Euphoria over foreign investments raises false hopes for jobs — Ibon

MANILA — President Arroyo is likely to trumpet in the upcoming State of the Nation Address (SONA) her administration’s ability to attract more foreign investments into the country by creating a more investor-friendly climate. But independent think-tank IBON Foundation says that the Arroyo government’s foreign investment-resource extractive- and cheap labor-led approach raises false hopes for job creation.

The Arroyo government is promoting three major areas to attract foreign direct investment and, hopefully, more jobs: business process outsourcing (i.e. call centers), mining and export processing zones.

But these three industries can only generate a fraction of the jobs needed to address the country’s worsening jobs deficit, said IBON research head Sonny Africa.

In a study presented at the IBON Midyear Birdtalk, Africa pointed out that call centers, the biggest employer in the BPO sector, currently employ 180,000, but even if the Philippines were able to corner all of the call center jobs in Asia, it would only account for some 1.5 million jobs.

Meanwhile, mining could employ 130,000 at the most while electronics manufacturing could employ less than 400,000 workers.

Further, these investment areas are very weakly integrated into the local economy– apart from being heavily extractive in the case of mining– thus perennially giving jobs to only a fraction of the labor force and otherwise operating as disconnected enclaves, Africa said. As of April 2007, there were 2.7 million unemployed Filipinos not yet counting perhaps up to 2 million more that the government simply stopped counting when it changed its definition of “unemployed”.

In exchange for such false hopes, the country’s mineral resources and agricultural raw materials are being offered for foreign exploitation. Cheap Filipino labor is offered for sale either locally through BPO and so-called manufacturing for export, or exported abroad as overseas contract workers.

Said Africa, “Part of the legacy that the Arroyo government can claim is how it was able to single-mindedly open the country to provide the most profitable opportunities for foreign capital while sacrificing national interest and economic development.”