Wednesday, June 29, 2011

The AmCham speaking frankly

Full disclosure: Almost 30 years ago the writer sat in one of the committees at AmCham – and the task was to ensure that American companies in fact pay market-competitive rates, i.e., better than local rates. [Reports Business Mirror, Jun 19th: “The secret to success is people management”, and explains “why US management rules the world”.] But that is what competitiveness is about: investing in talent as well as product and market development on top of aggressive investment in technology and innovation? But over the last 8 years the writer has been in Eastern Europe and guided a couple of Eastern European companies to compete in the EU market, against Western interests, and even hired away some of the latter’s talents. And it was under the auspices of the USAID – but that’s what free enterprise is about, fair and square, no handicapping or sense of entitlement that hierarchy or rank brings? And thus China is today able to flex its muscles . . . after leveraging the global economy. Granted they’re still learning the ropes? But so is the US in more ways than one – and even their supposed values are aspirational and forward-looking? And they admit to the greed that took the global financial system down; and the failure to lock up the culprits?

And with the Eastern Europeans the writer is among those preaching the imperative of competitiveness – i.e., competitiveness is about investment . . . but beyond capital. Thus the competitiveness rankings are simply the score. Similarly, poverty is not the cause but the effect [or the score] of a failed economy?

Why are we uncompetitive – and poor? Because we pursued competitiveness not as free enterprise is designed to be and celebrated “competitive edge” as a reward of a parochial and hierarchical system that is unwittingly protectionist, on the backs of 10 million OFWs? It protects the few and/or the hierarchy but leaves 30 million Filipinos hungry? The model limits foreign investments and misses that they come in many forms: capital, technology and innovation, and people, product and market development? It is disconcerting that our gross investments lag those of our neighbors. And it gets worse given our uncompetitive R&D investment levels and capacity. We need a radical shift – think beyond consumption and outside the box and think global. And favor investments that raise our technology and innovation quotients. It’s the 21st century?

Is it surprising to hear from AmCham then? Business Mirror, Jun 18th: “There is too much bureaucracy [and] red tape, and the Philippines is quite protectionist . . . The Philippines is moving too slow. This country reformed slowly than most Asian countries. Many of its laws and regulations are no longer in tune to the present setup . . . If it were up to AmCham, what some Filipinos regard as the “nationalist” provisions of the Philippine Constitution or Philippine laws would be repealed as soon as possible for being “irritating and out of tune” with the times. These provisions include the 60-40 division of any foreign-owned company in the country; the barring of foreign businessman from owning land; and the disallowing of foreigners to enter the retail-trade business in the country.

Remove these barriers, and one day you will wake up like Malaysia. It’s strict for bad business but wide open for foreign direct investments . . . Malaysia opened its economy in the last 25 years. The result made the country the second most developed nation in Southeast Asia . . . The Philippines has tremendous opportunities to grow because of its God-given resources. That is our fearless forecast. We’ve been here for over a hundred years, and we will stay here to witness our expectation for your country . . . AmCham . . . remains very bullish about the Philippine economy and identified seven core industries that would soon make it big if given the needed push and support. These industries include agribusiness, business outsourcing, creative industries, infrastructure, mining, manufacturing and tourism.”

Of course, to be competitive means to pursue the profit motive? It is this surplus that generates the benefit of free enterprise, i.e., it feeds the investment cycle and when truly successful becomes a virtuous economic circle. [The Bernard Lonergan, SJ, Institute addresses this point, the convergence of economics, ethics and theology.] Some are toying with other isms because “free enterprise” in the Philippines failed given massive poverty? The writer’s ex-socialists friends wonder when they read about our gripes. They can distinguish free enterprise from oligopoly – which still confounds them? And why they opened the media to Western interests – they had associated media with the old Communist-propaganda machine. They are in search of authenticity? What about us?

Saturday, June 25, 2011

‘New York state of mind’

The wife would pity the Eastern Europeans for rapidly learning and mirroring the New York state of mind: “They’re too young to be so serious with life!” The writer is with a very smart fellow who as a student represented his country in math competitions – and would probably run rings around American kids and be a good match against the Singaporeans or Koreans? They are discussing product development, and how to step back and approach lateral thinking – and not be held hostage by linear thinking. [He had heard the writer challenged two others to think big and leverage their growing businesses; and guided them back to the drawing board, i.e., incremental thinking must be out the window.] The object of the young man’s new assignment is to move up the value chain and it requires ‘discontinuity’, short of ‘creative destruction’. [A simple example is moving to liquid detergents from powder detergents.]

And he gets back at the writer discussing “quantum mechanics and the power (of thoughts) that comes with it; and explains he will manage the new business as though he’s in a chess match, an ancient battle – being disciplined and strategic, always anchored in the fundamentals”. The guy is a quant – and with his talent the expectations of the writer would, once again, be exceeded? The world is moving at warp speed!

Finally warm weather arrives in this part of Eastern Europe! Many years ago the family was in Paris and the writer wondered how Europeans could be lousing around in an outdoor café as though time stood still? It was his New York state of mind that was robbing him of the moment. Before stepping out of the hotel to explore Paris he had to make a phone call to New York – and the only thing he remembers today: “Please wear your thinking cap if you haven’t done so yet”!

How liberating . . . to be lousing in an outdoor café in Sofia – in jeans and driving shoes! And in his favorite tees from the daughter, which reads: ‘Retired – you’ll be charged a consulting fee if you want to talk to me’! With iPad in hand the writer breaks into a smile reading the piece of Dick Cavett. His wit is why the NY Times on a weekend brings the New York state of mind even to once communist Eastern Europe. Busy with his iPad the writer isn’t responding to the waitress until Andrea Bocelli comes to the sound system with a signature song and so he says: “a bruschetta please”.

When the writer first arrived in Eastern Europe he immediately noted that to be frugal was second nature. While wasteful Americans could learn a lot from them, there was a tendency to tolerate poor quality in more ways than one. And thus to move up the value chain is an uphill climb – especially when making-do is valued?

Is there an element of making-do in ‘Filipino abilidad’? Should we recognize that the 21st century demands much more, at warp speed? Says Robert Sears, AmCham director for external affairs: “The Philippines is moving too slow. This country reformed slowly than most Asian countries. Many of its laws and regulations are no longer in tune to the present setup,” reports Business Mirror, June 18th.

And it starts with wanting to do business beyond our shores – because it will mean, even force, investing in technology and pursuing discontinuity? Cebu Pacific comes to mind; and they probably are managing their international expansion as though it’s a chess match, an ancient battle – disciplined and strategic, always anchored in the fundamentals?

The writer again wears a grin as he reads: Secretary Gates looks forward to driving to a Burger King once he steps down as secretary of defense. What would his t-shirt say? Hierarchy is something we value but others don’t? And the iPad pops a message, “A bomb explodes in Southern Philippines”. Do we have more than an image problem?

Tuesday, June 21, 2011

Arrogance of success

A CEO at one of the world’s most successful enterprises, but is now retired, once acknowledged to the troops that “arrogance of success” was making them vulnerable – especially in a globalized economy that has become more competitive than they themselves imagined. And so he purposely reversed some of the company’s dogmas. But dogmas don’t just get erased or deleted – and those who ‘grew up’ with them stay wedded, as a friend would explain. Inertia is not confined to physics?

The Philippines doesn’t have such a problem with economic success but individually Filipinos have excelled. How do we stack up against the Western value of individualism? That is not to say we’re not concerned, especially given our falling global rankings (in competitiveness and economic freedom)? But being concerned and . . . moving forward are not one and the same – e.g., the JFC are expressing impatience with our PPP? And that is to be expected from the business community, local or foreign? “A prominent hedge-fund manager . . . has publicly called for a change at the top of the firm [Microsoft], arguing that Mr. Ballmer [CEO] is ‘stuck in the past’ . . . If IBM’s history is the guide, Microsoft may yet end up jettisoning its leader,” reports The Economist, Jun 11th. Given our respect for hierarchy, that would be heresy?

The writer’s Eastern European friends just received an invitation from the European Business Awards to compete in the 2011 International Growth Strategy category in recognition of their explosive growth over the last 8 years. But success in the business must equate to sustainable profitable growth – and it can only happen when they can sustain a clear cut competitive advantage? But separately and within the firm they felt like being stopped dead in their tracks as they were going through the periodic business-review debates. Ergo: the mantra of continuous improvement never ceases? Young marketing managers who have successfully built their businesses may feel they’re invincible . . . until they realize that there are ideas that could not travel outside their home market. On the other hand, Cebu Pacific confidently placed an order for a big number (37) of aircraft given their aggressive plans to go international. Put simply, they have an idea that could travel outside the home market?

A major barrier to Philippine competitiveness is our inwardly-focused economy? Because that is our strength and it is good for the local economy? Unfortunately, precisely because of such rationalization, which for all intents and purposes hasn’t done us proud, we have yet to develop the drivers of competitiveness – e.g., elevated and aggressive investment in technology and innovation, and people, product and market development? And our industry has no bias for R&D investment – and ‘Filipino abilidad’ will not compensate for that? [Writes The Economist, “By 1935 some 95% of its (IBM) profits were generated by innovations introduced in 1917. This effort soon expanded through partnerships with universities and embraced pure research as well as the more applied, commercially driven sort.”]

And beyond our lack of key infrastructure, we have now recognized how much our neighbors have outdistanced us in attracting foreign investments? And when we add how we complicate instead of simplify things (thus breeding insidious corruption – (KISS) keep it simple, stupid?), our ability to attract foreign investment remains suspect? NAIA 3 was, and still is, one pathetic exercise in futility – and we have others, e.g., Ro-Ro ports deal, Laguna Lake rehab, North Rail, etc.? But do we even care? It is another characteristic the writer senses in Eastern Europe: people don’t seem to care much beyond their respective worlds – because they have gone through so much forgettable events and experiences that they would simply take things in stride? [And we explain that as happiness or resiliency?] Instinctively we would recall the past to prove how colonizers took advantage of us; while Eastern Europeans would talk about how they made the wrong bets, like becoming aligned to the Soviets?

In the final analysis, does it boil down to getting over the past? It appears Westerners are more able to take stock and move on – while Easterners seem overwhelmed by the past? But says Medvedev of Russia: “the country must begin to attack the problem [of an oil-dependent economy] immediately to avoid ‘the point of no return’ from the (economic) models that are moving the country backwards . . . Corruption, hostility to investment [among others] are the taxes on the future that we must and will scrap,” reports the NY Times, June 17th. And the operative word is . . . immediately?

Saturday, June 18, 2011

Energy and electronics . . . hierarchy and corruption

The Independence Day celebrations must have encouraged completion of loads of homework from various government departments and partners in industry – from reporting progress in our energy PPP initiatives to developing a technology roadmap for electronics to the crafting of a game plan for tourism? And not to be outdone, one daily had an editorial on the whys of corruption – perhaps pursuing President Aquino’s pledge to traverse the straight and narrow?

Cronyism, pork-barrel politics and the absence of campaign finance reform would explain our insidious corruption? We believe we are holistic and populist and want to be inclusive when we’re addressing poverty? But how do we dissect corruption? Like ‘analytical Westerners’ able to sharply compartmentalize – and explain why we are unable to overcome it? But where is closure? Excellence and competitiveness have no respect for Filipino time? Are our legislators to blame for pork-barrel politics and our inability to pass a campaign-finance reform? Is cronyism synonymous to our “weather-weather” syndrome and an expression of hierarchy and the power that comes with it? Corruption is so insidious it is everywhere? When we violate easement rules and gain extra space for our homes or businesses we are not only aiding and abetting corruption but are polluting and undermining the environment as well? Or when we turn king of the road once we’re outside our gated communities, superior to traffic cops and traffic aides?

The buying of votes is a way of life and perpetuates hierarchy and power? Campaign contributions are there because kingmakers thrive in the environment – they are an investment because politics is big bigness; while blatantly undermining whatever leadership role public service is meant to bring in the first place? Political leadership is designed to educate Juan de la Cruz, not to undermine nation-building – or why public servants parade their superior education and training? [It appears we have made education big business (diploma mill?) given the staggering number of colleges and universities we have when only a small fraction in fact goes to college? And not a surprise our competitiveness ranking is mediocre? Similarly we have lots of SMEs but are ranked poorly in entrepreneurial dynamism because we don’t seek to excel and compete beyond our borders?]

Do we expect to move forward with our energy PPP initiatives – and make the failed EPIRA just a bad dream? Energy is so fundamental like an international airport or trains and roads and bridges – and will we learn to put them up sooner than later? What about the electronics industry’s technology roadmap? Do we expect local industry to commit to invest and move our semiconductor industry up the value chain – e.g., “automotive electronics, PV/solar, mass data storage and research and development (R&D)”? Or are we dependent on foreign enterprises – i.e., local industry has yet to invest and raise our capacity in science and technology? Tourism will largely be a local effort, though foreign investments could be tapped – and will we do better than our performance or non-performance in NAIA 3 or the Ro-Ro ports deal or North Rail and succeed in erecting the requisite infrastructure system for tourism?

We’re not unique given other people are also predisposed to messing things up? The only difference and why we seem the odd one is that we can’t seem to move up? We keep sinking in the competitiveness and corruption indices, for instance? And how do we propose to move forward – doing more of the same? Thankfully, the Aquino administration appears committed to do the right thing?

Should we debate corruption as much – or the incompetence in infrastructure building and development – as we do condoms? Is insidious corruption which has made us economic laggards and mired in poverty less of a concern than condoms? Both would touch the conscience but one is pulling the economy and the whole country down, today not tomorrow? What about the common good? How many have we contributed to the infamous list of the world’s most corrupt leaders? And where do our leaders come from? Not from some country out to screw us?

Tuesday, June 14, 2011

Tribal and thriving

Unfortunately that playing field is long gone, and our inability to pull together says we’re not ready for the 21st century? Even the Brits were tribal yet today the coalition-ruling party is working hard to push the country forward, embracing reforms that hit the pocketbook. [Unfortunately, Americans want their cake and eat it too – and find themselves like cartoon characters spinning wheels?] Deng Xiaoping moved the country to embrace market economy, socialism be damned? People know they have to move beyond warring tribes? And in our Christian faith it’s called the common good? Not only are our big boys in tribal wars but even within the media loyalties between current and past administrations are adding fuel to the fire – and so are clerics? The personal indeed trumps principle in our way of life? Thankfully, there is a great article from the scientific community about countryside development being key to growth – but the article does not speak to execution: ‘who will do what, when, where and how’?

Edison, being more than a scientist, knew that innovation had to come hand-in-glove with capital. And Silicon Valley today mirrors that orientation, i.e., venture capitalists are in bed with the innovators. And someone like Steve Jobs plays both roles so recently he made a presentation to the Cupertino city council explaining Apple’s new headquarters expected to be up by 2015. It will house more than their current 12,000 people spread across the San Francisco metro area. But it will be green and the vision is to make it a model for the 21st century. From photos it looks like a large UFO that had descended on a green earth. And when asked what he expects Apple to contribute to the community, he says unequivocally: “taxes and more taxes. [And added:] plus a bunch of smart people who could afford desirable housing in Cupertino. But you won’t see their cars in the campus because they will be underground. Green is the theme of the campus.” Eisenhower while commanding the Allied Forces in Europe was awed by the efficiency of the German autobahn system and when he became president pushed for what today is known as the Eisenhower highway system. Tribes look at their own; but Edison, Jobs and Eisenhower looked beyond their own and looked ahead?

We truly believe we’re smart and creative people but ‘no man is an island’? Like in institutions public or private, societies that deliver results for the common good are not the same as those confined in their respective tribes. And it is leadership that steps in to pull people and ideas together? It sounds Mar Roxas will be focused? Hopefully being a politician and future president won’t be a barrier to getting his job done? It appears President Aquino needs a no-nonsense manager? And it would pave the way for Juan de la Cruz to support Mar Roxas in his new assignment if he gives the lay of the land, and it’s not pretty?

For instance, getting basic infrastructure projects off the ground and completed in a timely manner is a must? NAIA 3, Ro-Ro ports deal, North Rail, etc.? How we allowed such incompetence and corruption to define Juan de la Cruz and his way of life is the first reality we must confront, and Mar Roxas must address? No amount of ‘Filipino abilidad’ can make up for these failures? Time is gold – and we keep asking ourselves how we could address poverty, when we don’t demand timely execution? We have to roll up our sleeves and get things done? And that means literally paying the price – delays cost tons of money, and sweeping them under the rug as we do must stop? It’s the 21st century and it’s long past for us to have these platforms – of a robust economy. Our economy is frail because we have not faced up to these realities? And that means stepping on people’s toes when warranted? In our desire to please everyone, we have compromised excellence and competitiveness – what the 21st century is about – and not a surprise, we’ve become an economic joke?

Poverty is not the cause but the effect . . . yet we keep banging at the wrong door? It is not poverty that we must fix but ourselves? We don’t do self-immolation or Gandhi-like fasting or the Japanese hara-kiri, but we must find a way to rally Juan de la Cruz’ spirit? Writes The Economist, June 10th: “. . . Italy has failed to renew its institutions and suffers from debilitating conflicts of interest in the judiciary, politics, the media and business”. Sounds familiar?

Saturday, June 11, 2011

Beyond communication

Behind a successful brand is an outstanding product? There are fundamentals we can’t ignore – granting we all want to lift the economy and the country up? Thinking and believing make it so . . . when the critical elements of an undertaking are in place? We want a new Philippine brand to burnish our image – thankfully it is what the Aquino administration is pursuing?

But the president by himself can’t do the job? Corruption is so insidious that major projects carried over from prior administrations are headline news. And everyone is crying foul as these projects come under scrutiny – with Juan de la Cruz oblivious to the inefficiencies, the costs of delays that set progress, development and GDP back? In business lingo, it hits us at the bottom line! Until we subscribe to the discipline of transparency, we would slip into the habit of opaqueness? Is the issue behind the fiasco of NAIA 3 out in the open? What about the ones of the Laguna Lake rehab, the Ro-Ro ports deal, the North Rail, etc.? These major projects may have already muted the outrage of the incurable compassionate Juan de la Cruz but foreign investors are watching – wondering about our numbness, i.e., how could such nice people keep shooting themselves in the foot? Not that all foreign investors are desirable – but the key is transparency? Respectable investors would respect us, and foreign investments would come if transparency is the rule?

It brings to mind an op-ed piece from the NY Times, June 4th: “An Archbishop Burns While Rome Fiddles.” The Vatican has been on a PR offensive to address the issue of sexual abuse opening its doors to US media to get nosey American journalists to hear it from the horse’s mouth. Yet, the efforts fall flat when the archbishop of Dublin can declare: “Nobody could have read what I have read and not did what I did,” he said as he walked me out into the windy spring day, writes the NY Times columnist. “If I didn’t react to the stories I heard, there would be something wrong.” And she adds: “He could not get through a story about “a really nasty man” — an Irish priest who sexually abused, physically tortured and emotionally threatened vulnerable boys — without pulling out his handkerchief and wiping his nose.”

We can fiddle with the shortcomings inherent in our economy – from the lack of basic infrastructures to corruption to raising barriers to foreign investors – but while doing so we can’t expect to optimize our efforts in rebranding the Philippines? We believe condoms will destroy the country when insidious corruption on top of parochialism and false patriotism already did? As the World Bank says, we ought to be attracting a lot more tourists and making tourism a strategic industry like they do in Thailand or Malaysia; but not when our world-class attractions are inaccessible thus limited to the moneyed-class – i.e., very consistent with our value of hierarchy? The mantra of excellence and competitiveness extracts a great measure of discipline – there is no free lunch? Imelda was a terrific promoter of the Philippine brand, and successfully orchestrated the big IMF meeting in Manila decades ago. We saw that she was a no-nonsense taskmaster and successful lifted our profile in the process. Beyond the meeting itself and the events that surrounded it, we saw infrastructure projects and 5-star hotels rise up as though via a magic wand. But how do you hide poverty and so she resorted to ‘white-washing’ fences along the roads in the vicinity of the airport.

And the rest is now history: crony capitalism became the economic engine of the Philippines? Marcos wanted us to join him in his supposed fight against oligarchy while creating his own version? But he knew the soft spots in our culture and so we all applauded in support of the new hierarchy he created? And it reinforced our patronage system? Our challenge goes beyond communication or branding – and why we’re economic laggards?

The writer is chatting with an Eastern European and she laments that it takes courage before they could admit to a mistake. And the writer shares stories of leaders who simply admit mistakes: The sooner we admit mistakes the sooner we can fix them. Mistakes are as old as man, and mistakes can be fixed, but not if we don’t admit to them? And it takes courage according to a young Eastern European? Demonstrated, for instance, by the archbishop of Dublin?

Wednesday, June 8, 2011

The PPP must be making a dent

With everyone scrambling to get into the action, the Aquino administration’s PPP (private-public partnership) vision must be gaining adherents? The Ayalas, Metro Pacific/PLDT/Meralco/etc., San Miguel, etc. are all opening their wallets? And there is even in-fighting with a little help from their friends (a.k.a. PR machines); who would accumulate the most? And not unlike school kids, unfair initiatives are being exposed and teachers and principals are being urged to step in?

But that’s the beauty of the market economy, people open their wallets? And especially in a place like the Philippines, where over the years we’ve paved the way for the few, and allowed gross investments to deteriorate; we could use these capital funds? Yet vestiges of parochialism and false patriotism – e.g., denuded forests, a polluted Metro Manila, insidious corruption and a skewed economy – ought not to undermine the great opportunity in front of us. With the world in an economic turmoil, capital would seek investment options – and developing markets like ours would get on the radar screen of investors. Bearing in mind that in a global recession developed markets would tend to contract, while developing countries would be caught in a building mode.

Eastern and Central Europe, for example, offer a panoramic view of how investors would prowl the world ever ready to jump on a “prey”. And this is in the midst of a volatile European-wide economy – i.e., with reports of debt-default risks, currency deterioration outside the euro zone and business pace decelerating from prior year. And precisely why mergers and acquisitions are ripe, i.e., poorly managed businesses become bargain wares for progressively managed enterprises. The writer hasn’t seen an abundance of heavy equipment like construction cranes since the speculative days of Hong Kong and more recently China. Clearly these people – born and bred as socialists – are learning about global competition and the global economy with all its ups and downs and would only come out of the experience wiser and more confident?

We badly need to move the Filipino worldview to the 21st century? Nationalism is to be proud of yet countless have become COWs – citizens of the world? It’s a small world – and we don’t have to make it smaller, and miss the parable of the talents? The good news is local-Philippine major players are reaching out to foreign partners with the expertise or the technology that we need, like rail transport, for example? It seems that we’re running out of investments that are driven more by political patronage but low in technology? And technology as an afterthought, and the innovation it brings, is why we are yet to develop the confidence in global competition?

It’s time to recognize that parochialism and false patriotism have inflicted the cancer in our society? And add corruption, it could become terminal cancer? We’re happy to have 4 Filipinos amongst the world’s wealthiest – with 100 million Filipinos being the market? We could produce more if we look at a market of 7 billion – or at least the region? And it would give us a larger economy, not confined to concocting livelihood projects – i.e., gain respect beyond compassion from the rest of the world? But the world shall not wait for us – e.g., global investors have already factored the Great Recession thus poised to pick up the spoils once the global economy picks up? It takes investment, technology and innovation, and talent, product and market development to be globally competitive?

And many countries don’t even have to pursue PPP or Arangkada Philippines-like initiatives yet Western capital funds are coming. Why? They don’t have biases like parochialism or false patriotism?

Writes the Harvard Business Review, May 31st: “In our increasingly interdependent global economy, (local) knowledge doesn't confer power. Instead, power stems from finding and sharing knowledge across national boundaries. Eschewing vertically-integrated, insular R&D models, Indian CEOs and policy-makers must learn to orchestrate global innovation networks anchored by collaborative partnerships. We look forward to India's "Decade of Collaboration."

Sunday, June 5, 2011

People not structure deliver result

It is encouraging given where we are as an economy and a nation that the Aquino administration has made its roadmap official with the issuance of EO 43. It appears the administration’s directions are not incompatible with Arangkada Philippines? And given it is a broad program there are many pieces to it. The reality is people not structure deliver result. And that remains our challenge? And it means focusing on outcomes not activities? We can’t afford more bureaucracy – where an activity becomes ‘the be all and the end all’? And to paraphrase former NEDA chief Dr Sixto K Rojas, we’ve tried every trick in the book. What we need is new thinking. For example, the administration appears serious about fighting corruption – thus must focus on outcomes not activities? And it means passing the Caesar’s wife’s test across the board? It is an uphill battle since in our culture relationship trumps principle? We don’t need another manifesto that says we are committed to fighting corruption? The test of the pudding is in the eating?

And Arangkada Philippines ought to be up there simply because there is no other initiative that captures our pressing need in a more straightforward manner? We need a substantial bump in our national income and that means we have to pour investments in a few strategic industries that can bring this about? Of course, the iceberg could be a monstrosity below the waterline – and here is where individual pet projects and vested interests would fight to get on the train? And it is here where leadership is called for. For instance, there are very basic elements that must be put in place to get investors committed to the administration’s roadmap and so there ought not to be any equivocation in this respect. And again, Arangkada Philippines provides guidance?

Reports Business Mirror, May 30th: “With good governance and anticorruption as overarching theme, the plan has three broad strategies. First is a high and sustained economic growth, which provides productive and decent employment opportunities. The second strategy is provision of equal access to development opportunities across geographic areas and across different income and social spectrum, which will ensure that economic growth and opportunities translate to poverty reduction. Thirdly, the plan will push for the implementation of effective and responsive social safety nets in order to assist those who will not be able to catch up by the character of a rapid economic growth,” the National Economic and Development Authority said in a statement. “The government’s targets are anchored on the 16-point agenda of the President, which he disclosed during the election campaign in 2010, as well as the country’s commitments to meet the Millennium Development Goals (MDGs) by 2015”.

And among the 16-point agenda would be: poverty, health care, education, housing, land distribution and acquisition. Clearly, while the government is driving trade and industry in order to generate economic output, it has to spend for many of these critical initiatives? The administration does not have sufficient means to cover all these initiatives to the level that would address our issues? Inclusive means generating the positive outcomes from these initiatives – not merely a laundry list? We don’t need to adhere to 300 tenets – but the Great Commandments? Of course in the global competitive arena they talk of Pareto’s Principle because he developed an econometric model. Amazingly, great competitors – like Apple or Steve Jobs – swear by it yet countless pay lip service?

Likewise it is imperative that we take political patronage out of the equation and again, it demands leadership? The question we have to ask ourselves is not who gets the spoils from the administration’s roadmap; it is what are the vital few initiatives that will give us the biggest bang for the buck so that they are sustainable? In short, the priority ought to be initiatives that will be sustainable over the short- to medium-term . . . to lift us ‘above water’ and then we can deal with the rest, but still on a smartly prioritized basis? For instance, we still have the NAIA 3 issue yet have added the Laguna Lake rehab, the Ro-Ro ports deal and SCTEX? And as we have seen PPP-driven projects don’t get off the ground on time? And so are the strategic projects in Arangkada Philippines?

Leadership is focused on the outcome beyond the activity?

Friday, June 3, 2011

Squaring a circle

We can leave that for the mathematicians like they sweated to figure out the accuracy of Pi? But to try putting a square peg in a round hole is foolhardy? Is competitiveness a round hole that won’t take a square peg? We’ve thrown loads into the challenge yet competitiveness appears elusive?

Are we ignoring ‘reality’ – or the ‘fundamental givens’? Are we bringing into the challenge a baggage – of ‘Pinoy kasi’? We’re proud Filipinos, especially proud of ‘Filipino abilidad’? But problem-solving doesn’t respect nationality and culture? Which is why Deng Xiaoping said what he said – and embraced market economy? And today it goes beyond Deng, reports the NY Times, May 24th: “The power companies say they face financial ruin if the government continues to tightly limit the prices they can charge customers, even as strong demand is sending coal prices to record levels. The chairwoman of one giant utility, China Power International, recently warned that one-fifth of China’s 436 coal-fired power plants could face bankruptcy if the utilities cannot raise rates.”

Subsidies [our go-to economic tool?] can only go so far – as we now know? It is like the environment; talking sustainability while denuding the forest doesn’t compute? True compassion is driving development, not treating ‘Pinoy kasi’ as sacred? Our expertise in accounting and finance is recognized worldwide – and why back-office operations are coming to the Philippines. But are we ignoring the fundamentals of margins? When we travel to the West it makes sense to do our shopping because goods are cheaper – and would proudly pull out our iPad2 once we’re home? But that is a function of economies of scale – and so even a democratic president like Clinton pushed for NAFTA, even though the US market in and of itself is a huge market?

Put another way, a market of 100 million Filipinos is still a disadvantage scale-wise compared to the regional and global market? Of course, to many local businesses and MNCs in the Philippines, 100 million is a big market. But that’s precisely the blind spot. We view ourselves – and are viewed by MNCs, too – as a market as opposed to a regional if not global resource, with the exception of BPOs and semiconductors and a few others? That is why our local economy is a lot bigger than our export economy?

To overcome this local bias we need in short order to be competitive? And that is a challenge to our creativity and ability to generate funds for investments? Our local bias would explain why oligarchy is alive and strong. And we are complicit [driven by respect for hierarchy?] for turning a blind eye on transparency and political patronage? For decades we accepted a phone monopoly, and a system from the dark ages? What about coconut? The resurrection of these debates is a reflection of our inability to turn from the past? Innovation and investments are available in a globalized economy and the key is to leverage them? And that means we have to get the basics right – e.g., an international airport, power, water, roads, bridges, Ro-Ro ports, etc.? And ensuring that to do business with us isn’t perceived by foreign investors like pulling teeth – because until we do, we will insanely be putting a square peg in a round hole?

Problem-solving is a discipline, not an expression of one’s culture or faith? Given our holistic perspective we tend to bring our cultural biases in our problem-solving – and also our faith? Culture and faith matter. But we can’t feed 100 million people . . . because our income as a nation is deficient – and so to problem-solve means we have to figure out how to raise our income? 10 million OFWs have figured it out – with a family income insufficient to make both ends meet, they had to go take jobs overseas?

And as a nation, we have to move from simply being a market to being a regional if not a global resource – and we should be debating how to make it happen more than debating whether to use condoms or not? Beyond individual upward mobility – which may be a function of education – is the challenge of the common good – which is a function of economic development? We’re critical of Western individualism – but have yet to be different?