A political shot in the foot of economic development

Paul Bograd

Posted on May 16, 2009

And this time it is not the politicians’ fault… Sort of

With your permission I will start off today’s missive with a couple of trite old sayings:

  • “Well they took careful aim and shot themselves directly in the foot.”
  • “They are trying to kill the golden goose.”
  • “Politics big and small is the biggest killer of Philippine jobs.”

Well the last saying I kind of made up for this posting, but you will get the point after a while.

One of the few global economic success stories coming from the Philippines has been the remarkable growth and resilience of the BPO and Call Center industries. Jobs, salaries and investment in the sector have continued to grow even in the face of global economic crisis. Hundreds of thousands of young and older Filipinos are grabbing up better paying, stable and dignified jobs. And I am not just talking about online customer service and sales jobs. But high-skill, value-added opportunities that are giving hundreds of thousands of Filipinos valued and tangible experiences for their resume even as they go beyond the BPO sector.

I am not unmindful of the social disruption that results from the 9 pm to 6 am work shift nor do I think that the largely urbanized BPO sector is the panacea to the developing world’s socio-economic aspirations; but the BPO sector has been a significant and undeniable and prideful component of the socio-economic ambitions of the nation and more importantly of the individual.

But the more extraordinary thing about the industry has been that this is a success story that evolved as a result of the formal intervention of the political establishment. To be sure these were a minority of forward thinking and globally competent politicians and not the typical bureaucrat and elected officials, but never-the-less there is a direct link between some members of the political class and the hundreds of thousands of jobs created by this industry. (It should be noted that there will be significant electoral and political benefit to accrue to them… and that is how the successful democratic system is supposed to work!)

This is no small thing in a political environment where the statement: “I am from the Government and I Am Here to Help You” is one of the great lies of contemporary public intercourse and a cruel paradox in the democratic evolution of a nation.

It is with this background that I noticed a small news item about a very small group of former Dell Computer employees suing Dell for “wrongful” dismissal in the Philippines. The details were sketchy, but the suit is by 70 former employees (Dell at that time had some 4,000 employees at a BPO center near the Mall of Asia in Manila)

Actually, for all I know the suit could be a justified action by a genuinely aggrieved group of “victim” former employees. But I doubt it. (If my assumption is wrong, I will apologize and buy all of the complainants and their many attorneys Ice Cream at the Mall of Asia.)

So what’s the point of this observation you might ask? Well the point is that in the BPO/IT-enabled sector the “political class” went beyond their usual “self-serving” norm into an extraordinarily productive “mutual self-service” kind of relationship with the governed; A kind of “Perfect Storm” of representative democratic political economics.

The governed get jobs, and dignity and opportunity… The business elite get profits… and the political class get votes! Wow! Send this formula to the IMF!

But hold on… a new villain emerges. Alas it appears to be the governed. This tiny minority; these 70 or so have chosen to respond to their job loss not with responsibility to the common good and self-examination and self-improvement. They responded not with responsible political actions; like for instance building a genuine organized labor institution.

These otherwise ordinary and probably very decent people chose a highly politicized judicial path. They are trying to take the “politics as usual” easy way out. Taking this into the quagmire of a judicial system that has become the poison pill of decent investors both foreign and domestic. The litany of horrors is endless; from “purchased TROs” to cases languishing for 15 – 20 years. It can and will kill the job-providing part of the “Perfect Storm” of representative democratic political economics previously mentioned.

Sadly it is a story repeated time after time not only in the developing world, but across the developed economies as well.

The long-time victims are now part of the problem. And it is not their fault. It is the obvious and inevitable Pavlovian response to a flawed power elite… My Interests Are More Important Than Any One Else’s has been their modus operandi.

So in this case of the 70, they appear to have responded “in kind”. The interests of the 70 are more important than the interests of the 4,000, or even the hundreds of thousands who have benefited from the BPO industry.

I am not sure I have an answer to this but maybe the answer is just as simple as not trying to change a flawed elite by emulating them. Maybe, just maybe you can replace them by being better then them.

Maybe the answer is a form of the “Perfect Storm” of representative democratic political economics previously mentioned… The governed get jobs, and dignity and opportunity… The business elite get profits…. And the political class get votes! Find those political, business and cultural elite that openly acknowledge the flaws of the “My Interests Are More Important Than Any One Else’s” paradigm.

Reward those willing to reject this flawed paradigm and replace it with a genuine altruism; or at least a form of the productive “mutual self-service” kind of relationship with the governed. Give them votes. That is the weakness of most politicians and that is the opportunity.

Or better yet replace the old elite with a better idea…

Mutual Self Interest; The “Perfect Storm” Of Representative Democratic Political Economics:

The governed get jobs, and dignity and opportunity…

The business elite get profits…

And the political class get votes!


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