Tuesday, March 30, 2010

Should a primitive economy . . . based . . . on . . . endemic corruption accompany us into the future?

That’s Mikhail Gorbachev speaking in an editorial opinion in the International Herald Tribune (March 13-14, 2010). Clearly Gorbachev does not subscribe to “false gentleness” and probably mirrors the challenge of the Beatitudes. In our case, without having to speak, the international media has had a field day given our endemic corruption – and why foreign investors favor our neighbors?

Gorbachev continues: “Russia once again faces the challenge of change . . . The Soviet system . . . condemned our country to inferiority . . . Our main mistake was acting too late to reform the Communist Party. The Party . . . soon became a hindrance to moving forward . . . We made other mistakes too . . . we lost sight of the economy, and people never forgave us for the shortages of everyday items and the lines for essential goods . . . Many people were plunged into poverty; the income gap became one of the widest in the world . . . Russia [lost] its industrial base, its economy became fully dependent on export of oil and natural gas . . . Stabilizing the country cannot be the only or the final goal. Russia needs development and modernization . . . in a global, interdependent world . . . The country has not moved closer to that goal . . . Russia will only advance with confidence if it follows a democratic path . . . The independence of the courts has been thrown into question . . . If the people are to feel and act like citizens, there is only one prescription: democracy, the rule of law and an open and honest dialogue between the government and the people.”

There are lots we need to correct but the first thing probably is to toss false gentleness. The best way to impress the outside world and attract investors is to do something concrete – for example, to fully engage the global economy, recognizing its imperfections . . . yet others have gained much from it? As our finance and accounting professions taught us, the key when evaluating an undertaking is to assess its net worth; not to just focus on either its strengths (assets) or weaknesses (liabilities).

The writer spends the most time in Eastern Europe and can relate to what Gorbachev is saying. Yet, if we Filipinos pause and reflect on his words, chances are we will see the Philippines in the same light as Gorbachev sees Russia?

The writer is at the Taipei airport, on a layover. Many years ago he did business in the country and realized that the Taiwanese could use Filipino expertise – beyond respecting the balance sheet and managing working capital especially in manufacturing, they also needed to raise marketing and sales efficiency and effectiveness. And so he had a couple of Filipinos mentor their Taiwanese colleagues.

At that time Taiwan had already progressed their manufacturing expertise (e.g., light industries – their bicycles were commanding premium pricing in North American, with technology developed in partnership with the West) and were moving into high-technology like electronics. Still, they embraced every opportunity to advance every facet of industry.

Talking up one’s strengths (like CEOs Fuld and O’Neal of Lehman and Merrill Lynch, respectively, did) could engender disaster. It takes a big person, as FDR admonished the Americans, to admit one’s shortcomings and commit to change. And Gorbachev, decades later, is still heeding the advice?

No comments:

Post a Comment