Wednesday, March 30, 2011

CSR . . . and setting higher expectations

We talk often about CSR and sustainability, including a major reforestation initiative . . . And now the rubber has hit the road in Makati: “P20-B redevelopment program for Ayala Center in full swing”, reports Manila Bulletin. “While communities flourished in the MCBD, the need for greenscapes where more people can unwind is of paramount importance. Anticipating years ago that quality of life will be given a higher premium . . . Ayala Triangle Gardens . . . is now recognized not only as a breathing oasis but also as a green hub for activity right at the heart of the Makati Central Business District where people unwind, relax and enjoy life.”

The Ayala Triangle Gardens offers various events and activities for the residents, officeworkers, diners, and visitors of MCBD . . . Supporting all of the developments are continued investments in the corporate sector. A highly modern hotel row at Ayala Center is being built, guaranteeing tourists and business travelers the best of world-class amenities.”

The news report speaks to great plans: “And in response to its requirement for connectivity and accessibility, a more convenient transport framework is being mapped out to improve mobility. Additional gateway structures are being constructed and integrated into the current public transport system. And as a boon for commuters, a revolutionary Bus Rapid Transit (or BRT) system, another first in the country, will be implemented and operational in a couple of years, one that accesses the entire CBD from other vital parts of the metropolis. This new scheme will combine the quality, speed, and efficiency of a railway line with the economy of a bus system that well suits the dynamic lifestyle that is Makati.”

Ayala Land is also establishing a comprehensive pedestrianization program. This provides an approach that supports the tenets of the redevelopment of the Central Business District. The current underground walkway system will be complemented by alternative routes and avenues especially conducive to walking. This matrix will enable people to bypass traffic, as well as encourage an efficient, healthy, and environmentally sound method of getting around.”

It is a great opportunity for CSR when in business plans like the above we present fully efforts to meet the spirit and intent of CSR . . . and sustainability – while setting for ourselves higher expectations?

It was delightful to watch Indonesia’s BOI Chairman on Charlie Rose. To paraphrase him: ‘My generation is selling coal, but my expectations are that my children would be selling high value-added products. Indonesia has benefitted from our abundant natural resources and the rising prices of commodities, but the future of the country does not lie there – we must industrialize. Start with rice: we produce 5 tons per hectare but Thailand and Vietnam do 10; in steel we do 30 kilograms per capita but to be industrialized means we have to do 1,000, South Korea is already at 1,500.’

Beyond investments, what we need more from the West is human capital. We need to learn how to move forward in industrialization. How organizations and institutions work more efficiently and pursue innovation. Corruption is still a reality but over the last 6 years we have put hundreds of people in jail. It will be a long journey but we must be resolute. We’re looking at Hong Kong – today they have zero corruption but they worked hard over 30 years to get there.’

Charlie Rose, speaking to another guest, an Asian-American points out: “You know, countless achievers have been in this program, and I always thought they were the best and the brightest; but they all said they worked hard.” We can’t assume that we, Filipinos, can’t set higher expectations – and work hard? ‘White Men Can’t Jump’? ('t_Jump)

Sunday, March 27, 2011

Fukushima, Katrina and the Berlin Wall . . .

The US and Japan, two of the largest economies, were ‘exposed’ by nature’s fury – no one is exempt from catastrophe. The good news is both have recovered from past disasters, e.g., Pearl Harbor, Hiroshima and Nagasaki. Two other countries have overcome daunting challenges, but of a different kind. China and India were economically frail but today are elbowing the US and Japan amongst the largest economies – while dealing with their own issues, including regional economic imbalances and corruption.

Germany had a different challenge: West Germany had to pour tons of money to unify with East Germany. And 20 years later, “Germany has overcome historic challenges and matured into Europe's economic powerhouse,” reports Bloomberg Businessweek, Germany at 20, Sept 30, 2010. “By some measures, the results have been uneven. Despite the transfer of $1 trillion from West to East since unification, living conditions in much of the former East Germany show few signs of improvement. With the disappearance of internal borders, some 2 million East Germans moved west, sapping the region of what little intellectual capital and technical knowhow it had left. Industrial towns once heavily subsidized by the Communists collapsed.”

Germans acknowledge that it may take years, even decades, before the country's social fabric, sundered by a century of war and division, comes together again. ‘Politically we've become one country, but not economically’ . . . West German officials ‘didn't understand the need to rebuild the society structurally, politically, even spiritually’. [Yet Kurt Lewin, a German-American, has influenced the field of social science; ‘he developed the framework – Force Field analysis – that looks at forces that are either driving movement toward a goal or blocking movement toward a goal, critical to development’ (and not risk regression)]. The beginning was bad—people in the GDR were like poor cousins who were given money and told to be quiet . . . Indeed, for all the travails of unification, precious few East Germans would go back to the old days, even if they could. When asked . . . whether they wanted the Wall back, only 9 percent of East Germans said yes—fewer than the number of West Germans (11 percent) who did . . .”

Japan is in the midst of a catastrophe, and fingers are beginning to be pointed: "Everything is a secret," said a former nuclear power plant engineer . . . "There's not enough transparency in the industry," continues the AP business report."We don't know what is true. That makes us worried . . . with . . . a culture that ordinarily frowns upon dissent, regulators tend not to push for rigorous safety . . . "You add all that up and it's a recipe for people to cut corners in operation and regulation . . .”

These are the five largest economies – the US, China, Japan, India and Germany – and they’re all far from perfect. Like Germany, China and India boosted investments, China at 47.8% and India at 32% of GDP per latest available data. Yet beyond investments, the bigger challenge to the Germans is to “. . . understand the need to rebuild the society structurally, politically, even spiritually”. And we, Filipinos, could learn from the imperfections of others? Successes are great but failure is the better teacher – when it calls upon the human spirit?

In a bell curve these countries would be at the opposite end from us; and thus international agencies are looking at them – and those of ours. Both groups are critical to move the global economy forward especially following the Great Recession. The largest economies could yield the biggest bang for the buck because of their higher revenue levels; while at the opposite end, emerging economies like ours have greater room to grow. And the more we demonstrate the commitment to drive our economy, the more brownie points we would earn; like a ‘Good Housekeeping seal’ of approval – that would make foreign investors give us a second and a third look, if not more?

It appears we are indeed getting the ‘Good Housekeeping seal’ with the efforts being exerted by the Aquino administration – fighting corruption, pursuing an investment-led economic growth plan, developing strategic industries and the requisite infrastructure projects. And as we demonstrate the ability to benchmark and step up execution efforts, the ‘Good Housekeeping seal’ would indeed attract and generate more positives for the country!

Thursday, March 24, 2011

Mistakes are a reality . . .

It’s good to remember that while we often think of saints as the ultimate perfectionists, in the Catholic tradition, the saints were not always, well, saintly,” says the NY Times article, It’s Just Fine to Make Mistakes, March 11th. “The Catholic calendar is full of notorious men and women who turned their lives around and became saints . . . St. Camillus de Lellis was an Italian mercenary soldier, a card sharp and con man. For six years, St. Margaret of Cortona lived as a Tuscan nobleman’s mistress. St. Moses the Ethiopian led a gang of cutthroats in the Egyptian desert. And St. Pelagia was the porn queen of 5th-century Antioch . . . Of course, they went through great suffering to become saints — but the point is they made their fair share of mistakes . . . And most of us are not — and more important should not be — aiming for canonization.” We’re not aiming for canonization; but we want to be a developed economy – and reduce poverty?

Being a perfectionist is not a bad thing; in fact, it may mean you have very high standards and you often achieve those standards. Those who have perfectionist tendencies, but those tendencies do not rule — or ruin — their lives, are what psychiatrists call “adaptive” perfectionists . . . On the other hand, what psychiatrists call “maladaptive” perfectionists . . . can also sabotage their own success. They do not turn in projects on time because they’re not yet perfect. They can’t prioritize what needs to be done quickly and what needs more time to complete. They want to rigidly follow rules to get things “right,” and this often means they’re terribly uncreative, because creativity involves making mistakes . . . Even worse, they don’t learn from their mistakes, because if, God forbid, one occurs, it should be concealed like a nasty secret. So they cannot get crucial feedback — feedback that would both stop them from making similar mistakes in the future and make them realize that it is not a disaster — because they won’t risk punishment or alienation for a blunder.”

This blog has talked about the ‘Dutch disease’ – brought about by our reliance on OFW remittances, and took our focus away from designing and pursuing strong economic fundamentals? Where we are as an economy – and as a country – is for us to fix? But we won’t fix something we don’t see as broken especially if the spoils come our way? And to be self-critical could prick our self-esteem? Yet to pursue a goal, it is imperative to recognize both strengths and weaknesses, e.g., SWOT or Force Field analysis. ( But the human senses could play tricks? Were the senses of German and US intelligence agencies deadened by Curve Ball’s story re Iraq’s WMD – they ‘missed’ the hoax, reports 60 Minutes? A FARC hostage in the jungles of Columbia was electrified to hear his mother’s voice over the radio (that the group secretly kept from their captors) that he could not recall a word – and asked several times, “What did my mother say?”[Out of captivity, Marc Gonsalves, et. al., 2009, Harper Collins]

The writer has witnessed other countries going through their economic cycles – and how enterprises and nations themselves dealt with them. And, representing USAID/IESC, he shared the stories with his Eastern European friends. He thought he had done his part after a couple of months. But they talked him into ‘continuing the journey’: “You would see history unfold; we’ve made wrong choices for decades – and found ourselves with the shorter end of the stick. Now we want to pursue a different path – become a market and open economy – like what you’ve seen in more progressive nations.” Indeed they embraced a new set of assumptions . . . only to see that their economy would shrink over several years from the fall of the Berlin Wall in 1989, when the domino first fell. It was not until 9 years after did they see economic growth . . . and then over the 10-year period, 1997 to 2007, their economy expanded over 224 %. They tasted the one step back, two steps forward phenomenon. Hopefully they’ve been toughened up – and are now better equipped to deal with cycles in their economy, including the Great Recession c/o Western greed?

We, Filipinos, have to bite the bullet: it will take time and great efforts to erect the strong economic building blocks that will make us competitive? Adolescents – sheltered or otherwise – go through the experience? Development has its costs . . . but underdevelopment is more prohibitive, e.g., massive poverty? The key is setting higher expectations, focusing, prioritizing, being creative and transparent; not nibbling at the edges – distracted by compromises, and losing the principle that ought to drive the enterprise? Simply put, we must have the political will to be a developed nation?

Saturday, March 19, 2011

Engaging with the outside world

As we continue to look beyond our borders and engage with the outside world, we would be the better for it. Our economic managers are hearing from the British about their experience in managing PPPs (private-public partnerships); while the Japanese are sharing with us how we could be preferred by investors. (Our prayers go with the Japanese as they deal with nature’s fury.) More of these engagements would hopefully encourage us to revisit our assumptions. It is human nature to stay with one’s assumptions: in the US there are the ‘parochials’ [which the writer’s daughter insists she’s not, though from a parochial school like the writer] and the COWs (citizens of the world). The parochials would explain why only a third of Americans have passports – although up from the teens. Which means two-thirds can’t even travel to Canada. And many have not ‘traveled west beyond the Mississippi‘– and oblivious that Defense ($680 B), Social Security and Medicare are behind the trillion-dollar plus US deficit. And they believe the US is spending 25% of the budget on foreign aid but would agree to 10% – it’s less than 1% and a shame! [The writer is a US taxpayer, and has represented USAID/IESC.]

Did corruption come from both sides in the NAIA 3 project? And now we have the Ro-Ro ports deal which is under scrutiny? It takes two to tango? But there are three sides to a controversy – there’s the right side which neither party acknowledges? Love begets love: we can demonstrate that we are upright people, no-nonsense, no room for corruption – bringing integrity, maturity, hard work and creativity in our dealings with foreign investors?

Are our neighbors better than us? Not really [the writer covered the region for 10 years and worked very closely with them] but they have engaged with the outside world more than we’ve done. And which explains why foreign investors prefer them. And so it is delightful that the Agriculture Department is teaming up with Nestlé, says Manila Standard, to revive the coffee industry. The writer is delighted to read about it – it could bring plenty of positives, but we must we aware that we’re competing with countries like Mexico and Columbia. And setting for ourselves higher expectations is good for our psyche and the human spirit.

To be a bigger producer means we have to think big and partnering with the world’s largest food company (from Switzerland) is a promising option. (See Within the industry they invest the most in R&D. [The writer doesn’t know anyone at Nestlé]. They work with local farmers but their operations are large-scale. Beyond the capacity to invest, they put their money where their mouth is: they pursue state-of-the-art technologies, are aggressive in innovation, they invest in talent, product development and markets. Put simply, they’d be ideal foreign investors because they bring the building blocks of competitiveness. We may have healthy savings but we need more than that, e.g., competitiveness – so that we may be able to optimize current (FTAs) foreign trade agreements, for example?

It appears San Miguel – and they could benchmark against Nestlé, in the same manner that Siemens has been measuring themselves against GE – is partnering with Luisita given their vision of large-scale agribusiness, reports Manila Standard. To be truly competitive, partnership of such scale is not a surprising path for a giant food and beverage enterprise like San Miguel. But then again, they have to contend with our legal system, if the Luisita deal is to happen. It brings to mind the ‘80s, when the Americans finally realized that the Japanese were beating their brains out in manufacturing, and could only sigh: “The Japanese are smart to produce more engineers while we produce more lawyers”.

"It’s convenient here because you speak English," Japanese chamber vice-president Nobuo Fujii said in a telephone interview. But for factories, high energy costs [which is echoed by the electronics industry] in the Philippines "is just one of the headaches", reports Business World. "Inadequate infrastructure, lack of clustering or development of related industries and ... problems with legal operation" were the most common concerns in the Philippines . . .” The issues the Japanese are raising are right up the alley of our economic managers, and legal community? We will be the better for it the more we engage with the outside world?

Thursday, March 17, 2011

We can make it to the top . . .

The Forbes World’s Billionaires 2011 list is out and four Filipinos made it to the top. It used to be many things were measured just within the confines of the US or the West; and with a globalized economy, for the first time, Asia has more billionaires than Europe. And American dominance is waning wealth-wise, as in most other measures – which would continue. In a universe, changes in its elements would change their distribution.

The Aquino Administration is pursuing an investment-led economic growth agenda, tapping the outside world to invest in the Philippines, especially in the strategic industries we’ve identified and their requisite infrastructures. And we are learning as we go along. For instance, foreign investors are telling us to spread the projects over a wider timeline so that more parties would be encouraged to participate. The reality is everyone would only bite what they could chew. But the important thing is we are learning and gaining from the experience.

The object of the exercise remains: To deliver against the incremental $100 billion export revenues the Trade Department is planning by 2016, for example, there must be a high probability that there is a market for these products – i.e., they are competitive. But we’re still riding the learning curve and so there would be slip-ups. And it is important that we invest in the building blocks of competitiveness – e.g., technology and innovation. The good news is the electronics industry, our biggest exports, is generating continued investments. And while semiconductors remain the bulk of the business, they are looking at the production of higher value-added segments (e.g., PV and solar, auto electronics, mass data storage), reports the Manila Bulletin. But they’ve raised their own issues: “The loss of most of the industry’s IT engineers and programmers to foreign employers; and the need to bring down the cost of power and make the Philippines conducive to foreign investors”.

Slip-ups are a reality. Reality is never a problem; it is how we respond to reality that is the problem. Boston and Philadelphia have to deal with sex abuse cases costing the faithfuls tons of money – but they remain faithful, while the church pursues reform. In investment the key is sustaining success, and global business costs money – as the writer’s Eastern Europeans friends have learned, with difficulty – e.g., investing in state-of-the-art technology versus fabricated machineries. Poor countries like India or us (e.g. jeepney) have to overcome a similar mindset. But India, while in car manufacturing for decades, recently invested in premium brands – Jaguar and Land Rover – to move up the value chain; these brands bring with them the building blocks of competitiveness: technology, innovation, talents, product development and markets! India is demonstrating how to move up the competitive ladder.

Everything starts in the mind – but must come down to the heart and to the gut to make it instinctive. The Aquino Administration’s economic growth agenda is predicated on moving from a parochial to a global mindset? Are we prepared to embrace the global economy? In the technology and innovation arena, for instance, whether at the academic or public sector level, our frame of reference has to expand from local to global – beyond being geared to support local initiatives, local products, and local markets?

In business education, our private sector and academic community have established the Asian Institute of Management, which we proudly advertise as the Harvard Business School of the East. Do we need a similar initiative, like the MIT of the East? MIT is acknowledged by industry as an ideal partner in the pursuit of ‘sustainable, high-impact industry-university collaboration’. And their successes have been quantified, equating to numerous successful ventures (e.g., aerospace, IT, automotive, software, consumer electronics, materials, pharma) that have made direct contributions to the global economy at mindboggling levels. But that may be looking too far out.

Those in the public and private sectors and in higher education have to embrace the 21st century globalized economy, and move beyond local orientation – in technology and innovation especially? If we can make it to the top in individual wealth, there is no reason why we can’t make our industry competitive, and our economy moving and accelerating forward?

Monday, March 14, 2011

Competing in a world at warp speed

Beyond being globalized, the 21st century economy is characterized by speed. And looking at the competitiveness and economic freedom global indices, we must assume that the countries at the top of the rankings would continue to gain on us because they have the means – and momentum is on their side – i.e., they have equipped themselves to build on their successes. How do we compete in a world that is at warp speed? It is important that we first understand who we are: We don’t have the means and the momentum to compete at their level. Our income per capita of $3,500 is a meager 10% of what developed-economies generate. But the above indices are not meant to be checked off like a checklist. So how do we respond? To build something we need to understand what the building blocks are. But akin to portfolio management, even the building blocks have to be managed accordingly, that is, prioritized.

For several decades we’ve designed to build our economy via programs that would cover as much of our wish list and ended up being the least developed nation amongst our neighbors – because we’re spreading scarce resources thinly. And so instead of reducing poverty, for instance, we see it rising! Yet, we’re still wedded to assumptions that have failed us – i.e., spreading resources thinly? For example, we talk about K-12 in elementary education and of social safety nets like they have in Europe. They are not wrong, and if we believe we must have them, then we must. The problem is our revenue levels. At $3,500, our per capita income can buy very little. But it does not mean presenting ourselves to the outside world cowed, coming from a position of weakness. How? We must exude integrity, maturity, hard work and creativity. In short: no-nonsense, no room for corruption – we’re confident, upright people, and we’re offering a win-win proposition.

And so it is encouraging that the top-most priority of the Aquino Administration is to drive investments in order to raise that $3,500 a bit. And if we benchmark against Thailand, we need an incremental income of $100 billion to have a chance at reducing poverty like they did. Thus, it is welcome news that the private sector is looking at the strategic industries and the requisite infrastructure that would generate said incremental income. (But to sustain it, we need to invest in technology, innovation, talent, products and markets!) And it is heartening that the Trade Department is putting together a plan to raise exports precisely to get us there. While it is a good intermediate goal, what we must aspire for is to be a developed economy – raise our income per capita 10-fold. And be a truly inclusive economy.

The writer talks a lot about his Eastern European experience because his ex-socialist friends wanted to be like their model Fortune-500 company. And so they wanted to have several mega-brands; instead, they learned the reality of portfolio management – what brands to power and which ones to eliminate, and thus to focus on margins in driving revenues. Margins generate the competitive firepower – the ability to fund investments in technology, innovation, talent, products and markets! But they are like gears that must be synchronized – and as importantly, they could only be had if the enterprise produces the requisite margins for investment.

With a per capita income of $3,500, we, Filipinos, can’t expect to fund a number of the things we wish to have. And OFWs are showing us how – their old jobs in the Philippines didn’t give them the income to provide either the needs or the wishes of their families; and so they had to seek jobs overseas to raise their income and sacrifice being away from home and family. (But as an economic driver the OFW phenomenon is bad because it gave us the ‘Dutch disease’ – it took away our desire to design and pursue strong economic fundamentals, e.g., competitiveness and economic freedom. And worse, weak economic fundamentals perpetuate the cacique model, characterized by a small, oligarchic ruling class; it is anathema to competitiveness and economic freedom – indeed a vicious cycle.)

We may not become like the countries at the top of the rankings in our lifetime. And we won’t get there either for the next generation if we don’t learn from our OFWs – i.e., raising our income is the top-most priority!

Wednesday, March 9, 2011

Do we need a trouble shooter?

It is welcome news that the Trade Secretary wants to create economic zones for manufacturers producing for the local market so that local regulations don’t undermine their operations with additional burdens and costs! And the administration’s investment agenda is laudable indeed and so are their efforts. What it needs besides is to truly focus on execution. Moving forward on the requisite next steps of the key infrastructure projects and strategic industries should be the focus of the trouble-shooter, for instance?

Focus and execution . . . will be the marching orders if President Aquino indeed wants a trouble shooter to raise the ‘success probability’ of the administration’s agenda? Without the bias for focus and execution we would undermine our best efforts? Change is never easy – and so benchmarking is indeed a chore and demands leadership? We can’t be like them because they’re bigger, and we can’t be like them because they’re smaller? We can’t be like them because they’re liberal, and we can’t be like them because they’re autocratic? Change is not natural – and so we’re tripping all over groping for excuses, and tempting fate? Opportunity knocks when we seek not when we run away from it?

It appears the bidding for key infrastructure projects keep changing time-wise? Key players involved in the projects – from idea generation to actual execution – should be identified and made to account for transparency’s sake? And the trouble-shooter should have an ongoing interaction with the media? Project management isn’t something foreign, and thus the administration should define timelines and control points that must be highlighted for review and media reporting? And as importantly, the trouble-shooter could demand proactive management of every project so that there is clarity each step of the way, including enabling legislations?

Transparency enhances integrity that must characterize our dealings with the private sector, including foreign investors – that is why corruption matters, i.e., we can’t even begin to move forward in our efforts to right our economic ship if integrity is suspect? Then again, we can’t keep to the assumption that anything or anyone big would simply take advantage of our poverty, weakness and vulnerability? Put simply, between the lack of transparency and the integrity that comes with it on the one hand; and our defensiveness when dealing with big foreign investors on the other, we are bound to yield less than the optimal conclusions? It takes integrity and maturity and hard work and creativity to operate beyond a parochial mental model?

China’s trajectory says they would become the biggest economy. But not too long ago they could not even raise their counterpart-equity shares in their joint-ventures and so they allowed foreigners to organize holding companies which the latter could wholly own. Instead of risking diminished foreign investment levels, they successfully generated more investments that brought in technology, innovation, talents, products and markets. Today they are in better stead investment-wise than the US because they don’t have to borrow capital; while the US is the world’s largest net borrower. Lee Kuan Yew writes that they were a third-world before becoming a first-world economy – and the world’s most competitive nation, despite its size. And Thailand and Malaysia are moving in the right direction. It is incongruous to rationalize that we’re under-invested in technology, innovation, talent, products and markets because we’re a small, poor country? Size and poverty don’t stop progressive nations? To be parochial in the globalized, 21st century economy doesn’t compute? (And so Obama is on TV speaking to high school students in Miami talking about ‘winning the future via reform, responsibility and results – and as importantly, to create a culture of high expectations; not only of students, but of principals and teachers. And schools that have replaced incompetent principals and teachers are raised as models’, heeding Bill Gates’ education crusade.)

With a trouble-shooter focused on the execution of the administration’s agenda, President Aquino could then tell us whether we are shooting our own foot or are in fact doing our share to right our economic ship? We don’t change an outcome if we don’t change our assumptions, so says Einstein? In modern parlance, ‘garbage-in, garbage-out’ – are we throwing garbage into the hopper?

Sunday, March 6, 2011

After another 25 years . . .

It is encouraging that a RAM member believes we should not have another EDSA I – because the positive developments that we assumed would occur following People Power did not? What is our reality? We can keep to our assumptions and replicate the last 25 years? Our assumptions come from our history, culture and tradition? But we can weigh them against our reality and progress as a nation? Our reality of corruption and poverty is sinking us, pushing us down the abyss? While to pursue progress, like the pursuit of academic freedom, does not mean having a pact with the devil – i.e., we have to guard against ideology and extremism, and not parallel the Pharisees and scribes? Or of more recent vintage, Bush-Cheney’s: “If you’re not with us you’re against us?”

It is no surprise we continue to be defensive in our negotiations of FTAs (Foreign Trade Agreements) – because our industry remains uncompetitive? And until we ask the right questions, after another 25 years, our playing field would be narrower and we would still be uncompetitive and defensive in our FTA negotiations . . . and beyond? We have to overcome groupthink – unfortunately, a normal human phenomenon? Put simply, we are what we think we are. As individuals we know it instinctively, think like a winner and we are! And that’s why leadership matters, demonstrated by Kennedy in the Bay of Pigs; he had to overcome groupthink, the opinion of the military – his key advisers on questions of war and peace – and the Senate, whose role is to provide advice and consent. ‘Leadership means taking the enterprise from where they are to where they have never been before.’

Our playing field has narrowed that until we question our assumptions, it would continue to shrink and choke us – yet be in denial, e.g., OFWs? For example, if we think a handful of tycoons (with due respect to them) being gung-ho about investing in infrastructure is our True North, we better think again? It is simply a confirmation that our playing field is so small that a handful of players could be in every major undertaking? The Berlin Wall had to fall because people wanted liberation, not a narrow playing field – and it is happening again today, in the Arab world?

Until we pursue technology and innovation beyond the current state and capacity of our industry we would remain in our narrow world and be uncompetitive? The question we must ask is: what technology and innovation must industry acquire that are world-class, stand up against global competition, expand our market and make the investment pay? The cacique model – hierarchical and inward-looking – is passé. Competitive nations leverage the global economy and tap investments and put them to good use: in technology, innovation, talent, products and markets. But we raise issues against foreign investments and confuse acquisition cost from operating cost, for instance? In the private sector they recognize that competitiveness is driven by margins not solely by acquisition cost and thus invest in state-of-the-art technologies. We can’t be an island unto ourselves – and better mean it? Singapore did not have the capital to create today’s most competitive nation, but has been attracting foreign investments that they put to good use. Ditto for Thailand and Malaysia!

Like any undertaking, the new world order poses a new set of challenges, e.g., Toyota wanting the old rules of least investment or the debate around energy? Thus they demand creativity and resolve? We can’t keep to a model of a few tycoons and an inwardly-looking and uncompetitive industry on the one hand, and a big chunk on the other pushing livelihood initiatives to keep body and soul together? These two elements of our economy would equate to more disasters that even another 25 years wouldn’t cure – because they leave a gaping hole in our economy, i.e., the lack of revenues that could spread greater wealth around? And when we add how much we’ve messed up the environment, what would we expect?

It appears the opposition to the Aquino Administration is beginning to sound louder? Is their economic plan just a bag of air as they say? Is the campaign against corruption undermined by the administration’s inability to pass the Caesar’s wife test as they claim? What do we expect to see 25 years hence? If we don’t want to replicate the last 25 we better get our act together? But Bongbong says we would have been another Singapore? And he’s a future president – bringing old assumptions characterized by a very narrow playing field? God save us!

Tuesday, March 1, 2011

“I am an Egyptian again . . .”

. . . Not without value or dignity . . . I feel like I have planted a tree. Now I need to look after it. I am cleaning [Tahrir Square] because this is my home. I am an Egyptian again,” a quote from a New York Times report, Feb 20th. This Egyptian probably shares how we felt when Marcos departed for Hawaii. Hopefully the emotions of the moment indeed reflect both the soft and the hard elements of their liberation. Planting a tree, cleaning one’s home and rebuilding one’s country take more than luck, more than emotions. They demand hard work as well, if indeed the Egyptians are to regain their dignity?

The New York Times report talks about the other countries that had to transition to democracy, including the Philippines, Indonesia and South Korea. South Korea has special mention, that the handoff from military rule to democracy went beyond simply being smooth, and as importantly, to great economic success. And that Indonesia appears to be moving in the right direction.

A flash in the pan does not make for greatness. It takes more than luck, more than emotions and demands hard work as well. Brazil’s new and first woman president, Dilma Rousseff, is finding out that despite Brazil’s recent economic successes, leadership can’t sit on their laurels. And it is especially painful when to simply acquiesce to populist demands is not what leadership is about. It would test her resolve because to keep an overheating economy in check she has to deny ‘justifiable populist demands’. (Two successive New York archbishops had closed churches and schools in Manhattan because of the imperative of sustainability; and Mayor Bloomberg appears to follow suit.)

February reminds us of People Power. The Egyptian quoted by the New York Times would remind us that planting a tree, cleaning one’s home, rebuilding one’s country would take more than luck? And it does not mean to simply espouse populism, either. That may be the dissonance in the Filipino psyche? The departure of Marcos was not meant to hand us our dignity on a silver platter? Rebuilding one’s country demands discipline, sacrifice, sense of country before self? We have to guard against the knee-jerk, of rationalizing our shortcomings – that patriotism isn’t a veneer for parochialism or ‘playing small, vulnerable country’ isn’t a failure to take responsibility, like misusing aid grants or insidious corruption?

There are the hard elements and the soft elements in rebuilding the country. The hard elements are being pursued by President Aquino with his focus on investments. The key is for the administration to be dogged in executing their plans and partnering with the private sector – from critical infrastructure projects to stepping up efforts to drive strategic industries that would move us closer to being a developed country. But there are the soft elements too. We can’t simply have a new set of political rulers and oligarchy on the one hand and populist demands on the other, like a vicious cycle? An inwardly-directed economy perpetuates parochialism and the attendant power dynamics explain our inability to attract foreign investments; and woeful investments explain our dismal competitive standing? At the end of the day it is us! We succeed or fail because of us – we can make the economy and the environment kind or harsh for this generation and beyond?

One can start with respecting time and space – the soft element of efficiency and productivity and of enviable enterprises like Singapore, today’s most competitive nation. They have strict traffic and land-use rules, for instance. Yet Singaporeans had to learn it from the ground up – e.g., their campaign to keep their sidewalks clean, including free from spit. In the mornings, 41 years ago, the writer on his first visit was fascinated to watch store owners scrubbing their sections of the sidewalks with soap and water. “I am cleaning [Tahrir Square] because this is my home” . . . And we, Filipinos, would want to ‘clean’ the country – because it is our home and our own dignity?