Labor Equity

The Philippines lacks capital but has a lot of manpower for development. In this situation, any development program has to leverage this rich human resource and minimize the use of capital, specially foreign sourced. Minimizing the use of foreign capital will result in the continuous reduction of the country's huge foreign debt.

One tool to accomplish this kind of development is the use of Labor Equity. Labor Equity is basically the use of corporate ownership as labor compensation. Many unemployed in the rural areas will work at wage levels that are competitive to Chinese levels. This will drastically improve the competitiveness of the Philippines in the international labor market. In return for such wage levels, employees will become part owners of the entity they are working for/with and benefit from the wealth they are creating.

In this model, the vast Philippine human resource is given economic value and leveraged for economic development, while minimizing capital resource needs.

I discussed this concept last night with two friends from the NEDA and I hope they input this into their agency discussion on developmental models.

©Rengab2004