Learning from the Iberian tiger
By BErnardo M. Villegas
When I last lived in Spain more than 40 years ago in the early l960s, this Iberian peninsula was thoroughly a Third World country, with per capita income of less than US0. Today, Spain can be referred to as the Iberian Tiger because for the past decade or so it has outpaced all the European countries, including the once mighty Germany and France, in GDP growth. Today, it has the lowest rate of unemployment in the European Union and continues to enjoy a housing boom and strong growth in consumer markets. It has gone a long way from those days during the l960s when there were a million Spaniards as overseas workers in such countries as Germany, France, and Switzerland. I still remember coinciding with some of these Spanish workers in a train going to France. One of them asked me how long it would take to go to the Philippines from Spain by train. Although that particular Spaniard might have been an exception, it could also have been an indication of the low rate of schooling prevailing in the country at that time. Today, Spain has some of the best educational institutions in Europe, boasting of world-class business schools that can compare with the Harvards, Chicagos and Stanfords of the U.S.
What happened to the one million Spanish overseas workers during those early years of the development efforts under the Franco regime? Most of them came back to productively use the skills that they learned abroad. What attracted them back to their home country? Whatever political weaknesses may be ascribed to those years of authoritarian rule under Franco, the Government then focused a great deal of effort endowing the country with first-class infrastructures in all the major regions. Dams, farm-to-market roads, irrigation systems, post-harvest facilities, super-highways, railroads, airports, subways, etc. were built. Even today, the construction of infrastructures continues. All over Madrid and Barcelona, among other cities, roads are being upgraded, water systems are being improved and whole areas are being subject to urban renewal. No wonder the country developed the absorptive capacity to reattract back the overseas workers who helped build such thriving industries as tourism, shipbuilding, construction, food manufacturing, car manufacturing and other industries Spain is now famous for. Barcelona just recently demonstrated its prowess as a convention center by hosting 60,000 delegates to the 3GMT World Congress where all the world’s leading operators of mobile telephone firms, including our Smart and Globe, were well represented.
Spain only had one million overseas workers during their earlier efforts to develop. We have close to l0 million official and unofficial overseas Filipino workers. The Central Bank reported that in calendar 2006 these OFWs sent l2.8 billion dollars to their relatives at home. I would estimate that the total—including remittances through unofficial channels—would be close to l5 billion dollars, some l2 percent of our GDP. The Government must find some way of channeling part of these funds to infrastructure spending by issuing bonds that can be attractive to the OFWs. Although a significant portion of these remittances are being used for the education of the future generation of Filipinos and the construction of homes (which are investment goods), there is room for diverting some of the spending on non-essential consumer items to savings in bonds which can be used for infrastructure spending.
As the tourism industry grows, including the very promising medical tourism and retirement village sectors, numerous Filipino workers abroad who are employed in allied industries such as hotels, cruise ships, hospitals, home for the aged, and health centers can be reattracted back to the Philippines with salaries that can approximate what they are earning abroad. This may sound farfetched, considering that the Filipino workers in a city like Barcelona may be earning ten or more times what they can earn in the Philippines. But the cost of living in this most expensive city of Spain can also drain their earnings. What we need is to improve our infrastructures so that we can make the Philippines attractive to investors in those industries like tourism that can productively used the skills of our OFWS.
A study by Professor Alvin Ang of the University of Sto. Tomas provides a clue to what can be done to hasten the return of a good number of OFWs to help in the development of the regions from where they originally came. According to the study of Professor Ang, Manila and five other regions that account for most of the labor exports also have the country’s lowest poverty levels, and five of these areas showed significant drops in poverty levels between 2000 and 2003. This means that a good number of our OFWs come from regions that are literally poised to take off in self-sustaining growth with a little help from the Government through major infrastructure projects. Some of these regions are precisely those singled out by President Macapagal Arroyo as super-regions that will receive massive infusion of infrastructure spending, such as the Northern Luzon Agribusiness Quadrangle and the Global Gateway in Central Luzon. It is not farfetched to assume that the OFWs coming from these fortunate regions can be lured to come back to work in the industries that will be built in these favored regions or to start their own businesses in bed-and-breakfast hotels, transport companies, restaurants, and other service-oriented establishments that will cater to the millions of domestic and foreign tourists that are expected to visit these more developed regions in the coming years.
To prevent a widening gap between these favored regions and the poorer ones, the Government should make sure that the lagging provinces should be endowed with farmtomarket roads, irrigation systems, and postharvest facilities to make them the food suppliers of the more industrialized and urban centers. A perfect example is the relationship of Aurora province to the rest of Central Luzon. Aurora province may not get the de luxe infrastructures of Pampanga, Bataan, Tarlac, and Zambales. But it will benefit from agriculture-related public works so that it play a major role as the feeder of the Global Gateway that Subic-Clark-Tarlac will become. The same can be said of provinces like Negros Oriental and Siquijor. These provinces may not become as attractive to large-scale investors in industry and services as Cebu may be. But endowed with better farm-related infrastructures, they can be the food belt of Metro Cebu and the surrounding areas. I am sure that there will be a good number of OFWs coming from Central Visayas who can be reattracted back to their hometowns if they see better infrastructures and improved employment opportunities in agribusiness.
Another outstanding model of Spain that can be emulated especially by provinces in Mindanao is the Mondragon Cooperative, one of the most successful credit cooperatives in the world, started in the north of Spain by a Basque priest. Leaders of cooperatives in the Philippines should contact the Spanish embassy in Manila to get as much information about the Mondragon cooperative so that they can learn from the best practices in cooperativism. It would even be worthwhile for these cooperative officials to make an observation trip to the Basque country to see for themselves the vast economic empire that has been built by this Spanish cooperative. They may even get some travel grant from Spanish aid agency, that is one of the most generous donors of ODA fund to the Philippines. For comments, my email address is HYPERLINK _bvillegas@uap.edu.ph_.
What happened to the one million Spanish overseas workers during those early years of the development efforts under the Franco regime? Most of them came back to productively use the skills that they learned abroad. What attracted them back to their home country? Whatever political weaknesses may be ascribed to those years of authoritarian rule under Franco, the Government then focused a great deal of effort endowing the country with first-class infrastructures in all the major regions. Dams, farm-to-market roads, irrigation systems, post-harvest facilities, super-highways, railroads, airports, subways, etc. were built. Even today, the construction of infrastructures continues. All over Madrid and Barcelona, among other cities, roads are being upgraded, water systems are being improved and whole areas are being subject to urban renewal. No wonder the country developed the absorptive capacity to reattract back the overseas workers who helped build such thriving industries as tourism, shipbuilding, construction, food manufacturing, car manufacturing and other industries Spain is now famous for. Barcelona just recently demonstrated its prowess as a convention center by hosting 60,000 delegates to the 3GMT World Congress where all the world’s leading operators of mobile telephone firms, including our Smart and Globe, were well represented.
Spain only had one million overseas workers during their earlier efforts to develop. We have close to l0 million official and unofficial overseas Filipino workers. The Central Bank reported that in calendar 2006 these OFWs sent l2.8 billion dollars to their relatives at home. I would estimate that the total—including remittances through unofficial channels—would be close to l5 billion dollars, some l2 percent of our GDP. The Government must find some way of channeling part of these funds to infrastructure spending by issuing bonds that can be attractive to the OFWs. Although a significant portion of these remittances are being used for the education of the future generation of Filipinos and the construction of homes (which are investment goods), there is room for diverting some of the spending on non-essential consumer items to savings in bonds which can be used for infrastructure spending.
As the tourism industry grows, including the very promising medical tourism and retirement village sectors, numerous Filipino workers abroad who are employed in allied industries such as hotels, cruise ships, hospitals, home for the aged, and health centers can be reattracted back to the Philippines with salaries that can approximate what they are earning abroad. This may sound farfetched, considering that the Filipino workers in a city like Barcelona may be earning ten or more times what they can earn in the Philippines. But the cost of living in this most expensive city of Spain can also drain their earnings. What we need is to improve our infrastructures so that we can make the Philippines attractive to investors in those industries like tourism that can productively used the skills of our OFWS.
A study by Professor Alvin Ang of the University of Sto. Tomas provides a clue to what can be done to hasten the return of a good number of OFWs to help in the development of the regions from where they originally came. According to the study of Professor Ang, Manila and five other regions that account for most of the labor exports also have the country’s lowest poverty levels, and five of these areas showed significant drops in poverty levels between 2000 and 2003. This means that a good number of our OFWs come from regions that are literally poised to take off in self-sustaining growth with a little help from the Government through major infrastructure projects. Some of these regions are precisely those singled out by President Macapagal Arroyo as super-regions that will receive massive infusion of infrastructure spending, such as the Northern Luzon Agribusiness Quadrangle and the Global Gateway in Central Luzon. It is not farfetched to assume that the OFWs coming from these fortunate regions can be lured to come back to work in the industries that will be built in these favored regions or to start their own businesses in bed-and-breakfast hotels, transport companies, restaurants, and other service-oriented establishments that will cater to the millions of domestic and foreign tourists that are expected to visit these more developed regions in the coming years.
To prevent a widening gap between these favored regions and the poorer ones, the Government should make sure that the lagging provinces should be endowed with farmtomarket roads, irrigation systems, and postharvest facilities to make them the food suppliers of the more industrialized and urban centers. A perfect example is the relationship of Aurora province to the rest of Central Luzon. Aurora province may not get the de luxe infrastructures of Pampanga, Bataan, Tarlac, and Zambales. But it will benefit from agriculture-related public works so that it play a major role as the feeder of the Global Gateway that Subic-Clark-Tarlac will become. The same can be said of provinces like Negros Oriental and Siquijor. These provinces may not become as attractive to large-scale investors in industry and services as Cebu may be. But endowed with better farm-related infrastructures, they can be the food belt of Metro Cebu and the surrounding areas. I am sure that there will be a good number of OFWs coming from Central Visayas who can be reattracted back to their hometowns if they see better infrastructures and improved employment opportunities in agribusiness.
Another outstanding model of Spain that can be emulated especially by provinces in Mindanao is the Mondragon Cooperative, one of the most successful credit cooperatives in the world, started in the north of Spain by a Basque priest. Leaders of cooperatives in the Philippines should contact the Spanish embassy in Manila to get as much information about the Mondragon cooperative so that they can learn from the best practices in cooperativism. It would even be worthwhile for these cooperative officials to make an observation trip to the Basque country to see for themselves the vast economic empire that has been built by this Spanish cooperative. They may even get some travel grant from Spanish aid agency, that is one of the most generous donors of ODA fund to the Philippines. For comments, my email address is HYPERLINK _bvillegas@uap.edu.ph_.
|
