Monday, November 29, 2010

‘The widow’s offering’

‘The problem with solving the [economy] is it involves painful choices. And people reward politicians who say they are worried about [it] much more than politicians willing to [take specific actions]. All of us would prefer what [suits us].’ That’s the gist of an editorial about the US economy.

And some Bible reading Americans reacted with a quote: “Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents. Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.” And wealthy Americans responded: ‘For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you [Pres Obama] allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled . . . ‘

We’re not the US, with a GDP per capita of $46,000 (or $14.26 trillion GDP), against our $3,300 (or $161 billion GDP). But they have a deficit of $1.345 trillion that is unsustainable and must be cut ‘from the 2030 budget . . . when the boomers start to weigh heavily on the budget’.

We also have a deficit issue: given revenues of $23.56 billion against expenditures of $29.82 billion (2009). But we’re a developing nation (while the US is fully developed with more limited options) and thus have plenty of room to grow, but require tons of investment. And which is what developing Vietnam is doing with gross investments of 42.5% of GDP against our 14.3%, or why Thailand is growing faster than we are with investments at 24.4% of GDP.

Government and industry are the drivers of investments, and both are able to tap foreign sources. And that is where our problem starts? By design (or by law) and by actuations (including oligarchy and insidious corruption?) we have driven them away and starved foreign sourcing? Hopefully President Aguino turns this around? And beyond that his other big challenge is to overcome bureaucracy – which in the case of the US translates to wrongheadedness and incompetence? What about us? We can’t start with less than a positive, confident outlook – and Pacquiao is our model – given our meager GDP and massive poverty? The writer talks about his Eastern European friends: they tossed the past and want to make their own destiny – and their model is a Fortune 500 – and the writer’s role is to show them how that cloth is woven.

What about our biggest investors – San Miguel, PLDT, Ayala, and Meralco, among others? What state-of-the-art or contemporary products and services have they developed and are global leaders? Investments are meant to generate products and services that drive a country’s revenues or GDP. And in a globalized economy – and at the higher-end of the value chain – that means from the global market? With the exception of Ayala these major enterprises have had different owners owing principally to the oligarchic nature of our economy and culture? Thus we won’t have an Apple that can be the biggest technology company and soon even bigger than industrial behemoth Mobil Exxon? Translation: we value deference to hierarchy instead of nurturing creativity and dynamism? And PLDT, San Miguel and Meralco, among others, represent our respect for hierarchy, i.e., conglomerates if not monopolies? It’s too bad so sad – because respect was meant for elders, not the way we are living it? Or where is the coherence?

Who will give until it hurts? Who will reform and restructure our feeble economic model? The ADB is not omnipotent but is articulating something fundamental: that investment in technology and manufacturing generates far greater multiplier effect – and that BPOs and OFWs don’t make for a 21st century economic model? And that holds if indeed we want to address poverty – not to preserve the status quo or our hierarchical culture?

Friday, November 26, 2010

‘‘I wouldn’t worry about why you haven’t gotten there . . .

“ . . . I would worry about what kind of basic ideas that would be driven home to get you where you wanna go because you can do that. There’s no doubt in my mind about that,” Clinton said [to us at the Manila Hotel].

That’s typical ‘looking forward’, not ‘looking back’? It’s what dynamism is about? And Clinton talks about ‘basic ideas’ – basic or simple, and they really work? And Pareto’s Principle (or the 80-20 rule) and Euclid’s ‘basic axioms – that generate an impressive body of compelling results’ – come to mind. (And he didn’t have to repeat what Hillary had to say to President Aquino about the oligarchic nature of our economy?)

Net, his message is for us to be dynamic and simple yet confident? (And we can take it or leave it?) But do we continue to sound clinical about our challenges, not action-driven? The world is moving forward, and progress is moving at warp speed – but the word ‘dynamic’ or dynamism is something we don’t talk about? It’s not top of mind – it’s not in our lexicon? What is the evidence – to continue with the Clinton thought process?

As a politician he’s one of the great communicators because he could distill his topic into a few points – what he would call ‘evidence’, a throw back to his legal training? Dynamism is not at the top of our mind – and is not even in our lexicon? How come we’ve lived through many years with such meager investment levels – how could we move forward? How come we haven’t developed winning product ideas for years – how could we compete outside our shores?

But the biggest evidence could be our ‘holistic perspective’? We seem unable or uncomfortable to pursue major undertakings unless we’ve done a dissertation in our head? Unfortunately, there are times when one stops asking and starts telling, like when a third of Filipinos are hungry? It was Clinton who presided over the longest economic boom in US modern times – driven by a simple agenda: ‘It’s the economy, stupid’!

And Fortune 500 companies likewise embrace a simple mantra – i.e., the bigger they are, the simpler they are because they valuethe be all and end all’: clarity and execution. (They are holistic in execution driven by a simple strategy – there is nuance!) But we’d nit-pick and point to their negatives – because Americans are ‘too dialed up’ (or ‘suplado’)? They’re out to protect their interests? (And we haven’t been undermining our own interests and squandering opportunities, e.g., allowing new-market economy Vietnam to aggressively drive investments when we were first at-bat?) Or they’re just not holistic? And Clinton himself isn’t perfect? (And so was the good thief – while the bad thief was so full of himself that he fell under his own weight?)

The writer went through a similar experience with the Eastern Europeans – but they came around sooner than later. For example, margins are the key to sustainable, profitable growth! Of course it’s not just margins; but if margins are at the core of the strategy, the corollary pieces will come into place. For instance, to be dynamic in product development while ensuring new products are designed to meet margin hurdles would sustain success over the long-term. And so the writer’s Eastern European friends now live with the simple mantra: ‘Drive turnover, margins and efficiency . . . and you beat the hell out of competition’!

And . . . so the writer restates a point: We want to be a developed country . . . And to get there we need enormous capital that will buy us strategic investments in strategic industries, technology, innovation, products, talent and market . . . We value capital, not cronies – and matching if not outdoing the Chinas of the world in incentives; we value strategic industries, not favors to friends; we value technology, not fielding our OFWs effectively as ‘muchachos’; we value innovative products, not low-value commodities; we value talent, not relations; we value markets – the bigger the better, not simply to corner the local market.’

But do we suffer from NIH – or ‘not invented here syndrome’? Or is it simply the absence of experience – we haven’t been a developed country yet? Young JFK’s Bay of Pigs’ trauma turned on his wisdom, overnight?

Tuesday, November 23, 2010

Our mental model . . . and assumptions

Do they explain why we take it for granted, and live with low investment levels in our economy and industry?

The writer’s Eastern European friends weren’t perfect – had a ‘less-than-progressive mental model’ and yet could provide some insights? It’s budget time and he’s overseeing their budget process. And that includes benchmarking against global behemoths and a sprinkling of local ones. And the writer, while reading a Philippine business periodical, also compared them against three Philippine companies: two were at least 50 years old and the other 25. They were a cottage industry 8 years ago and today are more profitable than all three Philippine businesses. Over the next few years, they could be well ahead – reminiscent of how our neighbors went ahead as economies? We know all about benchmarking – and so let’s use it to our advantage? (What we don’t know won’t hurt – but can sink – us?)

Just like us, the Eastern Europeans did not think big although in fairness, dreamt big. For example, their entry into the market was via very low-priced products. And as they got their products into store shelves they started dreaming big. Not so fast – first they had to be profitable or they could run aground! What did they need to change? (We have a well-developed marketing discipline in the Philippines and know that fundamental in marketing and business . . . is the product. Or why product development has to be top of mind. Yet product development and low investments are the biggest negatives of the Philippine economy and industry?)

The Eastern Europeans had to understand the business they were in – their reason for being. And that their dreams would come from the products they develop. Thus their next lesson was to grasp the fundamentals of a product architecture; that Maslow’s hierarchy of needs is the platform of market segmentation; and that lateral thinking is a tool to translate ‘moving up the value chain’ into reality. For example, IBM met a dead-end with big box computing and had to move lateral into software, storage and servers while leveraging scale – before it regained its footing, its market cap.

(If an IBM isn’t ‘entitled to deference’, what does it say of our model? Consider: We value hierarchy – e.g., monopoly, being one of its highest forms; it reinforces oligarchy – instead of honing the nation’s competitive instinct; it encourages deference – instead of nurturing dynamism; it could take generations to undo – while undermining our global competiveness; and worse, foreign investors could sense that the deck is stacked against them? Why do we have pitiful investment levels, a third-world GDP and massive poverty, again? And our best shot is CSR? That’s to start an exercise in lateral thinking, not to discourage us!)

Just like us, the Easter Europeans were thinking: low investment . . . low prices . . . cheap equipment and factories. And so they had to ‘go to school’ – to learn about business drivers. For example, where the consumers are mostly low-income or poor develop the appropriate product, and optimize volume and pricing dynamic. And if the financials still are unfavorable, to develop higher value-added products for the pricier consumers; but then again optimize volume and pricing dynamic . . . And to do the exercise until the length of the value chain is adequately covered – meaning, the company is able to compete across several segments and is more competitive. And when the home country has limited purchasing power, the goal is to target the region and then the world! (But the value chain is not static because of ‘man’s ever changing want’, i.e., product development is dynamic! Or why Silicon Valley is home to venture capitalists.)

The same thought process applies in R&D and manufacturing. Hire the best talent to run R&D – and in the case of the Eastern Europeans, a talent from the West. And with manufacturing they had to continue their ‘schooling’: ‘run the numbers and tell me if you really want to invest in cheap equipment’. And lo and behold, they proudly told the writer they would be acquiring state-of-the-art equipment from the West – i.e., it would generate the best margins, which they have done across four business units. The Christian growth model – be an agile competitor not a domineering oligarch?

And the thought process continues. They had to invest heavily in marketing and distribution – which has become affordable because of healthy margins. (Or why values like investing are critical in an economic activity!) But in fairness, these people had the talent to create great advertising.

Our business education is not mediocre – but what about our mental model . . . and assumptions?

Saturday, November 20, 2010

‘Every time we point a finger . . . at others, 3 are pointed at us’

That’s a favorite line of sales and marketing managers to their troops. And global competitors are well aware of it too! The bottom line: You paddle your own canoe or you sink to oblivion? Can we take a similar posture looking at our dismal economic performance?

We have a well-developed accounting and finance discipline and know that net worth is the net of one’s assets against their liabilities. Thus, while we are proud of our background – from our culture to history to tradition to religion, we have to discount all of them by our shortcomings. For example, our murky economic performance has translated to massive poverty?

Is Congress, in looking at legislating CSR for companies, for instance, again missing the structural problem we face? Is it ‘patronizing’ the poor yet again – i.e., yes, it sounds compassionate but until we fix the fundamentals of our economy, we would constantly be pursuing palliatives and be mired in ‘making-do’?

The fundamental challenge of industry is that they are not globally competitive – we can’t continue with the rhetoric: ‘our banks would encourage credit and support SMEs’! We’re not hitting the nail on the head – credit has to be efficiently and effectively used! Ergo: The starting point is to pursue product development? It’s not enough to celebrate local successes – the bigger market and the bigger returns come from being globally competitive. For example, while a local consumer-goods company should celebrate a doubling of profits, a profitability of less than 10% does not make it capable to compete regionally or globally! Hopefully, local firms are working in that direction?

Competitive products generate pricing flexibility that would raise margins and thus the ability to market competitively beyond our shores. For instance, a gross margin of less than 50% (in the case of consumer-goods companies) does not generate sufficient marketing firepower. Healthy margins are a mandatory to market and distribute and compete regionally or globally. They are fundamental competitive metrics that the Chinese, the Vietnamese and ex-Soviet bloc countries have learned. (While we’d be stuck as a craven, parochial economy if we’d stick to parochial – as opposed to global – yardsticks?)

Our current export levels are insignificant by global standards, and when compared to our neighbors. And while an appreciating peso could be an issue, our lack of competitiveness is the bigger challenge. Yet, commonsense says it presents an opportunity – given that the size our local economy is at par with our neighbors’. How? Local businesses must invest in product development aimed beyond the local market – from market research to product architecture modeling to R&D, and beyond.

Until we invest accordingly, our ability to raise the hurdle for manufacturing would be limited – which is why we have zero confidence in attaining manufacturing competitiveness. If we can spell out new-product parameters (the key to innovation) from such investments, we would be able to correspondingly draw up the specs for the manufacturing technology that we require. And countries like Germany and Japan if not the US would be able to supply us such technology. In short, we don’t have to reinvent everything from the nail to the jet engine – we need to get out of our shell because we’re not an island to ourselves; and tap best practice if not technology so that we could ante up and compete in the global arena. And which our friends from South Korea are encouraging us to do!

Do we really know who we are, what we are and how we are to find our place in the sun? For example, is the administration taking its own sweet time re pending trade agreements? Filipino mañana will ensure that the train leaves us behind for the umpteenth time? Or are we setting our sights and performance standards . . . oh so low? It’s too bad, so sad – for a people proud of their heritage and natural abilities?

Wednesday, November 17, 2010

Sense of purpose

Sometime ago, the UK wanted to consider a national sense of purpose and made reference to the American ‘pursuit of life, liberty and happiness’. The context: it’s not unusual for a Brit to keep a bed in the UK but work in another EU country and thus may have divided loyalties. And from across the pond President George H.W. Bush comes to mind – and his beef against ‘the vision thing’, and why he stumbled with his ‘read my lips, no new taxes’?

In the case of the Philippines, could our sense of purpose be ‘all over the board ‘especially given our ‘kuro-kuro’ culture? But with hierarchy we have no qualms? Thus, it is no surprise that leading the pack in the government’s infrastructure program are our conglomerates. Are they committed and able to drive and elevate our competitiveness or are they out to boost their portfolio – not characterized by best practice or what they know but whom they know? There are hurdle questions we must ask and answer if there is clarity in our purpose and values? We take it as gospel truth that our conglomerates can succeed in any business; but as a country we accept that we’re preordained to fail in manufacturing, for example? How can a conglomerate’s capacity be greater than the country’s? (Do we need more Fr. Bernas to clarify our value system – for one, our faith respects pluralistic societies?)

It appears within the administration that there is a lack of clarity which industries we would provide incentives to and why and how? Intel, for example, is building its largest and most efficient semiconductor fabrication facility in China because of aggressive Chinese incentives. The writer had experienced this first hand many years ago while representing an MNC. We keep thumping our breast over the $20 billion OFW remittances and the taxes we could collect via our current economic model? Yet our GDP shortfall if we are to raise our standard of living is north of $100 billion, a magnitude we have yet to internalize? Put simply, we have a structural problem – and are a disaster waiting to happen unless we become stout-hearted men and women?

We want to be a developed country . . . And to get there we need enormous capital that will buy us strategic investments in strategic industries, technology, innovation, products, talent and market. We need a simple ‘purpose’ so that we can craft a crystal clear value system – that will give us the strength of character to doggedly forge on? Sadly, politics, vested interests and a lack of sense of urgency can conspire to undermine resolve? And given our soft heart, we keep tolerating them and thus are unwittingly creating a monster: how do we develop a bias for efficiency, productivity and ultimately a competitive nature? Failure means relegating ourselves to a mere exotic South Pacific island chain – i.e., life imitating art like The Flintstones?

What could be our (economic) value system? We value capital, not cronies – and matching if not outdoing the Chinas of the world in incentives; we value strategic industries, not favors to friends; we value technology, not fielding our OFWs effectively as ‘muchachos’; we value innovative products, not low-value commodities; we value talent, not relations; we value markets – the bigger the better, not simply to corner the local market.

The thought process to develop a sense of purpose and value system could be the outcome of education – e.g., ‘The value of education is not the learning of many facts but the training of the mind to think’ (Einstein). But it doesn’t have to hold us hostage until we develop the equivalent of a Stanford or a Yale or a Harvard? Industry should provide education and training to its employees? We should partner with world-class universities to put their stakes in the country? We should upgrade our educational system – but that will not happen overnight? And so let’s not be frozen in time? But in truth we want to restrict foreign influence in education for Juan de la Cruz; while we send our kids to be educated overseas – reinforcing hierarchy? And we extend the restriction to foreign investors; while we profess dislike for oligarchy? The writer’s Jesuit friend (deceased) would call that ‘plastic’, i.e., are we for real?

Oh . . . we don’t need to read the negative in the American ‘pursuit of life, liberty and happiness’ – because we’re the chosen people? Like the UK, we need to establish our own ‘purpose’ – and others would cheer us on, not read the negative?

Friday, November 12, 2010

Privileged upbringing, poor outcomes

Just like in the Philippines, family events in the New York metro area bring extended families together. And almost always gut-level conversations especially about ‘the kids’ are at the core. The writer’s wife had major back surgery. And so he was in the middle of these chats while she was unable to play her hostess role. Yet it was a gratifying experience – beyond the outpouring of well-wishes and prayers were loads of great Italian cooking: ‘We know you’re not a kitchen person and like Italians we know Filipinos would come and you have to serve food’.

‘This neighborhood is not wanting of ‘privileged upbringing, poor outcomes.’ (And the writer recalls George W. Bush, who claims to be Texan but grew up in the neighborhood; in fairness, he became president.) ‘I know my son and so I wanted him to attend private school; my husband is a product of the public school system (in the Midwest) but they all walked to school, life was simple. Discipline to me is a mandatory. Do you know that even at West Point, a friend says, that it takes a year before they could reshape American kids?’

Obviously the extended family is delighted with the way ‘the kids’ turned out but the consciousness of the abundance of risks always remains. The writer remembers his father who always counseled to fortify his values and not fall into complacency. And when the father of his son in-law (both come from Wall Street like his daughter) talked about the subject using practically the same words, he realized that parents would always be parents.

We Filipinos can’t be guilty of being less than parents to our children. Unfortunately, we continue to struggle with corruption and underdevelopment, for instance? How are we formed – by the family, the school, the church, the community? As Hillary Clinton says, ‘it takes a village’?

One of the criticisms leveled on Americans is that they are ‘too dialed up’ or in the vernacular, ‘suplado’. But beyond the US, notable in the writer’s experience dealing with successful institutions is the clarity in their purpose and value system. The writer remembers growing up hearing elders talk about ‘business is business’. He was too young to comprehend, but now realizes that it was preaching ‘sense of purpose’ and clarity in one’s value system. For example, it is universally held that inherited businesses could run aground by the third generation when values take a back seat?

The extended family and the church and the school and the community ought to pull together to educate kids to develop clarity in their value system? Arguably, we have not done a good job? There is country first before family or friends? But public service in the country is synonymous to graft and corruption, fairly or unfairly? And so the writer is delighted to read Fr. Bernas’s piece, Religion and the RH bills (, Oct 25th), because it effectively talks about country first? The President is not defying Catholic teaching because Catholic teaching, for a pluralist society, requires that government interpret the common good of the country not only according to the guidelines of whatever religion may be the majority, but also according to the effective good of all the members of the community, including those belonging to minority religions. For that reason it is good that the President has invited other religions to the dialogue . . . We who have not experienced massive religious persecution must learn from the lessons of history.” As a resident of ‘Terry Schiavo (and Scott Roeder) country’, the writer can relate to the admonition.

We have a gigantic challenge: Can we do a self-critique of our value system? Until we recognize that our assets are discounted by our liabilities, we would always assume that to be critical is to be unpatriotic – and which explains why we seem unable to dig out of the pits?

Tuesday, November 9, 2010

The cost of entry

Hopefully as a people we recognize that the 21st century – characterized by a globalized economy and by extension a highly competitive environment – has an inherent cost of entry? Simply put, we can’t expect to walk into the arena as though we write the rules of the game – we don’t and the sooner we internalize reality the better we could gear up and play? Nor can we keep invoking victimhood – a lesson Obama tells black people and minorities? A lesson we can learn from (‘small’) Singapore too?

It would be pathetic if we’d consider that the whole world is wrong and we’re right – that we could play by our own rules, culture, history, tradition? That would be too bad, so sad for a people well-informed and well-traveled? (Of course our rules work for businesses benefiting from OFW remittances; but that is classic ‘thinking small’? And we can be people of big minds, and ‘lift all boats’?) The global economy is not perfect. But we’re not about to write a dissertation to prove a point?

And it’s not a theoretical argument – the global economy, warts and all, has lifted millions from poverty and made once poor China and India, Brazil, Russia and more recently Indonesia, major economic forces. Or why ideology has become moot? In fact the aftermath of Western greed – that brought about the ‘debt and housing bubble’ and the collapse of the global financial system – highlighted the reality of a competitive world. How? Singapore and Germany demonstrated how competitive economies would regain their footing. And the inverse, unfortunately, is: uncompetitive economies would slide down the scale?

What should be our end view? In a globalized and highly competitive economy, we must see ourselves as truly competitive? We have local teams that are truly competitive – how do they do it? Their mindset is to excel, not to ‘make-do’? Will the coach of Ateneo or La Salle field players because of compassion or because of the imperatives of competition?

It is encouraging that the Aquino Administration has become more discriminating. It is eliminating subsidies to uncompetitive industries. It is cancelling export promotion drives for low value-added products. It must in fact draw up a roadmap – and provide the leadership – that will spell out every major element of competitiveness – e.g., from capital and investment to technology to talent to products to market? Not friends, not relations, not cronies, not hierarchy – which, unfortunately, are preeminent in our value system?

Our challenge is to understand, accept and buy into a value system that brings out our animal spirits – so that we are all behind, adrenaline pumped up, what could be our best chance to raise our standard of living? We have to move on and not be distracted, justifying our mistakes and/or dissecting the mistakes of others – despite the human need for company? We can ill afford distraction in a highly competitive global environment? And everyone else is irrelevant to our cause – something to learn from athletes?

And we can’t afford to outsmart ourselves: there are notions that may ring nicely but it doesn’t mean they’re absolutes; nor are they representative of reality? How could China and ex-communist countries become competitive when they had no inherent competitive advantage in manufacturing, in product development, in global competition? Because they recognize what it takes to be competitive? And as importantly, they believe in themselves – determined to call upon their strengths while vigorously overcoming their shortcomings? The past is there to learn from, not live in? Let’s not undersell ourselves?

Friday, November 5, 2010

The greater good

A recent report argues that the Japanese seem to have lost their animal spirits. That they’ve gone beyond the ‘lost decade’: ‘For nearly a generation now, the nation has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought [though an exaggeration?] in the global economy.’ (The New York Times, Oct 16th)

Over a generation ago, we were seen as the fastest growing Asian country. Today, not unlike the Japanese, we appear to be disheartened instead of being dynamic – i.e., mired in ‘making-do’? Fortunately, the private sector has stepped up to the plate and is engaging the Aquino Administration to pursue an industrialization initiative.

But old habits die hard? It would be gut-wrenching if we’re still clutching our life-support, i.e., OFWs? What about our animal spirits? Our tendency to look back as opposed to look forward seems inbred? Are we distracted, can’t pursue the way forward because we want perfection, cross the t’s and dot the i’s? Does hierarchy distract us and turn us passive? Is our instinct to personalize (i.e., our compassionate heart) distracting us from recognizing the greater good? Major economic undertakings demand a laser-like focus?

If we keep looking back, we would find the continents configured differently; and the Alps would be nowhere? The US and Australia would be inhabited by natives and aborigines? And we would be a pristine Pacific chain of islands speaking Bahasa if not Chinese; or a combination of modern metros and rural farms speaking Japanese? The writer remembers a Jesuit friend (May he rest in peace!) who spoke at length about reality; but the writer, unfortunately, was dense.

The Pharisees and the scribes aspired to be models of perfection – but as we know they were off base? Or why Clinton, among many, calls the American system an experiment, its imperfection for all to see. Hierarchy has long been discredited by the imperatives of competitiveness, i.e., layers of authority are anathema to productivity and thus ‘high-commitment work teams’ came into being. And even before that, royalty has long been in decline. Even the Vatican has started to demonstrate a bit of transparency – because integrity suffers when hierarchy rules, i.e., abuses are not uncommon. But we won’t part with our señorito-muchacho culture?

As in any journey, it is important that we establish a baseline; and fortunately the private sector has done that precisely – via the initiatives the PCCI and JFCs have presented to the administration. And that baseline says we are lacking in infrastructure and strategic industries that could only be had if we amass enormous investments – both local and foreign. In one word, we need to pursue industrialization.

That ought to be our starting point? So that we can look forward and together create the animal spirits that major endeavors exact? And we could only take a new, positive posture if we seek the greater good – instead of personalizing our challenges? Over a period of more than a generation we erred by leaps and bounds – we blew it? And so we need to start afresh? We don’t want to personalize that – because ‘we’re all parties to the crime’, i.e., we’re like seeds that fell on the wrong spot?

Monday, November 1, 2010

‘People are funny’

Which explains, according to a New York Times article (Oct 16th), ‘the rise in popularity of behavioral economics, an effort to account for the slippery, indefinite nexus of money and humans’. And it continues: ‘The entire question of how emotion will change people’s behavior is pretty much outside the standard model of economics’.

The writer from early on has raised the impact of our culture on why we are where we are as an economy. Not that he is a behavioral economist – far from it – but having done business over 4 decades, and in many parts of the world, he is witness to how people could indeed be funny.

The writer, earlier in his career, benefited from the perceived sophistication of Filipinos given our access to developments in the West. And his task was to share these developments first with people in the region and later globally. The writer had watched in wonderment how in the region they scrupulously absorbed ideas apparently foreign to them; while Filipinos, on the other hand, demonstrated nonchalance – pride, indifference, lack of esprit de corps, whatever?

The writer is then the least surprised why we are where we are today as an economy; and why our neighbors are where they are! Sadly our attitudes haven’t changed all these years? Is our self-image fragile? Could we be objective and pursue something outside our comfort zone if it would do us good? For instance, in the 21st century when the world including those unschooled in capitalism have embraced (e.g., aggressively tapping and driving investment) the fundamentals of the free market, we are still celebrating our OFWs; and the businesses that are flourishing because of them? Our OFWs live abnormal lives away from home, and despite best efforts won’t raise our GDP beyond third-world levels. Shouldn’t they be the object of our compassion – beyond facilitating their needs like remittances, they need an economy and industry that would let them take their lives back? They could relate to our ‘muchachos’ – at work practically 24/7 and away from family, i.e., ours is a señorito-muchacho culture?

Compassion seems to turn our sense of values upside down? For instance, how much do we feel compelled to protect an inefficient and unproductive industry, forgetting that the interest of the country is far greater than the interest of one sector? In the process, we have dispersed and dissipated scarce resources to the detriment of the greater good. Fundamental to economics is the optimum allocation of resources – and we have a well-developed economics discipline. Why? Our culture or ideology gets in the way? The writer has lived and worked with ex-socialists; and observed them adopt a system totally opposed to their up bring. Bottom line: there are fundamentals that can’t be overturned by compassion and/or ideology nor by ‘kuro-kuro’ – that we have yet to internalize, and why we are where we are as an economy, i.e., crab mentality?

The Aquino Administration ought to be encouraged given its apparent commitment to do good. But will culture undermine their efforts – i.e., why can’t they be straightforward about their value system? If the CEO of HP was dispensable, how could friends be above country – even Nixon and Clinton had to account for their follies?

We are embarking on a major industrialization initiative; and more complex choices between what’s good for one interest against others and country would collide. How would the administration handle these complexities? The simple answer or why successful institutions are thriving is because there is clarity in their value system. But given our instinct to personalize, do we miss the import of the greater good, and instead misread it as the absence of compassion – and being imposed upon, i.e., ‘suplado’?

The writer has raised the lesson of Eden before. Our faith has compassion at its core but not of the selfish kind – or Eden would still be around? The compassion (and the love) had come earlier – being made into the image and likeness of the Creator, i.e., we possess the capacity to excel?