Saturday, February 26, 2011

The Filipino Maid Industry – Will the Middle East Crisis bring an End of the remittance bonanza?

FILIPINOS are all jittery over the events in the Arab world, and rightly so. This is a type of unease that is shared across the board, from those with next of kin working slave jobs for a pittance there to the dollar billionaires who own the malls and the juiciest slices of the national economy.

The ordinary families cannot afford losing the remittances from the Arab countries, which employ at least 70 percent of all OFWs. The business sector moving people and cargo cannot afford Middle East-supplied crude oil at over US$100 per barrel—which would likely happen once the political turmoil becomes a full-blown political conflagration.

The dollar billionaires who own the malls fear a drop in mall sales, which is inevitable once remittances thin out. The banks fear a drop in remittances, which the banks facilitate for a fee, as well as a sharp reduction in vehicle loans which OFWs take out from the banks to buy those brisk-selling AUVs.

Other fears:

1. The national government has been historically inept at evacuating OFWs from strife-torn countries.

2. The supposedly remunerative jobs back home for displaced OFWs are more fiction than fact. They do not exist, unless the returning OFWs have mastery of the English language that they can use for BPO jobs, or have programming and networking and database management skills for the ICT jobs in the BPO sector.

And we can add this: The ambassador in charge of evacuating workers, former AFP chief of staff Roy Cimatu, is a troubled man himself. He is at the center of a Senate investigation on corruption—and pabaon—at the AFP.

There is a two-word summary of the dire consequences of a full-blown convulsion in the Arab world: economic catastrophe.

The fear and trembling in Manila is at a scale we only know and feel.

Why? Because the other countries that are generating remittances on a moderate to huge scale do not have a one-dimensional, remittance-dependent economy such as ours, except for Mexico. But Mexico is a special case because it relies on dollars sent in from the US, not the Middle East. And the menial jobs that the Mexicans take in the US—while affected by the recession—will not really disappear in massive volumes.

India and China also have remittance-sending overseas workers but these workers are evenly spread out in various countries, again, unlike us whose OFWs are concentrated in the Middle East countries.

And, we all know this: We are the only economy in the world with a yearly remittance that is greater than its yearly merchandise exports and foreign direct investments.
That People Power, called Jasmine Revolution now, forced a despotic Ben Ali out of power in Tunisia awed us. But, it was shock that came after, when People Power spread through the Arab world like a proverbial wildfire.

As Bahrain and Libya were rocked by bloody protests, the worst of our nightmares—violence destabilizing countries that are host to hundreds of thousands of OFWs—is staring us in the face. What if the protests in Bahrain move over to the huge kingdom after the causeway?

We took note of the long Iran-Iraq War but only lightly. We were concerned a bit when Iraq invaded Kuwait and when the Allied forces dealt with Saddam. What is taking place in the Arab world right now is something that truly terrifies us because this is a real threat to our remittance-based economy.

Imagine these: Planeloads of returning OFWs, massive joblessness, an economy deprived of its main anchor overnight. A huge void and with no tools to fill up that huge economic void.

Planning for the return of dislocated workers—this is the greater tragedy—is not something that has been done by the national leaders. Because of our basic incapacity to deal with this. Because of the limited absorptive capacity of the local job market. Should the events in the Arab world force out, say, 100,000 workers, there is no way we can place one third of the 100,000 three months after their arrival.

We can say this again: Returning OFWs, unless armed with the skills required by the BPO job market, would end up swelling further the ranks of the jobless. We can’t state what await them any other way.

The six other growth areas other than BPO, mining, tourism etc, are not really potential major employers for returning OFWs.

So what are we to do? Right now, we have no option but to sit and wait—and join the community of nations in praying that the Arab upheavals would not result in more theocracy. Or worst, the emergence of Taliban-like leaders.

As a general rule, democracies with the rule of law, open economies, free press and strong civil societies are better host countries for our OFWs. Here is the econimic equation: A single OFW in North America sends in a monthly remittance equivalent to the remittances of 10 OFWs in the Middle East.

If a popularly elected parliament emerges in a post-Qaddafi Libya, we can truly claim “answered prayers” after the days of blood and unease. Manila Times

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