Education: The key to solving poverty

The ongoing debate on the quality of Philippine education needs to become more urgent. The employment issue and anything related is important because this is critical to reducing poverty.

Normally there are three economic sectors that determine employment – manufacturing, agriculture and services. Economists tell us that the Philippines must focus on industrialization as the principal job-creating path to reducing poverty. The government is finding that the attempt to attract manufacturing jobs has increasingly become more difficult.

Modern factories now require more capital and skills to build. Labor market data from emerging markets today show that only five countries have 18 percent or more of their population employed in manufacturing, compared with 16 countries in 1990.

The five countries are China, Sri Lanka, Taiwan, Turkey and Vietnam.

The World Bank reports that since 1990 however, service jobs have risen from 40 to 50 percent of global employment.

In a recent article in The Economist magazine, it categorized service exports and listed the principal exporters per category. The first category is IT and telecommunications with the five biggest exporters as Estonia, Ukraine, Bulgaria, Djibouti, India. This ranking of countries includes those with a population of at least one million and GDP per person of less than $30,000.

The second category is the less technological-oriented businesses under the group of business and trade-related services which cover accounting and human resources. This has been described as an area of growth. The two biggest countries here are Estonia and the Philippines with such exports, accounting for over 5 percent of their GDP.

The major exporters of these services offer low labor costs as well as a large English-speaking population.

The third category is health tourism. Among the most important health services being exported are dentistry, hip replacement, hair transplants and cosmetic surgery.

Manufacturing has become more competitive as the advanced economies like the United States and Western Europe have begun protecting its domestic manufacturing base. For example, in order to preserve domestic employment, the United States has imposed tariffs on importation of electric vehicles and solar panels to encourage these employment-generating industries in the United States.

The increasing popularity of remote work has made firms in the advanced economy more comfortable with outsourcing operations. An online remote employee is now being viewed as the same as an outsourced one.

Although manufacturing still offers more jobs, the services sector is rapidly closing the gap.

The advent of artificial intelligence (AI) may even provide a boost to the service sectors. AI tools can help the least skilled knowledge worker catch up with the more skilled ones in such areas as writing proposals and providing customer service.

It is clear that the main resource in manufacturing is now in technology and equipment or machinery. The capital requirement in the manufacturing sector has made it more difficult for the poorer countries to remain competitive.

The main resource for the service sector still remains the human resources. Investment in human resources has become more urgent for countries like the Philippines to remain competitive. The biggest and most important investment in human capital is in the education sector. Unfortunately, this is the sector which has fallen behind and different studies have shown that the Filipino student ranks low in international standards, even in the most basic comprehension and computation skills.

The shortsightedness and selfishness of our political leaders have led to the appointment of incompetent leaders in the public education sector. Even our major resource of being the main English-speaking population in Asia and Africa is now being endangered.

One of the biggest achievements in the education industry in this century is adding an additional two years to the basic education system. It may still remain a challenge but worldwide trends and best practices demonstrate that K-12 is the only way to go.

This historic reform was achieved when Br. Armin Luistro FSC was appointed education secretary. His advantage was that he had spent most of his life in the field of education, starting as a teacher and all the way to managing universities.

It may sound impossible but there are now politicians who are actually questioning the K-12 system and advocating a return to the ten-year basic education. While the overwhelming bulk of the world is focused on improving their education sectors – all K-12 – the Philippines is in danger of going back to the education structure of the last century.

Presently, the Philippines is focused on trying to compete in the industrial world. Our business leaders have managed to convince our political leaders that to remain competitive, the only solution is to keep wages very low. The only beneficiaries of this kind of thinking are those who are trying to compete with neighboring countries and insist on workers’ wages below poverty level.

The Philippines can certainly become a major force in the global service sector but it must seriously address the need to elevate education of the majority of its studentry and not just focus on a handful of elite schools like La Salle, Ateneo and UP Diliman.