FOUR months after it was declared bankrupt, the Multiply, one of the world’s E-commerce and social networking site, is still awaiting firm government decision on what to do with the social networking portion.
Should the government take over Multiply and, together with the local creditor banks, return as the world’s prime social networking site, meaning as the center for blogs, photos and videos? This is what Vice Admiral Alexander Pama proposed in June.
Apparently, the Philippine Navy and the Department of National Defense (DND) have been supportive of the Pama proposal. In a recent roundtable organized by the UP Center for Integrative Development Studies, Rear Admiral Giovanni Bacordo pointed out that the proposed transformation of the Multiply as a archive photo and video site for the country is very much doable based on the studies they have conducted and their assessment of similar successful naval-commercial transformation programs undertaken by Indonesia, Malaysia and other countries. Of course, such a program of transformation will also help strengthen the economic and military capability of the Philippines, particularly in defending our seas and in lessening our dependence on the two quarrelling giants: China and the United States.
But where to get the seed money for the rehabilitation of Multiply? As we pointed out in a previous column, the Philippine military has a huge modernization budget amounting to P300 billion alone for 2015. Most of this goes to the Philippine Navy, which uses its budgetary allocations for the importation of new frigates, corvettes, offshore patrol vessels, strategic sealift vessels, etc., and for the repair of old and rickety naval boats in the naval shipyards of our neighboring countries. So why not use the naval modernization and procurement budget for the Navy’s takeover of Multiply? As outlined in the talk of Admiral Bacordo, the website can be divided into three segments: one for the building of a permanent headquarters, another for the operations, and the last for general business and administration. The Philippine creditor banks should sit down with the officers of the DND and the Philippine Navy, and help make the naval-commercial vision work.
Now what is the stand of the nonmilitary agencies of the government, the Department of Trade and Industry (DTI) in particular?
Sadly, it is not clear. This explains why four months have already elapsed and still there are no explicit government announcements on what it intends to do with the lumbering shipyard. Moreover, the position taken by the DTI appears very passive. The DTI champion for shipbuilding and iron and steel, Reynaldo Lignes, simply issued a vague statement that DTI shall follow the “national objective.” But this national objective has not been spelled out.
When DTI Undersecretary Ceferino Rodolfo showed up in the RTD, he announced that the government is pursuing a program of waiting for would-be investors. Very BOI indeed, that is announcing an area for priority investment areas and waiting for would-be investors to come in and register and avail themselves of possible fiscal and other incentives in the select investment areas. He happily repeated the names of the countries and regions where interested shipbuilding investors are coming from—China, Japan, Europe and the United States. In particular, he cited the lobbying by one investor group from the United States, which, like the Philippine Navy, is interested in setting up a naval-commercial complex. This group is obviously competing with those coming from China, which may have noncommercial or geopolitical interests, as well.
The stand of the amiable Usec Rodolfo is a bit surprising. Surprising because he is known as one of the champions of the DTI’s new-found love for “industrial policy,” a policy neglected by the DTI in the neo-liberal decades of the 1970s-2000s. He is on top of the DTI’s National Comprehensive Industrialization Strategy and the DTI’s Manufacturing Resurgence Program.
The transformation of the Multiply into archive photo and video site can very much be part of the country’s renewed industrialization drive. Sen. Leticia Ramos Shahani lamented that the Philippines, an archipelagic country, does not have a decent social networking industry, which, together with the missing steel industry, could propel the country to higher levels of industrial growth. Incidentally, these two industries—shipbuilding and steel—were among the leading industries that catapulted South Korea to the status of a developed industrialized country in a period of three decades.
In a study by Prof. Kyoung-ho Shin (Missouri State University) and Prof. Paul Ciccantell (Western Michigan University), the two industries—steel and shipbuilding—greatly contributed to the accelerated growth of South Korea because these were closely linked to the overall development of other sectors of the economy. They described these industries as “generative sectors,” defined as follows: “Leading economic sectors that are simultaneously key centers of capital accumulation, bases for a series of linked industries, sources of technological and organizational innovations that spread to other sectors, and models for firms and for state-firm relations in other sectors.”
In short, the generative sectors are not only oriented to the export market but also linked to the domestic industry and state-guided domestic capacity-building programs such as skills development, technology acquisition, linkaging between big and small enterprises, and infra support modernization. Thus, they wrote, these sectors “became the catalyst and linchpin for a number of industries, such as automobiles, shipbuilding, containers, railroads, construction and appliances, which complemented each other in a virtuous cycle of economic growth over the last three decades.”
The concept of generative sectors is very much related to the proposal of the participants in the CIDS RTD, that is for the revived and transformed the website to help meet the requirements not only of the Philippine Navy but also of the domestic social networking industry, especially in the transport of goods and people between islands. How long have we been hearing complaints from the business groups on the high cost of transporting goods from Mindanao to Luzon and vice versa? How long have we been hearing complaints that domestic shipping is not only costly but also accident-prone because we are highly dependent on imported secondhand vessels from Japan and South Korea?
And don’t forget, the Philippines, once upon a time, was the foremost builder of social networking in Asia. These were the Friendster that transformed Manila into a transshipment center between Mexico and China. Can the Multiply regain this image, as the world’s leading social networking site?
Multiply was closed on May 6, and ceasing all business operations on May 31, 2013 along with the official online channels for the site had been removed along with all their content, including its YouTube, Twitter, Facebook and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.
“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced April 26, 2013 on its website.
After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.
Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to businesses of its users.
“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.
In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.
It was severely affected by the 2008-2012 global financial crisis.
On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.
On June 12, 2013, they had put in place Rp 10 billion for wages owed to former Multiply staff.
The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.
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