In an ideal world…

Lost in the headline grabbing response of Oscar Lopez to an ambush interview question during the conference of the European Chamber of commerce is Mr. Lopez’s speech on the assigned topic of “what we expect from Europe in an ideal world.” To cut all the diplomatic niceties, Mr. Lopez said, what we really want from Europe are the same things we want from America and the developed world: we want free access to your markets and we want open borders for our workers.

Mr. Lopez pointed out that “even if by some unexplainable happenstance the EU announces today that from now on, we have free access to your markets, that wouldn’t even be enough. Your agricultural subsidies make our products immediately uncompetitive.”

To illustrate his point, he cited the case of canned tuna. “In recent times, something as mundane as our canned tuna had difficulty entering Europe because of preferential tariff given to former colonies. Apparently, every major EU country sponsored a former colony and even if we were once a Spanish colony, Spain chose to sponsor some other former colony. As far as Europe was concerned, the Treaty of Paris which turned over the Philippines to the U.S. in 1898 erased 330 years of being a colony of Spain …”

Of the two ideal world wishes, Mr. Lopez was particularly passionate about allowing our workers to openly migrate. Curiously, the chapter on migration in the book Global Crisis, Global Solutions published by the Cambridge University Press started off with this sentence: “in an ideal world, there would be few migration barriers and little unwanted migration.”

If people were goods, the chapter went on, the solution to different wage and employment levels would be obvious: encourage the transfer of “surplus” people from poorer to richer nation states which should benefit individuals whose incomes rise, increase global GDP and promote the convergence in wages and opportunities between sending and receiving areas that eventually reduces migration pressure.

Indeed, the economist Dani Rodrik asserted that “even a marginal liberalization of international labor flows would create gains for the world economy far larger than prospective gains from trade liberalization.”

That’s precisely why Mr. Lopez told the European Chamber that while he realizes this is not a simple problem he urged his audience to “understand that open migration is most important to the Philippines today because as we all know, our fragile economy is now largely dependent on remittances from OFWs… We might even say that Europe and the G8 nations can forget sending us foreign aid so long as you all open your borders to Filipino migrant labor and we will be alright.”

The economics of allowing workers to migrate favor Europe too, as the same chapter on migration cited earlier points out. “If current trends continue, many developed countries will have shrinking workforces, while many developing countries will have high levels of unemployment and underemployment… migration should play in the mix of policies available to stabilize labor forces and social security systems that were created during past periods of rapid population and labor force growth, specially in Europe and Japan.”

As Mr. Lopez pointed out to his audience of European businessmen and bureaucrats, “ Europe is suffering from zero to negative population growth and fast becoming ageing societies. Thanks to Roman Catholicism that the Europeans introduced to this country, we have more people than we know what to do with, specially the politicians. I have noticed during my visits to European capitals that without the Filipino migrants, many of your Catholic Churches would be almost empty. You need us to repopulate Europe … to take care of your sick… to raise your children… to manage your households… to run the back offices of your businesses among many others.”

Touching on the realities of our less than ideal world, Mr. Lopez observed that “today, across the world, we have a form of global feudalism at play… In the creation of virtually anything today, the value chain is skewed very heavily in favor of the knowledge content, and progressively less in favor of the physical content…”

“Where is the money actually made? In the physical manufacture and assembly of the end product? Or in its conceptualization, design and branding? Take any electronic appliance or gadget, or any computer. The same phenomenon can be observed. Where is the knowledge content generated?  Most often in economically advance countries. And where is the physical content generated? In less developed economies, where labor is cheap and education is comparatively weak.”

“Because there are many developing economies all trying to promote their cheap labor, there is great competition for the physical content, and hence, margins are forced ever thinner by the operation of the laws of supply and demand. But that does not change the ultimate outcome, where providers of the physical content receive comparatively less value for their labor than those that provide the knowledge content.” 

He explained that he is “not against the principle of intellectual property rights, for without it, the world would have difficulty encouraging and sustaining gains from research and development, and from creativity and innovation. But the protection of intellectual property can also be pushed to extremes where it ceases to be conscionable… as in withholding medication from entire impoverished societies… Right here in the Philippines , making medicines available to the wider population at more reasonable prices is one of the more pressing issues of the day.”

That’s why, he explained, Sen. Mar Roxas, when he was still DTI Secretary, argued during the trade talks in Doha and Cancun for the right of countries like ours to have the flexibility to do parallel importations of lifesaving medicines or manufacture them as may be required by circumstances. 

He urged the EU “to make the transfer of knowledge easier and more economically affordable in order to allow the Filipino business sector to compete more effectively where the value chain provides greater economic returns and benefits, and not merely in sweatshops.” 

He acknowledged the beneficial effects of the outsourcing trend in providing jobs here but “it still does not quite reach the level of higher-value knowledge inputs.  I would like to see us getting deeper into software and systems development, and areas like computer-assisted design and engineering.” 

He thanked the European Chamber for its passion and desire to create better bridges between Europe and the Philippines . And while things might seem to be less than ideal today, he urged the conferees to never lose sight of how things should be in an ideal world and we should never tire of striving for our Shangri-la.

The Shoe

Chito Santos forwarded this one.

One evening after work, a man drove his secretary home after she had a little too much to drink at a party. Although nothing happened, he decided not to mention it to his wife.

Later that night, the man and his wife were driving to a movie when he spotted a high-heeled shoe hidden under the passenger seat. Pointing to something out the passenger window to distract his wife, he picked up the shoe and tossed it out of his window.

They arrived at the theater a short time later and were about to get out of the car when his wife asked, “Honey, have you seen my other shoe?”

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