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."

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