Forecast 2009 (Part 1)
Businessworld
Forecast 2009 (Part 1)
In Chinese the word “crisis” is composed of two characters. One represents danger, and the other opportunity, representing the Yin and Yang to every issue. That 2009 will be a tough year cannot be doubted, but last 15 December, I mentioned success being a matter of attitude, and that can make all the difference.
Because in recognizing 2009's possible trends and dangers now, Filipino Entrepreneurs can obtain a roadmap leading to exploitable opportunities, doing their part to deliver the Philippines from the wasteland of the Global Economic Crisis.
Oil Shocking
Another shocking thing about the recent oil shock is that prices, after reaching a high of $147.02 per barrel (July 2008), recently dropped to below $33 per barrel, as global recession curbs Developed countries’ energy demand.
Supply will follow demand, and OPEC, propping prices, will consistently cut output. So is another oil shock looming? Maybe not in 2009, but as GCC countries continue to successfully shift their GDPs away from oil-based revenues, oil output can be willfully manipulated.
The resoluteness in maintaining Oil EVAT has been proven. The President has directed the Php18 billion in “windfall revenues” to Conditional Cash Transfers, electricity and PUV diesel discounts, and the rice subsidy, helping our 30% poorest of the poor weather the Global Financial Crisis' effects. Some of it forms a strategic reserve, a buffer against a fourth oil shock.
Food Fight
The Administration has established Food Security parameters, targeting 98% food self-sufficiency by 2010. Filipino Entrepreneurs could focus on Agricultural geared towards food. Establishing vital pump-priming infrastructure - roads, ports and bridges – will make fertile but fallow lands more accessible, and enable farmers to deliver produce to untapped markets.
Government, with IRRI’s help, could initiate a Food Coordinating Council, with rice-producing ASEAN members sharing on best practices – including data on high-yield, blight-resistant rice strains, land maximization, and irrigation systems. Dissemination to farmers would deliver increased yields.
Food sufficiency is of paramount importance. Remember: another shortage is but a global-warming induced catastrophe away.
Cleaner, Greener
The “Big Three” Automakers' plight, having dropped production, closed plants, and laid-off more workers, as demand for gas-guzzling vehicles evaporates, illustrates the world's intent to shift to alternative energy – not just for huge industry and machinery, but real, practical, and consumer-based solutions, like automobiles and households.
The opportunity? Demand for ethanol and non-fossil fuel (alternative) energy, and componentry enabling alternative energy creation, will rise. This is where our CNG resources, sugarcane, gold and copper (for alternative energy machine circuitry and semiconductors) are crucial, and geared towards exportation, especially to Kyoto protocol countries.
Homebound Filipino Expats
Filipino Expat remittances, estimated at $17 billion by end-2008, still shield us from the Global Financial Crisis. But jobs worldwide are being churned as global economies contract. US unemployment hit a 15-year high 6.7%; in the EU, a two-year, 7.7% high. Approximately 65% of our remittances emanate from here.
The Administration is already nipping a budding crisis. As recession further ravages Western economies (the US projects an end-2008 1.3% GDP, expected to decline by 1.4% in 2009; the EU, expecting an end-2008 1.4% GDP, projects a 0.2% decrease in 2009), unemployment will increase, inevitably hitting Filipino Expat jobs. DOLE projects about 575,000 job cuts largely from Blue Collar ranks, mostly from Asian countries like Hong Kong, Macau, Taiwan and Singapore. I dare say however, that Filipino Expats will be returning from the US and EU.
It is thus timely - and critical - that the Government, with a Php250-million “reintegration program” ordered by the President, has 50,000 livelihood jobs on standby, and is expediting the creation of jobs in Australia, Canada, New Zealand, and Guam. Qatar has already offered 37,000 jobs.
Resourceful Outsourcing
Obama will try to create jobs through pump-priming: pouring massive public spending into US infrastructure rehabilitation, creating 2.5 million jobs. As he tries to lure Manufacturing – and outsourced jobs – back to the US, Philippine BPO experts fear that outsourced jobs – say contact center agents – will return to US soil.
Obama's policy is to rescind US company Tax incentives for outsourced labor. How companies weigh this disincentive versus labor cost savings - is the real question. An entry-level Philippine contact center agent’s average monthly wage is Php15,000 (about $315.00). That’s massive savings, equivalent to only 48 hours of labor at the US’ $6.55/hour minimum wage. And American contact center agents certainly earn above minimum wage. As proof, Google, Inc. recently signed with a prominent local Contact Center.
The Global Financial Crisis has shown how global economies are US-dependent. Will a gradual decoupling (say over the next decade) happen? BPOs must increase alternative customer bases in Oceania, Asia, and Australia. Perhaps Filipino Entrepreneurs could establish Academies offering Australian English, Japanese, Korean, and European language training.
The next article will examine more trends identifying more opportunities in 2009.
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