Battle plans versus safety nets

PUNCHLINE

Ike Seneres

Globalization is not yet over and as far as I know, more of it is yet to come. The WTO drives globalization, now it is the ASEAN that is going to drive regionalization, if we could call it that. To some extent however, we could say that regionalization is part of globalization, and the same rules and regulations would be applicable. Generally speaking, we could say that we were not, or we are not ready for globalization. The question now is, are we ready for regionalization or not?

Globalization is supposed to be a two-way street, and so is regionalization. Along with many problems, there are also supposed to be many opportunities that we could tap, in order to come out as the winner in these two frameworks. The bottom line at the macroeconomic level is how much our Gross Domestic Product (GDP) has grown, and how much our Per Capita Income (PCI) has increased. As I see it however, the bottom line at the microeconomic level is how much market share we have gained (or have lost) in each product category.

Looking at globalization and regionalization from another angle, it seems that we could also measure success and failure in terms of factories that have opened (or have closed), and in terms of jobs that have been created (or eliminated). As we enter the era of regionalization next year in 2015, it is necessary for us to know how we have really fared in these two measures in the era of globalization.

Words are just words, but more often than not, words would reflect the way we think, and the way we plan our actions. In the era of globalization, we often used the words “safety nets” to refer to our plans of actions, in relation to how we would “survive” the “damage” that was going to come. Looking back now, I think that that was really a defeatist approach, because we were already preparing to fall, and that is why we thought of “safety nets” to catch our fall. We also thought about surviving the damage, without thinking that we could have won many of the battles in the midst of the carnage.

I believe that globalization and regionalization are battles for economic growth (not just economic survival) and for market shares. Therefore I think that we should have a battle plan in order to come out as the winners and not as the losers (or as the fallouts needing safety nets). Of course, we could definitely win all of the battles, and that is why we need to choose which battles we should fight where we have a chance of winning. This is just like the Olympics, wherein we should not even think of joining the events where we could not hope to win any medal.

As far as I can recall, we jumped into the globalization era without a battle plan, and all we had was a plan to have “safety nets”, and apparently, none of these were built or installed. I even heard talks that “farm-to-market” roads were supposed to be included as part of the “safety nets”, and this was debunked by activists as false representations, because road building is really supposed to be a regular function of the government, with or without globalization. This is similar to the position taken by activists that basic government services should not be considered as part of poverty alleviation measures, because basic services are supposed to be delivered by the government with or without poverty.

In order to prepare battle plans for globalization and regionalization, we need software for game theory, and software for operations research, also known as the science of maximization. In both types of software, it would be best to have high performance computers (HPCs), because the processing power needed is beyond what ordinary personal computers (PCs) could do. Both types of software are used for highly intensive computer simulations. These are not ordinary tasks, but on the other hand, we are not facing ordinary challenges either.

Which Department of the government is supposed to lead in using game theory and operations research for computer simulations that could be the basis for preparing a battle plan? Should it be the Department of Foreign Affairs (DFA) or the Department of Trade and Industry (DTI)? This is not a problem for Australia, because they have combined these two functions into one Department of Foreign Affairs and Trade (DFAT). In our case, we have come up with a country team approach for purposes of economic diplomacy, but that does not seem to be working very well.

If you are afraid of global warming and climate change, you should also be afraid of globalization and regionalization, but only if we are not prepared. ASEAN integration is just around the corner, but there is still enough time left to prepare a battle plan that could make us win in some industries or product categories. What is important is that we could win some, even if we would also lose some. That is the nature of the game, but we have to play it.

Our battle plan should be divided into four categories, namely: processed goods, manufactured goods, onsite services and online services. We should no longer export raw materials and at the very least, we should process into higher value goods, and that includes our agricultural products. We already have many manufactured goods; we just have to choose which ones we should support for export purposes.

There are very few Philippine companies that are operating abroad to provide for onsite services. We should encourage and support this kind of companies. As a matter of fact, this could be a way to minimize the oppression of Filipino workers abroad, if their employers could also be Filipino companies. We already have many companies that are providing online services. We should just help them.

For feedback, email iseneres@yahoo.com or text +639083159262