Going 'glocal' (Philippines Daily Inquirer)

Quick now, see if you recognize any of these brand names: Haier, Lenovo, Tata, Wilmar, Bimbo, BYD.

Filipinos are probably familiar with Haier and Lenovo because they’re in the country. Haier is a Chinese company manufacturing appliances; Lenovo, also a Chinese firm, is into computers and cell phones and has made newspaper headlines buying IBM’s personal computer business in 2003 and Motorola Mobility (a cell-phone manufacturer) from Google in 2014.

Wilmar is a Singaporean agribusiness company with operations as far out as Nigeria. Bimbo is Mexican and has overtaken Sara Lee in selling bread to the world, with operations even in China.

Tata is Indian, a huge industrial firm that now sells cars in the Philippines. With its low-cost line of vehicles, it can be a major player in the local market unless it is overtaken by BYD, a Chinese company that started out with computers and cell-phone batteries and now produces electric cars. Warren Buffett, an American business magnate, predicts that BYD may well become the world’s largest auto maker.

Emerging multinationals

I chose these companies at random. There are many more and, including San Miguel Corp. and Jollibee, are called emerging multinationals, described in the corporate world as the new giants on the block. They’re not American, British, German, French, or Japanese, which tended to dominate Fortune’s Global 1000, the list of multinational companies.

Many of these emerging multinationals come from a bloc of rapidly developing economies called BRICS (Brazil, Russia, India, China and South Africa). I wonder if the companies and the BRICS are discussed in our schools, not just in business and management but in all courses, including the natural and social sciences, engineering, arts and humanities.

We are talking here about globalization, which is usually viewed from either of two perspectives. One is to see it as a boon, part of what has been called neoliberalism, an economic philosophy that calls for the tearing down of protectionist barriers so companies can compete across borders. The other, popular in my own University of the Philippines, is to reject it, seeing it as the triumph of western imperialism imposing itself on hapless nations, the Philippines in particular.

I want to use another perspective that first maps out and understands the new global economic landscape and its consequences, and then frame appropriate responses. This is particularly important for the Philippines because we did suffer from US domination of our economy. We failed to develop our manufacturing sector. With corruption and bad political governance, we lagged far behind many developing countries-condemned, it seems, to be mere consumers of the industrial products of other countries, including neighboring China, South Korea, Taiwan, Singapore and, perhaps in the near future, even Thailand and India.

We did develop our service sector, deploying millions of Filipinos overseas and, locally, through outsourcing companies (for example, call centers, accounting, medical transcription). And so, like it or not, we are in the vortex of globalization.

Back in the 1960s and into the present, activist groups railed against our dependence on the United States and, to some extent, Japan. In the ’60s and ’70s, socialist China was raised as an alternative model of development, kept isolated from the clutches of multinationals.

The world has since changed. Our leading trade partner is no longer the United States but, despite the West Philippine Sea tensions, China. Let’s look quickly at the Philippine Statistics Authority’s trade figures for 2014:

Our leading export markets are Japan (22.4 percent), the United States (13.9 percent), China (13.6 percent), Hong Kong (8.9 percent), Singapore (7.2 percent), Germany (4.3 percent), South Korea (4.1 percent), Taiwan (3.9 percent), Thailand (3.8 percent), Malaysia (1.9 percent) and others (16 percent). I did find it strange that China and Hong Kong figures were separate considering they are politically one nation. If you combine the two, China accounts for 22.5 percent of our exports, beating Japan.

In terms of imports, China accounts for 15 percent, followed by the United States (8.7 percent), Japan (8 percent), South Korea (7.7 percent), Singapore (7 percent), Taiwan (6.7 percent), Thailand (5.3 percent), Malaysia (4.7 percent), Germany (4.1 percent), Hong Kong (2.5 percent) and others (30.3 percent).

‘Patis’ and mining

Note how neighboring Southeast Asian countries are now major trading partners. All this reflects the patterns of foreign direct investments globally. The Unctad’s Global Investment Trends Monitor reports that from 2012 to 2014, overseas investments from developed economies dropped by 0.7 percent. In contrast, overseas investments from developing Asia rose by 33.9 percent.

We need to know who our trading partners are, and what the consequences might be. For example, I see many Thai food products in our groceries, including fish sauce rebottled by a local company and sold next to locally produced patis. A neoliberal argument is: Why not, maybe that will force our patis manufacturers to improve their product and lower prices.

But there’s more to all this than patis. Looking at Fortune’s Global 500, I saw quite a few Chinese mining companies. In terms of immediate threats, I worry more about Chinese mining companies operating in the country than the West Philippine Sea problem. I do consider the West Philippine Sea issue a high priority, but I’m appalled at the lack of attention to the destruction wrought by Chinese mining companies, often more irresponsible than western multinationals, in Mindanao. We’re talking here of pure extractive operations that blight the environment and corrupt local politicians as funds flow into municipal coffers for the short term.

Then, too, we keep going back to the point about Filipinos engulfed in globalization, through overseas workers and the local business outsourcing industry. So much of the antiglobalization critique is now focused against the K-to-12 program, arguing that this extension of high school is oriented toward training Filipino workers for exports, with visions of hordes of Filipinos trapped in menial occupations.

But there’s another scenario that has already been unfolding, and this is Filipinos working overseas in science and technology, management and accounting, the health professions, even as teachers from preschool to university level. Many are working for emerging multinationals, instead of the traditional western ones.

It would be so much better if we can keep them home to serve the Philippines. But if they must leave, then it may as well be for higher-paying professions and with an ability to negotiate with the world out there.

Last May I had dinner in Singapore with 17 UP Los Banos engineering graduates. Before we parted ways, one of them probably sensed some of my sadness and he tried to be reassuring: Don’t worry, sir. This is not for the long term. We will go home and we will go back with experience and lessons from here.

We cannot dismiss globalization with condemnation. The context, the primary concern, must always be the Philippines and Filipinos. Armed with a commitment to the local and an understanding of the global players, we can craft strategies for glocalization: tapping the world for the Philippines, rather than the other way around.