Up next: Manpower crisis

The problem I have with Malacañang press releases on the promises of BPO is the not so small detail of qualified manpower availability. Apparently, I am not the only who is thinking along the same lines. The European Chamber of Commerce of the Philippines (ECCP) has moved to address human resource problems in the country, specifically job-skills mismatch and migration.

The European businessmen have formed the Human Capital Club (HCC), now composed of 50 companies, to make sure the projected one million personnel required by the different industries in the next three years, notably in the outsourcing field, will be filled up. According to Richard Eldridge, HCC chairman and ECCP board member, the country will likely experience a manpower problem because of the inability of the universities to deliver their needed skills and the departure of their employees to firms abroad.

Eldridge was being diplomatic. We actually have such a manpower problem now. In fact, in Davao, better educated retired people are being hired by call centers based there. I imagine that there is no shortage of jobless young people who should be more physically able to withstand the punishing night time schedule of call center operations. But the educational system failed to prepare them for the available jobs.

Complicating our problem is brain drain. Eldridge said studies show professionals have been leaving the country, some 79,000 of them, since 2000 to work abroad. Eldridge said if the migration of qualified personnel continues, several key industries will be hit with staffing problems, including information technology, finance and accounting, and health care.

“The business-process outsourcing industry alone has a demand for at least 600,000 new employees by 2010.   There is also projected large staffing requirement across several other rapidly growing industries such as health care, retirement, medical tourism and the creative industries,” Eldridge said.

The manpower problem is now a competitive issue for the Philippines. According to Eldridge, 43 percent of companies were found by a survey to consider the scarcity of skilled labor as their primary problem. “We will be looking at the recruitment process, the educational system, training, work standards and productivity. There must also be ways for companies to provide adequate work packages to make their people stay,” Eldridge said.

The way I see it, government will continue to be unable to address this serious problem. Every company in the private sector will just have to allocate some budget for training employees and hope that they will be able to keep them from leaving for greener pastures abroad.

Alex is wrong

I do not relish the thought of having to publicly correct a colleague, specially one who writes a column for the same newspaper as I do. Worse, Alex Magno and I both belong to the Foundation for Economic Freedom and in our UP days, moved around the same circles and today, we really share about the same views on a lot of things. But Alex is wrong on NBN and he must be corrected.

Alex denounced in his column the “thoroughly uninformed claim that the proposed NBN duplicates what already exists. What already exists is a primitive system, much like the telegram did before it died out in the age of text messaging.” Alex should have checked his facts a little more carefully. His whole column seems to have been based solely on a ZTE press release.

If he did a little more asking, something as simple as posting a query in our FEF e-group, I would have saved him the embarrassment of sounding uninformed himself. I could have told him a little bit about the Telicphil backbone. I am sure that the Telicphil facilities are far from being “primitive” as Alex puts it. Or he could have googled, which I did, and he would have found out he is wrong. There is little reason to be uninformed in today’s Google world.

Called the National Digital Transmission Network, Telicphil’s 2,762-kilometer fiber optic backbone facility is one of two commercial backbones, the other is owned by PLDT. There are three segments for the Telicphil network; the microwave radio segment, the submarine fiber optic segment and the land optic segment.

The Telicphil backbone, about 80 percent owned and operated by BayanTel, has several fibers making it “future proof” as the capacity of each fiber is limited only by the electronics that one connects to it.   And the capacity of each fiber strand has increased with advances in the electronics that are added at the nodes.

I understand BayanTel has recently spent considerable CAPEX to put in new electronics to upgrade and increase the capacity of the Telicphil fiber connections. I have not checked this out with the technical guys in BayanTel because they are out of town as I write this, but I am sure it would be cheaper and no problem for government to connect their proposed WiMax facilities to the Telicphil backbone than to build an entirely new backbone through the overpriced ZTE deal.

I base my confidence on a statement Tunde Fafunwa, BayanTel’s Chief Consultant, made when they launched the recent upgrades. Mr. Fafunwa was quoted in the news story I googled: “The enhanced network can now provide a more robust and reliable infrastructure to support the delivery of emerging technologies such as VoIP, wireless broadband and other high bandwidth services nationwide that will give BPOs (business process outsources) and other businesses higher monetary and operational returns from their technology investments.”

If Telicphil’s facilities are good enough for BPOs, it should be good enough for our government’s less demanding requirements. One thing’s sure, existing facilities aren’t primitive, as Alex claimed. And as any economist in a developing country knows, you do not spend CAPEX on facilities that are already available in the country. You use the country’s scarce capital resources on other much needed infrastructure.

Incidentally, I am not sure it is also correct to say that the ZTE technology is leading edge. Mostly, you get that from Alcatel-Lucent, Nortel, Siemens, etc.   The biggest customers of ZTE are the developing countries like China, South America, Africa, etc. because they are cheaper, if you net out the overprice. Or maybe ZTE is more attractive to Third World government officials for reasons other than technical superiority.  China does not have a Foreign Corrupt Practices Act to regulate the behavior of companies like ZTE.

One other point I want to clarify. “Also belied,” Alex writes, “is the claim that no competitive bidding happened. If no competitive bidding happened, why are there two losing bidders for this project: Amsterdam Holdings and Arescom?” 

There are two losing bidders, Alex, because the word is being used loosely. Neither Amsterdam nor Arescom really submitted a bid in the strict sense of the word because no bidding was called. Even Secretary Mendoza did not deny that. What Amsterdam and Arescom submitted were proposals which DOTC probably didn’t even read.

For a formal bidding to happen, DOTC must issue terms of reference upon which all interested parties will base their bids. The only way to really find out if ZTE’s proposal is cost competitive to Amsterdam and Arescom, and indeed if ZTE is within industry standards, is for the specifics of ZTE’s technical and financial terms to be made public and compared with Amsterdam and Arescom and with industry norms. But because ZTE wants its terms kept confidential, public suspicions that ZTE is hiding something rotten are justified.

As I said, I hate to publicly correct a colleague. But Alex was not just peddling half truths. He is selling the Filipino taxpayer short.

Scared

This is from Jack Gesner.

Two kids are arguing over whose father is the biggest scaredy-cat. 

The first kid says, “My Dad is so scared that when lightning strikes, he hides under the bed.”

The second kid replies, “Yeah? Well, that’s nothing.   My dad is so scared that when my mom has to work the nightshift, he sleeps with the woman next door.

Boo Chanco ‘s e-mail address is [email protected]