Editorial Page column, The Evening Paper
Issue of 3 August 1995
Issue of 3 August 1995
An exciting experiment is about to take place in China and should be in full force before the end of the year. My interest here is anchored not only on the nature of the experiment but also on its motivation.
The experiment will take credit cooperatives in 35 major Chinese cities, group them into "collective city cooperative banks," and give them the authority to operate as commercial banks. They will be made to adopt standard commercial management and compete head-on with the big commercial banks.
A vice governor of the central People's Bank of China, who presented the country's new Commercial Bank Law, paid tribute to credit cooperatives. He said they have"worked quite well providing loans to collectives, private businesses, and other small ventures that are seen by the major banks as too risky." In their evolution into commercial banks, the credit cooperatives will continue to play the same role: that of servicing small and medium-size companies, which often complain they cannot get credit from China's huge and indifferent state banks. Allowing competition to flourish within a sector is admirable enough. Tasking the cooperatives to service a clientele that often does not get any attention from those in mainstream banking is even more commendable.
Our small and medium-size enterprises also need all the help they can get in terms of additional capital. Most of them already possess the enthusiasm, the technology, the drive. What they need is the added boost of capital. As Taiwan and South Korea have adequately proven, small and medium-size firms, especially those supporting export industries, are indispensable to a globally competitive economy.
This should convince skeptics in our finance sector who, only over two months ago, scathingly rejected the idea of a local Grameen-style bank. Not only the World Bank, it now appears, is convinced about the viability of "banking on the poor."
******
Another huge market goes global. Almost a hundred countries have now committed themselves to an agreement, brokered by the World Trade Organization, opening up their financial services markets for the next three years. What this means, theoretically, is that it is now open market--to a set level in the 95 countries that signed up for the accord--for banks and securities and insurance companies.
Again, for businesses all over the world operating in this market, competitiveness is the prime requirement. The 95 countries that signified agreement with the accord will eventually see "more foreign banks, more foreign securities, and more foreign insurance companies." The WTO claims the result would be increased security for investors and more investment in the developing world.
Between the time the agreement is enforced and the time WTO's vision comes true, however, things could go wrong--and badly. The Philippines is already seeing more foreign banks coming in this year. More foreign securities and foreign insurance companies to follow comprise a threat frightening enough to freeze many a local businessman's blood.
Charges of unfair competition are bound to be brought up again, ad infinitum. That's one way of looking at the new setup. The other way is looking at our local banks, local securities, and local insurance companies moving out, perhaps trailing our monster OFW communities abroad and profiting from the ready-made clientele.
And that's aside from the foreign business that our financial services companies may be able to catch once they establish their presence in thriving markets.
Fear of open markets and liberalized trade is understandable. But the time has come for Filipino businessmen to be proactive, to rise with alacrity to the challenge of global competitiveness. Successful Filipino managers in multinational firms here and abroad have reaped plaudits, or at the very least, learned to keep up with the exacting pace of global business. Most of them find, if they have to work again for local ventures, a slower pace frustrating, at the very least. Areas of production where local businesses are often found wanting, aside from speed, are quality, R&D, technology, and innovation.
It is time all local ventures initiated a thorough study and inventory of their processes, whether they be in manufacturing, agriculture and agri-based industries, or services. The time to reengineer, for all Filipino-owned ventures, is now.
Again, for businesses all over the world operating in this market, competitiveness is the prime requirement. The 95 countries that signified agreement with the accord will eventually see "more foreign banks, more foreign securities, and more foreign insurance companies." The WTO claims the result would be increased security for investors and more investment in the developing world.
Between the time the agreement is enforced and the time WTO's vision comes true, however, things could go wrong--and badly. The Philippines is already seeing more foreign banks coming in this year. More foreign securities and foreign insurance companies to follow comprise a threat frightening enough to freeze many a local businessman's blood.
Charges of unfair competition are bound to be brought up again, ad infinitum. That's one way of looking at the new setup. The other way is looking at our local banks, local securities, and local insurance companies moving out, perhaps trailing our monster OFW communities abroad and profiting from the ready-made clientele.
And that's aside from the foreign business that our financial services companies may be able to catch once they establish their presence in thriving markets.
Fear of open markets and liberalized trade is understandable. But the time has come for Filipino businessmen to be proactive, to rise with alacrity to the challenge of global competitiveness. Successful Filipino managers in multinational firms here and abroad have reaped plaudits, or at the very least, learned to keep up with the exacting pace of global business. Most of them find, if they have to work again for local ventures, a slower pace frustrating, at the very least. Areas of production where local businesses are often found wanting, aside from speed, are quality, R&D, technology, and innovation.
It is time all local ventures initiated a thorough study and inventory of their processes, whether they be in manufacturing, agriculture and agri-based industries, or services. The time to reengineer, for all Filipino-owned ventures, is now.
******
"The United States currently has the worst school-to-work system in the industrialized world," said a statement that accompanied the release of a study conducted by the American Federation of Teachers. The federation represents some 875,000 US public-school teachers and other education workers.
The report admits the US has the largest number of university graduates in the world, but it raises concerns about the education given the 75 percent of US students who do not graduate from college. US schools are concentrating too much on preparing youngsters for college and ignoring high school students who will be seeking jobs in business and industry.
"There is no systematic mechanism for moving young people into the workforce," the federation said.
Would the record of Philippine high schools be any better than their American counterparts? Do Philippine schools prepare our children for job competition in a global economy?
The report admits the US has the largest number of university graduates in the world, but it raises concerns about the education given the 75 percent of US students who do not graduate from college. US schools are concentrating too much on preparing youngsters for college and ignoring high school students who will be seeking jobs in business and industry.
"There is no systematic mechanism for moving young people into the workforce," the federation said.
Would the record of Philippine high schools be any better than their American counterparts? Do Philippine schools prepare our children for job competition in a global economy?
-- NBT
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