Issues in Cambodia's Garments Industry

2006

 

The garments and textiles industry is a rapidly rising manufacturing industry in Cambodia that raked in a high revenue rate of US$1.9 Billion in year 2004. To date, the garments industry is the country’s largest source of export revenues. A total of 270,000 rural-based garments workers are directly employed in the country’s 226 clothing factories, almost ninety percent (90%) of whom are women aged between 18 and 25 years. Cambodia’s garment industry accounts for 98% of its exports, a most promising industry after the country has been stricken by poverty while recovering from the vestiges of the Khmer Rouge genocide.

 Cambodia, being the newest member of the World Trade Organization (WTO), enjoyed free and ready access to the US and European markets, thereby embracing globalization and gearing up toward global competition. Cambodia, as a developing country, enjoyed being covered by the 1974 Multi-Fiber Agreement or MFA, a US protectionist measure safeguarding the US apparel Industry. The agreement that set the stage for a quota system limited the volume of garment exports from various countries. The MFA was drafted under the oversight of the General Agreement on Tariffs and Trade (GATT).

 

The end of the 40-year existence of the Multi-Fiber Agreement (MFA) in 2004 signaled the onset of free trade that has put Cambodia’s garment and textile industry at a relatively disadvantaged economic position. The phase out of the quotas left some countries dangerously exposed with few comparative or competitive advantages. The MFA was replaced by the Agreement on Textiles and Clothing (ATC) since the former violated principles of fair multilateral trade by discriminating against developing countries especially in Asia. The ATC mandates a transitional and gradual phase out of quotas within a ten-year period by year 2005. 

In lieu of the MFA, the Agreement on Textiles and Clothing (ATC) allowed the quantities of imports under quotas to grow annually. It is an agreement that implements the phasing out of quotas under the MFA.

For a country that has been under a communist rule for 25 years, integration into the free market opens Cambodia up to a new economic system where global competitiveness may mean alteration of work practices and institutions in relation to factory labor conditions and standards. Concurrently, Cambodia possesses very few competitive advantages such as cheap labor costs and the industry’s respect for workers’ rights. However, the threat of bureaucratic problems concerning widespread corruption and its dependence on total importation of raw materials for garments production may render the future of the industry quite bleak if these constraints are not finally addressed.

Afin Business Solutions - helping small Australian companies grow their businesses

There is an Adelaide-based Australian company that focuses on providing online business solutions to small start-ups, companies, organisations, clubs and tradies. Afin Business Solutions was established to offer cheap, affordable but reliable web hosting, web development, web design and business tools (web-based invoicing systems, web-based client management system) to small startups / organisations or individuals.

They even offer free trials. Lazy Pair is hosted by Afin Business Solutions – there is nothing more we could ask for in terms of the tools we have access to on their hosting service. Hence, Lazy Pair is proud to be affiliated with them – they won’t let clients down. Visit their website: http://www.afinsolutions.com.

E-Government experience in the Philippines

ICT in the Philippines started with the computerization efforts of the government in 1971 establishing the National Computer Center (NCC) by virtue of Executive Order 322. NCC was designated as the primary government agency responsible for directing IT application toward national development. Its functions include technical and professional ICT assistance to national and local government agencies, the ICT industry and civil society.

However, much of the Government efforts toward ICT development and utilization have been made within the past decade when more enthusiasm was gained partly from the belief that modern technology can transform the often negative image of the government. Such efforts provide the legal framework for ICT in the Philippines. These include the National Information Technology Plan 2000 (NITP2000), RPWEB, National Information Technology Plan for the 21st Century or IT21, the Medium Term Philippine Development Plan (MTPDP), 1999-2004 or “Angat Pinoy 2004”, and the Government Information Systems Plan (GISP).

In 1994, the government adopted NITP2000 and created the National Information Technology Council (NITC) as the central policy body on ICT matters in the country and tasked to coordinate the NITP2000’s implementation. For the first time, the government developed a comprehensive plan and strategies for the development of the ICT in the industry and the public sector.

In 1997, then President Fidel V. Ramos ordered the establishment of RPWEB as a response to the pressing need for viable and cost-effective communication and information exchange system for efficiency in intergovernmental communications and transactions. Specifically, RPWEB was aimed at directing all government agencies including local government units (LGUs) to undertake electronic interconnection through the internet.

Learning from the previous initiatives, the government launched IT21 in 1998, aimed at documenting the Philippines’ common vision and broad strategy to spur the country to global competitiveness through IT. The IT21 was designed to attain its vision under a three-phased action agenda:

• Phase 1 (1998 – 2000) or the period for consolidation and providing new impetus to initiatives was mainly concerned with building the infrastructure for businesses, government agencies, schools, families and individuals to have access to IT.
• Phase 2  (2001 – 2005) or the period for building on the momentum gained is quite within its target of enabling the Philippines to produce competitive IT products. Certainly, the Philippines today is one of the countries riding the wave of business outsourcing with foreign clients served with IT-enabled products and services ranging from global call center to 3D animation to software development.
• Phase 3 (2006 – 2010) or the realization of the vision of the Philippines becoming a Knowledge Center in Asia is on its way with IT education and training in the country becoming more and more globally competitive

Similar efforts were supported under the MTPDP, which contains some of the strategies and initiatives of promoting IT investments to improve the country’s technological stock. Some of the major initiatives stipulated in the MTPDP include (i) utilization of IT in business and trade; (ii) policy framework which includes the Republic Act No. 8792 or the E-Commerce Law passed in June 2000; and (iii) governance and institution development through judicious utilization of IT and institutionalizing reforms, administrative systems and procedures. The latter however has yet to be realized as majority of government units are still trapped in the traditional long, cumbersome, paper-intensive transactions.

In support to the MTPDP, the Information Technology and Electronic Commerce Council (ITECC) was formed in 2000. ITECC is the result of the merger of NITC and the Electronic Commerce Promotion Council (ECPC) which was a response to the country’s requirement for a coordinating body to enhance public-private partnerships for e-commerce development. ITECC was formed mainly to streamline and focus government initiatives in ICT.

Consistent with the initiatives and objectives contained in the MTPDP, the Government Information Systems Plan (GISP) was approved and adopted in 2002 as the overall framework and master plan for applying ICT in government. GISP specifically sets the enabling policy and institutional infrastructure and environment, as well as the direction, priorities, and benchmarks for computerization of key government operations and activities.

At the lower levels, agencies are now required to prepare their Information Systems Strategic Plan (ISSP) as part of their normal planning process. ISSP embodies a government agency’s overall strategic plan for the development and implementation of information systems, the use of IT and corresponding resource requirements. While agencies have their own initiatives under ISSP, GISP still provides the overall direction. Hence, ISSPs have to be consistent with the thrusts of GISP.
Currently, the government agencies are at various stages of implementing e-government in their operations. Some of the more developed e-government projects include:

• GSIS eCard. The Government Service Insurance System’s eCard is one of the more recent innovations by a government agency. The E-Card is a combination of G2E and B2C ICT application by serving as the electronic identification and claims card of GSIS members and as a savings account at a private bank (UnionBank) respectively. As an electronic ID, the card contains all relevant information on the card owner as regards to GSIS matters. With this card, members need not go to GSIS offices to file applications and claims for GSIS benefits. They can actually withdraw the amount claimed from any accredited ATM. 
• BOC EDI Gateway and Super Green Lane. The Bureau of Customs (BOC) electronic network allows companies to transact with BOC and make shipping declarations. The Super Green Lane intends to provide the top importers ship-to-truck release of goods.
• E-Census. The National Statistics Office’s (NSO) website and call center allow Filipinos to request for birth, marriage, no-marriage and death certificates electronically.

Some observations on privatized service delivery system in the Philippines

Privatization seems to be an ideal solution to our problem in water. Providers compete in a race-to-the-bottom bidding making them offer the best and most acceptable promises in improving our water service delivery. While such promises were very enticing, they proved to be superficial.

There are undeniable issues in privatization that are being overlooked. In fact the side effects of privatization can lead to more unfavorable outcomes for developing countries Philippines developing countries and they may be worse off than before. Below are general issues that can be observe in the privatization of our water sector.

Advantage only to the advantaged. Although privatizing the water sector is intended to benefit all citizens within the covered area, the reality is that the main beneficiaries of the reforms are those that are well-off. Privatization has resulted in increased cost in water of many Filipinos contradictory to the promised decrease in water bills.

The poor are at the disadvantaged end since the service is delivered at a higher price laying greater burden on them.

Shift in Values. Privatizing public services, critics claim, undermines public interest in favor of economic gains. This happens because providers are at the natural tendency to maximize their profits. Hence, values such as quality or customer satisfaction maybe overlooked. This very true in the case of our water sector. Since water is a necessity, the demand is relatively price inelastic and people will continue to consume anyway. Hence, private concessionaires, in attempts to maximize profits will increase their prices knowing very well that demand will not be decreased.

Centralization of decision-making. Under traditional public service delivery, the people are being involved in the identification of their own needs and in the planning and design of the services they need. However, with privatization, people’s participation becomes unnecessary. This is because the provider is using its own resources to operate and thus solely responsible for its own self. Again, this characteristic of privatization undermines public interest.

Precision Agriculture: just enough is more

This article is based on the 2007 study “Assessing and Increasing the Readiness of Selected LGUs in CALABARZON for Precision Agriculture” by D. Medrana.

Just enough is more.

The farming sector took this principle to come up with Precision Agriculture (PA), a viable and holistic farming system to produce more with just enough resources.

PA relies on spatial information to identify the variability within a field, and manage such variability to optimize profit and production while minimizing the adverse environmental impacts.

With PA, farmers can vary input use and cultivation methods including the application of seeds, fertilizers, pesticides and water; variety selection; planting; tillage; and harvesting to match the varying soil and crop conditions across a field (Srinivasan 2002). This would normally result in input savings and higher productivity.

PA also serves as a decision support tool by providing site-specific information like climatic condition, and the suitability of a crop or a cropping system in a given locality among others.
In a world where globalization has added intricacy to concerns on food insecurity and natural resource degradation, precision in agriculture can be viable development response.
Can we get a bit more precise?

 While PA offers tremendous farm productivity improvements, its adoption among farmers in the developing world is still very low. One contention is that its benefits may not be sufficient to justify the entailed cost of PA equipment.

Indeed, for Filipino farmers, most of whom are smallholders with an average farm size of 2.5 ha (IFAD 2006), the savings on inputs from PA may not be very significant as to cover the cost of modern tools.

Nevertheless, the principle behind PA is highly applicable in the developing world. But for it to be viable in the Philippines, it should build on the existing technology and resource endowments. Even the use of traditional and existing modern technologies in the Philippines in PA can attain some level of precision.

Hence, “Yes, we can get a bit more precise.”

Precision means benefits
In PA, greater precision means greater possibility of benefits. This means that developing countries, with their relatively lack of precision technology, can only attain a certain level of precision. But just how precise can we actually get?

This question is best answered by actual developing country experiences. For example, from 1997 to 2000, on-farm experiments at 179 sites in eight irrigated rice countries (Dobermann et. al. 2004) evaluated the performance of site-specific nutrient management (SSNM). SSNM was found to be most profitable at sites in China, Southern India, and the Philippines, with average profit increases ranging from US $57 to US $82 / ha per crop.

In the Philippines, precision is a principle highly valued by sugarcane farmers in the provinces of Negros, Tarlac, Bukidnon and Batangas, four of the Philippines’ largest sugarcane producers.
Precise information on soil types; slopes; elevation; land use; climate; and input-output records such as fertilizer, irrigation, variety, planting, and harvesting dates, pest and diseases guide sugarcane farmers in making critical farm decisions.

The maps produced by the geographical information system (GIS), a component technology of PA have also become useful references in making lease agreements.

Given its potential benefits to the agriculture and natural resources sectors, PA could be one of the most effective strategies to achieve sustainable development in the third world. Developing countries may not get as precise as the developed countries, but at least, some level of precision earns some level of additional benefits. (D. Medrana, S&T Media Service)

References:
Dobermann, Achim, Simon Blackmore, Simon E. Cook, Viacheslav I. Adamchuk. 2004. Precision Farming: Challenges and Future Directions. A paper published in "New directions for a diverse planet," proceedings of the 4th International Crop Science Congress, 26 Sep – 1 Oct 2004. Brisbane, Australia. Published on CDROM.

IFAD (International Fund for Agricultural Development). 2006. Geography, agriculture and the economy of the Philippines. An article posted at the Rural Poverty Portal, http://www.ruralpovertyportal.org last accessed February 2007.
Srinivasan, Ancha. 2002. Precision Agriculture, Modeling and Land Use Planning. Institute for Global Environmental Studies. Japan.

Decentralization in the Philippines

The end of the Second World War saw the Philippines’ foundation of a new era in the field of governance. For the first time, after four decades of foreign administration, the Filipinos had the chance to govern over themselves as a free nation.

However, like most of the newly established republics during that era, the Philippines had to deal with harsh political, economic and social transformation. And despite the clamor for a decentralized form of government, nation building and national recovery required a more centralized structure.

The calls for public sector efficiency, the democratization of political system, and the changing economic landscape, nevertheless, have triggered significant developments toward self governance within the last 50 years of the 20^th century. These include Local Autonomy Act of 1959, the passage of the Barrio Charter and the Decentralization Act of 1967 which are “incremental national legislations in response to the clamor for a self-rule concept” (UNESCAP 2003).

It also became apparent to many legislators and politicians that much of the country’s seemingly intractable problems stemmed in no small measure from the government’s highly centralized structure (Quizon et. al. 2003).

Hence, a significant development was the enshrinement in the Philippine Constitutions of 1972 and 1987 of the Government’s policy to create:

“a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative and referendum..”

Further, the Constitutions provide that the Congress shall:
 

“..allocate among the different local government units their powers, responsibilities and resources and provide for the qualifications, election, appointment, removal, terms, salaries, powers, functions and duties of local officials and all other matters relating to the organization and operation of the local units."

The 1987 Constitution further provided that local government units, as political and territorial subdivisions, “shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals.”

In keeping with these legal mandates, the Philippine Congress passed the Republic Act 7160 or the Local Government Code of 1991 (LGC). The LGC was the country’s biggest attempt at decentralization primarily because of its four outstanding features. First, it puts the responsibility of basic service delivery on the shoulders of the local government units (LGUs). Second, it grants the LGUs considerable regulatory powers. Third, it increases the financial resources of the LGUs through increased internal revenue allotment (IRA). And fourth, the code recognizes and encourages the active participation of civil society in the process of governance (Brillantes 1997).

These features, however, make the LGC also seem ambitious. While the devolution of responsibilities and powers from the national government had started since the onset of the LGC, the LGUs had not much time to prepare. And while several provinces and municipalities seem to perform fairly well in areas like local administration and delivery of central government functions, much work is needed to prepare the rest for the devolved functions and responsibilities.

One specific area that many LGUs have yet to build capability for is LFPM. The fiscal decentralization afforded to LGUs by the LGC has made sound LFPM very important in Philippine local governments. Specifically, this function is crucial for all LGUs as the quality of their service delivery would heavily rely on their ability to generate and manage resources effectively. Especially for the poorer provinces and municipalities, LFPM is a daunting challenge. T

he solution, nevertheless, lies in the active participation of the civil society, which is an inherent feature of the LGC. This feature recognizes the important role of the civil society and provides a strong foundation for a vibrant participatory governance. Section 3 of the LGC specifically states that the “participation of the private sector in local governance, particularly in the delivery of basic services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development.” This provision supports bottom-up, or community-based planning wherein both the local government and its constituents influence and share in the control over development initiatives, decisions, and resources that affect them.

Source: D. Medrana, et. al (unpublished)

The Philippines needs greater investment in Science and Technology.

Over the past decades, countries, especially the more advanced ones saw that the fruits of their continuous innovation process can have significant contribution towards their economic development. Specifically, the high level of Science and Technology Activities (STAs) has fueled their bid for economic and social progress. The rapid economic growth achieved by some countries in the 1990s, for instance, can be characterized as driven by rapid creation of knowledge and technologies.

In the case of Philippine agriculture, success stories resulting from science-based knowledge or technologies are not lacking. The achievements of Masagana 99, the breakthrough in mango flower induction, and the tilapia sex reversal technology are among the more familiar examples of such stories.

Nevertheless, many of what have been achieved in the past were not without struggles for financial support from the government and other donors. Together with economic decline, funds for STAs have dramatically decreased. Fund shortage has persisted through decades and has even worsened in the recent years that today, government investment in agriculture S&T and S&T as a whole is nothing short of dismal.

Clamor for increased investments in agriculture S&T is gaining renewed momentum as the country’s economic and social standing continue to worsen. Considering that 75% of the rural poor and more than a third of all working Filipinos are dependent in agriculture for income and employment, investing in agriculture S&T is one of the most direct strategies for decreasing poverty and promoting equal opportunities for socio-economic growth. However, this poses a strong challenge before the now much smaller public funds and may jeopardize budgets for other sectors.

Precision Agriculture

Precision Agriculture

excerpt from D. Medrana (2007)

Concerns for increased agricultural production and sustainable environment in the developed world have led to the inception of Precision Agriculture, a holistic farm management approach that relies on spatial information to optimize profitability and productivity while minimizing the adverse environmental impacts.

Precision agriculture (PA) was first introduced in the United States during the 1980s as a response to environmental problems resulting from agricultural activities like the use of chemical fertilizer and pesticides (Liu et. al. 2003). Over the years, the developments in information and communications technology (ICT) such as satellite imagery and global positioning system (GPS) have led to the expansion of PA’s applications and to its further development into what it is today in the developed countries – an integration of new and emerging technologies (e.g. GPS, geographical information system, variable rate farm input applicators, remote sensing, and telecommunications) to identify and manage the variability (e.g., soil nutrient requirement, pesticide requirement, and yield potential) within a field to improve production, increase profits and minimize the environmental impacts.

Specifically, PA, through its associated technologies, enables farmers to vary input use and cultivation methods including application of seeds, fertilizers, pesticides and water; variety selection; planting; tillage; and harvesting to match the varying soil and crop conditions across a field (Srinivasan 2002). This would normally result in input savings and higher productivity. Also, PA serves as a decision support tool by providing site-specific information like climatic condition, and the suitability of a crop or a cropping system in a given farm among others.

The two main PA benefits often cited in literature are very much relevant to the developing countries’ concerns. Such benefits are (i) the increase in agricultural production (from improved crop/farm yield) or reduction in input costs which address food security issues brought about by large and fast growing population; and (ii) the sustainability of the environment and natural resources as a result of systematic use and/or reduction of chemical inputs in agricultural production and sustainable management of soil and water resources in agriculture.

From a global perspective, PA has strong positive implications on the world food scenario. It is specifically a very promising tool for increasing agricultural and food production. Since increases in agricultural land area for food would not suffice the expected increase in world food requirement, the necessary increases in production should come from crop and/or farm yield improvements, which PA may effectively deliver. Considering that at least about 50 million people will be added to the world’s population every year up to 2020, precision agriculture would definitely play a very important role in increasing food production, especially in the developing world where majority of such population growth is expected to occur.

In terms of sustaining the environment, PA may prescribe good agricultural practices (GAP) through the precise recommendation of chemical inputs only at levels required. It can also prescribe reasonable farm practices, those that comply with existing environmental policies, so that farmers within a locality would be led towards practicing sustainable agricultural production.