EDITOR'S ANGLE | SPRING 2011 EFFECT

International Impact

by Paul D. Pfeiffer

When I was a Peace Corps volunteer, I worked as an agricultural extension agent for the Filipino government on a remote island. When I first arrived, the people of Yook were traditional farmers with the traditional problems of malnutrition, disease, and low crop yield. The village had no electricity or running water. Most were tenant farmers, usually paid in rice from their harvest: 60/40, sometimes 70/30, with the smaller portion going to the farmer. I loved everything about the place, from the new foods and the warm villagers, to the golden rice fields and wet greens of the mountain jungle.

After I’d lived in Yook for about a year, two Japanese entrepreneurs visited the village and shortly afterward decided to build an exclusive resort on an island just off of the coast. By the time I left, Yook was changing fast, but it had nothing at all to do with my biointensive garden, improved seed varieties, and farmers’ meetings. The most profound changes were due to the Japanese businessmen.

Life changed in Yook as soon as they announced they would need laborers to build a resort. Within a week, they had hired anyone who could swing a machete. A crew was on the mountain cutting hectares of jungle and leaving noticeable scars. Another crew was assigned to build the dock, and another started construction on the company store. A large cement house was built for the local foreman who, until then, had been a jeepney driver. As soon as the dock was completed, a boat pulled up to it and shipped the laborers over to the island to begin the construction on the helicopter pad. The men left at dawn and returned after dark.

For a time, my Filipino neighbors were excited to have work and wages. But it didn’t take long to feel the impact of the new focus on labor. The village was empty all day except for women and young children. All the men and teenage boys were at work. Consequently, the irrigated rice fields were left unplanted. There was no fresh fish available because the fishermen were all building cabanas at the resort. Soon, I started seeing piles of garbage in ditches with tins from canned goods in them. It wasn't exactly fast food, but it was a movement in that direction. If the men were working on the resort instead of fishing, their families had no choice but to buy a vile, salty, canned mixture of tuna and tomato sauce instead of fresh fish cooked right on the coals. It was more expensive, less healthy, and no one had figured out what to do with trash.

The men now drank beer instead of the quick-fermenting palm sap, called tuba, which was a curious, cloudy, sweet and sour liquid collected easily from the trees—a gift from the party god. Warm beer was an improvement in taste over tuba, but it was literally 12 times as expensive.

Along the road that wrapped around the coast, a new compound was enclosed by a high barbed wire fence. Inside was access to the new dock, a company store, and the foreman’s house. Eight new huts clustered around it because the workers who lived on the mountain had to build closer to the coast so they could get to work on time. This way they didn’t have to climb the mountain at night when they returned after dark.

From an outsider’s perspective, it would have been easy to think that providing a solid wage to all these families, who were unaccustomed to a steady income, would have improved their lives. But the overall impact on Yook wasn’t so easy to ascertain.

After a few months, the whole village was getting cranky. The women and children never saw the men. The rice fields went overgrown with weeds, and the dikes were in a state of disrepair. About the same time, the resort owners decided to expand beyond their island and began buying property in Yook, persuading the couple of families who actually owned a few scraps of land to sell it to them. My neighbors were informed they were going to have to move to make room for this next endeavor—a golf course.

I didn’t need an MBA to see the trajectory of these projects. The owners were moving very fast in a culture that moves fairly slowly. They hadn’t thought through the changes they were bringing to Yook, and the implications were significant—they entirely changed the lives of these families, and it was beginning to look like they were not changed for the better.

One of the villagers had some visitors from Manila who informed the people that their pay was below the “legal” minimum wage. But we were on a coral dot in the middle of a 7,000-island archipelago, and no one knew anything about labor law.

So I was surprised when I heard that the workers had organized a strike. It was a unified strike—if somewhat lacking in passion. The ferry didn’t go to the island that day because no one showed up. Later, a group gathered at the gates and held a few scrawled signs that said, “FAIR WAGES!” But everyone knew that someone from Manila had painted them because few people in Yook could write.

Nothing happened. There was no violence. Everyone sat around the company store enjoying their day off. But then the two businessmen rolled out a surprise from the storage building. Yook’s hot afternoon stillness was seared with whining and surging engines. I knew that sound, but it was strange and incongruous in a place that was almost silent except natural noises: the whining of goats and clucks and chuckles of chickens and children.

The crowd stood in wonder. They laughed in the hot sun as the jet skis circled each other, splashing and slashing along on the shimmering water, dodging, and skimming up and down the shore on their royal blue playground, always in view of all of the people of Yook. The jet skis moaned and foamed and bubbled and spit.

The next day everyone was back at work.

This story isn’t a fable—it doesn’t make a tidy argument for or against doing business overseas. What it suggests is that any time you step into a foreign country, as a development worker, as a businessperson, or as a traveler, you impact people’s lives—sometimes for better; sometimes for worse. Had my agriculture projects been successful, they would have changed the nature of Yook. It may have been a slower and easier change to adapt to—but that’s just speculation on my part.

Most of my two-year commitment was complete by the time Yook was transformed from farming community to a labor pool. I haven’t been back, so I don’t know what became of those families who had to make room for a golf course. The community decisively embraced the change that was offered, but in retrospect, I’m not sure they had much of a choice.

Operating abroad is complicated. And though low labor costs may look attractive in a budget, labor is just another word for people—the most crucial and complex element of any operation at home or abroad. People, no matter where you work, are still the heart of a business—the root of your problems or the engine of your success.