business Review: “An analysis of media mentions for the term
‘globalization’ across several major newspapers – Wall Street Journal, New York Times,
Washington Post in the US and the London Times, Guardian, Financial Times in the UK – reveals a
marked souring of sentiments with scores plummeting in 2016.”

A recent issue of the Economist magazine has apparently accepted the fact that globalization
may have benefited certain sectors and regions, but has left behind large segments of society,
in an article entitled “ Left Behind: How to Help the Places Left Behind by Globalization.”

The article provides some useful insights on the reasons for regional inequalities caused by
globalization. Firms – particularly manufacturing – often do better when they are close together.
A maker of industrial machinery saves on costs when it is near the firms that provide it with raw
materials or components as well as its customers. Manufacturing plants must therefore, come in
clusters. A cluster of manufacturers attract workers.

The same concept of ‘clusters’ apply to other industries. Financial firms do well in New York
because they are close to banks that finance and clients that hire them. Start ups in Silicon
Valley have access to financing, customers, and new ideas that they will not easily find
elsewhere.

According to the Economist, “A larger, more integrated market enables production at more
efficient scale and increased global output. Consumers gain access in cheaper and better
goods and services including new foreign varieties.

They do imply, however, that production will become more geographically concentrated. Cities
with long standing industrial tradition that could get by in a smaller economy find themselves
bleeding talent and jobs.”
These concept of “clusters’ means that countries cannot afford to have a policy of attracting
only single firms to invest; but, must look for ways to attract clusters of factories or financial firms
or service firms. Even within a country, globalization will make regional inequalities worse.

As the rich became richer, their wealth was supposed to start “trickling down” to the poor so
that ultimately everyone would benefit from the rich accumulating more wealth. This theory has
never worked. Income inequality has reached a level unprecedented in human history.

There was a time when the same “trickle down” theory was believed to be applicable to
nations. As certain nations became richer, they were expected to share their wealth with the
poorer countries of the world. This was the dream of many organizations like the United Nations.
Instead, the rich Western nations continued to further enrich themselves by economic
exploitation of the poor countries. The Third World countries were developed solely as sources of
raw materials and markets for the goods and services of the Western imperial powers. Japan
joined the Axis powers during the Second World War primarily because Imperial Japan needed
to secure reliable sources of raw materials and markets for its industrialization.

Today, China – the new economic giant – is following the same imperial pattern of the past
powers. Its Belt and Road initiatives are primarily aimed at securing reliable sources of raw
materials and markets for its economy. The primary objective is to continue the economic
growth of China.

China and Japan were once heavily protected economies until they were able to build an
industrial and financial base that could compete with the rest of the world. Now they are
suddenly champions of open markets and globalization.

The United States and the United Kingdom were once champions of globalization and open
markets. But now that they are losing their competitive edge, these two countries have elected
governments that are advocating protectionism.

Perceptions about globalization will remain mixed because its effects will continue to be mixed.
Globalization and technological change will enhance the economies of scale that will result in
more geographic concentration of wealth and talent. The Alibabas and Amazons will increase
their dominance in the service industries which will further decimate locally based businesses.

There are those who will insist that the exponential growth of technological change makes
globalization inevitable. Perhaps that is true, but the process of change will be a costly and
chaotic period. This is what history teaches us. The Industrial Revolution gave birth to the class
wars and Marxist revolutions of the 20th century. The economic and social changes resulted in
the rise of populist leaders and dictators that led to two World Wars and a Cold War.

I once read two contrasting articles on the same topic. The title of one was “ Globalization at
Warp Speed”; and the other one was “ The End of Globalization.” The future reality will probably
be somewhere in the middle of these two titles. Hopefully, the period of change will not be as
violent as similar periods in history.

BREAKTHROUGH - Elfren S. Cruz (The Philippine Star) - November 4,2017

www.philstar.com/opinion/2017/11/04/1755762/reality-globalization#p7IfRcxtzguiXlAJ.99
President Duterte’s lament on Globalization

In the recently concluded Asia-Pacific Economic Cooperation Summit in Vietnam, President

Duterte addressed a side assembly of overseas Filipino workers (OFWs) working in this fast-
growing neighbor of ours. Most of these OFWs happen to be professionals and skilled workers.

And yet, in the YouTube documentation of his speech, the President devoted the first 15 minutes
of his hourlong speech bemoaning the brain drain that has slowed down the country’s industrial
progress. Paano ang mga naiwan? [What now for those left behind?]” was his plaintive
question. He elaborated that, the exodus of the country’s best and brightest has stunted the
growth of domestic industry and agriculture, including livestock raising. He said that, without
these talents, industrial development in the Philippines has been so weak we cannot even
produce decent toothpicks.

In summary, the President’s message is a reiteration of what we have been saying: Filipino talents
are the country’s gift to the world, in particular to the more developed labor-receiving countries
that are always in short supply of engineers, information-technology (IT) programmers, doctors
and other professionals and skilled workers. The economy of a number of Middle East countries
are likely to be impaired, even grounded to a halt, if there will be a massive return migration of
overseas Filipino workers (OFWs). In the North sea oil-drilling project in Europe, the rig engineers
and workers who go down to the sea floor
several kilometers deep are mostly Filipinos.

It is, thus, ironic that while these OFWs are able to contribute to the development of other
countries, they are not able to share their God-given talents and skills in building a more
progressive Philippines. Their contributions to the home country come mostly in the form of
remittances, most of which are spent either on imported consumption goods or on the service
industries (malling, real estate, education, etc.) that the Sys, Gokongweis, Ayalas and Gaisanos
have been building to take advantage of a remittance-driven economy.

Industry complaints on the adverse impact of the brain and skills drain were registered as early
as the late-1970s, when the “manpower export” was officially launched by the martial-law
government as a “temporary” program while the country was still waiting for the “labor-intensive
export-oriented” (LIEO) industrialization of National Economic and Development Authority to
bear fruits in terms of robust growth and job creation. The LIEO tree failed to bear the
anticipated miracle fruits of more jobs and more development. Instead, the exodus of skills and
talents even intensified in the succeeding decades of the 1980s to 1990s as almost all continents
of the world, including the North Pole, became the destination for our migrant workers. The list of
professionals and skills leaving the Philippine shores also grew exponentially, covering not only
the construction industry (mainly for the Middle East) but also the IT industry, health sector,
finance, mining and so on.

Complaints of Philippine-based industries also grew—from the loss of scarce skills, such as those
possessed by expert electricians, plumbers and carpenters to the cost of training provided by
industry to those who eventually become migrant workers. One old theoretical debate on
migration states that the departure of OFWs represents a drain; however, the OFWs, upon their
return to the home country, bring with them new or enhanced skills that they can apply at
home. In short, these OFWs can become industry innovators and job creators. This argument is
illustrated in the case of South Korea, which was a major exporter of manpower in the 1970s and
1980s and which became a major importer in reverse once it reached the “migration hump” in
the 1990s because of its rapid industrial growth. In the case of the Philippines, this did not
happen. Very few successful and rich OFWs invested on job-creating undertakings utilizing the
know-how they acquired from working overseas. Also, there were hardly anyone who went into
industrial development based on the knowledge and skills that they gained from certain
industries abroad. For example, there were no records that those who worked as professionals
and skilled workers in the high-tech small and medium enterprises of South Korea and Taiwan,
such as watch making, IT parts assembly and shoe production were able to set up similar
ventures in the Philippines upon their return or retirement.

The point is that migration, as a platform for industrialization, has not worked in the Philippines, as
lamented by President Duterte himself.

Meantime, more problems are cropping up. The Middle East, which hosts the most number of
OFWs, is a powder keg and can explode in a big way. The Shia-Sunni conflict, not to mention the
terror campaign of the Islamic fundamentalist ISIS group, is putting the two big powers of the
region, Iran and Saudi Arabia, on a collision course. Some OFW communities are also affected
by the rising xenophobia in Europe, America and other places. What will the Duterte
administration do if there is a sudden massive return migration of OFWs? This question is not new.
It was also raised in the past administrations, and, fortunately, this never happened. Instead,
there were only some dislocations in a few host countries involving only a few thousand OFWs,
not millions. Nonetheless, the question remains valid and should be raised given the uncertain
times we are in. The government should always be ready with its contingency plans.
However, the immediate policy challenge to the Duterte administration is how to revisit the issues
of migration and industrialization. Paano babalikan ang napag-iwanang industriya at agrikultura
ng bansa?The phenomenal growth of migration as a life saver for the country is due to the
phenomenal failure of industry and agriculture to grow under the LIEO and export-oriented
industries development programs from the 1970s to the present.

Some economic commentators claim that the Philippines is a victim of the “Dutch disease,” that
is, industrialization has been stunted by national dependence on a resource abundance in the
form of OFW remittances. This is clearly not the case because the growth of migration came
about precisely because of the poor growth of industry.

Ironically, some manpower recruiters are complaining that the eroding industrial base of the
Philippines is affecting their capacity to recruit and deploy more talents and professionals. The
explanation is simple: Overseas labor market is selective not only in terms of skills and know-how
but also on a person’s actual work experience and background. If they lack direct experience
in managing manufacturing units in the Philippines, qualified production engineers cannot be
deployed.

To conclude, the Philippines cannot afford to forever wait for the migration hump to happen.
The efforts of Department of Trade and Industry officials to have a “manufacturing resurgence”
should be intensified and should involve more stakeholders, not only established industry
associations. These include the OFWs and their families, especially those who claim that these
OFWs have acquired new skills that can help the country do industrial leapfrogging. Why not a
strategic road-mapping exercise on how the Philippines can finally graduate from its
overwhelming dependence on migration and how skills and savings gained from migration can
be used to spur accelerated industrial and agricultural development? Dapat walang maiiwan!

President Duterte’s lament on Globalization - Rene E. Ofreneo - November 15, 2017

businessmirror.com.ph/2017/11/15/president-dutertes-lament-on-globalization/
Does Globalization Destroy Culture? – OpEd

Globalization is routinely decried for its disruptive effects, particularly as it relates to local culture
and community enterprises and institutions. Even as it’s proven to drive significant economic
growth, questions remain about its steamrolling influence on the culture.

“Even if we grant that global competitive markets create prosperity, is it worth the fast food
chains and the big box chains we see everywhere we go?” asks Michael Miller in
an excerpt from PovertyCure. “What about a sense of vulgarity and bringing things to the lowest
common denominator? And perhaps most important, does globalization destroy local culture?”
The threats to culture are real and pronounced. It is undeniable that
globalization can and has and will diminish or destroy certain cultures, traditions, and enterprises.
Yet as Miller and others remind us in, we are not powerless in our response, whether as creators
or consumers.
Indeed, globalization also presents a tremendous opportunity for cultural diversity.

In Ireland, for example, increased participation in global trade not only boosted and diversified
the Irish economy; it also allowed the Irish to spread their culture around the world, whether
through beer or film or music and dance. Simultaneously, the influx of competing cultural
influences has increased awareness of their cultural identity, spurring citizens to defend,
preserve, and restore the cultural features they care about the most (e.g. the recent
renaissance of the Irish language).

As Irish economist Marc Coleman explains, even though the predominant push of globalization
represents a “secularized, individualized view of the world,” that message is an opportunity for
more traditional or family-oriented cultures to harness those same channels for their voice and
cultural perspective. “Instead of complaining,” he says, “let’s actually use globalization to fight
back and push our view of the world.”

It’s a reorientation that we would all do well to heed, and it doesn’t just apply to more tangible
cultural artifacts. For Christians, as with any other proponent of any other belief system, the
avenues for application should be obvious. Whether we’re trying to spread a particular message
through more direct communications or cultivating culture and serving our neighbors in the day-
to-day economic order, the channels are already there, and they’re only continuing to expand.

“Man cannot live by bread alone,” concludes Coleman. “It’s very important that developing
countries do not see the global market and the opportunities of a global market as a substitute
for their native culture and values. It’s extremely important to know who you are and what your
culture is.”

Does Globalization Destroy Culture? – Joseph Sunde* - January 6, 2017

www.eurasiareview.com/06012017-does-globalization-destroy-culture-oped/