Monday, November 14, 2011

Investing in human capital

This was my column on the date indicated above.This post is antedated.

People are our only remaining source of competitive advantage; most of our other resources are gone or are fast going but what we do have in large quantities are people. It stands to reason, therefore, that we should be spending more in terms of investments in human capital. I know I have written about this so many times, but it is something that bears repeating because it is something we cannot keep on glossing over.

The sad fact is that far too many people in this country seem to think that Filipinos are naturally gifted as if competencies and talents are our natural birthright. When people sing paeans to overseas Filipino workers as among the preferred or the best talent in the world, many among us are lulled into thinking that everything is all and well as far as the overall preparedness and competencies of Filipinos to compete in the global arena is concerned and that Filipinos will continue to find jobs anywhere, anytime. This is farthest from the truth. The reality is that even in our own country, there are thousands of jobs that cannot be filled simply because we don’t have enough candidates that meet the requirements of these positions. The mismatch between what academe produces and what industry needs is becoming an alarming cause of concern.

Creating jobs is a difficult challenge, but a challenge that pales in comparison to the more critical question: Do we have a steady supply of talent that meets global requirements? We have achieved some measure of success in positioning ourselves as the outsourcing capital of the world, but we forget that this industry is human capital-dependent. The call centers and business process outsourcing centers will continue to locate in the country for as long as we have the people that will perform the jobs. But other countries such as Vietnam, Cambodia, even China will soon catch up with us unless we scale up efforts in terms of proactive investment in human capital.

This leads us to the critical question, then. Are we really doing enough to ensure that Filipino talent will continue to have the competencies that will make him or her stand out – 10, 15, 20 years down the road? We need to think strategically if we are to strengthen our competitiveness. We need to focus our sights on Filipinos who are not yet in college today.

Most studies show that certain competencies are developed at an early age. For example many studies show that mastery of certain competencies such as assertiveness and even some skills associated with communications such as grammar and fluency can be traced to a person’s formative years. There are also studies that indicate, although the empirical evidence is not very conclusive, that interventions to improve certain competencies that are made in later years yield poor results. In short, if the foundation skills are not strong, the possibility of achieving dramatic development in competencies in college is slim.

Clearly, developing human capital is a matter that requires long-term investments. We need to start putting in place more aggressive programs to ensure that children are kept in school. Better still, we need to make sure that children who are in elementary grades have access to basic needs such as health and nutrition because of their causal links to skills formation.

This is why I have always supported feeding programs such as the milk program for elementary pupils initiated by Senator Frank Drilon a couple of years back.

And this is one of the major reasons why I support the Conditional Cash Transfer Program of the Department of Social Welfare and Development, known as the Pantawid Pamilyang Pilipino Program or four Ps.

Oh I know. Programs like these do not really directly fix the structures that create inequities in our culture. The four Ps program will not fix everything that is wrong with this country. It’s not a magic bullet, that’s for sure. To be honest, these were also my reservations about the program early on.

I have talked to a number of people in our farm in Leyte including farmhands whose lives have become a little less difficult because of the program. I have personally talked to a fatherless brood of five whose monthly source of income was the P3,000 sent by their mother who worked as a household helper in Manila – a figure that has been greatly aided by the additional P1,400 that they have been able to source from the four Ps program. As a result, they children have been kept in school and the number of times they have missed meals have been reduced. For many families in rural areas, P1,400 a month makes a major difference.

We can all dream about comprehensive solutions that will fix the problems in our country in a systemic, integrated way. But we all know such solutions are not forthcoming anytime soon given limitations in the abilities of our elected leaders. But this does not preclude us from doing what we can to help our countrymen now. The four Ps is not perfect, but this is what I firmly believe in – right now, it’s the only program of this administration that it can honestly take pride in. All other programs remain inchoate or lack the impetus to make a difference.

Many people have attacked the program, citing two main criticisms. First, that dole does not work and only promotes indolence and dependence. And second, that the program is far too ambitious and will cost the Philippine government hundreds of billions of pesos that are better spent somewhere else.

The program is called conditional cash transfer; the word condition is not there for rhetorical purposes because money is only released to a qualified family on condition that they avail of health services (pre- and post-natal care for pregnant mothers and immunization, weight monitoring, nutrition counseling, and deworming for children) and they keep their children in school. In this context, the cash transfer is not a dole-out.

Of course the intellectuals among us can debate endlessly about what does and does not constitute a dole – and the ethical and moral considerations around it. We can intellectualize, moralize, and romanticize poverty and concepts like self-reliance, but at the end of the day, we all know everyone deserves a fair chance of proving himself or herself and a little assistance from government wouldn’t be all that bad. I personally would like to see stronger social security systems put in place in this country such as unemployment insurance, better retirement benefits, more comprehensive health services, etc. From where I sit, giving poor families a little help to become responsible parents and citizens cannot be all that bad.

The matter of the hundreds of billions of pesos that the program will require over the years is staggering; but not if we divide the amount by the total number of families (around 2.3 million as of last count) that would benefit from it. If we look at the amount as investment in Philippine human capital - and it is investment in human capital because we are ensuring that future employees know how to read and write and do not have health problems, for crying out loud – then, the amount is hardly enough. It certainly is far less compared to what our politicians spend collectively just to get elected into office.

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