Prof says global competitiveness requires global salary rates for workers

DAVAO CITY (MindaNews/15 December)—An economics professor at the Asian Institute of Management (AIM) told a city competitiveness forum here Tuesday that Mindanao companies should pay their workers global salary rates if they want to keep up their competitiveness with the rest of the world.

“If you want the best of the world, pay your workers global rates,” Dr. Federico Macaranas, an AIM professor and one of the country’s leading economists, said.

“You cannot just say because you are in Mindanao, you must only have Mindanao level wages. In a perfectly mobile world, wages must somehow equilibrate with foreign rates,” he said. “So, in the end, you must pay your workers global rates.”

The forum preceded a planning workshop where mayors, local planners and some business leaders identified ways to increase the competitiveness of Mindanao cities.

“Work to make your highly-skilled workers stay with you, rather than work abroad,” Macaranas also told Mindanao mayors and forum participants. He cited the time when rattan was unavailable in Indonesia and Indonesia hired the Philippine rattan makers.

“So, instead of us thinking of how to export rattan, we just sent our workers away. That meant a very poor competitiveness of the rattan furniture industry vis-à-vis Indonesia.”

City planners and executives were made to identify their city’s strength, weaknesses, opportunities and threats and how to come up with ways to stay competitive.

“You must keep your technology current in order to promote the products that your city wants to promote,” he said.

AIM conducts the yearly Philippine Cities Competitiveness Ranking Project (PCCRP), which seeks to measure the strength and drivers of competitiveness of Philippine cities, and to draw out and promote the best practices. The project also serves as a planning and policy reform tool.

Results of the survey are also benchmarked with the rest of the world, to make the cities “globally-conscious.”

“How do I keep my labor cost from pulling down my competitiveness?” Macaranas asked, “Very simple,” he said, “Have good managers, who cut down cost in any other way, (except labor) because our labor may already be very productive. When workers are already productive, you cannot keep them more productive by suppressing their real wages.”

Although some local executives raised the danger that the survey and ranking might pit one Mindanao city against another, Trade Undersecretary Merly Cruz, said the cities in Mindanao should work as a cluster and promote Mindanao as one area.

Macaranas urged the local government units of the competing cities to “work for their mutual benefit,” and make Mindanao more visible by increasing the competitiveness of its cities. (Germelina Lacorte/MindaNews)