I have just returned back to India from the Philippines. And what I saw there was very surreal, in reference to what is happening in the United States.
The Philippines was hit by two nearly back-to-back typhoons. Typhoon Nesat hit northern Philippines a few hours before I landed in Manila. I saw the last remnants of that typhoon as the night went by. And Typhoon Nalgae hit Manila just as I was leaving. While Manila wasn’t directly affected except for some minor property damage along the sea front, the people in the northern area really bore the brunt of the storms. My thoughts are with the families and hope they recover from this phase quickly.
Today I will describe to you the scene that I saw there that was, frankly, unbelievable.
I was visiting two of the world’s largest global banks, which have a large presence in Manila. One of them leases three whole buildings while the other has an even larger presence. And the ground floor is fully designed for recruitment. The entire setup is designed to recruit people en masse. There are a series of counters based on the stages of interview that candidates go through.
The first counter is for new applicants, the next window is for written test candidates, the next for interviews and the last window is for submission of documents. At the right side of the windows is the desk that greets the new employees and sets up the induction and introduction process. So in one clean process, candidates walk in to get hired. And they start work next day.
The process at the other bank was not much different.
And once you have joined the bank, you will be treated with utmost care. The dining area on the 15th floor has a great view. But the food choices are just spectacular. I counted about 12 different cuisines that were available at half-price, relative to outside. And the bank also had vendors exhibiting products (TVs, DVD players), which employees could buy at special prices.
As you can see, employees are treated as royalty here. Pampered and coddled to ensure they stay. And yet the attrition rates are about 25 percent to 40 percent. Employees quit despite being treated so well because there are other banks offering better pay. And this treatment does not stop at banks alone. The Philippines is growing with shared service centers, call centers and other outsourcing services at double digits each year.
The Philippines has benefited from its Overseas Filipino Worker (OFW) for several decades. Filipino workers who live overseas and earn in hard currency send back about $20 billion each year. And now the BPO (Business Process Outsourcing) companies bring in as much as $17 billion each year. And this industry has started only about 7 years ago.
So jobs are easily available and the youth are really benefiting from this. Their lifestyle is full of stylish and fashionable discretionary spending on cell phones, digital tablets, cars and other symbols of newfound affluence. Nightlife is vibrant and full of vigor. Returning from a karaoke bar at about 2 a.m. on Friday night, I was caught in a traffic jam at some places.
And this is not unique to the Philippines. I saw similar consumer spending patterns in Malaysia and have heard about similar stories emanating from Indonesia and Thailand as well.
As you can see, life is thriving in Asia. And it is decaying and declining in America.
We will see bouts of the strength in the U.S. dollar from time to time.
And this is one such time. But in the medium to long term, the vibrancy observed in Asia will translate into handsome returns to the investor who has a strong stomach and can sustain the gut-wrenching volatility and gyrations of Asian stock and currency markets.
Stay strong, international investments.
Until next week from India.
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