Tuesday, September 3, 2013

Pork-and-Beans Economics - An analysis why the Philippines is not progressing fast

Dr Abe V Rotor  
Living with Nature - School on Blog
Paaralang Bayan sa Himpapawid with Ms Melly C Tenorio 
738 KHz DZRB AM Band, 8-9 evening class, Monday to Friday

Lesson: Practical Economics
Every country is proud of its own products and services, the value of which is a healthy measure of economic growth (GDP).

In teaching economics, one approach is to use a model product, in this case the popular pork-and-beans. What we can do to simplify the analysis is to fold a piece of paper in three columns. On the first, write the components of the product, on the second and third, locally produced and imported, respectively. It's a simple checklist. 
The setting is the Philippines, and countries with similar conditions.

Pork-and-Beans - people's favorite

    Components -------------------------- Local -------------Imported (foreign)

1. White beans
2. Tomato
3. Onions and other spices
4. Pork
5. Tin can
6. Paper label
7. Label pigments
8. Labor
9. Make of tools & equipment
10. Advertising & marketing

Tropical countries, like the Philippines, import white bean which is a temperate crop. The tin can is imported, made from iron ore the subject country earlier exported. Likewise the paper label and packaging materials are imported, made from pulp wood and minerals also exported by the subject country. In short we export the raw materials and import the finished products.

How about the piece of pork? Well, the animal is raised locally, but the corn and other feed ingredients and medicine may be imported. Corn which comprises 80 percent of the animal feed is often cheaper to buy in the world market. How about the tomato? It could be a product of farmers under contractual agreement with the manufacturing company. While labor is provided locally the consultants and executives are under the discretion of the company.

Definitely the machines and equipment, owning to their sophistication in automation and computerized operation, large volume of production, come from abroad. So with many other tools of the industry.

For our learning methodology, the class may be divided into groups. Each group presents the results of its analysis, and solutions to the problem. The output is a consolidated report which includes resolutions and advocacies. Since this is a simple excercise, further research is recommended.

Next time you pick from the shelf in a supermarket such products as coffee, sardine, wheat bread, milk, or an item as seemingly innocent as mineral water, think of the pork-and beans model. It can be transformed into a real progressive model for a developing country. ~

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