Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Posts Tagged ‘netherlands’

Raffle for Partylist Groups

Posted by butalidnl on 24 June 2012

The Comelec will be holding a raffle of partylist groups to determine their order in the ballot. The poll body had approved Resolution No. 9467 mandating a raffle of accredited party-list groups “for purposes of determining their order of listing in the official ballot” for the May 13, 2013 national and local midterm elections.

The rationale for this is that partylist groups are striving to be the first in the alphabetical order, resulting in a large number of partylist groups’ names starting with the letter ‘A’, and even some starting with ‘1’ (which comes before ‘A’). So now, Comelec wants to just hold a raffle to make the listing ‘fair’.

The problem is that the raffle is not that fair either. If we follow the logic that many people will just vote for the first party on the list of partylist groups, a raffle will mean that the party which gets drawn for the first position would probably get seats for free – simply as a result of pure luck. While more deserving parties with a much better parliamentary record may get less seats than otherwise.

All this sounds like Comelec is earnestly seeking to reinvent the wheel. After all, very many countries have party list systems for their whole parliament. Comelec could have studied how they approach such a problem (and other problems regarding party lists).
In the Netherlands, the whole parliament is elected using the partylist system. Parties are listed based on the votes they got in the preceding elections. New parties then are added at the end of the list, and ordered based on the order of their registration. The system is fair and rather simple. The system ensures that the more significant parties get top ranking, and that new unproved parties start off at the bottom of the list.
Many other countries have similar systems.

A party’s ranking is important. For instance, election debates are open only to the top parties on the list – up to six parties at times. And it does have something like a bandwagon effect – if your party is Nr 1, it convinces some people to vote for it. So, when parties split, there are bitter court cases to determine which faction ‘inherits’ the party identity and its ranking – the loser ends up being ranked as a new party.

The Comelec raffle is scheduled to be held on 14 December. There is still time to scrap the raffle idea, and adopt the Dutch solution to the ‘problem’ of ordering the partylist groups.

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On Bio-industry

Posted by butalidnl on 3 September 2011

The business of raising chickens and pigs has grown into a full-grown bio-industry. ‘Mega-stalls’ for these animals are sprouting in the Dutch countryside.  It seems that raising the animals themselves is much more profitable than importing meat.  This is profitable when these animals are raised in ‘optimum’ growing conditions.

Mega-stalls have advantages of scale: personnel cost per animal is lower; less space per animal in terms of buildings (which at a later stage could be maximized further by building multilevel stalls), lower cost of buying feeds, bulk advantage in selling. At the same time, because of the scale of these stalls, they require a different ownership structure than the traditional family farm. Mega-stalls are generally corporate; and this means that it has to operate like corporations do, and not like family farms. They require attention to ROI (Return on Investment) because of the big bank loans needed to finance them. And with ROI comes corporate efficiencies, which may lead to ‘externalities’ (negative side effects) in the quest to maximize profits. One issue is that of their environmental impact – which boils down mainly to the disposal of waste. And then there is the issue of animal welfare – chicken/pig movements are restricted as much as possible, to optimize conversion of feed to meat. And then comes the issue of health – since large collections of animals are susceptible to all kinds of diseases, mega-stall owners tend to use a lot of antibiotics to lessen this risk. But this leads to antibiotic resistance being developed by bacteria in the meat, which means that bacteria that infect humans are more likely to be resistant.

All the issues related to mega-stalls could, in theory, be resolved by government regulations. However, since resolving these is in conflict with the whole rationale of having mega-stalls in the first place (which are built to maximize profit), it will be extremely difficult to regulate their operations by simply specifying environmental, animal welfare and health requirements.

One kind of regulation that may prove effective in controlling these ‘externalities’ of mega-stalls is by requiring that the meat coming from them be labeled. The government should require that all meat be packaged, and that these be labeled (note: not only the meat from mega-stalls need to be labeled). At the same time, imported  meat should also all be similarly packaged and labeled.  On the labels, it should be indicated how much fat, salt etc. that it has, and if no antibiotics were used in raising these animals. There would also be strict minimum requirements on environment, health and animal welfare.

The individual countries of the European Union could not do this by themselves. There needs to be a EU directive to implement a centralized labeling system. This way, it would not be possible for growers in one EU country to produce sub-standard meat, and export them to other EU countries.

When companies are forced to label their products (and an independent body should be in charge of inspecting for compliance) people could directly compare the quality of various kinds of meat. Hopefully, they would reject, or at least discount, lower quality meat – paying much less for it. It would then not pay, for example, to feed salt to chickens before slaughter – salt is sometimes added to increase slaughter weight of poultry or hogs, since a high salt content will make that meat cheaper. And animals who don’t move much will have a large proportion of fat, this will merit a lower retail price.

Here to Stay
Despite mega-stalls being eyesores and running counter to the cultural-determined accepted mode of agriculture, I think that further scaling up of the bio-industry is here to stay. All we can do is to minimize (or correctly price) their externalities. The growth of meat production in EU countries will eventually be balanced by meat production elsewhere – in grain producing countries like Ukraine, or nearer markets. And by that time, mega-stalls will only be enough to supply the meat requirements of a given country.

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A Four Day Hike

Posted by butalidnl on 25 July 2011

My wife Maya participated in a national hiking event here in the Netherlands. She walked 40 kilometers for 4 days in a row (total of 160 km), in the Nijmegen 4 Day March  on 19-22 July. About 40,000 people participate in this event every year. It is organized by the Dutch National Hiking Federation. There are lots of hiking events organized throughout the year, but the Nijmegen 4 Day March is the most popular of these.
at Vierdaagse 2011
The 4-Day March is a huge event in Nijmegen. The hikers can hike 40 or 50 kilometers per day (or 30 km for those over 60 years old). It started as far back as 1909, and was originally a military event. On each of the 4 days, the hikers follow a different route, bringing them to many of the towns surrounding Nijmegen. This event brings many people together and promotes regional understanding. Those who don’t hike enjoy listening to various bands at podia set up across the city.

The Nijmegen Four Day March comes from a deep-ingrained Dutch culture of walking. There are all kinds of walking events all year round.  People walk or bike to work; I used to walk for 25 minutes (about 2 km) from the train station to my office (and back, of course). I believe that walking (and biking) are part of the reasons why the Netherlands is a country with a comparatively small number of obese people (among developed countries). Hiking is healthy.

Hiking events in the Philippines usually involve hiking in nature areas with a guide. There are no massive hiking events that are packaged as such. However, there are various demonstrations and processions that we could actually call hikes.

Running seems to attract more and more people in Philippine cities these days. I think we should expand the ‘menu’ to also include hiking events in the cities. Hiking has a number of advantages. First, it is a good source of exercise, which is relatively cheap since all you really need is a good pair of shoes and functional legs. Second, hiking has the potential of including a lot more people than running, since many people are not able to run, but could walk.  And third, if the event is packaged well, it can lead to more social cohesion, especially if it is part of an annual event like a fiesta.

Just imagine if there is a Holy Week “Visita Iglesia Walk” that goes to seven churches. People should walk between them, riding is not allowed. Or that a 5 kilometer walk is part of the celebration of a town fiesta.  Who knows, it could help to make Filipinos healthier, while also promoting the local economy and even attract tourists.

But walking should also be integrated more into the daily life of Filipinos. We should stop the practice of taking a jeepney or tricycle for a distance of as little as 500 meters.  Schools should integrate short hikes as part of their Physical Education. And there should be more and bigger pedestrian shopping areas.  This will help to keep Filipinos healthy.

Posted in Philippine economics, Philippine education, Philippines, The Netherlands, Uncategorized | Tagged: , , , , , , , , , , | Leave a Comment »

Developing a Business “Ecosystem”

Posted by butalidnl on 16 June 2011

Here in the Netherlands (and I think, most OECD countries) there are a lot of companies in the “Business Services” sector. This sector includes services such as: payroll administration, janitorial, security guards, as well as Human Resources, warehousing, transport, internet, etc.  I would like to call this network of businesses as a “business ecosystem”. In effect, business functions are broken up, redistributed, and recombined in new ways; and all this, in the interest of lowering costs and increasing efficiency.

I believe the higher efficiency of businesses in these countries has a lot to do with business services, and less with the specific efficiency of individual workers. It is thus good to take a look at how this kind of ecosystem is built, and how we can learn what we can from this.

In the Philippines, there are some aspects of business services. There are security agencies (for security guards), IT, and even some warehouse services; but not too many others.  I believe that there are things that hinder the setting up of business services, and that this is keeping Philippine businesses from being more efficient and cost-effective.

Kinds of Services
Let us take a look at what kinds of services there can be. First, the general services:
Transport/Logistics. Transporting goods from one point to another does not need to be done by the main company. Especially when shipments are not that constant. Logistics services make better use of trucks and transport (even storage) infrastructure. Trucks don’t have to stay idle for days, or warehouses unused most of the time (or having too much extra capacity).

Payroll Administration. They not only compute the salaries (with all the deductions, allowances, refunds..) every month; they also pay out these salaries, and send the premiums to the specific agencies. Smaller companies don’t need to employ people specifically to do this task anymore. Even bigger companies use external payroll administration services.

Collections. The collecting of payment is often done by banks, in the form of “periodic payment orders”. Banks get authorized by people to make payments every month or so, for their rental, insurances, newspaper subscription, water, electricity, etc.  And, if the customer doesn’t pay on time, the company then hires another company to collect the overdue payments.

Human Resources, Recruitment. This would range from those that recruit people for temporary jobs, to those who “headhunt” for highly skilled people.  These bureaus advertise for qualified personnel, they do the intake interview, tests, etc. for the company. They then either turn over the employee to their client company, or simply “detach” them to work there (while they remain as employees of the HR/Temp company).

Facility Management. Does the setting up of everything in the office, from the dividing walls, to desks, computers, filing cabinets, etc.  This is an occasional task that actually is quite a hassle for the regular employees to do, so why not hire a specialist company to do this?

Waste Disposal. There are companies that “destroy” files (these need to be done correctly, for security reasons), dispose of waste oil from restaurants, or other special waste disposal needs.

Printing/Photocopying/Scanning. They do the often tedious task of producing your printed materials. Some even offer to do the layout for you.

And then, there are those business services which are specialized per sector.
“Fairs” for Retailers. For every kind of retailer, there is a regular “fair” which brings together all the suppliers for that sector (e.g. fashion accessories) so that buyers could simply place their orders at the fair. Through this system, all the retailers are assured of products from a wide selection of suppliers.

Special Stores for Businesses. For other sectors, there is a big store dedicated to the needs of the sector. There are big stores, for example, for restaurants and snack bars. Everything that operators of restaurants and snack bars could need is there: from various kinds of snacks, to waiter’s uniforms, napkins, utensils, etc.

Construction. The construction sector is really full of business services and subcontracting companies. It seems like a whole web of companies cooperate to make a single building.  First, there is a company that does the ground preparation, then another that does the structural work, then those which supply specific pre-fabricated units (e.g. re-bar frames, stairs, wall slabs, etc.), and cement is delivered by another company.  There is a company that leases out cranes, and another that supplies the crane operators. And then there are others who do the brickwork, painting, electrical wiring, flooring, etc. There are even specialist companies in the UK that sets-up the scaffolding.

It might look complicated, but it is indeed a very efficient way of doing the work. It is also more flexible than having a single contracting company doing everything. It is as if the project coordinator doesn’t have to pay individual workers, but that things are done by companies on a pakyaw basis.

“External” Conditions Needed
In order to have a fully developed business ecosystem, certain conditions are needed. First among this is that it should be easy to set up a business. And the operating costs of a business should be relatively low, so that the efficiency gain from subdividing the work is not lost because of high business operating costs.

In the Philippines, it takes a long time to start a business, and the process is tedious and expensive. Then, there are a lot of troublesome administration and tax requirements (e.g. a documentary stamp tax for each receipt). For some industries, though, especially those classified as “pioneering” or export-oriented, administrative and tax requirements are less tedious.

Second, there should be a level playing field for labor, work conditions, safety regulations, etc. In the Netherlands, salaries and labor conditions are regulated under national Collective Bargaining Agreements, which cover workers in a whole sector. For example, construction workers of various kinds pay the same salaries, and have the same safety standards.

Third, there should be a favorable bank and insurance system.

Fourth, a lot of things need to be standardized. Business forms and formats need to be standard throughout the economy, or at least the particular business sector. Even the specifications for things like window sizes or paint color need to be universal.

Why Efficient?
Dividing up the work into definite tasks for specialized companies, if done properly, greatly improves the efficiency of production. Take the case of the prefabricated concrete stairs. This has a lot of advantages. The company specializing in producing them makes use of the efficiencies of producing in scale, since it makes lots of prefabricated concrete stairs. Employees are fully utilized – and their skills in making prefab concrete stairs  improve with scale. They are able to save on materials cost and on equipment. This all adds up to a lower cost for producing the prefab concrete stairs. Now, multiply this for all the components that go into the final product (2x per floor of a building), and you will come up with a tremendous cost savings.

The other point of efficiency is that competition – through competitive bidding – means that the most efficient companies win out. And that, if outside sourcing of certain components or services do not result in lower costs, then the company could decide to do the task themselves.

In the Philippines?
Setting up integrated industries and a whole business ecosystem across industrial branches is not something only for advanced countries. The Philippines could also do it; it needs to work hard towards it.

The fact that the country is divided into many islands sets limits on the extent of business specialization, especially in the case of the smaller islands. There would simply be not enough scale for specialized companies to be set up in smaller islands. And, in dividing up the work, companies face large expenses in placing their workers in many job sites. But these limitations are not present for those businesses that operate in and around Metro Manila.

The electronics industry is well on its way to operating as a business ecosystem, with its many specialized companies making components for each other. And the government goes out of its way to simplify their administrative requirements.

The government should stimulate the development of business ecosystems, first for specific industries, and then to the overall economy. It should reduce the costs of setting up and running businesses, by reducing tax regulation and reporting requirements. At the same time, it should be stricter in enforcing technical, labor and safety standards.

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For CBCP, sex education or abortion?

Posted by butalidnl on 8 June 2011

(This post was published in BusinessWorld on  5 June 2011, as an opinion column. )

The Catholics Bishops’ Conference of the Philippines (CBCP) objects to sex education because they say that it encourages promiscuity. In other words, if teenagers don’t have sex education, they won’t engage in sex before marriage.

In this era of speedy communication, mass media and Internet, it is naive to think that we can “shelter” teenagers from sexual knowledge by not teaching it at school. As things are, teenagers will learn about sex from the mass media, Internet, or peers — and this information is often incomplete and incorrect. It is better to teach teenagers about sexuality in schools to ensure that the information that they get is more balanced and complete.

The argument that sex education is mainly the parents’ task is also wrong. In the first place, parents find it quite awkward to teach their children about sex. And there is the question of what they will teach them. There would need to be sex education courses for parents for this to work. I think that parents have a role in sex education, but this will be secondary to the role of schools.

I believe that an information campaign on human sexuality for adults would also need to be undertaken, as part of the sex education campaign, since there are so many married adults who know too little about sexuality, especially on how to prevent pregnancies.

The CBCP says that the government proposal for sex education is more about the technical aspects of sexual behavior. They want sex education to teach “values” instead. They would rather have something similar to the US “abstinence-based” sex education program — which teaches about the ideal of abstinence before marriage, and which does NOT teach about how to avoid pregnancy in case you don’t abstain.

The US abstinence-based sex education and movements like “Say No to Sex” and “True Love Waits” and abstinence pledges simply don’t work. They may have the short-term effect of delaying the age of first sexual encounter, but when these teenagers do have sex, they won’t know how to avoid pregnancy or sexually transmitted diseases. Studies show that their sexual behavior is the same as that of teenagers who have not had sex education. The US government poured $15 billion in the last 10 years to promote abstinence-based sex education; and as a result, the US has the highest rate among developed countries of teen pregnancies and abortions (combined rate is 86 per 1,000 teens), which is up to four times the rate of other countries.

It is all quite logical. If people are taught about sexuality, including how to avoid pregnancy and sexually transmitted diseases, there will be less unplanned pregnancies, and consequently, there will be less need for abortion.

Estimates of illegal abortion in the Philippines vary from 400,000 to 550,000 per year. And 1,000 women die every year while having abortions. Compare this with the Netherlands’ abortion rate (note that abortions are legal in the Netherlands) of 28,000 per year. If we correct for population size (and taking the figure of 400,000 Philippine abortions/year), the Netherlands’ figure is about 1/3 that of the Philippines. Comprehensive sex education is given in the Netherlands, and not in the Philippines.

If the Philippines had a comprehensive sex education program (but retains the abortion ban), there could be up to 270,000 less abortions, and that the number of deaths will drop to 330 from the present 1,000.

The Dutch system also teaches “values” together with the technical aspects of sex education. They promote the value of love and commitment in relationships, that teenagers who become mothers are ruining their lives, and that children should grow up in loving families. The Dutch have one of the lowest rates of teen pregnancies in the world, and have low rates for HIV and sexually transmitted diseases.

The question then comes: if the CBCP is really against abortions, they would be well-advised to promote comprehensive sex education. It would radically reduce the number of unwanted pregnancies, and thus the number of abortions. If the CBCP is against comprehensive sex education, then they have to accept that this would result in more abortions, and more deaths of mothers during those abortions. There is no middle ground, the church needs to choose.

I suggest that they agree to a program of comprehensive sex education. This way, they would indeed be decreasing the number of abortions. And if this is not being “pro-life,” what is?

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